Two separate conversations with two different groups of people about one subject can only lead to one thing: a blog post.
The subject of today’s burning discussion? That elephant in the cookie room: money.
This post is particularly for those of you who might be just starting a home-based business; testing the waters to see if your idea is viable enough to take to the next level. And, if you are anything like I was, you’re more than a little scared.
You see, it’s one thing to have friends and family say “You’re THE BEST cookie maker! You need to go into business and sell these! People would just line up to get them.”
Sigh.
Friends and family love you for the special cookies you create for their birthdays, their graduations, their weddings. They want to see you share your talent and be paid for what you love to do. And, they mean well, they really do. They’re your cheerleaders, your taste testers, your waste management team*. Do not, however, depend on them to be your customer base. No business was ever built on friends and family.
Depending on your personality, hawking your own wares can be the hardest part of starting your own business. You almost think you sound conceited, rather than confident. Opt for believing you are confident. You’re passionate about what you do so let the confidence shine through. And please, remember that confidence when potential clients tell you they can only afford to pay you a smidgeon of what you’re asking. Summon your inner strength and politely say no. Calmly and nicely, explain that you run an artisanal business with an emphasis on individual handcrafted edible art.
So, you’ve established a price for your cookies. You’ve come up with what sounds like a nice low-ball price for cookies because you don’t want customers to say no and you want orders. Maybe you’re pricing by the cookie, maybe the dozen. Whatever it is, you might very well be shooting yourself in your own foot just a little bit. Before you quote your next job, see if you’ve considered the following criteria before coming up with that random number:
1. If you have a standard price for a cookie, be it a single cookie or a set, are all your cookies roughly the same amount of work? The same size? If so, then fine. But, if they differ widely in size and detail, then you’re cheating the clients who get the simplest of designs, and giving the work away to those who ordered an intricate cookie.
2. How much time do you spend researching images? And, do you make your own cutters/templates for these images? That’s time you’ve put in on the project, too. It needs to be considered. The same thing goes for making your own cutters/templates.
3. Are there 3 colors in this cookie design or 6 colors? Again, that shouldn’t be the same price.
4. Are your cookies bagged and bowed? That takes time, too, part of your labor & materials cost. Packing them in a box? Don’t forget to factor that in.
5. Utilities. Electricity, gas, water. That’s your overhead, you know. You’re using more of those services than you would if you weren’t home ‘working’.
6. Multiple cookies making up one particular cookie, like Martha Stewart’s stacked wedding cake cookie? You know that’s 8 cookies making up one cookie favor. Price needs to reflect that AND the labor it takes to make it Martha-perfect.
7. Hand-piped message or name? Cha-ching. Add more labor to that order!
7. Delivery. That’s gas, AND wear and tear on your vehicle, not to mention your time. Again.
I’m not just lecturing from my ivory cake pedestal, I promise you that. I’ve made every single mistake. How do you think I got the material for this post? From my vivid imagination? Mistakes are the best teachable moments in the universe. You don’t even have to go out of your way to make them. They just happen. Experience them and move on.
Fast forward a bit. Your business is catching on. You’re making a name for yourself. Clients are recommending you to their friends. Do you know what this means? It means it’s time to re-evaluate your prices. Not ridiculously, but within reason. You’ve earned it. But, how do you know when it’s time to raise your prices?
1. Have you been written up on blogs, local newspapers? That’s press, you know. You’re being looked at as a professional.
2. Cost of supplies like butter and sugar go up. Are your cookie prices doing the same?
3. You’re getting better and better at what you do. Experience at your craft elevates your worth again.
Please know I’m not telling you to be the most expensive game in town. Far from it. I just want you to be able to run your business successfully, so you can grow and prosper. And, at the end of day, if your cookies can bring in a little more of this
to put in here
then I’ve cleaned up a little after those elephants, haven’t I?
