Month: November 2016

How to price your Cakes for profit

Part guesswork, part experience, part number crunching – how ever you look at it, determining your cake price can be quite a difficult task.

Cake pricing or how much to charge for your cakes can be the most challenging and intimidating question to most beginners in the cake decorating world today.

Unfortunately there are many factors to consider.

But I am going to break it down to just 7 factors that will help you price your cakes in a way that will make you and your customers happy.

d5

  1. LOCATION…LOCATION…LOCATION…

Where you live and where you bake will be the most important factor to consider when looking at pricing. If you live in Lekki, your pricing will be very different than if you live in Gbadagry.

Researching your local market is the best starting point to figure out pricing. Call other custom bakers and find out what they are charging. If they are successful and are charging a lot more than you were planning to charge, you need to raise your prices.

d6

  1. DO NOT UNDERCUT YOUR COMPETITORS

When you are starting a company, you are telling friends, family and clients that you believe you are good enough to open a business.

You may not feel like you are good enough, but pricing your cakes low hurts yourself because you will be working a lot of hours, and not make any money, and you can become known as the CHEAP cake lady.

Undercutting your competitors also hurts them and the cake industry in your area. Bringing prices down in your area can take business away from other companies and cause them to loose income, which can have many unwanted consequences.

Lower prices at the beginning can also make it very hard to raise prices once you have a strong customer base.

They will not want to pay the higher prices and will find the next new decorator to take your place. You want to attract loyal customers that see the quality of work you do and are willing to pay for it.

t2

  1. KNOW YOUR COSTS

This is a big one! You have to figure out your costs. You will need to calculate what you actually spent or will spend on making a cake.

Here is a list to consider as you calculate your costs

  • Overhead: rent, utilities, business cards, posters, office supplies, computer
  • Bakery equipment and supplies: mixer, oven, tables, cooling racks, pans, bowls, food coloring, luster dusts, fondant, tools, boxes, cake stands, cake boards, dowels
  • Ingredients: flour, sugar, butter, eggs, baking powder, chocolate, vanilla and other specialty ingredients
  • Delivery: petrol, wear and tear on your car, your time
  • Time: You need to make sure you get compensated for your time. Set an hourly rate for yourself and charge accordingly.

 

b3

  1. DO NOT COMPETE WITH SUPERMARKET &FAST FOOD STORE PRICES

When pricing a cake, never try to compete with them. Those cakes were flash-frozen months ago and decorated as fast as possible with buckets of premade icing.

You need to target the customers that are loyal and will come back for great tasting, quality cakes. If you want to know if your prices are too low, compare your prices with the supermarket. If you are close, raise your prices.

b2

  1. IT’S JUST A CAKE…NO IT’S NOT!

This is something you may hear from customers, or you may have even said it yourself. When a couple gets married/ there is always a picture of the bride and groom cutting the wedding cake. When people go to a wedding, what do they talk about? The dress and the wedding cake!

A wedding cake or a birthday cake is the centerpiece of that event.

Custom cakes are not just cakes. They are works of art that are central to the celebration.

Also, from the business aspect, your cakes are not just a cake you throw in the oven and hope it comes out right. Your cakes are tried and true recipes, icing, cake boards, dowels, fondant, decorating tools, days of work preparing decorations, planning, sketching, designing, and working with the client, then you deliver the cake and make sure it is perfect before walking away.

 

d12

  1. DO I PRICE BY THE SERVING (by the number of people the cake can serve) OR BY THE CAKE?

Once you have run your numbers and you know the costs involved, this is usually the next question.

They want to be able to compare prices and feel that they have a basic idea of what they can expect as far as pricing is concerned.

Here are 2 things to consider when setting your prices:

d9

Have a Minimum Price Point

Make it very apparent that your cakes start at a certain price point, such as, “Fondant cakes start at N100.00 per serving” or at N4,000 or “Wedding cakes start at N65,000,” then add that the prices go up depending on the design and size.

This can save you and your customer time. They will walk away if they know the minimum price is too high. You don’t want to spend time emailing and meeting with a customer only to find out they were expecting a three-tier wedding cake for N20,000.

You may have customers that tell you your prices are just too high, but do not lower your prices! You wouldn’t go to a supermarket and tell them their prices are just too high and ask them to give you a discount.

