- Work out your cost price, i.e. everything it’ll cost to make the cake. Don’t forget to include ribbons, cake boards and boxes, even down to the cost of the luster dust. For example, if you bought a 30g pot of luster dust for £2.99 and used a third of it, you’ll be including approximately £1 into your cost price for the luster dust.
- Estimate time: Based on how long it’s taken you in the past, estimate how long it’ll take for you to finish off the cake. Resist the urge to underestimate your time. Imagine you had to pay your staff for time worked on the cake, how long would you pay your staff for? That’s how long you should estimate. Include set-up and clean-up times.
- Work out your hourly rate: Do you know how much to charge for your time? Start with your ideal net monthly salary, then divide this figure by 100. You’re running a business and you’re working for the business, your aim is to make money and so your cakes should pay more than minimum wage for your time.
- Work out your margin. Your margin is your profit. It could be a percentage of the sum of your cost price and the cost for your time (for example, 10-15%), or it could be a round figure. There is no hard and fast rule here, you decide what your profit margin should be.
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