*lucky recipients of reject cookies
Great post! This is so true! Love your straightforwardness and for sharing your thoughts on this as well! BTW, adore the coin and piggy bank cookies!
Brilliant post… I think this is a good reminder for all of us! I have learned my lesson the hard way (more than once)… I have had quite a few friends and family turn me down after they hear what I’d charge for cookies, but in the end, I’m always happy that I didn’t sell myself short.
Aaah, thank you for writing this, Gail! I am so all about doing the minute math for pricing things out, but I’ll admit something… I am usually SHOCKED at the cost of homemade goods. The stuff I make ALL the time.
I don’t eat at chains, but I know their prices pretty well. And I think part of what I have to accept is that if I’m going to be selling homemade goodies, it’s got to be to people that truly understand the quality/price difference of my goods versus Crumbs or anyone else.
One thing I discovered: OTHER peoples’ word of mouth about me can be more effective than my own. If a friend tells another friend about my cake pop/cookie/brownie they love, that friend may come to me totally prepared to pay the money it fairly costs, without you having to sell yourself.
Also, I’m so glad to know I’m not alone when it comes to friends/family/coworkers/strangers saying I should make this my business. Little do they know…
Ok, enough words from me! I hope others comment giving their advice and such.
Great post! Loved your cookies too
Gail…I love this post. It’s so thoughtful, so well-explained, and so, so true. This post is something every would-be cookie maker should consider before printing those business cards!
I don’t have a cookie business, nor any type of business for that matter, but I’ve given much thought lately to starting something and I can see everything you wrote being 100% transferable to any start-up. There is a fine line to being confident rather than conceited, especially for someone like myself (and I think you as well) that often feels uncomfortable tooting their own horn.
Thanks for sharing the lessons you’ve picked up along the way. And I must say, the last two cookies totally cracked me up…so good!
I want to cry, laugh, giggle, hit the wall…I have been all around this rollercoaster. I strated out making cookies for ten dollars a dozen, but it didnt take many late nights for me to realize that I was insane. The worst part was, after I decided that I was worth more, it didn’t sell so well with others…
I get my feelings hurt quite often about this, and that’s exactly why I’d rather make cookies for loved ones than give away my heart and soul.
I think of our cookies like any luxury item. Lexuses or Rolex Watches. They aren’t for everyone. But there are the people who will pay more for exceptional quality! Great great post! I’m totally passing this along!
This is an excellent post with all the things one should consider when deciding to enter into a baking business (whether home-based or not)
I know that I’m not charging the true value (total cost of making, packaging, delivering etc) of my cookies and my husband says that I’m the only person he knows who loves to work for a buck an hour! That being said, I bake and decorate cookies more so as a hobby and to further develop my skills as a cookie decorator. If someone wants to purchase them, then that’s a bonus and right now, I’m happy with the price I’m getting for them.
The only other point I would add is that people have to consider what the market in their area will bear as far as price is concerned. A person living in a large metropolitan area can probably price their baked goods higher than someone living in small town America/Canada.
P.S. I just decorated 3 dozen cookies standing at my kitchen counter…for the first time. I normally sit at my dining room table but it was taken up with another baking project. I don’t know how you stand all the time when decorating
Maybe this order should have a price increase LOL.
Gail, you nailed it with this post. This is relevant not only to home-based cooking business, but to any business. You have to believe in yourself and price your services (goods) appropriately. I made the mistake once and ghost-wrote a book for $1200.00. It took me 18 months! I asked for $1800.00, which is the minimum price for just basic proofreading (I was doing the guy a favor, as I basically wrote the book using his facts), and he refused to give me another penny.
Now he wants another book, and I had to say no, even though I really need money:) Cannot sell yourself under the market value:)
Great post Gail. I keep trying to tell the cookiers I know to stop undervaluing their work.
Maybe your next post should be a recipe costing tutorial!!;)
And I too started out giving away the farm, but it’s all about confidence.
