Are you the crafty and detailed oriented artist of sugary sweets? Baking cakes is one of the best money-making hobbies you can do at home in your spare time. The fanciness wedding cakes cost up to $4,000 and the lowest cakes start at…get this, still around $400 bucks. It’s still cake, but we all know the profit margins are high because of the skills involved. It’s not easy to please both the taste buds and visual requirements for an excited bride.
In addition to the extra income, you could also unwind the stress, especially if you love baking and creating. If you’re interested in making a home-based wedding cake business as a side hustle, you should first know the pros and cons of this industry first.
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The Pros and Cons of a Home Cake Business
Every business has pros and cons, and wedding cake business is not an exception. There are also unique factors from one person’s case to another which might affect the success of a cake business. Here are the pros of building a home-based baking business for additional income.
Pros:
1. Easy to start
As long as you have the experience and the drive to start, you can start selling cakes as soon as you receive your first order.
2. Can give you a decent additional income
The average cost of a wedding cake is about $500. Depending on the size, design details, and the ingredients needed, it could cost less or more than the average cost.
3. Learn new skills in baking
Try something simple until your skills can finally tackle more elaborate cakes and more complex recipes.
4. You’re doing one of the things you love
A side hustle doesn’t need to be stressful, a hobby should not be just for passing the time. Baking for other people and earning money from it is a win-win situation.
5. Finally have an excuse to bake BIG
My husband is a big time amateur baker. But he doesn’t get to bake BIG often because we simply can’t eat or give out all those calories. Everyone these days are healthy and wary accepting baked goods from strangers. He has the ideas but he doesn’t know what to do with 24 chocolate turtle brownies and it’s a bit unhealthy to eat ourselves every week.
Cons:
1. Dealing with negative feedback
Dealing with negative feedback is essential to level up your skills and to know where you have to improve.
2. No orders, no income
In a per order-based business, if you don’t receive an order, you won’t also receive an income. Because of this, the income from baking cakes is very irregular.
3. Needs a lot of time, effort, and planning
Baking a wedding cake would take a lot of your time and effort. This is especially true if you receive multiple orders within a week.
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Money and Earning Potential
Income through baking is hard to estimate whether you decided to go full-time or part-time. Unlike other commodities, a cake is a luxury food and only gets available on special occasions like wedding. A month can go on with a ton of orders coming in every week (especially during the wedding months like April and June) while there are some months that you won’t have any order at all.
Your earning will also depend on the size of the cake, the cost of material, and the effort needed in order to bake it. According to the Better Business Bureau, the average cost of a wedding cake is around $582. I’ve seen normal people shell out $700 to $1,000 on a beautiful cake to feed everyone.
The higher end salary for professional bakers is almost $40,000 and those figures include bakers who only work part-time. The profession is expected to grow until 2026 and onwards.
You can price your cake more or less than this depending on the ingredients and the effort skill level required. Make sure you account for the delivery cost as well.
Requirements To Start an At-Home Wedding Cake Business
Baking Experience
There’s a lot of things going on when it comes to baking a 3-tier wedding cake. You need to have a delicate while working in the cake (especially if you’re cutting the dome part) to avoid re-baking another set. Each level can consume about an hour of baking, and you need to bake six cakes for a 3-tier wedding cake. Being efficient will cost you time and effort.
In addition, you also need to know decoration techniques like royal icing, putting fondant, and advanced piping techniques for more detailed designs. Background training and education are obviously helpful but if you’re a natural baker then you could cater to those on a limited budget and hone your skills until the local market finds you.
Last but not least, you must have creativity and patience (especially patience) when stacking and designing the cake. According to Learn.org, you will more likely gain these skills after working on the industry for one to three years.
All of the necessary baking skills are pretty much available on the internet. There are free online cooking classes that someone checks if they want to start baking. In addition, YouTube is your friend for tutorial sessions.
You can get all the education for free, but you need the practice to gain experience. If you bake like…everyone on Netflix’s Nailed It…then it’s probably better just entering Nailed It at that chance to win $10,000 cash 🙂
Baking Equipment
You would need to do it in an industrial or certified safe kitchen (more on that below.)
