When asking the cake decorating community what exactly was their biggest challenge – the answer came back a resounding ‘cake pricing’. So what was the problem? Our cake decorators didn’t know where to start.
And to be fair…how would they know? If they had never experienced small business pricing or working out how to charge for their time, the whole concept of pricing a cake is daunting.
1. How to Set the Price for Your Cake
Always start with the recipe and ensure that when any ingredients are purchased, the till receipt from the shop is retained. This is so you will know exactly how much you paid for each item.
What happens if the entire receipt is not used for this cake?
It could be argued – the ingredient had to be purchased, and the balance would not be required for another cake perhaps until after the ingredient is past its use-by date. This would render the product useless and therefore the entire charge should be passed to the customer who ordered the cake requiring that ingredient.
However, some cake decorators are just not keen to charge for unused ingredients. But it is your call!
Work out the cost of each ingredient and use this in your recipe costs.
Remember to include how much time you have spent, as well as all the sundry items such as boxes and boards, flowers, ribbons, etc. you used to complete the cake.
Cake Pricing for Profit
If you are really serious about pricing to make a profit you do need to think about other costs that have been expended on behalf of the customer too.
Items like gas and electricity – whilst minimal for the occasional cake will add up if left not charged over a period of time. And the only loser will be you and your household. The customer will be very happy with her bargained, under-priced cake.
So it is important to get this right!
2. How to Present the Cake Price to the Customer
My other thought is about presenting a price to a customer. Some cake decorators wait for the ‘Yes Please Book Me In’ email confirming the price and booking the cake.
And that is it. If a reply to their quote fails to materialize in their email inbox they do nothing.
They fail to pick up the phone and talk to the customer.
They then say they are super disappointed not to have heard back from their potential customer with a resounding ‘Yes’ accepting their quote.
But here is the thing… the customer wants to have a conversation! How do I know this? Because I asked! Each person who wanted a bespoke cake would prefer to talk to the decorator to discuss details and price. Shocker!
They didn’t want just an email and to hear nothing more from their cake decorator. In fact, one lady told me she had asked three different cake decorators for quotes. One never got back to her, the second one sent her a delayed email.
But the decorator who won the contract (despite being more expensive than the second girl), was the decorator who picked up the phone and enthusiastically communicated with the potential customer to create the cake of her dreams.
Having received a confirmation of an order from a customer…what then?
3. Note Down Everything About the Cake Order
Do you have a place to note down every aspect of the cake order – or do you rely on bits of paper that are then easily lost?
If you want to look professional, get the order written down clearly and get a signature from the customer to approve any finer details, including perhaps any message that is required to be piped. (Getting approval on this will ensure costly spelling mistakes for any bespoke messages are eliminated).
At least with an approved order, everyone knows the price, the details, and when any money is due.
Finally having priced the cake, got an order, and had the details approved – we arrive at… Accepting money.
4. Receiving Money for Your Work
Have you thought about just how much you will charge as a deposit? Or even whether you would wish to wait for the entire payment upon collection or delivery?
But whatever your strategy is to receive money for your services, do ensure that you stick to your terms, and that way your customers know what to expect and when to pay. Clarity means eliminating embarrassing conversations in the long run!
So do be sure of your price, and how you present it to your customers. Be firm on your terms and don’t be scared to negotiate!
Who Wrote About Cake Pricing?
Hi, I am Karen MacFadyen – and why do I know what I know?
I have worked with creative designers all my life, organizing them, encouraging them, and advising them on how to price, and a little while ago I realized that I could help cake designers/decorators to do exactly the same.
I am qualified in City & Guilds Sugarcraft, have run my own home-based cake business, have a teaching certificate, Business Coaching qualifications as well as have small business skills gained from working with designers for many years. I wanted to help specifically the cake decorators/designers to start by pricing correctly and to build their hobby into a sensible and profitable business.
Find Out More About Cake Pricing!
And from the get-go – this has to begin with pricing ingredients correctly and not losing money on a quote.
If you have ever wondered where to start with Cake Pricing, why not grab a copy of our FREE downloadable Cake Pricing Guide and discover no less than 10 ways a cake COULD be priced. Discover which method you are using! I hope it is NOT number #10! Here is the link! And feel free to check out our website CakeCoachOnline for more cake pricing tips.