Wow, am I learning this the hard way. I am proud to say that I have a steadily growing business that has taken me on a true journey. I am constantly fighting the urge to charge more because I am certain that I am giving much more than the cost of my work is worth. Every single example you provide is truer than true. You really hit home.
Great post! Baking, sewing – it is all pretty much the same when selling your work. A friend has asked me to sew a quilt for her queen sized bed. She says we’ll pay you of course (gee thanks)but has never asked once how much it is going to be!!! She did ask last night if I charge by the hour or just a lump sum. I laughed and said if I charged by the hour you could not afford the quilt when it was done. She still didnt’ ask for any more details. oy. The thing is, I like making quilts to GIVE to friends because then there is no pressure. Now I have a schedule, a deadline and get this…I don’t even like her fabric choices AT ALL! So my enjoyment while making the quilt is pretty much zilch. I have made cookies for two events recently (I am REALLY new to the cookie decorating scene) and already people have said YOU SHOULD SELL THOSE! Uhhhh, no thanks. It was enough pressure to get them done and surprise people. I can’t even imagine the pressure if someone were to be (under)paying me for them.
Perfection. You said it completely right here…AND have made me reevaluate a bit. Thank you
I feel like I should link to this post with every cookie quote I send out!!
You personally have been responsible for encouraging me to price my cookies appropriately. I’ve come a long way and still feel like Paula said, that sometimes I’m working for $1/hour!! Sometimes I quote a standard price not realizing how intricate the design is going to be or how much time I’d end up putting into it. That has come with experience.
Great post, Gail, as always!!
Gail; what an awesome post! You’ve explained all the important points and in such a lovely way! I’ll be sending anyone who asks about starting a cookie business here!
I can’t really add to anything you or the commentors have said here, except that you’ve totally hit the nail on the head. Well said.
What a great, well written and thought out post! How many times had you given me this talk when I was running my cookie business? Lots, and I always appreciated your support.
As many commenters here have stated, your words hold true for any small business. I now often hear your voice in my ear as I price my tiles and I can’t tell you how much I’ve grown in that regard. Confidence is key and more times then not it comes from having learned the hard way and selling yourself short (literally).
Kudos on this Gail. Thanks for sharing!
All so very true. I started making cookies for fun and posting them on facebook. And got a few friends/co-workers asking me to make them. Boy is even that stressful. I could never venture past that. People really don’t get the time/effort/stress that goes into it. I’m with Paula…keeping it a hobby is really my goal.
BRAVO BRAVO Gail!!!! I’m going to print this out and hand out with business cards! haha
Thanks for the fabulous pep talk girl!!
Gail – what a great post. I had to laugh and smile the whole way through this – and thought ‘been there, done that’! This post is going to be so great for people starting out, and even for people who have started and are well into their business venture – it’s a good reminder to re-evaluate.
Loving your blog as always my dear!
Danielle x
You totally hit the cookie on the head with this one! Thank you so much for expressing so perfectly what all of us cookie gals are always feeling. I sometimes feel bad when I give someone a quote, but I know to lower the price would just be cheating myself. Luckily I haven’t had anyone ask me to lower the price yet, although once or twice they have just ordered a smaller quantity. I’m with the other girls, I’m printing this and handing it out with my business cards! LOL!
Hi! Awesome post, funnily enough I started my home (for now) bussines totally wanting to make cookies (is even called Cookies Factory) but have since changed my main focus to cupcakes and whatnot… Decorated cookies are such time consumers and here in the DR people are just not interested in paying what’s fair which I think has more to do with time and labor than the ingredients themselves…
Loved and Retweeted your post!
Wow. This post couldn’t have come at a better time. I have only recently started selling decorated cookies in my smallish town (since Valentines Day). I have definitely under sold myself. I’ve quoted a 6 dz order of grad cap cookies for $15 a dz.. and it’s a 4″ cookie.. I’ll def be working for pennies an hour on those! I’ve been trying to come up with a method for charging for cookies besides pulling a number out of my rear. I’ve looked online to see what others charge but those are all over the place price and looks wise. This post will help me feel more confident when I quote my next order. I hope so anyway
Thank you so much! This is great information, and probably the hardest thing to do with any small business!! Thanks again!
