how to set prices

How To Price Your Cakes Better

When I first started my cake business some years back, I had no business knowledge. I had no business plan, did not know what to charge for my cakes and was just going through the flow.

All I had was a passion for baking and a dream. I knew I wanted to sell cakes so I could give my children a good life.

So I started my business and it showed me pepper. Lol.

Not only did I have to learn a lot of things for myself, I was the baker, answering emails and inquiries, marketing manager, administrative manager, delivery person, shopper. I would work from early morning to late at night.

One of the reason I stated the business was that I wanted to spend more time with my children, but I was still working long hours and hardly seeing them even though we were in the same house.

I was working myself to the bone and I was still not making money. By the time I bought ingredients, groceries, petrol, paid my nanny’s salary, school provisions, my money was gone.

I was like what was the use. I might as well as stayed being a lawyer and collected my salary at the end of the month instead of killing myself with flour and butter.
So why wasn’t I making money?

Reason– I was charging too small. I was so scared of pricing my cake at a high price. You could say I was the cheapcakelady. Customers used to bully me about quoting a lower price and I will succumb.

I was so not confident in pricing my cakes that I would ask the customers if the price was ok.

I remember doing a lovely buttercream big 12 inch lemon cake ( I even used real lemons, -foreign ones, you can imagine how much they cost) with lots of intricate roses on it that took me like 2 days just to do all the roses and you know what they paid- N7,000.

I am so embarrassed about it now. I used my own money to fund their cake.
But really I was my fault. I accepted that price from them.

I didn’t think I was good enough so that was why I charged very low for my cakes. I was not bold enough to voice my worth to my customers so they dictated my worth for me.

This should not be so.

I felt like quitting a lot of times. But I had no choice but to keep at it. I mean I had nowhere to go. What will I do for money?

A famous quote by Eleanor Roosevelt says that ‘No one can make you feel inferior without your consent’.

I was allowing others to direct things for me, because I was so afraid of losing the order.

Eventually I had to overcome this and be more confident in my pricing. I put up certain structures in place and made sure that a customer would not be able to price me down. I stopped being pressurized to give a price to the customer at the spot- I will get back to them.

I was able to quote and price confidently and with a purpose to secure the order.
And you know what; I hardly had a customer that didn’t place the order. Infact I think it was only 2 customers last year that did not get back to me.

So there is a way for you to quote any price to a customer and get that booking.
If you are like how I was, please don’t despair, the ‘Pricing your cakes right to build a money making cake business’ masterclass is starting this week,

I will reveal the strategies that have worked for me that will get customers to pay the price you want for their Cakes.

I will be relaunching this course soon; so to be on the waiting list just register below with your email address and you will be informed first hand when it is ready.

You will no longer be known as the cheapcakelady but the ultimate cake queen.

So now let me give you 10 strategies to help you price your cakes better:

Pricing Tip #1

Adopt a pricing strategy

There are various strategies you can adopt to price your cakes. Once you have worked out the labour and costing involved you would group certain types of cakes together and come up with an average price. For example you can have a 3 tier pricing strategy. Where you have a 3 price options for any customer depending on their budget. Where you have a low, middle and high priced option.

I will be teaching  different pricing strategies in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

Pricing Tip #2

Determine you profit percentage

Determine how much profit you want to make. This is a vital step to add if you want to grow your business. What type of profit do you want your cakes to have? 2.5%, 5%, 10%, 40% or more? There is no right or wrong answer. Start with a number that is comfortable for you and build it from there. The important thing is to have a profit percentage

 For home cake businesses I would suggest aim for 30-50% profit margins

I will be teaching exactly how to work out your profit margins in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

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Pricing Tip #3

Work out the cost of Ingredients, Supplies and Utilities

Record how much it costs to make each type of cake you make. How much do your ingredients and supplies cost? How much does the gas, water, electricity do you use when making each cake? Do not guess. Everything counts. Work out the exact costs for each type of cake you make.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

Pricing Tip #4

Research your competitors.

Research your competitors and see how much they charge for the type of cakes you make. Once you do, choose a price in the middle of the range.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass.See all what you will get in this Masterclass.