If you want your life to be easier and more organized in your kitchen, you must have the proper utensils for baking. The number one thing you must have is the stand mixer, as it saves a lot of time and effort when mixing the ingredients. You must also have the right baking pans, whisks, spatula, and standard measuring cups. Later on, you can add more items that will fit your needs.
You can find cheap baking sets on Amazon, some would only cost below $60 for a ten-piece nonstick bakeware set. Rent the stand mixer if you don’t have one because it can cost more than $300, which is not practical. If there’s one thing that you should not forget, that would be a cake turntable.
Licenses and Legalities
When doing business for your friends, family, or a co-worker, licenses and legalities might not be very important at this stage. However, if your customer base started to grow and more people are ordering your cake, getting these legalities done is highly recommended.
You can start by checking your state’s rules from FDA’s food service codes and regulations (licenses vary on each state). It would be likely that you’ll be required to get a Food Hadler’s Permit from your state’s Department of Health. Sometimes, your local council can offer free training courses for food hygiene.
As for freelance taxes, it is worthy to note that while you earn and make money baking cakes if IRS considers your business a “hobby”, you cannot claim your expenses as tax deductions. There is an allowable hobby deduction available, but it is currently limited to the amount of hobby income. So if you have losses (e.g. you messed up during the cake delivery), then you might not be able to deduct your cost in this transaction.
The Art of Cake Pricing for Profit
The average cake per slice could range anywhere from $4 to $8 which adds up to a pretty penny of profit for the wedding cake baker and decorator. On the lower end, it could be just $1 or so per slice for a minimalistic cake. So a basic wedding cake for 100 people will cost around $100 to $150 dollars.
Obviously, the range you see…this is not a pennies industry if you have the design and piping talents. It depends on your branding, marketing, design skills – and not so much the cake-cake itself.
Charging a cake takes a lot of consideration. It is one of the factors that will help you regain your old customers, as well as find new ones. Factors will be very different for each individual because things such as location and demand will affect the pricing. Here are the 3 basic steps in cake pricing.
Do take note that because of a lot of factors can be considered, these 3 steps should be considered a “barebone” guide to get started:
1. List all the cost related to the cake
One of the biggest cost that will affect the cake price is the cake ingredients itself. Make sure to account for all the costs which are related to making the cake. Include transportation and rent costs (if you rented your equipment) in the price as they are related to the cost.
2. Decide on your hourly rate
After getting the cost of ingredients, what you will need to do next is to determine your hourly rate, as well as the estimated time that you’ll make the cake. You should know your worth as a baker, as it will be the one where you will base your hourly rate. The harder the task will be, the higher the hourly rate should be. You should not price your cake on the cost only, make sure that you’re also accounting for time and effort. YouTuber CHELSWEETS recommended a simple formula in pricing a cake.
Cost of Ingredients + (expected time to finish the order x your hourly rate).
3. Charge decently, but make sure the price is fair
Your target is to make the price as low as possible to attract customers, but not too low enough that you basically made the cake for free. One more thing to keep in mind is that don’t base your price to supermarket wedding cakes. The reason for this is the fact that you might be taking custom orders, and that you will give more effort for the taste and design.
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Cake Transportation
A lot of times, cake businesses charge for delivery. This encourages buyers to pick it up and deliver it themselves. It avoids liabilities for the cake maker and much less stressful.
Transporting a cake, especially if you don’t have a personal vehicle, could be a pain in the neck. You need to be able to drive and have a car big enough to store a completed wedding cake.
Make sure the cake is packaged well and nothing (visually) is dented or damaged during transport. You will notice every pothole in the world when you’re transporting a cake. Public transportation is not an option at all.
You can call for a friend to hold the cake on while you’re driving or vice versa. Put the cake in cardboard boxes for protection. If you cannot be accompanied by your friend or family, use non-slip mats to keep the box from moving around. Buckle it up and secure it with camping gear if necessary (depends on the vehicle of course.)
Don’t transport the cake fully assembled, unless the circumstances needed it to be assembled. Instead, put the decors and stack the cakes at the reception. Be sure to set aside extra frostings so you can be ready to repair the cake if it needs repair. Carry your baking tools with you in order to make repairs easier.