I love your blog and enjoy looking at all the wonderful things you have made. You are truly talented. This post is great and perfect for me as I start out with my small home-based business called Sugar & Spice. It is very small and I find it difficult to advertise, especially since I don’t have a shop front. I love making cakes and cookies, but like you said there is a lot of hard work involved and usually the price only covers the cost and no profit is made. I certainly have a lot to learn from “managing the books” to perfecting my skills. I would love your input on my work. Most of my work is for family and friends and they are pretty biased! Thanks for this great post.
Hannah Fedorowicz
My (very new) blog is sugarspice-hannah.blogspot.com
and I have a facebook page which is Sugar & Spice, but it’s difficult to find.
What a great post! SO very very true!
What a great post! I have a VERY non-cookie related home based business, and that’s tough enough. Many friends have encouraged me to make money on my cookies. Um, NOT so easy for all the reasons you listed. If they only knew how much went into each cookie, even the “easy” ones!
in Argentina, milles away From you, it’s the samé, so true! I love your blog, and this one is for keéping in favorites for ever!
Best wishes From Argentina!
Gabi TAgliabue
As others have mentioned, this information is valuable beyond the world of cookies…they are inherent truths to anyone starting a business. Value your time and expertise!
I’ve been mentoring a young woman who is starting her own business and the first words of advice I gave her were, ‘Know when to say no.’ That can be the hardest thing to learn when eager for clients.
I hear of people working from home and see the prices they are charging for goods and it’s evident they are not equating their time as part of the value either; that business owner will quickly burn out. No matter how much fun it is, if you are selling something, you deserve to have your time investment be rewarded.
You did hit a nerve and your voice is valued and listened to Gail; you are mentoring so many others when you share information like this.
Thank you! I always thought about these things, but felt that my goodies weren’t worth it because I don’t have a “culinary school” training. I needed to hear this!
Could not have said it better myself! This ain’t a fire sale dawlin
Oh yes. For that person who’s happy to work for $1/hour….. you are undercutting other business owners and that’s just not right.
Such great advice! Thank you so much for posting this. I haven’t sold any baked goods yet, but I have sold several crocheted items and I literally make about $1-$2 an hour if I were to really calculate the time that goes into everything and the cost of the yarn.
I may have to reevaluate my prices. I just get so afraid that if I price it to what I really should be charging no one will buy anything.
AWESOME post! I’ve been making cookies since halloween of last year and just started selling them recently… I finally made myself come up with a ‘price chart’ that gives a MINIMUM price for different types of cookies and a minimum order number, this has worked great so far, because when I know something is going to take a long time or I am super slammed, I’ve given the wiggle room to talk with them and charge what’s necessary
HOWEVER.. I have definitely run into a few people who just couldn’t pay even the minimum, and as much as I wanted to make them anyway… I’ve tried to really stick to it. One lady said she’d be sure to budget more for her party next time:)
Here’s an example of my ‘minimum’ prices that I posted on craigslist.. mind you.. I’m nowhere NEAR an expert at any of this:) Just in case it’s helpful to anyone: http://macon.craigslist.org/art/2308773659.html
Thanks again for the inspiration!!!
Sally Lewis
Thank you so much for postng this. It is extremely helpful. My business has just celebrated its first year and I’ve been through your steps. I thought I was crazy for re-evaluating my prices, but you’re right in doing so. I was trying to get more word of mouth from friends and family – and I did let everyone know that I was giving them a discunt. It did pay off. Now I’m charging my regular price to everyone. Thank you for posting this as I now know I’m on the right track!