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Pricing Tip #5

Work out the timing

In order to price your cakes effectively you need to know in detail how long each cake takes to make from start to finish. Without understanding this aspect you will be literally be saying a price for your cakes out of the air!  So make a note of everything. Do not guess! Record everything. From how long it takes you to mix, bake and decorating the cake, to washing up, invoicing for the order, answering enquires, shopping for the ingredients and more. Everything you do to make your cake, make sure you record the time it takes.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

Pricing Tip #6

When should you raise your prices?

The time to raise your prices is when: #1 – you are not making any money or your costs are not being covered.

Learn when and how to raise your prices in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

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Pricing Tip #7

Decide how much you want to pay yourself

Next decide how much you want your rate is per hour then work out it out.  Do you want to work for N500 an hour or do you want to work for N2,000 per hour. There is no right or wrong answer. Each business, wants and needs are individual to the business owner.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

Pricing Tip #8

Figure out how much you want to earn

Write down how much you want to earn from your cake business each month or in a year. Then start incorporating that figure into your cake prices. 

For instance if you want to earn N50,000 this month, you just have to sell 5 Nos. N10,000 cakes. 

Learn more in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

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Pricing Tip #9

Survey potential customers

What is the general budget for your potential customers to pay for your cakes? You need to have an idea what your ideal customer will happily pay to buy a cake. If you find out that most of the people want cheaper cakes, don’t just drop your prices yet, maybe you should widen your search and look for those customers that can pay the price you want for your cakes.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass.See all what you will get in this Masterclass.

Pricing Tip #10

Decide the pricing bracket you want to belong

Decide which pricing bracket you want your cake business to belong to. Want to be in the low or high end priced group. For the low end group, your customers will be family and friends, wholesale, food stalls.

For the high end price group, these will be big birthday celebrations and weddings.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass.See all what you will get in this Masterclass.

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Pricing Tip #11

Follow up

If a customer doesn’t call back, don’t just think they are not interested. People forget. So you should take the initiative and contact the customer back and ask if they want to go ahead with the order. Don’t feel bad if they say no. When you continue following up eventually you will get a yes from a customer.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass.See all what you will get in this Masterclass.

Pricing Tip #12

Calculate Method

Do this for each type of cake you create.

    • Take the timings it takes to make this cake from start to finish (include everything!) then multiply this with your hourly rate.
    • Calculate the cost of the ingredients, supplies and utilities. Add this number to the number above.
    • Then work out your profit percentage.
    • Add the profit percentage to your ingredients, supplies, utilities and labour total.
    • You now have the price for this cake.

Learn more in the Pricing your cakes right to build a money making cake business Masterclass. See all what you will get in this Masterclass.

 


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This month register for the Pricing The Cakes Right To Build A Money Making Cake Business.

Pricing The Cakes Right To Build A Money Making Cake Business is created for bakers so that they can achieve their cake business dreams of building a moneymaking cake business.

In this Masterclass you will learn:

  • How to gain confidence in pricing and selling;
  • How to market to the right customers;
  • How to price cakes easily without stress;
  • Customers relations: How to deal with customers so they accept your price always;
  • Systems you should put in place to grow your cake business

If you are interested in this Course (which i highly recommend you do) and want to be a part of it, just send me an email at cakelady@bakingbusinessschool.com.ng requesting for payment details.

Or you can just fill in the below form and I will get back to you with details of the Masterclass:

Classes start as soon as you make payment, so don’t delay.


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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 magazines and also been a Guest Speaker at the Bakery World Convention.

If you are struggling with getting customers for their cakes, I can help you solve this problem by showing you how to market, sell, price, plan, structure and brand your business so you are constantly selling to the right people who want your cakes.

 

The Baking Business School, Rotimicakelady, Get better results in your cake business

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We All Need Help Once In A While

For the last few weeks I have been so busy working on the Price Your Cakes right for profit Video Course. Recording videos, research, writing content,  doing the presentation slides, marketing on social media and also on.

