Wednesday, March 15, 2017

The Worst Business Advice I Ever Heard

If you're in the business of selling cakes, you're going to get a lot of advice from people who don't know what they're talking about. Frighteningly, some of them will also be in the business of selling cakes too.

I was thinking about what the worst advice I'd heard was, and it all came back to pricing.

The first bad advice is to take the cost of your ingredients and multiply it times three to get your selling price. No, just no. That won't give you enough profit to maintain a business.

The second part to this is to price low to start with because "You're just starting out." No. You don't need to price at the top of the range in your area, but if you're good enough to sell cakes, you should be charging the correct amount. It's a really bad idea to gather a client base that wants to underpay, then try to raise prices later.

The third part to this is the idea that everyone "deserves" a custom cake, so you should sell them for cheap. No, they don't. A custom cake is a luxury item, not a right. You'll end up being the cheap cake lady who burns out from being overworked if you try to give everyone more than they want to pay for.

If you see yourself in any of these three pieces of advice, go get my pricing guide and force yourself to take a hard look at your process. Go through the worksheets and do the math to figure out how much you should be charging, then stick with it. Don't fall for bad advice, do the math and figure it out the right way.



Kara Buntin owns A Cake To Remember LLC,  online cake supplies at  www.acaketoremember.com and www.acaketoremember.etsy.com

1 comment:

Colleen Charles said...

Part of my business is Gourmet Cheesecakes..starting at $4 per slice plain....3lbs of cream cheese in a 10"...anyway people will go out to a restaurant and plunk down $6 for a slice of frozen cheesecake and have a cow when I give them my price. I use to explain : my cheesecakes have blah blah. Now....that's my price. I took a half a day last week to go through and check out my pricing for them and I'm right on the button. When I took Wilton classes that was there method price and triple it or I remember my instructor saying just start low and gradually increase. NOT