Cake Biz Tips With Custom Orders
When making wedding cakes, one of the most common problems of the baker is dealing with custom orders. After all, the final product will be the one that will decide the customer’s satisfaction. Although the old adage in the customer service that “the customer is always right” is still used today, it might not be right at all times.
One such example and one of the most hideous experiences for a home-based business is to work for free in exchange for exposure. This might be a good idea, but the truth is, there is no guarantee that the “exposure” will bring enough value to the cake you made for free. If you think that this plan is actually free publicity, think about the cost of the ingredients and the effort you put in the final product.
Difficult customers
Another example is when a client is so demanding (Bridezilla!) and has a lot of requirements, but with not enough budget to justify the features and demands. There could also be core problems like balance, symmetry, impact on baking time, design realism, etc.
There are a lot of lowballers in the professional world. Always remember that your skills, time, and effort are the things that make your business. If you think their budget is not worth your skills and time, kindly decline any offer.
The most annoying kind of customer is the one with so many revisions. These revisions might be costly and time-consuming.
If you encounter one of the lowballers, the best thing you can do is to explain your price and give a detailed cost breakdown. Make sure they understand that baking is a job that requires a lot of attention to detail, time, and good ingredients for a good product.
Remember to sell cheaper alternative options
Another thing you can do instead of working for free or working for a low price is to give the client a cheaper alternative. For example, instead of the 3-tier cake which is too expensive for their budget, give them an option for a 2-tier cake which does not require a lot of details.
Learn how to speak up
Last but not least, if the customer will still try to coerce you to work for free (for experience) or work for a very insulting price, learn to say no and move on. When it comes to the customer that keeps changing something and keeps bothering you for a revision, you can charge him or her for additional revisions, especially if he or she is trying to revise the whole thing into a very different cake design or recipe.
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Advertisement and Branding
Word of mouth
If you’re just starting out, advertising services might be costly, in addition to its uncertain results. Nothing beats the traditional word of mouth advertising: it’s free, effective, and indicates that your product is liked by your customers. Word of mouth is a good advertising tactic to make your small business grow without putting too many resources.
Branding & social media
If your business is growing and you’re expecting more customers, then it is safe to move on to a better advertising technique. For a growing business, you should get an advertising technique that will reach out to a lot of people. You can post some of your works at social media platforms to reach more prospective customers. This stage is where you would want to think of an official, catchy business name and logo for easier recognition.
Uniquely you
One of the things you can do to stand out from the competition is to sell something that only you can do. Most of the popular food business are known for their unique products that can only be found in their store. Always try something new and demonstrate your creativity and baking skills. Another important thing to consider your customer relations. Provide a platform where your customers can contact you immediately like Yelp messaging or creating your own website.
Do good work
This is one of those businesses that skill and talent can easily be flush out. An eye for design and good cake making will get you the attention because it’s so visual based. The best advertisement is the product itself.
Always strive for the best quality in each order, deliver the final product on time. Price still matters, but if your customer really likes your cakes, it can always be negotiated. Update your baking skills and techniques, because the more customers you have, the more efficient you are, the better. Get creative and make your own recipe, style, design, and essence.
Home Bakers Who Succeeded
Rodney and Lavinia Hesley (Big Boss Baking Co.)
Rodney and Lavina Hesley were former licensed contractors. After the financial crisis some years ago, the two-loss their work. The couple knew that they needed to get into business (jobs were not available for them at that time) to make ends meet. They decided to make a business out of Lavina’s hobby at that time, which was baking.
Big Boss Baking Co. was created in 2010 where they started selling baked goods in their garage. Now, the company has a 10,000 square foot baking facility as of March 2014. Their success is attributed to their mixing style and by using 100% whole grain oats sweetened by natural honey (for their best selling granola bars).
Cathryn Howard (Truly Madly Sweetly)
Cathryn Howard is the founder of the baker known as “Truly Madly Sweetly”. Howard loved baking since she was young, and one of her fondest memories is when she baked a heart-shaped cake for her parents. However, she spent her career as an elementary school librarian to raise a family.
Her life had changed when in 2006, at the age of 50, she decided to join the Le Cordon Bleu Culinary School. After graduating, she interned in a local bakery but is not satisfied with the experience. After the internship, she moved to Murrieta where she and her daughter in law successfully created a store.
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