You could use your better judgment to estimate how long it takes you to complete a batch of cookies from start to finish. The countless hours of work and attention to detail are what make these edible pieces of art so special. When it comes to decorated sugar cookies, labor costs usually far exceed raw ingredients costs. Personally, I’m going with the Mercedes strategy for a home bakery.īegin by making a list of all the raw materials needed to create your recipe.īefore you start to figure your cost per unit, you will need to break down the cost of each raw material called for in your recipe. If you want to build a baking business that will last, this is a strategy that’s destined to end in failure. We want to do excellent work but don’t have a line of customers waiting at the door.Ī lot of bakers try to say they are high quality, low cost and that may be true. Mercedes strategy: You can do high quality and high price, and have low volume. You need a lot of orders to maintain this strategy. Walmart strategy: You can do low quality and low price, but HIGH volume. The process of figure it out prices will start with these steps:įirst of all you have to decide your bakery strategy, that is sustainable to your business. When I was selling cookies, I charged anywhere from $4, $18 or up to $23 a piece depending on the design. Pricing is always a challenge since consumers don’t expect to be paying upwards of $4 for one cookie if they’re not already aware of time that goes into making each one. Even if we were to assume that you are using the exact ingredients as a fellow decorator therefore, the only way to guarantee profitability is to figure out your own costs accurately and price your cookies accordingly. You see, there are different factors involved to your overall cost per cookie for profit like: Indirect or allocated costs this means costs that relate to the general running of your business, not directly to the making of the cookies, such as rent, insurance, and utilities also how much your competitors are charging, if they sale, how much is your target market willing to pay, cost of ingredients, your rate of speed, labor, packaging etc… I used to do this as a business so as you can see there are more things involved. Not long ago when I was still baking to the public I was charging a fair price for my baked goods and I’ll still sell everything! You have probably face some clients that will look at your baked goodies with a reaction like… “No one would ever pay that much for cookies, cupcakes or whatever!” and I understand that situation, because I used to believe that too…but it’s simply not true.
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