Getting started
Business Plan for Cakes and Catering: 7 Numbers to Set
A cake and catering plan built on ingredients, your labor, and overhead, so you know what each order really earns.
On this page
- Start with the three costs in every order
- How to split overhead across cake and catering orders
- Write the plan in seven short sections
- A worked example for one cake order
- How to price a catering order as its own job
- Check the rules before you take catering orders
- The mistakes that cost you money
- Set your break-even number before you bake
- How to check capacity before you take a big booking
- How to update the plan each month
What to remember
- Cost ingredients, labor, and overhead for every order.
- Pay yourself an hourly rate before you count profit.
- Use one flat monthly fee, like Brevl at $20, as part of overhead.
- Know your break-even order count before you take a big booking.
You do not need a 20 page document to start. A one page business plan for cakes and catering can be enough if it shows your costs, your prices, and the number of orders you need to pay yourself. Keep it where you can see it when you price a new order.
Start with the three costs in every order
Ingredients are the first cost, including what you bake with and what you pack the order in. Labor is the second cost, so put an hourly rate on your time even if you pay yourself later. Overhead is the third cost, and it covers what you pay whether you bake or not, such as the flat $20 a month Brevl fee if you use it.
If you also sell cupcakes, use the same three costs in the cupcakes business plan. The numbers change, but the order of the math does not.
Packaging belongs in the ingredient line because you buy it for the order. Count every hour you spend on the order, including prep, baking, decorating, packing, and delivery. If you leave those hours out, the price will look better than the order really is.
How to split overhead across cake and catering orders
Overhead is the cost you pay whether you bake or not, so split it across the orders you expect in a month. If your overhead is $100 and you expect 20 orders, add $5 to each order. If you expect 10 orders, add $10 to each order.
Use the same split rule for cakes and catering orders so one type does not hide the cost of the other. Write the rule in your plan and update it when your order count changes. The order price must carry its share of overhead before you call it profit.
Write the plan in seven short sections
Your menu and your best sellers
List the cakes and catering orders you want to sell. Keep the list short enough to buy and plan for.
Your prices
Write the price for each cake size and each catering order. Do not set a price until you know the three costs.
Your cost per order
Add ingredients, packaging, and labor for one order. Add overhead per order.
Your break-even number
Add your monthly fixed costs and divide by the amount each order leaves after ingredients and labor. That is the number of orders you need.
Your capacity
Decide how many orders you can bake in a week. A plan that ignores your oven and your hours is not a plan.
Your rules check
Ask your county about permits, kitchen rules, and labels before you take orders.
Your first 30 days
Set one goal for orders, one goal for cash, and one goal for a new customer. Review them at the end of the month.
Keep the plan to one page if you can. A page you update is better than a long file you never open. Review it at the end of each month and change one number at a time.
A worked example for one cake order
For example, a cake order sells for $120. Ingredients and packaging cost $30. Labor is 4 hours at $15 an hour, so labor is $60.
Monthly overhead is $100, and the $20 Brevl fee is part of that total. At 10 orders that month, overhead is $10 per order. Total cost is $30 plus $60 plus $10, which is $100. The margin after all three costs is $20.
The margin is what is left after ingredients, labor, and overhead. It is not the same as the price. A $120 order with a $20 margin leaves you $20 to cover profit, savings, and surprises.
How to price a catering order as its own job
A catering order is not a large cake order with a different label. It has its own ingredients, packaging, hours, and delivery needs, so cost it as its own job. Use the same three costs, but count the full hours for shopping, prep, baking, packing, and service.
Add the packaging the order needs and its share of overhead. Do not spread a cake price across a catering order just to win the booking. If the catering order does not cover all three costs and a margin, the booking costs you money.
Check the rules before you take catering orders
In Fairfax County, many businesses can be established with the administrative approval of a Home-based Business Permit, according to the county. Ask your county what permit, kitchen, and label rules apply to cakes and catering. Do this before you spend money on packaging or take a large booking.
Ask your county about the rules for the cakes and catering orders you plan to sell. Do this before you print labels or promise a delivery date.
The mistakes that cost you money
The first mistake is pricing from ingredients alone. The second is leaving your labor out of the price. The third is treating a busy month as profit when the money is already spent on supplies. The fourth is taking a catering order before you check what your county requires.
Set your break-even number before you bake
Add your fixed costs for the month. That includes the $20 Brevl fee if you use it, plus any other cost you pay whether you bake or not. Use the amount each order leaves after ingredients and labor, before overhead, and divide the fixed cost total by that amount. The answer is how many orders you need to cover your fixed costs.
Check the number against your week. If you can bake 8 orders and your break-even is 12, the plan does not work yet. Raise the price, cut a cost, or add a second sales day. If you sell cupcakes too, the cupcake business plan shows the same math for a dozen.
How to check capacity before you take a big booking
Your oven and your hours set your capacity, so write down how many cakes and catering orders you can finish in a week. Compare that number with your break-even count. If break-even is 12 and capacity is 8, the plan does not work yet.
Before a big booking, check the date against your capacity. A large order can push out smaller orders and still leave you short. Raise the price, cut a cost, or add a sales day before you promise the date.
How to update the plan each month
At the end of the month, compare your actual ingredients, hours, and overhead with the plan. Change one number at a time so you can see what moved. If overhead rises, recalculate overhead per order. If your order count falls, the same overhead is spread over fewer orders.
Keep the plan where you price orders, and review it when you take a new booking. A page you update is better than a long file you never open. The plan should change when your costs or your order count change.
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Common questions
What should a cake and catering business plan include first?
Start with your menu, your price for each cake size and catering order, and your cost for one order. Add your labor and overhead, then write your break-even number. A plan that skips labor or overhead will make a busy month look more profitable than it is.
How do I price a catering order when I also sell cakes?
Use the same three costs for both: ingredients, labor, and overhead. A catering order may take more hours and more packaging, so cost it as its own job. Do not spread a cake price across a catering order just to win the booking.
Do I need a permit to sell cakes from home?
It depends on where you live. Many businesses in Fairfax County can be established with the administrative approval of a Home-based Business Permit. Ask your county about permits, kitchen rules, and labels before you sell. Get the answer in writing if you can.
How many orders do I need to break even?
Add your monthly fixed costs, including the $20 Brevl fee if you use it. Use the amount each order leaves after ingredients and labor, before overhead. Divide the fixed cost total by that amount. The answer is your break-even order count. If the number is higher than your oven can handle, raise your price or cut a cost.
Should I write a plan if I only sell cakes?
Yes. A cake only plan can be shorter, but it still needs ingredients, labor, overhead, and a break-even number. If you sell one size of cake, the math is simpler. Write the plan before you take a large order so you know the order pays you.
Sources
General information, not legal or tax advice. Check your county and state rules before you sell.