Deciding what to buy is one of the hardest part of a creative business than a home decorative cake company. On the one hand, you must have a decent benefit to be viable and adequately compensate your time and expertise, and share your creations with people at a price you can afford without breaking the bank – yours or theirs. It is difficult to balance between the two, so pricing must be a major part of market research.
There are many things to consider here and the first article in this series will focus on cost calculation – analyzing costs when creating a cake.
How much does it cost to make and decorate a cake? Calculate exactly (for the century!) The cost of each component of the cake, and the same for decorative ingredients for everyone. Do not miss anything – measure exactly everything and conscientiously. If you use five M & Ms to decorate a clown face for a child's birthday cake, count the number in the package and share it with the cost of the package to find the unit price. It may seem that the cost of a drop or two food coloring is too insignificant to interfere, but seemingly inexpensive products are rapidly accumulating.
Each item used in the process must include: electric current from the oven, dishwasher, food processor, mixer, electric knife etc. To operate (the energy manager should be able to provide this information), your phone is essential if you want to provide a good customer service, dishwashing liquid and other detergents – all peripheral costs you need to know.
It is worth mentioning here that if you only buy domestic quantities of components and supplies at normal retail prices, your costs will be significantly higher than when you buy bulk at wholesale prices, wherever possible. If you would like to try the market, you should definitely buy smaller quantities, but then develop pricing on both approaches. The difference in costs here can make a difference to gain or not.
Factor in Your Time The biggest cost factor for this or any other creative, service-based company is your time. In any case, you must keep accurate records of every minute of the cake, including finding plans, talking to customers, baking, decorating, cleaning, buying ingredients, and delivering and installing the finished product. Remember to include administrative and accounting time – every business has incorporated it into the pricing structure as part of your business.
You need to know how long the cake lasts for two reasons: 1. To know how many you can promise to deliver within a certain time and 2. So you know how much time it takes to take care of the costs. Remember that if you first start, you spend more time in a cake, and while gaining experience, it will be much faster in the creative part of the business and more proactive than bookkeeping, but it is best to pricing on the basis of current information and need change it.
Part 2 of the series examines how to give a price to your cake now that you know how much you spend on it.
Source by sbobet