Cake Pricing Sheet: Five Steps to Build One

Here is the whole idea in one picture. Four columns are typed by you, and two are worked out from them.

A price you cannot explain is a price you will end up discounting.

Step 1: Give every size and flavor its own row

A row is one thing you can sell. Cardamom pear in 8-inch is one row. Brown butter pecan in 6-inch is another. A 9x13 sheet cake gets a row too, because its cost differs from any layer cake.

The example sheet holds four cakes: cardamom pear layer (8-inch), brown butter pecan (6-inch), lemon olive oil (4-inch) and dark cocoa layer (9-inch). Start with your four best sellers.

Step 2: Type the cost of each row first

Cost goes in before price, so the price never decides the cost. Penn State Extension counts ingredients, labor and packaging as variable costs, and all three belong in the cost column.

Build each cost from three parts. Ingredients are the pack price divided by the pack amount, times the amount you use, added up for the recipe. Labor is your minutes times your hourly rate, so 45 minutes at $18 an hour is $13.50. Packaging is what the box, board and liner cost for that cake.

Cost changes with size. Pans scale by area, so a 6-inch cake uses about (6 ÷ 8) × (6 ÷ 8) = 0.5625 of an 8-inch cake, and a 10-inch uses (10 ÷ 8) × (10 ÷ 8) = 1.5625, if the layers are the same height. From an 8-inch cost of $20 that gives about $11.25 and $31.25. Treat that as a first estimate and check it against one real batch. At a 40 percent margin those costs price at $18.75 and $52.08.

The example costs are $20 for the 8-inch pear, $15 for the 6-inch pecan, $12 for the 4-inch lemon and $24 for the 9-inch cocoa. Haven't costed a cake yet? Do that first and come back.

Step 3: Type a price and read the margin

Margin is the share of the price you keep. Take the price, subtract the cost, and divide by the price. For the 8-inch pear at $32, that is ($32 − $20) ÷ $32 = 37.5 percent.

Three rows sit at 40 percent and one at 37.5. The odd row is the one to look at first.

Why a cake pricing sheet needs a margin on every row

Markup and margin sound alike and are not the same number. Penn State Extension's cost-plus example adds a 60 percent markup to a $1.75 jar to get $2.80. Read as a margin, $2.80 on a $1.75 cost is 37.5 percent.

The 8-inch pear row is the same sum. $20 plus a 60 percent markup is $32, and $32 on a $20 cost is a 37.5 percent margin. Pick one word and use it on the whole sheet. Margin is easier to check against a target, because 40 percent means you keep $40 of every $100.

Nobody can name a healthy margin for you. The examples here sit at 37.5 to 40 percent. Your target has to cover more than the cake, since the IRS puts the self-employment tax rate at 15.3 percent, and profit is not all spendable money. Choose the margin from your own costs and your own pay.

Step 4: Add a check column that says it in words

Color is not enough for a quick scan, and it fails if the sheet is printed in black and white. Write the result in words. A tick and OK when the price covers the cost, a triangle and Under cost when it does not.

The check is one test per row, written as =IF(cost>price,"Under cost","OK") with your own cell references. If the cost is higher than the price, it shows Under cost. Try it on the 8-inch row. Change the price from $32 to $16. The margin becomes ($16 − $20) ÷ $16 = −25 percent, and the check reads Under cost. A blank price should read Enter price, so an empty cell is never taken for a free cake.

The Cake Price List file has these checks as locked formulas, so you only type cost and price.

How a cake pricing sheet handles flavors that cost more

A dearer flavor gets its own row. Fruit filling and premium chocolate raise the cost, so the margin on that row tells you at once whether the price still works. Sort rows by flavor first and size second, so a customer reads down one flavor and sees every size together.

To show one flavor price plus an upcharge instead, give the upcharge its own row with its own cost. Work out the upcharge's cost as the extra ingredient's line cost, then the sheet checks it like any other row.

Step 5: Give customers a copy without cost and margin

Your working sheet shows your cost. A customer needs only the cake, the size and the price. Copy the sheet, delete the cost, margin and check columns, and save it under a different name.

Keep the two files in the same folder. When a price changes, change the working sheet first and copy again. That way, no customer ever sees a cost column by accident.

In the Cake Price List file, cost is a number you type, so nothing updates by itself. Look at the cost column whenever a receipt shows a new price on a main ingredient, and always before you send the customer copy.

When a pricing sheet is the wrong tool

A pricing sheet does not work out cost. It stores the cost you type. Without a cost for each cake, start with a recipe cost, then add your labor and a box.

The Cake Price List file has room for twelve cakes on one sheet. A bakery with a long list of sizes and flavors will want a second file or a different tool. It also has no column for add-ons, lead time or a minimum order, so those go in the note you send customers.

Using this in the app you already have

• Will it open in my app? The file is an .xlsx. It opens in Excel. For Google Sheets, upload it to Google Drive and open it with Google Sheets. Google's help page says an Excel file opened from Drive can be edited in Sheets.
• Why pay when I can build it? You can build this sheet in any spreadsheet for nothing. What $5.99 buys is the work you would otherwise do: the margin formula, the check formula, and locked cells so a stray click cannot overwrite them. There is no free sample.
• What do I get? One workbook, sent by email after checkout. The margin and check formulas are locked with no password, and the four sample cakes clear with one named range.
• What if I get stuck? Both formulas are printed in this guide, so you can rebuild them by hand. The first tab, How to use, is three short sections. In Excel, Review then Unprotect Sheet opens a locked formula for editing.

If you would rather not build the check column, the Cake Price List is the same sheet, ready to fill.