Increase Your Profit WITHOUT Raising Your Prices in Your Home Bakery
Wait a minute! Wait. A. Minute!
You mean I can increase my profit from my business without having to raise my cake prices? HOW?!
Yep, it’s true. After hearing “Raise your prices, charge your worth!” over and over again, it probably never crossed your mind that it is possible to increase your profit WITHOUT raising your prices and even after reading thus far you’re probably still thinking it’s impossible.
And that’s ok, because not only am I about to blow your mind with the fact that it totally is possible, but also with the fact that it is so easy to do!
Let me show you how you can increase your profit on a $50 cake from $30 to $80 WITHOUT raising your cake prices! Yeah you read that right and I meant what I said. This is going to be fun!
But before we get into this “secret” and you start increasing your profit without raising the price of your cakes I must give the disclaimer. If you have not calculated your numbers to know how much it costs you to make your products, save this article and come back to it after you read these on How to Price Your Cakes for Profit and How to Price Your First Cake.
These posts outline the fundamentals needed to be able to successfully benefit from this post.
By the way, you can get 15% off the pricing calculator I personally use to help you properly price your cakes by using my code STATIONBAKERY.
Ok, so now that we have that out of the way and you know your numbers, let’s get into this article.
You have been worried about raising your prices because of the fear that your customers won’t pay if you raise the price of your cakes, so here are three ways to keep your prices in a range that YOU are comfortable selling at and still earn a profit without raising those prices.
Lower the cost to make your product
When you lower the cost to make your product, you can keep your prices the same and you will have an increase in profit. The money you save by finding more cost efficient ways to get your ingredients will then become a part of your profit.
So for example, you charge $50 for a cake and the ingredients and materials normally cost you $20. You then implement what I am teaching you here and are able to get your ingredients for only $10 now. You keep your cake price at $50 and now you have a profit of $40 instead of the original $30!
But, how do you do this, especially with the cost of ingredients rising?
Consider finding alternative brands to use instead of your typical go to or search around for the best deals at your local stores and markets. Save and print coupons and keep up with any deals to load up until your next grocery haul.
Alternatively, if your bakery can support a larger quantity of ingredients, consider buying what you can in bulk.
Bulk buying is beneficial because you can usually get a great deal by buying more, than buying less at your local grocery store.
Consider buying items that have a longer shelf life in bulk. This will allow you more time to use these products safely with little waste if you don’t produce a high volume of products. You can also look for items that can be stored frozen until ready to use.
Some examples of shelf stable items to buy in bulk are flour, sugar, cake mix, extracts, cake boxes, cake boards, parchment and foil products. You can also freeze eggs, butter, and milk but you’ll need to research for how long.
2. Increase your efficiency when making products to save time
Most bakers pay themselves by the hour, so your pay is dependent on how long it takes you to make a cake. If you read my article on How to Price Your First Cake, you have already figured how long it takes you and how much you have decided to pay yourself to come up with the price of your cake.
If you keep your cake price the same, but cut the amount of time it takes you to make a cake you have now given yourself a raise and increased your hourly rate without having to raise the price of your cakes! You get what I am saying?
Ok, so here’s an example. You have chosen to pay yourself $5 an hour (please don’t do this in real life) and it takes you 6 hours to make a cake. If you created systems that allowed you to work faster and you were able to cut your time in half to 3 hours, you are now making $10 an hour compared to your original $5 an hour.
And you’ve gained three more hours to LIVE YOUR LIIIIFFFFFEEEEEE! 🙌🏽🎉
Here are some ways to improve your efficiency when making cakes.
Choose a day to bake all cakes for the next two weeks.
Choose a day to make your buttercream (and fillings if possible) and store them in these containers until ready to use.
Multitask as much as possible. For example:
While those cakes are baking, make your buttercream.
While your buttercream is whipping, start on your fillings.
While your fillings are cooling check on your buttercream and transfer them to storage containers.
While your cakes are cooling, clean your work space.
You can see how I do this in my own home bakery in this vlog.
Skip the crumb coat
Plan your design ahead of time so you know exactly what you are doing.
Invest in tools and services that will help you save time
A larger mixer to mix more cakes at once
Multiple cake pans
A turn table for faster icing and decorating
3. Simplify Your Designs and Offers
This is a major move that I am implementing into my home bakery business not only to increase my profit without having to raise my prices, but also to save me a lot of time and headache.
Simplify what you offer. This will help majorly with the above tips as well. This means cut back to just a few items that yo can manage easily.
Cut back on what you offer and streamline your products. Do this by choosing recipes that use the same ingredients. This will save you money by not buying one off products that will cause waste and it will allow you to buy in bulk easier.
Streamlining your products also saves you time because you are able to create easier processes when creating cakes.
Remove items that are expensive to make to save money. Remove items that don’t sell often. Remove items that are time consuming, and aren’t able to be sold at a higher cost to match the time spent.
This is going to help you be more consistent in your pricing and know that you are. making a profit every time with everything you offer!
Ways that I have simplified is by only offering cakes. I no longer accept orders for treats because they are just too time consuming and it costs too much to keep the necessary ingredients in stock.
I have also simplified my packaging. I only offer items that can fit in this box or this box. I use the same sized cake drums for all cakes so they fit into these boxes. No need for multiple sized boxes and I can buy them in bulk and not worry whether I will use them or not.
Let’s refer back to our original example. You are selling a cake for $50. Originally it cost you $20 for your ingredients and $30 for 6 hours of labor. You implement the tips above and now you have a solid menu where it only costs you $10 in ingredients, and your hourly pay has increased to $10 an hour for only 3 hours of work.
Originally you were making a profit of $30. Now you are making a profit of $40 and have saved yourself 3 hours of work that you can fill with another order (if you desire) where you will bring in another $40 in profit! You just went from only making $30 profit to making $80 in profit for the same time! WOW!
And you never had to raise your cake prices…
As you can see, it is very possible to increase your profit without raising your cake prices with the tips I have just shared with you. Are you excited to go back into your numbers and see where you can save so you can increase? If so, comment to let me know which one of these tips you’re ready to try right now, then pin this post to your Pinterest boards for later!
See you in the next one!
Don’t forget to get access to the pricing calculator I use to successfully price my cakes here! Use code: STATIONBAKERY for 15% off!
