How to cost a recipe and price your bakes
To price a bake, first work out what one item costs to make: its ingredients by weight, its packaging, a share of the oven's energy and a share of your overheads. Then add pay for your time and a profit. Most home bakers undercharge because they only count the flour and the butter.
The four parts of a bake's cost
- Ingredients, by weight, at what you actually paid. Include the small things: starter, egg wash, dusting flour, the sprinkles.
- Packaging and labels: the bag, box, band and label for one item.
- Energy: the oven's running cost for the bake, shared across everything in that bake.
- Overheads: insurance, card fees, pitch fees, website, and wear on mixers and tins, spread across what you sell in a typical month.
Your time is separate. Keep it out of the cost so you can see clearly what's left to pay you.
Worked example: one sourdough loaf
| Item | Amount | Cost |
|---|---|---|
| Strong white flour | 450 g at £1.10 a kg | £0.50 |
| Wholemeal flour | 50 g at £1.00 a kg | £0.05 |
| Salt | 10 g | £0.01 |
| Starter | 100 g | £0.06 |
| Paper bag and label | 1 | £0.12 |
| Oven energy | share of a 45-minute bake | £0.34 |
| Overheads | share of the month's costs | £0.30 |
| Cost to make | £1.38 |
Sold at £4.00, that leaves £2.62 a loaf. Now take your time out of it. If shaping, baking and packing a batch of eight loaves takes an hour of hands-on work and you pay yourself £12 an hour, that's £1.50 a loaf. What's left, £1.12 a loaf, is the business's profit: money for a new mixer, a quiet month, or a holiday.
Setting the price
There are three ways to check a price, and a good price passes all three:
- Cost plus: cost to make, plus your time, plus a profit you're happy with.
- Ingredient share: a common rule of thumb is that ingredients should be about a quarter to a third of the selling price. In the example above they're £0.62 of £4.00, about 16%, so there's room.
- The local market: what bakes like yours sell for nearby. If you're well under, you're probably undercharging.
Celebration cakes need the time counted most carefully: decorating, consultations and messages add hours that never show up in the ingredients. VAT only matters once you're VAT-registered (from £90,000 of sales a year). Most bread and cakes are zero-rated, while hot food and eating in are not, and HMRC's VAT guide for food has the detail.
Spreadsheet or bakerykeeper?
Spreadsheets are free, and plenty of good bakeries run on them. Here's an honest comparison:
| Spreadsheet | bakerykeeper | |
|---|---|---|
| Flour goes up | Update the price in every sheet that uses it | Change it once; every recipe's cost updates |
| Sub-recipes (buttercream, frangipane) | Possible, with careful formulas | Built in, as deep as you need |
| Scaling a batch | Copy and adjust | Pick the number of items |
| Allergen labels | A separate list to keep in step | From the same recipe, so they can't drift |
| Orders, bake plan, takings | More sheets, or other apps | The same recipes and products, in one place |
| On a phone in the bakery | Fiddly | Designed for it, with 44 px buttons for floury fingers |
| Price | Free | Free in the beta; monthly plans after |
How bakerykeeper costs your bakes
You log what you paid for each delivery, and your recipes by weight, with sub-recipes such as a levain. bakerykeeper works out each bake's cost from the latest prices, adding packaging, labels, oven energy (hours × kW × your price per kWh), your labour rate and your overhead percentage. The pricing panel then suggests a price for your target margin, shows profit per item and per batch and the break-even number, and tells you in words, not just colours, whether a price is on target. A what-if table shows how the price and batch size change your profit.
Questions about costing
Should I include my time in the price?
Yes. If the price only covers ingredients, you're working for free. Keep your time out of the cost to make, then add it when you set the price, so you can see both.
How do I cost oven energy?
Multiply the oven's power (in kW) by the hours it's on, including preheating, and by your price per kWh from your energy bill. Divide by the number of items in the bake. An oven running at 2.5 kW for an hour and a quarter (preheating plus a 45-minute bake) at 27p a kWh costs about 84p: roughly 28p a loaf if you bake three, and less with a full oven.
How often should I re-cost my recipes?
Whenever a main ingredient changes price, and at least every few months. Flour, butter, eggs and chocolate move most.