So I didn’t have much of an Easter break or holiday when the children vacated for Easter. In fact the past 2 weeks have been something else. The children were on holiday and my nanny decided to take some time of. And on top of that, my temporary nanny was ill so it was just the kids and I. Plus I had to prepare for this Course.

I’m wondering how mothers handle childcare without any help. I have to clap for them. By the end of the week, lets just say i was exhausted. From bathing them in the morning and night, taking them to the toilet, cooking, feeding, entertaining them, cleaning up after them. Goodness, even nannies try.

I thank God I am fortunate enough to afford having a Nanny for my kids. I will be the first to admit that i don’t think i can do it all by myself day after day.

Although it was enjoyable the first 2 days. the kids loved that i was around with them doing their daily tasks. They know that when Mama is working they are not to enter the invisible door of her office (i have a small desk in one corner of my house, where i do my work).

So we have got to realise that we need a little help once in a while and there is nothing wrong with admitting that you do need help either at home, in your business and so on. That is why i have released 3 Pricing videos to help you if you have trouble pricing your cakes right.

I will also be doing  a webinar tomorrow on how you can increase your cake prices without losing customers (more details below).

At the end of the Webinar I will be opening registration for this Ultimate Course, which will cover what you need to have a money making cake business. 

So join me for the Webinar tomorrow and register for the Course. I will talk more about it in the Webinar tomorrow. Don’t miss it. It is at 6pm tomorrow. Once you register, the link for your Webinar shall be sent to you by email.

And by God’s Grace, when I make my income target for my Courses, I am going to give my nanny a raise. She sure deserves it.

For those who went through the Pricing Workshop with me, i say thanks.

I know you have gained loads of valuable information and you are on your way to being more confident in pricing your cakes.

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For those who missed out, here is again a summary of what we covered:

Workshop Video 1 (Part 1) & (Part 2)in this video we looked at the reasons why you are struggling with pricing your cake right and ways to overcome them so that you can price your baked goods properly.

Workshop Video 2Here I provided you easy to implement pricing techniques to get you started being the Pricing Queen.

Workshop Video 3 In this awesome video I showed you how to can get customers to accept the price you give them, no matter what.

If I do say so myself I think these Workshops were worth it.

But I am not done yet, because I am awesome like that. I want to invite you for this amazing Webinar class that I will be doing. You can get all the information here,

In this Webinar I will be teaching you how you can increase your prices without losing your customers.

We all know that the present economy has made ingredients go up almost 100 fold and we can’t sustain our business if we are scared of increasing our prices because we don’t want our customers to go somewhere else.

Yes you need to get your pricing right, but you need to know how to gain the confidence and know how to increase your prices while keeping your customers.

This is a live class, so it will be starting at the certain time and ending to at a certain time.

It is going to be packed full of information so get ready to gain valuable benefit for your cake business.

The webinar is going to be held only once, so please don’t miss it. 

REGISTER HERE

Link to join the Webinar Class: https://zoom.us/j/590522169

Date: Tuesday, 25th April 2017

Time: 6pm

See you at the webinar!

Here are the Registration details for the Webinar once againHow to increase your prices without losing customers.

In the Webinar you will learn:

  • How to increase your prices without losing customers- so that you can stop losing money;
  • How to increase your prices without losing customers- so that you can stop losing money;
  • Tactics & Strategies to increase your prices;
  • How to  convey value so your customers readily accepts any price increase;
  • How to communicate an increase in prices to your customers so that they can keep coming back;
  • A proven template to send your  customers that will guarantee your next  booking;
  • How to turn an enquiry into a paying customer at the price you want without sounding desperate.

     Register for the Webinar here

I will talk more about this Class at the end of this Workshop Video.

This class fills up quickly so it is best you register early.

Registration has opened.

IMPORTANT. I will send you the link once the Registration for the webinar is ‘live’ and you  can get more information about it here.            

Register Here For This Free Webinar

Also don’t forget to register for my Messenger Bot Service. I want to be sending messages to you directly on Facebook Messenger, so that you do not miss anything from Cake Business Owners Club. All you have to do is to subscribe by clicking on this link below:

m.me/bakingbusinessschool 

Cake Regards,


me3Rotimicakelady 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.

