How I Made N100,000 For One Cake Order

Should You Take A Free Job Now On The Promise Of Future Orders?

Sometimes we may feel that for us to get more customers, we should  cater for an event at our own cost  or enter into an agreement with vendors who need our products and do it for free on the promise of future work, which may or may not happen.                     

You may feel that on this particular occasion you will do it for free, with the hope that that particular vendor will love your products so much and will be ordering from you for all their future occasions.

So what do you do in these types of transactions? When a company or a vendor asks you to provide your cakes for free and that they will start paying you next time.

Here are a couple of ways to handle these kinds of situations:

 

  1. Offer Them Something Of Extra Value

Instead of you using your money and doing all the cakes and they not paying anything. Why don’t you tell them that they will pay the full price for the cakes but you will add something extra like maybe free delivery or an extra batch of cupcakes.

Think of something that will be of value to them and offer it to them. So this way, if they decide not to order from you again in the future, it will not be a complete loss as they would have paid you money to cover your costs.

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  1. Offer Them Wholesale Pricing

Create a pricing list just for them.  In this sort of pricing, the price goes down as their order numbers go up. For example:

1-50 cupcakes: N700.00 each

51-100 cupcakes: N500 each

101-200 cupcakes: N400 each (and so on.)

This will encourage them to stay, but also encourage them to place the bigger orders with you.

 

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  1. Be Firm

If a vendor says just do this job for free and I will promise you the next one you will get paid. If you are not happy with that arrangement, you can say ‘ I don’t work that way but I’m happy to negotiate on a deal that will be beneficial for both of us.

“How about this, I’ll do such a good job on this first one at a very good price, that you’ll come back for the second one, and we can talk discount on the next job.”

This way you are letting them know that you value repeat customers, but you’ll provide them that value when they fulfil their promise.

Too often, very well meaning potential customers offer us the sun,moon and stars– that is they’re offering us plenty work in the future. Too often, this future work never pans out.

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This was for an order I had for 100 cupcakes

 

 

 

 

If working with other vendors is something you want to start venturing in, then by all means go for it. It can be a very profitable market –  just remember that they are not working for free or cheap so neither should you. It should be a mutually beneficial relationship. 

MOST important of all, make sure you’ve got the same target market as they do. If they do not have the same customer base as you …don’t align with them.

Align with companies and vendors that share your values, share your demographic, and share the understanding that this needs to be a win/win relationship, not an opportunity for them to exploit you. You are not the cheap cake lady.

 


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About Me:

Hello, my name is Rotimicakelady and I am a cake business coach that teaches cake business owners how to grow and have a profitable cake business so that they have a constant stream of customers buying their delicious treats.

I have been running my own successful home based cake business for some years now. I have also been teaching bakers through my online courses who are struggling with low sales, with strategies on how to market, and price their cakes for profit.

In addition I am also run a Facebook Group where I coach, offer support and help bakers in their businesses.

I have helped over 50 bakers through my online course A comprehensive guide to starting your cake business in 30 days’ with much needed information on how to start a cake business in Nigeria. I also teach close to 4000 cake enthusiasts through my Facebook Group how to run a money making cake business.

I have been featured in ‘Naija Top Baker’ magazine, one of Nigeria’s foremost cake magaz

How I Made N100,000 For One Cake Order

This past week I have been so busy with cake orders. I had to do a massive 3 tier cake and some birthday cakes.

The 3 tier cake was a bit of a challenge for me. I don’t really like doing tiered cakes, so that is why I do not do wedding cakes. The cake required an array of flowers and I did enjoy making them.

There is nothing like having some quirt time after the kids have gone to bed, watching TV

And making sugar roses and peonies.

I was alright till it came to stacking the cakes. I was not sure how many dowels I needed or whether the dowels I used were enough. Anyway managed to stack the cakes, but the next day, I noticed the top tier was leaning over. Complete nightmare. I managed to shock it, and then it came time to deliver the cake to the venue. It was like if I was carrying a new born baby. My heart did not stop beating till the cake was safely at on the cake stand in the event.

Well the cake held up and the celebrant loved the cake. I kept thinking why was I so worried.

But that is the life of a baker. It is our craft and we feel a personal connection for every cake we make.

Here is a pic of the cake and I was paid N100,000 for the cake. So I bought a new mixer with the proceeds. Not bad at all!

 

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So how much do you think you would have charged for this Cake.

If you said anything less than N50,000, then you need to read this Pricing formula desperately.

Here is how you should price your Cakes.

It is a simple formula;

 (Labour + Ingredients Costs + Sundry Costs + Utility Costs) x Profit = Total Cake Price

Step 1: Labour/ designer fee

Step 1 is labour, often the undercharged part of the cake pricing formula. When you know you are being paid something good then you making a cake becomes more enjoyable. But if you aren’t getting any good money,then it can be like a chore.
You do not want to work for nothing

To help you gain a control on the labour aspect, make a note of what you honestly want your hourly rate to be. Then increase it by 20%. This will be your hourly rate. Next start to monitor how long each type of cake takes to create. Record everything, from the initial enquiry, to the mixing, baking, cooling, cleaning, decorating, shopping, delivery, stacking, etc.

Step 2: Cost of Ingredients

I know this can be quite time consuming part. It is important to know the
price of each cake so make sure you calculate every batch. And remember to cost out every single recipe and recipe variation you work with.

Step 3: Sundry Costs or Extra Costs

Similar to step 3 this is fairly simple to cost, and again. Sundry costs, are things like cake boards, boxes, ribbons, dowels, etc.

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Step 4: Utility Costs

I know calculating Utility costs are a little trickier to calculate as you have to look into your utility bills or think of an estimate or figure to cover your utility.

If you get bills and want to be very accurate. Find your gas, water and electric bill then
calculate the total yearly costs.

You can then calculate your daily or hourly costs.

Daily Costs = Yearly total divided by 365 days

Hourly Costs = Yearly total divided by 8760 hours in
a year

This is how you can calculate the utility costs  per day or per hour (whichever you prefer).

Step 5: Profit

If you want to grow your business this is the most important part.

So so far if you follow the process until this step you will be paying yourself a salary, covering your costs and not losing money. If you add this part this is where you will see your business grow. The profit will allow your business to grow without you sacrificing how much you will make.

The profit is money that you can invest back into your business. So that you can afford that shop you want, buy new cake equipment, create a website, buy flyers, generally market your business, and outsource your bookkeeping, admin, etc.

Do not overlook this step. How much profit you add to your cake pricing formula is your choice. But aim for at least somewhere between 30% – 60%.

 

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Step 6: The Total Price

The final step is calculating all the steps.

(Labour/designer fee+ Cost of Ingredients + Sundry Costs + Utility
Costs) x Profit = Total Cake Price

For example,

Bose of Bose Cakes and Bakes has an order for  a 10 inch fondant vanilla birthday cake with small piping  and a few fondant roses on an iced cake board in a box.

Let get calculating:

Labour/your designer fee – N1,000 x 5 hours = N5000

Ingredients Costs = N2000

Sundry Costs = N600

Utility Costs = N450

Profit x 30%

The Formula (N5000+ N2000+ N600+ N450) x 30% = N10,465
Therefore the total price of Bose’s cake to the customer is N10,465

So this is the pricing formula  you can use to price your cakes and you can tweak it how ever you want. So no more undercharging for your cakes, you are a professional and should be paid as such.


 

me 6Rotimicakelady is your personal cake fairy. She is a cake business consultant and Coach.

She runs the Cake Business Owners Club 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, so you make more money. Rotimicakelady is passionate about Cakes, business and making money.