You should not try to make every person that contacts you happy. Stick to your pricing and if they choose to go somewhere else, they may not be the right kind of customer for you.

b30

Pricing specialty cakes

Specialty cakes and carved cakes require a lot more time for designing, structuring and decorating. This is a great time to price by the design.

Be realistic about the time required and price it accordingly. Just because a customer only wants to serve 10 people does not mean it will take you less time than a cake to serve 30 people.

Be honest with your customers, tell them these cakes take much longer than other cakes, and are priced based on the design not on the number of servings.

 

d8

  1. YOUR TIME IS WORTH MONEY

Make sure you give yourself credit and include the hours you worked on your cakes. Your prices may seem high to you, but if your research shows that your market will sustain your prices, go for it.

Your time is valuable, so set an hourly rate and stick with it. You have a great talent and should not be making less than minimum wage because you are building your portfolio or because you are just starting out.

Before i go let me introduce you to this awesome E-Course.

                           n5

Are you ready to finally start making serious money in your cake business, so that you can get more orders

                                         THEN REGISTER HERE

                                                   (Just fill in your details below)

How to Sell your Cakes using Facebook

I will take a wide guess and assume that you know how to use Facebook, or at least you have heard of Facebook.

Even if you don’t have a business page, the chances are you’re already have a Facebook personal page.

Facebook is a great social media platform to take advantage of for your cake business.

The multiple functions available on Facebook – your personal profile, groups, pages to name a few – there are many channels you can engage with to market your cake business. 

Just make sure you keep up to date with Facebook’s rules for business use to make sure you don’t run foul.

These are 3 great tips on how to sell your cakes using Facebook which are easy and don’t take a lot of time to set up. For more tips on how to market your cakes Click Here.

b30

Create a Facebook Business page

Creating your own Facebook page for your cake business is a great way to give your cake business an online presence beyond having a blog or website.

Having a dedicated Facebook page for your cake business means that people can search for your business and find it easily.

Word of mouth referrals go a long way for many cake businesses, especially when you’re just starting out and building a client base. If a potential customer has heard of you from a friend, searching for your business on Facebook will likely be one of the ways they will try to find you apart from a Google search.

You then have the opportunity to seal the deal when they reach your Facebook page.

How do you do this?

You could share testimonials from happy customers, have pics of your cakes and cupcakes and/or photos of your bakery or photos of you at work baking or decorating a cake.

So that any visitor on your page will see that you have a thriving business, know what you’re doing, and – most importantly likely to order from you having seen your cake portfolio and social proof from other happy customers.

It also keeps the people who have liked your page up to date with your fantastic cakes keeping you in their minds the next time they need to order a cake for an occasion.

n22

It is very easy to create a Facebook page for your cake business, just follow these steps:

  • Login to Facebook;
  • From your personal page, at the top right hand corner is a downward arrow and select “Create a Page” on the left-hand side;
  • Options are provided for what type of business you have. Select the options that best apply to you. The local business option would suit a cake business fan page;
  • Choose type of business and business name (make sure your business name is obvious that you sell cakes);
  • Tick the box, ‘I agree to Facebook terms and conditions’;
  • Upload an image as your profile picture;
  • Add your website address if you have one. Fill in the ‘about’ section;
  • Make sure you include your opening hours if applicable and your contact details so any visitors know how and when to place an order;
  • Include a Call to Action in your description box so that anyone visiting your page can order a cake.

 

e27

Local Facebook Groups

Local Facebook groups are another great place to sell your cakes using Facebook.

In the search bar, type in your location to find Facebook groups dedicated to your local area, then ask to join them.

Once you have been added to the group, you can see what other people in your local area are posting about. If they ask for recommendations for a cake supplier, jump in there and offer your services, linking to your Facebook business page to show them more about your cake business.

This can be more effective than linking directly to your website as it doesn’t ask the reader to leave Facebook, the platform they are currently on, just to visit an alternative page.

You can also use Facebook groups to promote your business page.

Check the group’s information section or pinned post for any rules on promotional posts as these are sometimes limited to certain days of the week. Some groups do not like advertising or soliciting for customers. Abiding by the group rules, share your Facebook page for your cake business to spread the word locally to other potential customers.

n23

Facebook Adverts

Although this option isn’t free like the other two, Facebook adverts are still a way that you can sell your cakes using Facebook.

