Cake! magazine by Australian Cake Decorating Network August 2014 | Page 64

Business Basics Louise Vansleve is the Founder of Learn Cake Decorating Online and Cake! magazine's regular Business Basics contributor. This issue Louise is covering the hot topic of PRICING... Oh this must be the bane of the cake decorators’ life! One of the most commonly discussed topics on blogs and forums around the world is pricing. Second only to perhaps ganache! Rather than tell you what you should be charging for your cakes, I am going to give you a formula, so you can work out a price based on your own costs and market. After all, there are huge variances across the world. One of the biggest problems in pricing cakes is that we undervalue ourselves. Just because your business is relatively new, does not mean you are not paying the same electricity and raw ingredient prices than the cake decorator in the next suburb.Selling cheap cakes, devalues not only you but also every cake decorator out there who is trying to make a living. I find it amazing that people will sell cakes and not take into account the labour involved! I hear stories constantly of people selling cakes for only a few dollars more than what it cost them to buy the ingredients! That, my friends, is not a sustainable business. It may be tempting to sell cakes cheaply when you are starting out, as you may have only done a few novelty cakes or a few classes. Don’t worry, this is an issue for all decorators just starting out. And its a tricky one. Firstly, don’t just work for free! Even if you don’t think your work is worth charging for just yet, you have still paid for ingredients, your tools, your electricity and importantly your time! A good way to tackle this is to advertise a limited time “portfolio building” pricing package. Make sure you advertise it and invoice the client with the prices you are aiming to get once you are more established. Show a discount given on the invoice, so the client knows the true value of the work. This strategy is often employed by more experienced decorators who, dying to try out a new technique but knowing the client has a limited budget, may offer to do the cake within budget because they would rather be paid something for trying out a new technique than doing it in their spare time for free! Just know when to stop. It’s ok to do this occasionally or when you are at the portfolio building stage, but you will soon be out of business if you do it too often! Secondly, its ok to say no. Actually, start practicing this...on your kids, husbands and clients. It gets easier I promise you. Just remember if you asked, the client to go into their office for a day for free, they probably wouldn’t hesitate to pull out the ‘n’ word! An option is to offer additional free product with your regular pricing. For example with a $200 cake, you may offer 12 matching cupcakes. Now these cupcakes may have a sale value of $5 each or $60 for 12 but are going to cost you about $20-30 dollars to make. Therefore rather than offering the client a 30% discount that will cost you $60, you will be costing yourself $20-$30 and protecting your future business. Wedding cakes are a little harder. You may find that you have some friends getting married and you may offer to create their cake at a reduced rate. However if your cake making skills are up to standard and you are confident in your ability to produce a high quality cake, I do not recommend ever discounting a wedding cake. The time that you invest in your cakes and the stress (yes getting a cake out the door and to the venue in one piece has caused more than one decorator to break out in a sweat) simply is not worth taking a discount to.