6 Essential Home Baking Business Pricing Tips
Discover how price home baking business goodies like the pros by
uncovering how one very successful home-based baking
business owner sets prices for her business.
When Starting A Home Based Baking Business, You've Got To Know How To Price Your Goodies
I've heard from a number of people who want to start their own home-based baking business.
The one common question I get is how to get started and how to set prices.
Let's face it, in a baking business, you've got a lot of various ingredients coming together to create your product.
So it's helpful to understand what you should do to ensure that you set your prices just right.
Setting Prices For Your Home Bakery Business Is Part Art And Part Science
There's a delicate balance of setting your prices in such a way that
- Your customers can afford your offering and
- You can afford to continue to buy all of the supplies that you need to be able to stay in business and earn enough profit to be able to sustain your living expenses.
If you set them your prices too low, you won't make enough money to stay in business.
However, if you set them too high, then your customer's won't buy and you still won't be able to sustain your own business.
It's Important That You Know What You Need To Do To Ensure That Your Business Can Actually Earn Money
Read the tips below from a home-based baking business owner who have turned pricing into an art.
Dear Latarsha And Home Baking Enthusiasts,
I have learned the fine art of finding just the right pricing strategy to
- Keep me in business,
- Earn me enough profit, and
- Keep my customers happy.
The valuable lesson I've learned in my home baking business is that pricing has to satisfy both your needs and your customers needs as well.
Therefore, when you are trying to determine which how to price in your home-based baking business, it helps for you to keep both your profit need and your customer's budget in mind at all times.
Why I Decided To Start My Own Baking Business From Home
I loved to bake and this inspiration allowed me to begin a home baking business.
I basically own a Vietnamese baking business specializing in Banh Mi and many other Asian bakery goods.
I Began With The Inspiration Of Making Bread
I thought that my Banh Mi was better than all the other stores' bread and I though at first that I may be able to compete with them (which is obviously impossible) but still turned out successful.
Before I Started My Baking Business, I Offered Taste Tests
Being a Vietnamese bakery, I usually only sell Vietnamese baked goods, specifically Banh Mi, and Vietnamese donuts and puffy bread.
I knew I could gain a profit off my Banh Mi, however, the Vietnamese donuts and puffy bread need refining before I could actually sell so I offered a partial taste test for a few days to gain criticism to make the bread better.
Home Baking Business Tip 1 - Determine Your Prices Based Your Time And Ingredients
I usually determine the price based on the time and ingredients needed to make it.
- Usually Banh Mi is about $2 per loaf.
- I usually inflate the price about 15% higher than my ingredient price to actually insure that I will have some sort of profit from the business since this business doesn'tt technically pay for taxes.
Home Baking Business Tip 2 - Pay Attention To Daily And Monthly Income
I haven't yet ran into financial trouble...and that's because early into my business I learned a very important pricing reality.
The trick to remaining financially fit in your business is paying attention to the daily income and monthly income, to gain a sense of insight of the fluctuation of the pricing.
Home Baking Business Tip 3 - Know How To Adjust Pricing In A Down Economy
I usually increase prices based on ingredients and time, as well as current economic situations.
- I place the prices 10%-15% higher than projected ingredient price.
- I perform monthly calculations actions based upon instinct and acquired data.
- That way, Im sure that the numbers I have are accurate and precise and there wont be any errors.
- Up to this point, I just reduced the quantity since the demand for my baked goods dropped slightly so I can avoid any price fluctuations, but save money within the business.
Home Baking Business Tip 4 - Focus On Quality
What really surprised me was how high you could set the price to consumers as long the quality of the item was great. If you have quality and quantity, the business will do great.
Home Baking Business Tip 5 - Price For Your Needs And Your Customers' Needs
What I really wanted to know with the pricing before was that you have to have a price that the consumers can afford, but you really want to have a price where you can have profit.
So you have to find the median between both worlds to actually keep customers and gain profit.
Home Baking Business Tip 6 - Be Mentally Prepared To Face The Challenges
My regrets for my business were not knowing anything about markets beforehand.
I just jumped right in hoping to make money off my Banh Mi which I knew was good, but it took weeks for others to realize.
One time, there was really no activity for an entire week so I had trouble deciding whether or not I should bake or hold supplies.
And then the time came when I had a few customers and I had no goods or the time when I had a few goods but no customers so I lost a bit of profit.
What I did was just be prepared both ways and accept the fact that businesses such as mine will have problems like these so just better to be prepared then have no goods at all.
Starting A Home Baking Business - My Bottom-Line Advice
I would recommend others to start a home baking service, only if they are experienced bakers.
If not, then you better off working your current job as youll lose more money if you dont have an actual profit.
My Three Pieces Of Advice For People Seeking To Start A Baking Business At Home
- Know the economy,
- Set the price right, and
- Focus on the quality.
Here's To Starting A Home Bakery Business That Customers Can't Resist!
P.S. Here's A Few More Tips To Make Your Home Baking Business Start-Up A Success...