The question of when to raise your prices makes most cake bakers shudder a little.
You have to raise prices occasionally, because the cost of materials and your overhead is constantly going up.
Brides want a good deal, though, and if you raise your prices, you could end up sending clients to a competitor whose prices are lower. So people are reluctant to raise their prices a lot, and many people stay at the same price point for years out of fear of losing business.
Well, regardless of how much your cakes cost, there will always be someone cheaper. There will always be someone more expensive, too. And the argument about identifying and communicating why your product merits the prices that you charge comes into play.
Then if you do increase your pricing, how do you do it? Do you make a big announcement to warn people that your prices are going up? Do you ignore it and just go with the new price list after a certain date? Announcing it could either scare people away or make them more eager to book before prices go up. Ignoring it could alienate brides who come to you who are expecting one price point but get a higher one quoted to them for their cake.
I raise my prices periodically, and I don't make a big deal about it. I do try to put off price increases as much as I can, but if I left my pricing where it was when I first started doing cakes I'd be earning less than minimum wage at this point.
Not raising your prices often enough can result in burnout. You'll probably get resentful of the time that you put into cakes when the return isn't enough. That can make you want to just stop doing cakes all together.
In addition, many people who are either undercutters or who just don't charge enough go out of business after months of not earning enough to support themselves. A business is there to make money, not to run at a loss.
How do you handle price increases? Leave a comment below to weigh in.