When it comes to properly pricing your cakes it can be tricky. And it can bring up a lot of stuff – especially within your mindset. Throughout my cake business journey I’ve found that there are 3 main areas with money mindset that come up: practical problems, emotional blocks and societal influences.
In this mini series I'll be look at each of these three areas, looking at common blocks and how to can start dealing with them.
So let's take a look at the more practical side of things and how you can start getting your pricing in order.
And I'll start with a story. So if you're sitting comfortably....
Once upon a time we all needed cars to get around. If I didn’t need a car for, you know, life, I wouldn’t have one. I’d be happy walking or peddling about on my bike. (It’s super cute – it has a basket!)
I find car stuff really triggering. I feel like car things always pop up during times of general money stress. You’ve got a bit on your mind and then your car starts making a funny noise or a light comes on that you probably shoudn’t ignore.
But you ignore it for a little while because probably it's going to end up being bloomin’ expensive! And somehow this always sends my down a spiral of being a failure at life/business, etc.
Overdramatic, much?
But on one particular occasion my husband’s car broke. And we couldn't really ignore it because it wouldn't start.
We went through the whole rigmarole of getting it picked up and taken to a garage and assumed everything would be sorted after that.
But it wasn't; the car was basically a write off. Engine stuff. It was going to cost more to fix than the car was worth.
Normally, this is where I would have spiralled but instead I felt something else altogether...
Anger
Not at the car but at myself.
I was angry at myself for not running a business that could offer the security of just being able to go out and get a new car.
Or to fix something in the house if it broke.
How good would it feel for that to not be an issue? To be able to say – fine, life happens. Best go car shopping, or whatever.
It lit a fire under me. There is no reason that shouldn’t be my reality. It’s the reality for other people. The people who have the 9 to 5 jobs and the annual salaries. Why can’t it be the same for someone who works damn hard running their own business?
In that moment I gave myself a bit of some talking to and some tough love and it really helped me to see things from a different perspective.
So let's remind ourselves of what we need to hear in order to run a more profitable and stable business:
1. YOU NEED TO MAKE MONEY ON YOUR CAKES
First things first! Putting to one side the idea that it’s nice to make money, you need money to live. That’s just facts. And if your business isn’t allowing you to do that then it’s not working. As we’ve said above you wouldn’t go to work for someone else and not expect to be paid a wage that you can live off. Why should you expect anything less from yourself when you are probably working twice as many hours!
What to do
Do your sums – yep, boring!
But you have to do the maths. Work out how much you want to earn and use that to figure out what your hourly rate needs to be.
If you have a little Google you can find a formula for working this out – you start with your ideal annual wage, how many weeks you would like to work and how many cakes you would like to do a week and go from there.
If you do this and find that your current pricing is nowhere near what you should be charging, don’t panic! You know now and that’s a great start! Start by increasing your prices a bit and see how it feels. Then 6 months down the line, increase it again.
2. YOUR REASONS FOR YOUR PRICING ARE YOUR OWN AND ARE VALID
We’ve all heard the catchy song by @woahdudedesigns on TikTok or Instgram: “it costs that much ‘coz it take me … hours…”
And yeah, it blooming does.
But it also costs that much because that’s how much it costs. It costs that much because after you have done all the sums you have come to a price that is aligned with how you want to run your business and live your life and that is that.
Your prices don’t need any explanation.
There may come a time when they're challenged when people don’t understand what goes into your work - like the person who says that they’ll just buy all the stuff for you and you can just do the cake. But they aren't your customer and you need to make sure they don’t get into your head!
You don’t need to share your pricing methods and reasoning with anyone.
What to do
Make a list of the reasons why you want to make money. Yes, list down all those life reasons but what else? Do you want to be able to take your family on holiday? Do you want to save up for something? Do you want to be able to go and have breakfast in your local independent café once a week? Do you want give regular donations to a charity close to your heart?
All of those are valid reasons. And good ones too.
If you're making money you can put it back into other small businesses and the local (and wider) economy – everyone wins. You’re basically doing it for the greater good. What a hero!
Or maybe you only want to make 1 cake a week so that cake comes with a certain price tag. Well fine! Do your thing!
3. YOU ARE NOT RESPONSIBLE FOR SOMEONE’S BUDGET
Ever priced up your cake and then freaked out that someone wouldn’t pay that and dropped the price?
Yep, me too!
And you know what? Some people might freak out at your prices – you can’t please everyone – but the thing to remember here is that that is none of your concern. You are not responsible for determining what someone is willing to pay or not.
Yes, you can be helpful and offer them alternatives within their budget – but only if you have ways to do that – e.g. maybe they will be happy with a smaller cake or less decoration. It’s up to you if you are happy to give people options (that still fit within your pricing framework) but if you can’t they’re not your customer.
That's not their fault and it's not your fault. It just is.
What to do
Make your prices easily accessible – as in make them easy to find. Let’s not be shy here!
Have a page for them on your website and make sure potential clients know to go there. That way they can make their own decisions without any awkwardness and without anyone wasting anyone’s time.
If you don’t have a website, make sure you are upfront about your prices. When people ask for availability and want to discuss ideas, give them a price quote too.
Seems obvious but I know how easy it is to put off the pricing side of things. A number of times I've only given there price before collection and doing it in that moment brings up the fear that they won’t want it if I actually tell them the price so I drop it down to be ‘safe.’ I do not recommend this method to anyone! Be up front (and proud) of your prices.
This all takes practice. And there will be slip ups but don’t get disheartened. Just pick yourself back up, remember your system and your whys, and try again next time.
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If you are struggling with your cake pricing and your mindset, I have created a Pricing Guide + Pricing Spreadsheet, which you can find in my online shop. The guide covers the practicalities of pricing, as well as some mindset work. And the spreadsheet helps you confidently and consistently price your cakes.
I’d love to hear if you have any thoughts – have you had to learn any tough money lessons? Or do you have a fab money mindset tip you would love to share? Comment below or get in touch on social media!
And don’t forget to come back for part 2 when we’ll be chatting about those emotional money blocks.
See you then,
Vicky
Business photos created by freepik - https://www.freepik.com/photos/business