Pay Yourself To Work For Yourself
The secret to making money in your baking business is to pay yourself. That sounds too easy, right? Well, thats it. Pay yourself.
The trick is that you have to calculate your payment into the cost of the product.
If you charge $50 for a cake, the price of the cake should include the wages you paid yourself AND a profit for your business. This is where the lightbulb turns on.
Too many times, the money comes in, but it doesnt end up in the wallet of the home business owner. It goes to overhead and operating expenses, the cost of running the business.
Sometimes home bakery owners cant figure out what is going wrong and why they arent making any money. It seems simple: make a product, sell it, make money. Business around the world works like that, right?
Required Materials And Supplies
Do you have the materials that you need to start this side business? Do you even know what you need?
You dont need to get a fancy new oven. However, you might need a few more bowls and baking pans if you dont already have enough in your kitchen.
Make sure that you have a good working knowledge of what supplies youll need to get started.
How I Got To This Point
I get a lot of emails from new bloggers asking me how I grew my blog overnight. The truth is, I didnt. My pictures and written content were embarrassing in the beginning and not nearly as developed compared to those who had been food blogging longer. I constantly compared my baby blog to the big leagues and often felt bad about myself. Why compare apples to oranges though? It inspired me to just KEEP working hard.
Ive been able to improve my photos, recipes, and content simply by of the amount of time I put into it. Learning, making mistakes, learning more, and always improving. Its the perfectionist in me. From this work, Ive been lucky to have my content featured all over social media.
Keep at it. Ask questions, read books , make mistakes, enjoy the process of doing something you love. My post about producing quality content and how to start a food blog are packed with more blogging advice!
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Get The Necessary Legal Documents You Need To Operate
The legal requirements for cupcake business vary slightly from country to country, states to states and even from cities to cities. So it is important to contact your local authority to know the legal requirements that you would need in order to open your own cupcake shop in your country.
These are some of the basic legal requirements needed before you can successfully start and run your own cupcake business / shop in the United States
- Business and liability insurance
- Franchise or Trademark License
Create A Pricing Spread Sheet
A costing sheet is easier to make that you think, and once its created, the file does all the hard work for you.
List Out Your Ingredients
I made a master sheet of every ingredient I buy for my cakes, ranging from butter to freeze-dried strawberry powder! After I made my ingredients list, I created a price column next to it.
Price of Each Ingredient
I then scoured my grocery store and receipts to figure outthe price of each ingredient.
But you dont need to know how much a container of salt is.You need to know much a tsp costs, or how much a cup of flour is! The nextcolumn I made shares a standard portion size for each ingredient.
For instance, I measure baking powder by the teaspoon, and brown sugar by the cup.
Calculate the Cost per Unit
This next step takes some time. You have to figure out howmany servings of each ingredient a container or bag has. For example, a smallbag of granulated sugar contains about 8 cups of sugar.
If youve made it this far, youre golden. You can now easily calculate the cost per unit of each ingredient, and link it your recipes!
Calculate the Cost for Your Most Popular Recipes
I made a tab for each of my most popular cake recipes, andthen calculated the cost of each of my batter and frosting flavors.
I know this is a ton of work, but its worth it. It alsohelps you know how much money youre actually making on each cake you sell.
Read Also: Mrs Fields Happy Birthday Cookie Cake
How To Make Money Selling Homemade Cookies
by Saeed – Last Updated June 11, 2015
Ive talked about a lot of ways to make money on this site, but weve rarely ever touched on the ages-old bake sale. If youve ever participated in one, you might not be surprised to hear that you can actually make money selling cookies.
It wont be as sweet and easy as the gig that Girl Scout cookies have set up, Im afraid, but if you have a passion for baking and youre willing to put in some effort, there is money to be made selling cookies!
Now before we get into it, I should point out that youre not technically supposed to sell anything if you dont have an official license to do so. Food, especially, has all kinds of red tape surrounding the actual production and sale of your merchandise. So you should consider this a grassroots operation, at least in the beginning the licensing and such can come later.
How To Sell Baked Goods Online
Making your own chocolate chip cookies during your free time is plenty of fun. But what if you could make a part- or full-time living selling food online, especially your favorite baked goods?
Knowing how to sell cookies online is more than a pipe dream. With the right digital tools, business licensing, and a few phenomenal recipes, you can sell baked goods online. It doesn’t have to end at cookies, either. You can sell wine online, sell beer online, sell whiskey online, or any other kind of food product you’re licensed to purvey.
DTC food is an excellent industry to be in. More than 80% of consumers plan to buy from a direct to consumer brand, and food and beverage is the fastest-growing category of online retail.
Letâs look at the essentials of getting your homemade baked goods venture up and running.
Also Check: Birthday Cake Ice Cream Ben And Jerry’s
Gain The Right Clients When You Pay Yourself Properly
You may be wondering if I lost customers or if my orders decreased. The answer is yes. I lost those customers that would send me a photo on Facebook and type messages like, How much? Also, I lost the customers who were only buying cheap baked goods.
My long-time customers didnt quit ordering, but they ordered less frequently, which ended up being great. I got to be part of their truly special occasions instead of competing with the grocery store for their sweet tooth fix. Despite all that, my earnings increased. Yes, its true, I had half of the orders and made 3 times the money.
I can tell you something else from experience when you like the work you do, there is great satisfaction in getting paid well to do it. There is the pride in craftsmanship and responsibility for the product that makes it even better. I can put my whole self into baking and feel good about it because I know that I am exchanging fairly with my customer.