Is it possible to make money selling cakes?

The Simple answer is YES. It is possible for you to start earning thousands of Naira in monthly revenue selling cakes.

 

Dear Caker,

Think about this.

 When you first started your cake business, what did you think it would be like?

  • making money from baking cakes all day long

  • I will be able to quit my 9-5 job;

  • I don’t have to be waking up early each morning, going through traffic and being in a job that I hate;

  • I will finally be able to spend more time with my children;

  • I can work from home;

  • I will be financially independent;

  • I don’t have to depend on my spouse or relations for money;

  • I can finally contribute financially to the household.

But once you made my decision, you soon realized that this cake business thing is a lot harder than you thought. It’s not a small thing at all.

 You started dealing with such things like:

  • Where are these customers?

  • I am not making any money

  • Why do I people don’t like paying for my cakes?

  • How do I price my cakes?

  • Ingredients are expensive so how and when should i increase my price?
  • How come Iyabo cake business is doing much better than me and i started before her?

  • Why am I not making any profit?

In fact you are just tired and fed up and feel like giving up and maybe going to find a job. At least i will be getting a salary each month.

But you know deep down that is not what you want really.

 Let me tell you a true story:

 When became a single mum, i know i had to make serious changes in my life. Even though I had a fairly good job, I realized that my humble salary was not enough to take care of me and my children needs.

 I had always had a passion for baking, so I decided to start selling cakes. My friends for a long time used to tell me that I should go into business selling cakes but I lacked the confidence to do it. When my children demands increased, it dawned on me that I needed a side hustle to supplement my income. I thought it would be a breeze selling cakes to the public. How wrong I was. I really struggled to make any sales. Even my friends hardly patronized me.

 I knew my cakes were good and of good quality, but still people were not buying. I felt like giving up and didn’t know how to market my cakes to make enough sales where I would be able to make serious money to enable me quit my 9-5 job and have more time to spend with my kids.

 I knew I needed a change, so I spent many a sleepless nights learning how to market my cake business to the right target .I experimented on different strategies and applied it to my business and knew what gave me optimum results and what didn’t.

 Almost a month later, I started getting results. My fellowship and orders started increasing steadily. I even had to enlist the help of some of my family members to help me with my orders. I  get hits on my website- Three Sisters Cake & Pie Company from other countries. I was also getting a lot of inquiries from my subscribers to give them advice on running a cake business. In fact I was becoming quite an expert in my field. And the best part in all of this is that I now have a steady stream of income coming in each month.

 So you may be asking what is the magical solution?

 The Baking Business School Courses are the magical solution you have been looking for!

 I help bakers and cake business owners through online courses have a super successful and profitable cake business in Nigeria

      Register for one of our Courses today


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Rotimicakelady 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.


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

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.

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  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.

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  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.

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  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.

 

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  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.

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  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.

 

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  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:

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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.

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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.

 

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  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)

Educating Customers About Your Cake Price

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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.

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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. 

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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.

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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’. 

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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,

Top 5 Mistakes New Cake Business Owners Make

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When I was complying materials for the Baking Business School. I observed some common mistakes made by new cake business owners. It’s one thing to be a skilled cake decorator, but it’s something quite different to be the owner of a successful cake business.

 
Making mistakes is part of life and it’s only by learning from those mistakes that we become better business owners. Having a cake business is about figuring things out as you go along, but knowing the common mistakes new baking business owners make is a good way to avoid them entirely.
 
                    ‘Remember you’re A Cake Business Owner, not a Cake Decorator
 
To thrive in the cake business world, you have to be a good marketer and be business-minded.
 
Here are a few of the most common mistakes in staring a cake business that you should try to avoid.
 

 #1: Undercharging For Your Time and Talent

Most of us started like this- you make a cake for a friend and suddenly everyone is telling you to go into business because your cakes are great. Then a friend asks you to make a cake for her child, gives you money and suddenly you’re in business. You have just conducted your first business transaction. Yay!
 