Great Post…. I have a tid-bit to add – while many/most home “businesses” begin at home to “test-the-market” & build a customer base and while many people work “under-the-table” as opposed to getting a business license…If you are hoping that your cookie making/baking business grows – you may want to check out state, county & local city business license requirements & regulations. This is probably not a big deal in most states – but, I live in California which has very strict (restrictive) regulations about using a home kitchen for business.
This is a terrific post! Fifteen years ago when I started my own non-cookie business, I needed to read these words. What you have written is so relevant to anyone in a creative arts business. Thank you!!
Oh how I love you Gail! And your savvy, wisdom & wit!
Hi, thank you so much for this post. It is so true!
That’s why I don’t sell my baking. Thank you again!!
Such great food for thought. Best post I’ve read in a while. Thanks for sharing
This is all very informational and I appreciate you taking your time to alert those of us who aren’t aware of our cookie worth. Although informative, this post was a little off-putting to me. I have thought about starting an at home bakery to decide if I should take the big leap and I got to thinking if I charge what’s fair to me, my cookies won’t sell and I’ll feel like a failure. I realize this is not due to your words, as they are helpful but rather due to people nit realizing how much goes into making a batch of cookies. Maybe I’ll follow the trend and print this out and give it with every price quote
THANK YOU SO MUCH!..VERY INFORMATIVE..AND YOUR SO RIGHT THE ELEPHANT IN THE ROOM IS ALWAYS WHAT IS A FAIR PROFITABLE VALUE..FOR YOU & YOUR CUSTOMERS..FINDING THAT PERFECT BALANCE ARE THOSE LITTLE BALLS THE ELEPHANT IS ALWAYS JUGGLING ON IT’S LIL PEDASTOOL..MUCH RESPECT & LOVE..{{HUGS}}~JEANI~
I so loved this post. I’m not a cookie artist but I do make hand made items and all the things you address can be applied to any business. We should not undersell ourselves…we are worth our talent!
THANK YOU, for this post!
Truly.
I’m just now starting a cookie business. I’m terrified…yet, so very excited. Wonderful, informative post.
No matter what business you are in, it’s a wise business person who evaluates overhead costs on a regular basis. As a salesperson, I know one of the biggest fears is people saying “No.” Get past it. Not everyone is your client…..but the ones that are are the ones that will be your best advertisers. Good luck to you baking entrepreneurs! Thanks for such a candid post!
Ah yes, the dreaded “$3.50 for a cookie!!” Just went through this a couple days ago. Thanks for the reminder about the time and effort put into making our cookies. And also, the cost. It’s amazing how people just don’t get it. It’s not “just a cookie”!!!!
I was just saying to a friend last night whose SIL is thinking about starting up her own cupcake biz…I said, “You know who she needs to talk to about how to figure out her prices? My friend, Gail.” And then you wrote about it. Thanks for reading my mind with this perfect post.
I’ve had your cookies… and I can honestly say that they’re worth the price
Well stated!!!! I would much rather buy a more expensive and made with love treat than one that was cheaper-and tasted like it. Stick with a client list that appreciates what you do. Someone that doesn’t want to pay your prices will find someone cheaper, and will then understand why you charge more.
Thank you so much for posting this. I’m currently struggling on how much to charge for my cookies. I’m just starting out and am feeling a little overwhelmed on how to go about all of this. I love reading your blog and seeing all your lovely creations!
Thank you! Thank you! Thank you! Thank you! ¡gracias!
This post hit close to home for me. I’ve been struggling with this very issue lately. Don’t want to charge too much in fear of not making any business, but at the same time not charging what my time and efforts are actually worth. I SO appreciate this post and your cookie wisdom. You are definitely one of my cookie idols!
BRAVO!!! This post is pure gold… loved it, Gail!
EXCELLENT post! So true, all of it! THANKS!
So true – every crumb of your blog. I’m at a crossroads now and this was perfect reading – thanks!