To create an advert, visit your business page and choose whether you want to promote your page, website, or boost a specific post.

When you click one of these options, you’ll have the option to add some text to your promoted post. This is the place to advertise your services, availability, and contact details. You can also include a testimonial from a happy customer followed by these details for social proof that you are the cake business to go with.

Include a call to action at the end of the advert to encourage people to take action, get in touch, and order their cake with you.

Whilst Facebook Ads are a paid for service, they are relatively reasonable in price in comparison to traditional forms of advertising.

However, note that Facebook Ads are charged in dollars. A few months ago, you could use your naira card to pay for Ads, but now you will need a Dollar card, so that means you will need to have a domiciliary account.

With just a $5 promotion you can reach a wider audience of people. Thereby leading to more and new page likes which could lead to more sales.

It’s important to target your advert when setting it up to only appear for people in your area so that your audience are all people who it would be practical to sell your cakes to.

The more people who like your page, the more people who can engage with and view your posts, and the more people who can share your posts and cake pics with others.

post3

So what have you learnt?

  • Create a Facebook business page to make your cake business visible online and give you an avenue to promote and market your cakes
  • Participate in local Facebook groups to spread the word about your cake business
  • Use targeted Facebook Adverts to increase the reach of your cake business and find more customers

Find this post useful? You’ll love this sample of a Marketing Plan for your cake business. Click Here to get your FREE Marketing Plan

Till next week.

Happy Caking.

Cake Regards,

Getting more sales in your Cake Business

b5

When you’re first starting out in business it can be a little disheartening to get a lot of enquiries but not get any orders. In the sales marketing world we call this your ‘conversion rate’ – meaning the amount of people you manage to convert from prospects into paying clients.

Effective converting and selling is a skill all on its own. Some people are just born salespeople who are naturally persuasive and can sell ice to Eskimos while the rest of us (like me) really need to work at it.  

If you find ‘selling yourself’” uncomfortable, and me telling you that you’ve got to learn sales skills probably makes you feel like ‘Why nah!’. Selling or marketing is not dishonest or desperate, both of which are things nobody wants to be. But you have got to learn those skills if you want to earn the type of money you want to change your life.

Here are a few things to help your conversion rate (that is, make more sales) that don’t make you feel like you’re begging or desperate for the order.

b4

MAKE IT simple and EASY FOR PEOPLE TO ORDER FROM YOU

Don’t make ordering a cake from you a 10 step process that tires people before they have even begun. If you have a website and people can order online from you, make sure the entire process, from selecting the item to checking out of your shopping cart is uncomplicated and easy to use and follow.  

The “buy now” button, “shop here” and “online ordering” buttons and pages should be visible and easy to find. Don’t make it hard for people to buy from you.

The same is true if they are ordering directly from you, whether by phone or email. Make it VERY clear how they can pay their deposits, what the process is (and make it a short process.) Don’t wait for them to as how to do it, tell them!

This is an opportunity for you to start thinking of putting in place clear, simple and defined business procedures that will help you in your customer ordering process so that you will be prepared for any question your customer needs to know on how to proceed with an order.

b2

TAKE CONTROL OF THE COMMUNICATION

When you’ve reached the point in the email discussion where they clearly are interested and wanting to order from you, actually pick up the phone and call them. “Hi Amaka, I thought it would be faster if I just called you to confirm the details we spoke about in email and get the deposit organized.”  

The longer you keep dragging out that email conversation, the more of your time you are wasting, and the less likely you are to get the sale done and over with.  It’s also a lot harder to say no over the phone to someone – so you’re effectively closing the deal just by calling them.  

If this sounds scary to you, remember that you’ve already established their interest in you via email

(How to get their phone number: Make it a required field on your website “contact us” form so that they have to give it to you to submit their order question. If they didn’t come through your website, ask for it at the very beginning – “What’s the best number to reach you on in case I need to get in touch about your order?”).

A question you may ask is if you should chase up on quotes after they’ve sent them out. Well it depends on you, if you’ve got the time and you really want to do that order from a creative point of view, following up is not a bad idea.

If however it’s not really an order you need or are interested in (or it’s a small one that won’t make much difference to you), just leave it.

