price for profit

Wondering How To Price Your Cakes? Let Me Show You How

I decided to repost this article that i posted some time back on how to price your cakes. You have to realize that once you get your pricing sorted you can now move and pay attention to other important aspects of your cake business like marketing.

Another reason why you need to price and cost properly is that you will determine the profit your business makes and you can now know where to reduce costs and when you can give discounts without you losing money

Here are the basics so you can make a start on pricing your cakes for profit.


 

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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

REGISTER FOR THE MASTERCLASS HERE


 

1: Labour costs

Step 1 is labour, often the undercharged part of the cake pricing formula. However, when you know you are being paid a decent salary then you making a cake becomes more enjoyable.

But if you aren’t getting any good wage, then it can be like a chore or a job and you will feel demotivated. 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. This can be anywhere from N500 – N5,000 an hour. It all depends on you, your skill level, years of experience.

If you are just starting out, you may charge N400- N1,000 an hour, When you start getting better in your skill level, you can increase your hourly rate to maybe N1,500 or N3,000 an hour.

So now that you know your hourly rate. Next start to monitor how long each type of cake takes to create. Record everything, from the initial enquiry, shopping to the mixing, baking, cooling, cleaning, decorating, delivery, set up, etc.

So if it takes you 3 hours to do a vanilla cake and your hourly rate is N1,000 an hour, then your labour wage/salary is N3,000.

Do this for every cake you do and make a note of it, then you will have a record of what to charge for the cakes you sell.

 

ri74

REGISTER FOR THE MASTERCLASS HERE

2: Cost of Ingredients

I know this can be quite time consuming part.  If you are making cupcakes or small individual cakes it is important to know the price of one so make sure you calculate every batch.

So when you are shopping for ingredients, take note how much the eggs, flour, butter, margarine, etc costs.


 

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REGISTER FOR THE MASTERCLASS HERE


3: Sundry Costs or Extra Costs

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

 

ri75

REGISTER FOR THE MASTERCLASS HERE

4: Utility Costs

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

But how many of us have time for this, again if this is too much trouble, just come up with an estimate amount.

ri76

REGISTER FOR THE MASTERCLASS HERE

 

5: Profit

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.

How much profit you add to your cake price is your choice. But aim for at least somewhere between 15% – 60% profit.

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REGISTER FOR THE MASTERCLASS HERE

 

6: The Total Price

The final step is calculating steps 1 – 6

(Labour + Cost of Ingredients + Sundry Costs + Utility

Costs) x Profit = Total Cake Price

 

Practical Example,

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

Bose starts calculating:

Labour – 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 Bose will quote to the customer is N10,465.

So this is a simple method I recommend you use to price your cakes. Once you have mastered this Formula, you can change and adapt it from time to time.

Will love to hear from you. How do you currently price your cakes? How has it worked for you s far? Comment below please.


REGISTER FOR THE MASTERCLASS HERE

pricing masterclass 2.jpg

 

Registration for the   Pricing your Cakes Right to Build a Money Making Cake Business Masterclass is officially now OPEN.

Enrol for the ‘Pricing your Cakes Right to Build a Money Making Cake Business’ Masterclass here.

This Masterclass is an absolute must for those bakers that want to build a sustaining business, that is, you want your business to continue making money, and I mean profits year after year.

You need to know how to run a business, and I mean a profitable one.

 

You can be the best baker in the world, but this business is an overcrowded market and if you are not able to stand out. You will just be lost in the crowd and just continue to be a small business making just enough money.

 

I know you want more than that.

 

Don’t you want to be extraordinary?

 

You too can be like them and even surpass them. But you’ve got to know what to do. And I am doing this in this Masterclasss.

 

Don’t you want to have a regular inflow of profit coming in each month in your cake business?

 REGISTER FOR THE MASTERCLASS HERE


 

me16

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.

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.

cake 6

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.

 


pricing image

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.


me16

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.

The Door to your Business Success has been Unlocked[Gain Access Here]

r72.jpg

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, the 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.

r70.jpg

 

(This is the 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, I am developing a Course called How to price your Cakes for profit (I may change the name later) of how you never have to worry about pricing for your cake business. I will reveal the strategies that have worked for me that will get customers to pay the price you want for their Cakes.

By God’s grace the Course will be launched in April; so to be on the waiting list just click here 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 Register today and I will talk to you next week.

I would also love to hear about your pricing  woes, so just comment below

Could you do me a favour?

Could you just take some time out to  fill out this Survey.  It is about Pricing. I really want to know your challenges so i can address them in the Course.

It won’t take you long (just 4mins).

Just click here to fill the Survey

I really appreciate it

Take Care and Happy Caking.


me3

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.