The thing you have to realize is that the moment you charge for a cake, you’ve moved from amateur to professional. This shift requires a change in thinking, especially when it comes to how you view the value of your time.
 
In most cases, selling your cakes means you’ve already made an investment in becoming a legally registered business. All that is needed is a simple change in perspective: from amateur to serious business. The rules are entirely different, and you need to think about things in a different way  – even if your cakes are not perfect and you only charged a few Naira for the cake.
 
If you are serious about your cake business and it’s not just “a side hustle”, you must think seriously about the cost of keeping your business open. With this change in perspective and a realistic valuation of your time, you can calculate accurate prices that reflect your work, effort and skills.
 

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#2: Working For Free

Even if you are new in the cake business, my advice is to always know what your cakes are worth, and refuse to negotiate below a certain price.

Making a cake for free in the hope of future orders means you won’t be in business for very long. If someone asks you to bake a cake for a very low price saying that your sacrifice will lead to more highly-paid opportunities in the future. Don’t do it! This is an insult to any baker and does a lot of damage to your business and the cake industry at large. You risk being known as a cheap cake maker who will negotiate at any price.

#3: Waiting for cake customers to just appear

 You’ve got the business cards, the cake equipment, the website and the logo, but no cake orders are coming in. New cake business owners forget that it’s not enough just to be a great baker; you’ve got to go out there and get customers. You need to market and get on social media to advertise your cake business. Word of mouth is good and helps bring in customers, but you can’t always rely on that.

#4: Not keeping track of your expenses

While you were still an amateur baker you never thought that such things as your cake equipment and ingredients were ‘expenses’. When you start selling your cakes as soon as you start, you should start keeping track of what you’re spending.
 
So keep track of the items you’re buying and note your expenses even if it’s just in a notebook and also keep your receipts. This exercise helps to keep a business mindset.

#5: Living in a Dream Fantasy

Running a professional cake business, is not so easy. Most cake business owners feel u will become a millionaire overnight just by baking cakes.
 
The reality is that the cake baking and decorating is only a small part of your business efforts.  The rest is selling, accounting, marketing, social media, customer service, ordering supplies, negotiating with customers and so on. Those business-related tasks are required in running your business so don’t ignore them. However, the good news  is that now when you’re doing those tasks, you’re and investing in your future cake business long-term success.
 

Other Business Mistakes worth noting include:

Worrying about the competition

As a new cake business owner, you need to know your competition, like what they charge and what products they sell. Knowing this is information is vital because it helps you make decisions.
 
However, if you’re spending the time comparing yourself to the competition online, complaining about other bakers doing better than you is a complete waste of your time. Spend that time marketing your business, developing new products, and surveying new and existing customers. Remember this is a business and you are doing this to make money doing what you love.

Setting Prices Without Knowing your total Cost of Goods Sold

Pricing is not discretionary. It is a calculated process. Costs includes all the direct costs necessary for making a sale such as ingredients, but not fixed costs such as internet, telephone, rent etc.
 
Take note that you should also include your time in calculating your costs. Your time is your most valuable asset and you need to charge for it.
Having determined the cost for any cake you sell, its good practice to mark that up at least 3 times or 50% to give a final retail price. Try and resist the temptation to reduce your prices for fear of not being able to make a sale.
 
To know more about pricing with pricing guides.  Register for the Start Your Cake Business in 7 days free Mini Course..
 

Failing to have Business Plan

I know! I know! this can be a hassle, but it is worth doing. When you’ve started your new cake business try to take a break and write a business plan.  Know this can be quite boring especially when you not only have to bake, but market, sell and so on. However, without a plan, you are unlikely to achieve long-term success. A business plan helps you plan your goals and tracks your progress.
 
It provides a continuous frame of reference for your cake business, defining your goals, and making you accountable.
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In conclusion, in the cake business, the easy part is the baking and decorating but the tricky part comes once you are actually in the business. Staying in business, and being successful at it, is most challenging thing you may have to face.
 
If you remember one thing, is that, this is your cake business and is not just about the baking, it’s about the business side of it too.
Happy Caking.
Talk to you next week.
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RotimiCakeLady