Speaking at the recent Atlantic Bakery Expo, David Dirks of Satin Fine Foods addressed Rule No. 1 in the bakery business: profitability.
“Profitability is the litmus test for everything you do in your business,” Dirks says. “A lot of cake decorators work for very little money, even in their own business.”
Five key factors, he adds, impact your profitability: product selection, pricing strategy, product innovation, competitive landscape and your time.
In the cake decorating world, Dirks points out that many of today’s customers are looking for a unique experience. Decorating with rolled fondant can help you stand apart from the competition, he says.
“Play in the whitespace, where there is little or no competition in your area,” Dirks recommends. “This is the space that provides continual growth and profitability.”
Cake decorating instructor Jorg Amsler of the Sugar Arts Institute recalls that when he owned a retail bakery where he focused on premium cake artistry, “people would come and ask for crazy cakes, but would have no clue what we do and how much time it takes.”
Although three-dimensional cakes can be very popular with customers, Amsler points out that this type of cake is very labor intensive. He started to concentrate on two-dimensional cakes as a more affordable option for customers who want something unique but aren’t willing to pay a higher price.
A two-dimensional cake like a purse cake can be very appealing without the elaborate costs involved in adding structure. Amsler explains there are two basic methods: carve a cake into a two-dimensional shape and then decorate it, or make fondant pieces that you can place on the cake.
“You don’t want to say no to the customer because you’ll lose money, but very often they want to work with you,” he says. “If you explain the labor involved, they typically understand.”