Working from home running a cake business is often the choice of those who are trying to juggle having a family with needing to earn a living and pay the bills. It often starts out as a hobby and progresses into doing cakes for friends and family and spirals from there.
The one main gripe from those who start home based cake businesses is that they don’t earn enough money or that they earn enough money, but are working very long hours to get it.
This is most often down to a lack of experience in business and pricing. It is however something you can learn and change so that you are soon making the cakes you love and turning a profit whilst working from home.
1. Get your product range right, making cakes in every size, style and flavour will never make anyone rich. You’re spreading yourself thinly, needing copious amounts of stock and tools and will be exhausted before you’ve even broke even.
Instead choose a small range of cakes you will offer, for example if you have a core range of three products, you will have something to suit all clients. This doesn’t have to be restrictive at all but it does help you plan your time better.
An example of this is Cupcakes either boxed or in a cupcake bouquet for the lower end of your pricing, then celebration cakes in standard shapes and from 10-100 servings, finally your bespoke range which can be anything from your carved cakes to wedding cakes.
The boxes and bouquets of cupcakes are an item that is from £20 and under £50 and is suitable for both a gift or smaller gatherings like a family meal for a birthday. The mid range celebration cakes are from £60 for a 6” upwards, these are cakes for bigger celebrations like a party or significant birthday. Then finally your bespoke range is where your prices aren’t fixed as they are based on the hours that the cake will take you and the skill you will need to devote to it.
By having these distinct tiers of product your client will never be scared off by your pricing and if they would like a bespoke cake but haven’t got the budget then you have your celebration range to suit their needs and budget.
2. Don’t get out of depth with your designs. What I mean by this is, as a cake designer we’re naturally creative and we enjoy making things look fabulous. What we often forget is whilst we’re thinking that the handbag cake we’ve just spent 8 hours on would look lovely with a Louboutin shoe next to it, we forget that that is adding on more time which we won’t necessarily have been paid for.
One suggestion I always make is that when a client approaches you with a request for a cake, get an idea of a rough budget, how many they need to serve and the theme they’d like. Then go away and do a detailed quote for them with three options of a cake for them. A budget option , less detail on the cake, outline everything that will be included. Then a second option which is bang on the money, the right amount of detail to create the theme and the price to warrant your time spent. Then finally detail an all singing all dancing cake for them with the cake fully themed and put the price that covers the time it will take you. This is often outside their budget but don’t be afraid to give this price.
Quite often when you give a quote like this the customer appreciates it as they then have a choice and they can go with head or heart as to which design they decide on. Most often they will go for the mid range one and this is good as for once you’re not going to spend excess time making decorations you’re not getting paid to do. Sometimes however the client will see the cake they want is that all singing all dancing one and realise that it’s expensive for a reason and choose that one.
The good thing is you’ve put the choice in their hands. It’s a bit like when we go shopping ourselves for an item of clothing, let’s say Jeans. If you go shopping for them you know there will be a budget range in a supermarket clothing area, Levi’s in a department store and designers at the top of your budget. Because you have that choice you are able to happily decide without pressure which ones you’d prefer. It’s the same with your business, you are fulfilling the client’s needs without the pressure on you or them to either pay more than they wanted or work harder than you wanted to without being paid right. It’s win win!
3. You need a core product that’s your bread and butter of the business. Something that’s not going to drain your time, but that is going to bring you a good wage into the business. For me this was when I started making my cupcake bouquets. They take around 2 hours to make including the baking and they are inexpensive to produce too. The good thing with the bouquets is that they are both a gift item and a celebration cake display so they cover two different markets well. When people were looking to send someone a gift they would choose them as they have an impressive impact on delivery. When a client’s planning a meal for someone’s birthday these work well as you can have from 7 in a bouquet and they would always come in under £50.
The good thing about them for you as a business is that they are speedy to make, very little outlay and they sell for a good price.
To give you an example, for a 6” cake to serve 12 in a pretty floral shabby chic theme I would charge £65. It would take me around 6-8 hours to make from scratch and the profit on this cake would be approx £40
A bouquet of 12 cupcakes takes under 2 hours from scratch to make, costs no more than £7.50 to produce and sells for £37.50 making you a profit of £30.
You could make 3 bouquets in the time it takes you to make that one cake, netting you around £60. If you’re savvy with your planning you can do this quicker and for slightly less cost too making your profits even better.
Your client is happy as they have either a gift or showpiece display of cupcakes and you’ll have more time to move on to other orders or spend with your family. This sort of product is what I call a bread and butter product. It will be the day to day item that comes in time and time again.
I hope this helps you, if you'd like to learn more about the cupcake bouquets you can do so here.