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.”
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