INGREDIENTS:
- PICK PRODUCTS TO START WITH
- UNDERSTAND PRICING
- USE SAMPLES TO MARKET
If you love baking, it is tempting to try and start your business with too many products. Most of us are capable of making a wide variety of products. I urge you to start small and use the KISS (keep it simple stupid) principle.
You also need to consider what type of product has the perceived value that commands enough of a profit margin. For instance, many people can make chocolate chip cookies. Although the ingredients for cookies can be pricy, the perceived value may not be high enough to have a profit margin that makes sense.
On the other hand, many cakes have a higher perceived value but actually have lower ingredient costs. A nicely decorated cupcake or cake can command a rewarding return. If you learn the wedding cake trade, now you can charge top dollar.
Pricing
When we start our business, knowing what to charge is a challenge. Since we can easily whip up a dessert, under estimating the value is a common mistake. One rule of thumb is to total up all the costs, including packaging, and multiply it by three.
It is important to remember that if you set your prices too low, you will have to work harder for less money in the end. Your competition is not the big box store, they make their money with volume sales and it is impossible to compete on volume.
Instead, you compete on quality, producing a better tasting product. There are lots of customers out there who are willing to pay for homemade baked goods, so don’t be afraid to get paid for your time and expertise.
Samples
Letting you potential customers sample the product is an easy way to start selling your product and get people talking about it. All of us have been to the grocery store and see the tables where vendors are offering samples of their product. Take a hint from the experts, if that was a tactic that did not work, companies would not be giving away their product. It often gets customers literally hungry for more.
