Pricing is a bitch

Pricing your food business FOR PROFIT

Here’s the honest truth - pricing is an absolute bitch. I don’t care if you own a bakery, a cafe, are a caterer, design wedding cakes, or provide a service, deciding how to price will be one of the toughest things you do in your business. Sure there will be some trial and error, but not checking in and getting it right will put your business at risk. In order to pay yourself, your bills, and your employees it means putting in the time to get your prices right. Just having enough to pay your bills isn’t enough - there has to be a profit on the other side.

I get it - no one likes to talk about money as it has long been deemed a taboo subject. We worry that asking for it makes us greedy. We stress that wanting more makes us evil. We fear we are not worthy of more money. From me to me and you - fuck that bullshit. In order to take away its power we must talk about it. Not talking about money lets big businesses win and will keep you small. Were you born to be small? I think not. 

LET’S DIG IN.

In order to be a business one must earn money, because without the exchange of cold hard cash for your product or service it is your hobby or a charity. Don’t get me wrong, having hobbies and donating to charities are wonderful things, but if you are wanting to grow and earn a living from your business - pricing needs to be at the forefront of your plan and it needs to be reevaluated at least 1x per year.

You want to charge enough to make a living and build your businesses, but there is a worry that people won’t want to spend it on you or your product. It can be incredibly stressful and overwhelming to get it right for you and your customers. Believe me I have been there. When I was starting my home bakery - trying to figure out pricing was extremely difficult. I didn’t have the economy of scale (when you increase production and spread it over a larger number of products it helps to lower the costs overall) so it felt like pricing was even harder to get right. There was a lot of trial and error. The first idea was a weekly treat box that I called Cookie Wars. There were many reasons I decided to pivot, but one of them was pricing.

I didn’t want to have a brick and mortar and getting the pricing where I needed it within the space I had wasn’t going to work long term. An in-home bakery has more flexibility and time to adjust, but once you decide to go into a brick and mortar and are in the thick of things, if you don’t have your pricing locked down you risk not being sustainable.

There are many factors that come into play when figuring out pricing for your sweets, treats, and creations. The basics - ingredient cost, yield, overhead costs, and time it takes to make. There are also variable and fixed costs, as well as start up costs that need to be factored into your overall pricing. One thing that often gets overlooked is factoring in your expertise and the service you provide.

No two bakeries or cafes are the same and your customers are coming to you for what you can provide. Your pricing needs to cover your cost of goods at the bare minimum, but pricing that way will not keep you in business. You’ve got to have a healthy profit margin to give you long term success in your business. There is also what the customer is willing to spend to consider too.

“Don’t let money run your life, let money help you run your life better.” - John Rampton

We are so scared that people won’t want to pay our prices that we lower them dramatically to get the business. Living in this fear will not help to grow your business, but end it. Although it takes a great deal of time, energy, and commitment to pricing out your products, it is the only way to make sure you are pricing for profit and to keep your business moving forward and filling your bank account. 

Money helps the world go round and you deserve to have your slice of that pie. No matter where you are in your food business - take a step back and evaluate your pricing. Don’t just price based on what feels right - make sure the numbers make sense. It is the only way to keep your business growing and moving forward.

Need help? I’ve got you. Now offering PROFIT UP - one hour zoom meeting to get your pricing on track. We will cover where you currently are in pricing your products, dive into your frustrations, talk strategies, and you’ll go forth with actionable steps to get things in line.

Click the link below and let’s get your pricing in check to build a better, more profitable year ahead.

Need more than just an hour? I’ve got you covered - click the link below to get started.