Like Diy Gift Ideas Check Out How To Make A Diy Candy Bouquet
Below I will give examples on how to make this for a for a birthday gift, but you could easily adapt it to be a graduation gift , wedding gift, a retirement gift, etc etc. Not only do I give you examples on how to make an awesome grad and birthday DIY Money Cake, BUT I designed some to make your DIY Money Cake look awesome that Im giving you for FREE! to get the free printables for yours.
If you want to make a graduation money cake specifically, check out this tutorial with custom made printables to make one HERE!
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Professionals Get Paid For Their Work
As I thought more about it, I saw that I was actually diminishing the profession that I loved by not charging properly for my work. Undercutting the competition so extremely was decreasing the value of everyone elses work.
When you pay yourself fairly, you are also valuing the collective of bakers and food professionals. When an industry is respected and performs well, everyone in it can benefit. Sadly, I didnt understand that competing on price was the very last way that I should want to compete.
Sparing you deep details on what to charge here, I am just telling you its hard to decide how much you are worth. It can also be hard to ask people to pay more.
If you are having trouble with the idea that you are a professional and deserve to pay yourself I want you to consider the professional services you are providing in exchange for the money. Here are just a few reasons why you should pay yourself:
I could go on and on here, but truly take some time and figure out some other ways that you are providing value to your clients beyond just dessert.
Transition From A Freelancer To A Boss
I recently watched a video by online entrepreneur Courtney Chaal on this topic. All home bakers start out as freelancers meaning that someone asks for a certain bake for a certain day and we proceed to make it for them.
They then start manipulating you by saying their budget is so tight this month because of this and that, so you end up giving them a discount
The client calls the shots. They determine what we make, when we make it and they influence what they pay for it. This means that we base our business strategy and pricing by just REACTING to our clients.
You might still be running your Home Bakery this way and be thinking well, what other way is there??
There is another way my friend and that is to become a BOSS and start running your business like a boss.
A boss decides what services and products they do and do not offer. They decide what the prices are. They call the shots and determine the course of their business.
A freelancer is just reacting to clients and their business will end up going wherever their clients end up taking them which could be in circles or downward, and not forward.
There is a COLOSSAL difference between a freelancer and a boss!!
RELATED: How to Create a Home Bakery Business Plan
ALL Home Bakers do start out at freelancers, but if you desire success for your Baking Business, youll need to make the mindset shift into the boss world sooner rather than later.
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S To Pricing Your Home Baked Goods With Confidence
Pricing your home baking can be simple.
But how do you know if youre doing it right? How do you know if youre undercharging or overcharging?
If youve been struggling to price your home baking, know right now that its not your fault at all and youre so not the only home baker struggling with pricing!
Personally I also struggled with pricing in my home bakery for a few years, and this post is here to make pricing quick & simple for you.
I understand completely how you feel right now.
You bake your heart out and spend all day in the kitchen baking the most delicious goodies. Youre so proud of your creations you spent HOURS on!
And then your customers say What?! Im not paying THAT much! Ill only take it if you give me a discount.And you do it because you dont want to lose their business!
You bake the most amazing, delicious treats. A family member excitedly tells you theyd love some of these goodies too!
But since you dont really officially have a Home Bakery Business yet, you feel too guilty to charge them for your baking And then you give it to them for free.
Its been a few months of giving away bake after bake after bake and your bank account just cant handle this much longer.
Resonate with these 2 scenarios? Then youre in the RIGHT PLACE my friend!
The most popular topic in the Home Baking Businesses world is PRICING. Hands down!
This post will clear up Cake Pricing for you once and for all!
Keep Track Of Incoming And Outgoing Funds
Tracking expenses and revenues is important to any business, since it is a solid representation of your gains or losses. You can track cost traditionally with files and folders, or you can utilize a do-it-for-you service like ShoeBoxed.
Make sure you begin your operations with a bookkeeping system, so you wouldnt have to rush during tax season.
If youre hiring people, set up a payroll system as well.
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How To Start Selling Baked Goods Online
When your initial research on how to sell products online is complete, there are other tasks necessary in setting up your business. The more you can set up ahead of time, the less youâll be burdened by unforeseen difficulties.
Hereâs what you need to complete before the sales come rolling in:
Finalize Your Legal Paperwork
All of your business files should be completed before you start baking goods. This includes sales taxes, eCommerce shipping and handling fees, and any other cost you need to include in the sale of goods. It will also prevent legal issues later on.
Establish a Basic Business Plan
While your business will grow over time, you still need a basic framework to guide your operations. At a minimum, your eCommerce business plan should include:
- Purpose of business
- Type of products you sell
- Target customer and buyerâs journey
- Starting equipment and miscellaneous inventory
- Basic sales and eCommerce marketing plan
- Potential or realized funding sources
- Initial financial projections
This information acts as a reference tool when youâre feeling unmotivated, fleshing out a particular part of your business, or hiring employees. A business plan makes it easier to track goals and spot problem areas that need to be fixed.
Set Up Your Online Storefront
Firm Up Your Product Offering or Menu
Create and Equip Your Kitchen
- Oven
- Refrigerator, freezer, and/or other food preservation equipment
- Bread slicer
Buy eCommerce Packaging and Labeling Supplies
Think About Standing Out
Theres a large number of baking and cake making businesses out there, so you need to think about how youre going to differentiate yourself. You could specialise in vegan or gluten-free bakes, for instance, or concentrate on childrens party cupcakes or wedding cakes.
Since cakes are difficult to transport, you need to have a good sense of your local market, as most of your customers need to be close enough for in-person delivery or collection.
Stuck for inspiration? Our guide to the best small business ideas highlights the latest trends in the baking world, including vegan options and nostalgic flavours.
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