If you’re trying to figure out how to price cakes for your business, you’re not alone. Pricing often feels like the hardest part — it can be awkward, confusing, and even a bit uncomfortable, especially when you’re just starting out.
But getting your cake prices right is essential if you want your business to last. It’s not just about covering your costs — it’s about protecting your time, energy, and motivation to keep going. Let’s look at what can happen when pricing isn’t handled properly, and how things can change when you take control of your numbers.
Two Bakers, Two Very Different Results
Baker 1: The Guesstimater
“I want to build a proper business, but I can’t charge more than others around here.”
Baker 1 is serious about growing her cake business. She wants this to be her full-time job, not just something on the side. But she’s constantly battling one major belief:
“People in my area won’t pay more than £40 for a cake.”
She’s seen other local bakers posting prices that are just as low, so she feels she has to stay in line. To make it work, she charges £40 for a 6-inch cake and is happy when she sees bookings rolling in.
She’s never properly worked out how to price cakes — instead, she guesstimates. She tells herself that ingredients cost about £10, and the rest should cover everything else. But here’s what’s really going on:
- Actual ingredient and packaging costs? Around £18, once you include butter, fondant, boards, boxes, colours, and dowels.
- Electric, water, and small supplies? Roughly £4–5 per cake, but she’s never tracked them.
- Time spent? 4 to 6 hours per cake between shopping, baking, decorating, and cleaning up — unpaid.
- Other costs — cling film, baking paper, mileage, tools wearing out? Not even thought about.
By the time the cake is picked up, the baker has made maybe £10 at best — and that’s without paying herself anything for her time or effort.
- She’s building a business, but it’s costing her more than it’s bringing in.
- She’s stuck matching prices that aren’t sustainable, because no one’s ever taught her how to calculate properly, or how to feel confident charging what her work is worth.
She’s exhausted. She’s fully booked, but still stressed about money. She wants this business to grow, but deep down, something isn’t adding up.
Baker Two: The Planner
Baker 2 charges £75 for the same type of cake. She used to feel nervous about what people might think, but she took the time to work out what each cake costs her, and now she feels much more sure of her pricing.
Here’s her breakdown:
- Ingredients and packaging are around £18
- General business costs like insurance, electricity, cleaning, and wear and tear come to about £4 per cake
- She pays herself £12 an hour, and each cake takes her around 5 hours
- She adds a little on top for profit, so she can build a buffer for the future
Her prices aren’t random, and she’s not guessing. She knows what she needs to earn, and she charges in a way that supports her goals. Some people do question her prices, but most don’t — and the ones who do usually aren’t her ideal customer anyway.
By understanding her costs, she’s in control. She has space to grow, take on orders that work for her, and feel proud of what she’s built.
Why Getting Your Numbers Right Matters
When you don’t charge properly, the problems start quietly. You feel like you’re working hard, but your bank balance doesn’t reflect it. You second-guess your quotes. You start to feel like you’re constantly behind, no matter how many cakes you make.
But once you sit down and work out the real costs of what you’re doing, things start to change. When you work out your prices properly, you stop relying on guesswork or emotion and start making decisions based on what works for your life and your business.
That doesn’t just affect your income — it affects how you feel about your work. You’re no longer hoping the numbers will somehow work out. You’ve taken the time to make sure they do.
What to Include When You Work Out Your Prices
If you’ve never sat down and done this properly, don’t worry — you’re not alone. But today’s a good day to start.
Here are the main things to include when you’re working out what to charge:
1. Ingredients
Every single one, including sprinkles, boards, boxes, and ribbons.
2. Packaging and Materials
This includes things like cling film, greaseproof paper, cake boxes, cupcake cases, and anything else you use to store or present your cakes.
3. Time
This is a big one. Your time has value. Hours spent baking, replying to messages, shopping for ingredients, or cleaning up after a long day, it all adds up. Decide how much you want to earn per hour and include it in your pricing. If this is hard to work out how much you should pay yourself, think how much you would be comfortable paying someone else to do that job
4. Business Costs
Things like electricity, water, cleaning products, tools, subscriptions, insurance, and anything else that helps you run your business from day to day.
5. Travel and Delivery
If you offer delivery, don’t forget the cost of fuel and the time it takes to drive, park, and drop off the cake.
6. Profit
Once you’ve worked out the full cost of making a cake, you’re not done yet. You still need to add a profit margin.
How Much Profit Should You Add On Top?
20-30% is a good place to start. As your skill, speed, and reputation grow, you can increase this margin. When people start to come to you for your cakes, that value deserves to be reflected in the price.
Profit isn’t a bonus, and it isn’t greedy – it’s what keeps your business stable, allows breathing room when prices rise, and enables investments in tools and training. It’s the difference between making ends meet and making progress.
Pricing and Mindset Go Hand in Hand
A lot of what holds bakers back isn’t just maths—it’s mindset. Worrying about what people will think, feeling guilty for charging, or assuming that higher prices mean fewer customers.
But when you believe in the value of what you do, and when your numbers back that up, the worry eases. You stop chasing every order and start building a business that works on your terms.
Pricing isn’t just about money—it’s about respect. For your time, your talent, and the business you’re working so hard to build.
Try This: A Quick Check of Your Last Cake
Take a minute now and think about the last cake you made for a customer. If you can, grab a notebook and go through this exercise:
- Write down what you think the cake cost you to make
- Now, work out how to price cakes properly:
- Add up the actual ingredients
- Include things like cling film, boxes, and cleaning products
- Count all the time you spent on that order
- Add in delivery, shopping time, and electricity
- Add up the actual ingredients
- Now compare your estimated cost with the real cost
Were you close? Or were you under?
If you undercharged, work out how much you lost. Now imagine you do that with every cake you make. Multiply that by how many cakes you sell in a month, then in a year.
That’s how much you could be missing out on.
Make sure you’re paying yourself properly — your time, skill, and effort have real value.
If you’re building a business, it has to work for you as much as it works for your customers. Pricing isn’t just about covering costs — it’s about giving yourself the chance to keep doing what you love, without running yourself into the ground.
So take the time to look at your numbers, even if it feels a bit uncomfortable. It’s one of the most important things you can do for your business – and yourself.
