PRICE YOUR CAKES RIGHT CHECKLIST
Price is the value that is attached to a product or service. It is a component of an exchange or
transaction that takes place between two parties and refers to what must be given up by one party (i.e.
buyer) in order to obtain something offered by another party (i.e. seller). Cake baking and decorating
like any product based business is a profitable business. However, poor pricing over time can bring the
business down. Following this simple checklist can help you reach a right pricing that will be beneficial to
both your business and your customers.
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DIRECT COST (RAW MATERIAL COSTS):
Make a list of all your ingredients you use for your cakes and frosting then cost them per unit
measurement. For example:
ITEM COST (currency)
FLOUR (PER KG)
SUGAR (PER KG)
EGGS (PER CRATE OR PER 1)
MARGARINE/BUTTER (PER KG)
ICING SUGAR (PER KG)
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INDIRECT COST (OVERHEADS):
These are cost incurred from running your business. They are not directly involved in the cake itself
rather required to keep the business running. They can be divided into fixed cost (rents, equipment
depreciation, and loan repayments) variable costs (Electricity bill (pay per use), gas bills)
So make a list of these overheads as peculiar to your business and break the cost down per month
ITEM COST/YEAR COST/MONTH
RENTS
ELECTRICITY
WATER
EQUIPMENT DEPRECIATION
GAS
TOTAL OVERHEAD COST PER CAKE = TOTAL COST OF OVERHEADS/MONTH
NUMBER OF CAKES MADE PER MONTH
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LABOUR COSTS
Every business owner should pay themselves a salary. This is for the survival of the business. You can
pay yourself based on your skill set. To make it easy calculate your labor cost per hour (cost of staff
inclusive)
ITEM PER MONTH PER HOUR
PERSONAL SALARY
STAFF SALARY
TOTAL LABOUR COST ON A CAKE = LABOR COST/HOUR × NUMBER OF HOURS SPENT ON A CAKE
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SUNDRY COST:
These are additional costs that go with the cakes and not charged as ingredients or direct cost. They are
usually specific to a particular cake
ITEMS COSTS
CAKE BOARDS
CAKE BOXES
RIBBONS
BLINGS
TOTAL
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PROFITS:
Profit is simply the money that you can reinvest in the business, to expand or keep your business
running. NO it is not the same as LABOR. You can employ a simple mark-up system. Adding a figure you
are comfortable with or set a percentage usually between 20% - 60% or use a multiple of the total cost
(1.5, 2, 3). Choose the profit system that works best for you.
OVERALL COST PER CAKE = DIRECT COST +
INDIRECT COST + LABOR COST + SUNDRY COST +
PROFIT
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HAVE WE MET?
Hello, my name is Oluwakemi Adedoyin, recently married to the best Man in the world, Creative
Director at Habeebah Cakes n Confectionery, a cake studio located in the serene city of Osogbo, Osun
State, Nigeria. We create decadent cakes and desserts guaranteed to leave long lasting memories. In
our studio, we pride ourselves on our excellent delivery of quality products and service at all times. Our
customer’s satisfaction is our topmost Priority and we do not hesitate to go beyond our call of duty.
Cake decorating for me was discovered by “accident”. It was more of a hobby for me but the passion
grew over time and it became a business.
I am very passionate about learning not just about my chosen craft but also about business growth and
sustainability. I have attended various trainings on business strategy, entrepreneurial development and
Of course cake baking and decorating classes. I am of the school of thought that “learning never ends.
The day you stop learning you die”. Harsh right. It’s the hard truth.
I am a recipient of the WIMBIZ MENTORING PROGRAM 2017 where I was opportune and priviledged to
learn at the feet of a great Mentor.
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I also a have strong flair for teaching and so it is no surprise that I chose lecturing as my Career. I have
successfully trained over 50 people (men inclusive) who have all gone on to start their business or grow
it as the case may be.
I wrote my first E-BOOK titled “BLUEPRINT OF CAKE PRICING” , A step by step guide to pricing your
cakes for profit coming out really soon and I am super excited to share it with you. In this E-book, I
shared with you quick and easy steps to calculate the cost of pricing your cakes in order to maximize
profit.
I hope you enjoy it as I did creating it for you and find it really useful. You can always reach me via E-mail
at [email protected] or via instagram @habeebahcakes and facebook
@habeebahcakesnconfectionery
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