In theory, pricing a cake is easy. It’s simple math: Cake Price = Cost of Ingredients + Cost of Time (hourly wage for hours worked). Right?? Wrong. But I used to think this way too.
In fact, when I first started making cakes, I did them for free! I’d show up to every event I went to, baked goods in hand. I was the go-to gal for every single birthday party, retirement celebration, and engagement shower. Happily! But then… People started to ASK me to bring desserts. To events I wasn’t even invited to. It was all fun when I was doing it as a surprise, but once it became expected, it felt more like a chore. And I thought – I wonder if people would pay me for this? I mean, they seem to really like my stuff… so, I started asking people to cover my ingredient costs. I quickly realized this was not going to be enough. Baking is a labour of love, and decorating is often a lengthy process.
Just a few of the cakes I made for free:
I really struggled with valuing my time, my work, and ultimately, myself. I still struggle with this! But I am a big fan of the scientific method. Of evidence. Of facts. And I figured I could convince my emotional side, if I could just show her the numbers.
So I started a spreadsheet to track my ingredient costs, my materials, the hours I worked, and my profit margins. Surprise surprise… I was losing money. Until I had it all laid out in front of me, I didn’t realize how quickly costs add up. Especially when a single cake box runs you about $4.50! Not to mention, how time consuming all of the steps are: baking and decorating, but also – consulting, planning, sketching, grocery shopping, photographing, packaging, clean-up, marketing, training, researching, etc etc etc.
The nice part is, I knew I wasn’t alone. Sadly, it seems MANY home bakers undervalue themselves – whether it’s from lack of awareness or lack of confidence. I thought, how can I help others learn what I learned the hard way… a little easier? So I re-vamped my spreadsheet to make it more user-friendly (rather than just the dumpings of my scattered mind), making it fillable and entirely customizable.
Now, this Customizable Cake Pricing Guide is available in my shop – including a sample spreadsheet with my chocolate cake recipe as an example, a video walk-through, and direct email access for any questions.
More free cakes:
Why a spreadsheet though? Why don’t I just tell others what I sell my items for? There are too many variables, that change too often. For example: I have a friend who lives in California who can buy butter for $3.49 a pound. Up where I live, it’s $8.99 a pound! If her grocery trip costs her $50, and mine costs me $70, should we charge the same amount for a cake? Nope. The spreadsheet also factors in your time – some people work faster than others, some cakes are more complicated than others, some areas have higher minimum wage, some people place lower monetary value on their time… it’s up to YOU! When I first started out, I payed myself below minimum wage; I was actually a student at the time, so really any money was good money. Now that I have a full-time job, I pay myself nearly the same hourly wage as I get from my employer – because that is what my time is worth. I have also greatly improved my skill level over time, which means I am comfortable with pricing that is comparable to other bakers of similar skill in my region.
Building this spreadsheet is when my business really shifted. I started to understand the importance of paying myself, and making a profit! Otherwise, running a business is not sustainable, which helps absolutely no one in the long run.
If any of this post resonated with you… I suggest you start crunching your numbers! And if building a sheet yourself isn’t something that sounds doable (or enjoyable), grab my customizable guide here:
Happy baking!