I can’t thank you enough for posting this. I JUST started selling cookies and sweets. The first sale I ever made I charged $1.25 per cookie!! Packaging and all! My price hasn’t gone up too far from that figure and I know it’s not enough but I just feel bad raising the prices. I know it’s something I have to do though. You just showed me that. Thank you!!!! ♥
love it!!!
excellent post!
been there. done that. LOL
the only think that I would add, is to be prepared for success. I love baking, and I have meet other wanna-a-be bakers, who LOVE baking, but, let me restate, I love baking on my schedule, not when orders come in and make me miss my kids events. price your work to cover the cost of your time and that may mean the cost of you not making dinner, attending a kid’s event or cleaning the house…. (do you pay Mickey D’s $1/hour? or a maid?)
I now bake for gifts, and I love it again!
thank you for posting this!!!
Gail, you have certainly hit a home run. The advice here is truly sound. So many times since our product has been appreciated by family and friends, with only compliments for pay, we have a really hard time putting a monetary value on our efforts. We can clearly understand charging for the actual ingredients, after all, that was money out of our pockets. Covering the “invisible” expense like utilities, gas, etc. are expenses we tend to overlook but can see the expense when we have to pay that bill. Tthe biggie is our time. I think so many of us have trouble deciding a dollar value to put on our time. Thanks for pointing this out and empowering others to not apologize to customers for putting a dollar amount on our time.
Thank you for this post. A friend and I have just opened our own business and we’ve been struggling with the ‘are we overpriced?’ feelings. I appreciate your words of experience.
EXCELLENT, EXCELLENT advise!! I truly appreciate this post and reading your words of wisdom! Well said! *Ü*
I completely whole heartedly agree. Was in the Specialty Cookie Bouquet business for a VERY short period of time. There was not a way in the world I could compete with Bakery prices for a dozen of cookies that took 4-5 hours to make! Not to mention the last minute phone calls for a very intricate designed bouquet with 24 hours notice…I decided it was just not for me…Wish I would have had your advice..at the time:) would have saved me alot of tears! Thanks so much for this post!
Too true- Great post! xo
Great post. I’d like to start a bakery way down the road and you just cleared up a lot of the things I’m already worrying about!
THANK-you!! SO MUCH!! This is exactaly what I needed. I found you via Fairytale Frosting. I really, really need to figure out MY WORTH!!!!
Such wise words…and I really needed them!! Thank you for this post
Everything I have thought after reading your great post has been affirmed by the many thoughtful comments of your readers. One thing I would like to add is something I have discovered myself. I never felt bad working for almost nothing when I was working for friends and family. However, when I started working for strangers, I started feeling resentful of missed sleep, missed family events and lack of pay. When I started charging what I think is a proper amount/started valueing myself properly and once I had the confidence to say “no” to unreasonable requests and expectations, things fell into place. There is a level of respect from customers when you deliver an exceptional product with a matching level of taste and quality and I find it is these customers that most often pass my name on to their friends.
Thanks again for a great post!
Thanks for the helpful tips. It was the perfect time for me to read them.
I just found this post. Thanks for the help. I’ve been making cookies off and on for a while mostly for family. I recently had an order from a stranger. I made 4 dozen four inch cookies and charged $50. The cookies had 3 colors and 2 icing consistencies. They took me about 8 hours. I’m realizing I’m not charging enough. She would like to order again. Any advice on how to handle telling her about a price change? Or should I just suck it up this time and not change the price?
Emailing you.
Love this blog!!! So what I do do? I was trying to be competitive with all similar businesses around but there seems to be one Cookie maker who charges 1/2 price of what Im charging which its a tiny bit cheaper than the local bakery. What do you do? I am really upset because considering the time you put in, if I were to charge “half” I might as well give them away…
If someone’s charging that little, I wouldn’t worry about being competitive with them. Their audience may not be your audience. They might be using cheaper ingredients in their cookies, for example. They may not put the time and detail in that you do. There will always be issues like this.
Align yourself with the best, which may not be the cheapest. People who recognize the quality of your work will seek you out.