Following up is good, mainly because if your competitors won’t bother – but nor do I want you wasting hours and hours on chasing up people who aren’t the kind of client you want that is, a client that calls back.

b3

ACT AS IF YOU ALREADY HAVE THE ORDER

Believe me, this works unbelievably well. Positive assertive action thinking goes a long way.

So for your next order, do it like this. When someone contacts you the first time act as if  the order is already confirmed. This means the language you use in emails or over the phone has an assumption that you will be doing the order.

You’re not ASKING them to pay the deposit; you’re telling them they’re going to do it. Not in an aggressive or threatening kind of way, but in a gentle, natural way as though the deal has already been sealed and you’re just helping them get there.

So at the end of the email instead of saying, “The price is N25,000,” your email should end by saying, “To create this cake for you is N25,000. To secure the date, I ask for a 50% deposit which needs to be paid by bank transfer (include your account details) by 19h November. I’m really looking forward to making this cake for you, you’ve picked a gorgeous design – the party is going to be amazing!”

Nobody reading that would say it sounds desperate.

b1

For one, it’s friendly, it makes the sales process very easy for them by stating the steps and gives them the chance to take the next steps, and it openly assumes that you’re going to get the order.  

If you act as if the deal is done, and confident that you’re going to be the only person who can make this thing for them, they are going to feel that confidence and just go with it. Plus you’re saving them a ton of time and effort here – you’re making the process easy, simple and most of all you are meeting their needs right NOW, not 5 emails from now.

We live in an age where people are immensely time poor, reluctant to commit, and bombarded by sales requests all day long. If you can help them save time, help them commit to making a choice – you’re already halfway to getting the order.

You’re flat out saying that you’re going to make it happen for them. Don’t we ALL just want that certainty, that confidence, that knowledge that a job is going to get done, get done right, and not require a bunch of wasting time to make it happen?

So in summary, the key to closing the deal, get the order and make more sales is that do not make the whole process all about you, make it all about them.

Hope you found this post useful? If you did, please comment.

Till next week.

Happy Caking.

Cake Regards,

Educating Customers About Your Cake Price

142

When you get lots of phone calls or enquiries about your prices, or lots of rejections based on price alone, it can seem as though that’s all people care about. 

To be fair, for most people, price plays a major role. However, I find most people are willing to get more than one quote, and willing to consider why those quotes differ. 

The thing about cakes is (especially custom ones) is that your potential customers are actually not in this business, so they don’t really have any idea of how much effort and time goes into creating our cake creations. 

TV shows like ‘Cake Boss’ or ‘The Great British Bake off’ have done a LOT to educate the general public about the amount of effort and artistry which goes into cakes, but not everyone watches those shows. 

Plus, there are a lot of perfectly reasonably decorated, mass produced baked goods out there which will do the job just as well.  If all your client wants or needs is a cake that a 5 year old will be happy to take to school to feed just 10 kids. You’re going to have a hard time justifying why they should spend N25,000 with you when a N4,000 cake from the supermarket can meet that need.

141

The challenge for us as business owners is working on the people who see a cake (no matter where it’s from) as “just flour, butter and eggs,” and get them to see why our custom cakes are so much more than that.

The general public doesn’t just “get it.” They really don’t. They think Cake is just cake, but we know that’s not it.

Part of our job as cake business owners is to educate and convince our customers to buy our cakes, and that means taking the time to explain why it’s worth why it’s worth. 

144

You don’t need to look any further than KFC to find a great example of this – they market their specialty by telling us about using the best chicken, seasoning and so on. Why? Because those special things are more expensive and they want to convince you to spend that little bit more. They do not assume that consumers just “get” that the fancier stuff is worth the money, they explain why it is worth it.

Cakes are no different. You’ve got to market your products and your business precisely because not everyone understands what makes your cakes special. 

Yes, there will be some people who will not care that the quality of your cakes are better? If they say “no” based on price, that’s okay…but there are plenty of people who, with a bit of education, will be willing to spend a bit more to get something a bit better.

145

Instead of just getting angry that “all anyone seems to care about is price,” and “I keep losing orders even though I’ve made my prices reasonable,” – why not try educating your potential customers?

One way is by re-examine your marketing. Re-examine how you answer their enquiry about the price of your cake.

