June 5, 2013

The Basics of Starting A Wedding Cake Business

wedding cake businessContinuing with Wedding Week here on Small Food Business, today we look at one of the sweetest parts of the wedding business – the cake itself!  While I have enjoyed my fair share of wedding cake and have made a few myself when I worked for a high-end hotel and a few for friends, I have never been the person in charge of actually charging for the cake itself so I turned to one of the smartest cake business women I know, Wendi Hawley of Madeline’s European Cakes, for some insight and expertise.

Wendi has been making wedding and celebration cakes professionally for more than 10 years.  Though in recent years she’s cutback on the volume of business she’ll accept in order to raise her young son, she creates truly elegant and unique custom cakes

Connecting With Brides & Grooms

Wendi has been making wedding and celebration cakes professionally for more than 10 years.  For this reason, Wendi says she’s seen a lot of change in the wedding industry.   Originally, Wendi focused on using Google Adwords and having listings on weddings sites to help drive business her way.  But that tactic has grown increasingly popular which makes it harder, and more expensive, for a wedding cake baker to stand out.  “When I started I was paying $.06 per click for the top slot on Google,” Wendi remembers.  “Now it’s $1.50 to be on that first page!”

Social media, in Wendi’s opinion, is now the best and most direct way to reach out to new brides who don’t already know about you.  One wedding cake designer not only has an active Facebook presence but also uses Facebook ads targeted only towards ‘engaged’ women and men so as to best target those people who are most likely actively planning weddings.

Without a doubt though, Wendi still believes that good old-fashioned networking and relationship building is still the most powerful way to drive business to your company.  She recommends getting to know and work with other wedding-related vendors such as caterers, coordinators, and florists.  Since Wendi works in (and owns and runs) a kitchen incubator, this makes it easier for her to network with caterers who share the space with her and they all refer business to one another.

Similarly, it benefits you to get to know other wedding cake bakers whose work you admire and trust.  Undoubtedly at some point you will run into the situation where you simply aren’t able to take on another cake for that day/weekend and you will want a few names that you can refer that client out to.   This is a two-way street and chances are those who you refer out to will also refer business your way when they are at capacity.

As far as wedding shows – those big convention centers filled with eager bridal parties and hundreds of vendors, Wendi says that she personally doesn’t find them to be beneficial to independent wedding cake designers like herself.  “For most cake makers, if you’re billing between $500 – $1200 per cake it will be very hard to get a good return on your several thousand dollar investment to be in the wedding show.  Not to mention the cost to you of samples that are eaten at the show.  There is just so much competition at these shows that it’s hard to stand out.”  Wendi says that these shows might be beneficial to caterers who charge $10,000 for their wedding-related services or to large wedding cake stores that can pump out cakes in high volumes, but a small wedding cake maker really needs to question whether they are going to make their money back before committing to a show like this.

Pricing Wedding Cakes So You Make A Profit

It’s no secret that wedding cakes are more expensive than your ordinary sheet cake.  The question to cake makers is how to price your cakes in a way that a) makes sense to the bridal party b) is competitively priced and c) will cover you not only for your ingredients but also the time it takes you to pull the cake together.

Wendi explains that part of the reason that wedding cakes are more expensive is because that they come with a higher level of service.  “Brides or someone in the bridal party may want one or more consultations, they may change the guest counts several times, they may change logistics; the wedding cake maker will put more time into this event then an ordinary cake and in order to deliver the highest possible level of service that needs to be accounted for.”

Wendi acknowledges that the most common way to charge for wedding cakes is by the slice but she personally charges by the size of the size of the cake tier and how many tiers.  She explains it this way, “because guest counts change, if you charge by the slice then the bride and groom may expect the price of the cake to go down if they’re guest count has gone down by 6 people.  But with small changes you may still have to make the same size cake.”  Wendi believes that charging by the tier makes it easier for the bride and groom to understand that if they add/subtract a tier (or add/subtract enough guests that it changes how many tiers are needed) then the pricing will change but otherwise they can expect pricing to be consistent with the estimate they originally received.

Wendi has developed a pricing system that includes a base price which she has calculated covers her ingredients and the time to construct a simple cake.  Her base price includes, at this time, Italian Meringue Buttercream, simple garnish, 2 flavor combinations in the cake, a consultation, and delivery and setup within city limits.  Everything else, she explains, is additional.  This includes things like special frostings (such as rolled fondant or marzipan), additional ingredients, or things like handmade flowers or special scroll work that will take additional time to create.   She lays all of this out in the estimate which enables the bride and groom to determine what they want versus what they can afford.

Wendi also believes that cake makers should be willing to charge what their time is worth.  For intricate work Wendi builds in an hourly rate of $30.  Certainly, she acknowledges, hers are not the cheapest cakes on the market, but her attention-to-detail and quality ingredients are evident in every cake and she believes she shouldn’t undersell herself.

One other recommendation Wendi has is setting a minimum for cakes to ensure that you’re not spending all of your time on a cake that will not net you much at the end of the day.  In Wendi’s case she has a $350 minimum and she charges a $25 tasting and consultation fee.  The fee, she says, helps weed out people who were just cruising around tasting cakes with no real plan to hire the cake maker.  Since instituting the fee she now books 75-80% of the people who come in for a tasting compared with approximately 20% before.  “I feel that they are just more serious,” she says.

For cakes she’s hired to do that fall about the minimum $350 she’s set she will actually refund the $25 fee back to the bride and groom.  Cakes that fall below that minimum though she will keep the fee and will also charge for delivery and other aspects of the cake to ensure that her bottom line doesn’t suffer.

Know Your Limit

For small wedding cake makers who might be working by themselves or, even, doing this part-time in addition to a regular job (or raising kids!), Wendi stresses that it’s important to know your limit.  You are committing to give the bride and groom an excellent experience so you want to make sure you have the time and attention to devote to them during the planning stages as well as on the actual day that their cake is scheduled to be delivered.  At one point Wendi accepted upwards of 6 cakes per weekend and she says it was “suicide.”  “For one person that meant an 80-hour week with a minimum of 14 hour days on Friday and Saturday.  It was simply exhausting!”

Since then Wendi, and in part because she now has a young son, she has placed stricter limits on how many cakes she’ll accept.  “It’s about budgeting my time,” she says.  “Now I will accept up to 2 cakes per weekend and I charge more than I used to.  But I’m also enjoying it more than I used to.”

Side note, I use the phrase ‘bride and groom’ to stand for any two people getting married regardless of their sex…it’s just easier…and I hope that doesn’t offend anyone.