What do I charge?
I am just starting a cake decorating and party tray kind of gig out of my home. It's based soley on word of mouth. Well, I've been asked to give a quote for a 5 year old's birthday party. I was asked to quote my prices for the cake, as well as a fruit, meat/cheese & veggie tray as well as a witch's brew pot filled with dry ice and punch and an adult cake. There will be 30-50 kids who will eat the airplane cake I design and make as well as the punch. The grown ups will be eating off the trays and sheet cake. I have no idea how to figure a price for all of this. I need serious help! I am going to go to the store and price out my cost for all of my supplies.........how do I know how to charge for my time and profit?
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9 Comments:
PS........there will be about 50 adults at the party. I forgot to mention that important number!
traceyllee at 4:39PM on 10/21/09
Call around to people who do this already for a living and pretend you're asking for the same service. Then you'll know what your local market rate for this kind of thing is. My wife is self-employed and used this very strategy to find local pricing conditions when we first moved here.
Garvey at 5:53PM on 10/21/09
Thank you Garvey. I will do that! I appreciate your advice so much!
traceyllee at 6:16PM on 10/21/09
In the restaurant world, food costs are generally around a quarter of the retail price, so that might give you a starting point. Keep in mind that they're not paying retail, which you will be, so you'll probably need to have a lower markup to be competitive.
Obviously, the decorated cake is a different structure - then you're billing more for time than ingredients.
cyberroo at 6:43PM on 10/21/09
Not sure if this helps any, but my neighborhood cupcake shop, A Cookie and a Cupcake (included the link so you can take a look at the style/FAQ and gauge from there), makes cakes and charges ~$40 fee for artwork and then $4/person. Also, they charge a ($100) deposit.
This is in Cleveland, where we have a low cost of living, if that makes any difference. Gasoline today is ~$3.65, eggs are $0.99 - $2.50/carton, organic milk is $2.40/half-gallon.
Cassaendra at 7:22PM on 10/21/09
Oops gasoline is $2.65/gallon, not $3.65. :P
Cassaendra at 7:23PM on 10/21/09
Is the cake airplane decorated or airplane shaped? Makes a huge difference. If you're making a shaped cake charge for your artistic ability as well as your time.
As a craftsman I always found that at the end of the year half my income went to expenses, even though my supplies were inexpensive. Even not advertising you'll be spending money on some equipment, electricity/gas/wear on your oven, etc. I also found that only half my time was spent making my craft. The rest went to buying supplies, setting up for shows, displaying in shows when I wasn't making inventory, time given to design, preparation, etc. This meant that I was only make 1/4 of what it seemed like I should be making if, for example, I could make a widget in an hour. If you figure you'll sell that widget for $10 you'll be making $2.50 an hour. I didn't exactly make per hour what I wanted to, but I also tried to avoid making $2.50 an hour. There are other advantages to working from your home and when you want to that may convince you to not count some of the time you really do spend, but don't cheat yourself, or so underbid your competition that you don't have the resources to build up your business over time.
lemonfair at 9:47AM on 10/22/09
@cassaendra - eggs at .99 sounds like a very good deal. At least 2.50 here. Gas is also 2.65 here.
lemonfair at 9:49AM on 10/22/09
I would also take into consideration the number of hours you're putting into this and the hourly rate you would like to be paid, plus the expense of all of the ingredients.
yayfood at 3:42PM on 10/22/09