If you get an email enquiry about baking a 2 tier Mickey Mouse cake. Do you say, “A Mickey mouse cake for 30 people costs N32,000,” or do you say,

“Thanks for your email! We’d love to make you a Mickey Mouse cake for your son’s upcoming 1st birthday. Our cakes are all baked from scratch, and we’ve got an array of kid-friendly flavours to choose from – I’ve attached a list for you to pick from. We’re also happy to customise the birthday message, and if you need delivery we offer that service too. To feed 30 people, you’re looking at a cost of N32,000. Please give me a call on 080-123-4567 so we can discuss further. I look forward to helping make your celebration fantastic.”

Tell me. Does that 2nd email require a little more thinking, a little more effort and engagement? Sure it does – but the investment in service and education are worth it if it means you’ve converted them into buying from you rather than just settling for a cake from ‘ Cakes and Cream’. 

143

Every company, everywhere in the world, selling anything at all is going to come up against people who seem to only care about price.  In every market (clothing, cars, food…) there will be companies who service the very low end, companies that service the very high end, and a whole lot of companies’ right in the middle of that. 

Even the companies selling things for cheap have to market themselves and their products – because they are not the only ones in town claiming to be the cheapest. The companies at the top are no different – because they too are not the only one in town that sells a premium product.

You would aim to be the cake business that educates and then converts cake enquiries to sales.

However, accept that some people just won’t be won over …but be clever enough to at least try.

Not everyone gets it, and not everyone needs to … but you would be silly not to even try because you have decided ahead of time that they can’t be taught.

Hope you found this post useful? If you did, please comment.

Till next week.

Happy Caking.

Cake Regards,

How can I Improve my Cake Sales?

Everyone loves cake, well at least most people do. You might think that because 85% of the population loves cakes, you may not have any issue selling your cakes. But as you and i know it is not as easy as that when Selling in business.

if you get 1 or 2 people order from you a week. That’s good at the beginning, but it is not going to help you to sustain your business. You need a larger customer bases.

So in order to expand your customer base, i am going to show you a few good ideas to make more money selling cakes.

t7Try Selling Wholesale

So one great tip for growing your business and making more money apart from custom orders is to try and venture into the wholesale business.

How do you do this?

Look through your friends list and contact those caterers or those who own restaurants, cafe’s or supermarket or even Buka’s and offer your products. If you are able to secure an order, is a very good way to get your product out to the public and increase sales.

But do a bit of research before you book an appointment for your sales pitch, find out what they are selling and the price range of their products. You don;t want to price yourself out of the market.Also find out what your competitors are selling and their prices so you will have a idea how much to sell your baked goods.

 

o74Social Media

Having your business online is a must. If you don’t. Create one NOW.

Create a website and social media page for your business and posts pictures of your cakes. Make your website very visual and  let people know how they can order from you. Also on your website have an Opt In page to collect email address of those that visit your website. once you have that information, you can now send weekly or monthly emails showing them your specials and discounts.

a2Give out Samples of your cakes

If you have a Cake Shop. Lucky you! How do you get more customers to your door?

Try and look for inventive and creative ways to get customers into your shop such as offering free samples to passersby. People are more likely to purchase whatever you are sampling if they taste and look good and are available immediately for purchase.

 

c35Branch Out

Just don’t think you should be selling cakes to make money.

Why don’t you sell your skills.

You could open your home and offer baking and cake decorating classes. Not only will you be adding value, but you will gain more exposure for your brand, your students will be able to purchase good that you are selling in your store and  now you have added another stream of income to your business

 

With these marketing techniques you  are sure to be on your way to getting your cake business name out in the public and draw more customers thereby improving your sales and profits.

Are there any more marketing tips I didn’t mention? Comment below if you think of any.

Happy Caking.


x19Rotimicakelady is your personal cake fairy. She is a cake business consultant and Coach. 

She runs the Baking Business School  where she helps bakers through Online courses have super profitable and successful cake businesses.

She has a passion for helping women who have a passion for baking, transition from hobby cake makers to successful and profitable cake business owners. 

She also help cake business owners who have struggling in their cake business with strategies to enable them get more customers and get booked out with orders. Rotimicakelady is passionate about Cakes, business and making money.


Need some help with your Pricing? Register for the Pricing your Cakes for Profit Course.