Baking for Profit Five Part Mini Course Part 4

Part 4
How do I calculate cost and price my baked goods?
Calculating cost is the easy part.
Did you know there are 4 cups of flour to a pound? 2 cups of sugar to a pound?
You break down a recipe for cost as follows:
Example: Blueberry Crunch Pie (a 25 year favorite in my family)
1 1/3 cups all purpose flour say 5 lbs. = 20 cups and cost 1.59. Divide 1.59 by 20 = about .08 per cup so I estimate the flour to cost about .11cents
1 cup nuts divided 2.00
1 stick margarine .15 if a pound cost .60
11oz. cream cheese 1.50
2 cups powder sugar .32
1 can of blueberry pie filling or homemade $2.00
1 - 8 oz. whipped topping .99
I add all these cost up. $7.07 for 1 13X9 size blueberry crunch pie.

To price this I will add cost + time (less than 30 minutes) + value (how much it is worth to the customer and to me to make it). If I price mine at $20.00 it would give me an hourly wage of $26.12.


Part 4 Continued....
You do not want to spend your time baking if it does not really benefit you. Decide how much it is worth to you. It is better to have less customers and a higher profit for what you make. Do not worry that you will not have enough business. It will come!!

Before you set your price too low, start looking around at coffee shops, bake shops, grocery store bakery prices, upscale restaurants, and even mom and pop shops. You will be surprised. A whole 9 inch coconut cream pie from an upscale coffee house in my area sells for $25.00 take home price. If they get $4 for a slice of pie they are getting $32.00 for a whole pie.

Helpful Hint: If you want to make a larger profit watch the sales for items you know you will use flour, sugar, margarine, etc. and stock up. You can decrease your cost by as much as 50% by shopping the sales. You rarely find a better buy at buyers clubs than you can find in the local grocery store sales.