Pricing custom cakes is one of the hardest parts of starting as a home baker—and it's not the only challenge. If you're in the planning phase or you've already sold a few orders, you've probably felt it: the mix of pricing confusion, legal questions, time pressure, and marketing on top of actually baking. It's easy to feel overwhelmed.
The good news is that you don't have to fix everything at once. This guide names the main challenges home bakers face when starting, leads with the one that hurts most—pricing—and gives you a clear order: fix pricing first, then legal, then your systems, then marketing. By the end you'll have a formula you can use straight away and a sequence that actually sticks.
The Biggest Challenge: Pricing Custom Cakes
Most home bakers struggle with pricing for the same reasons: they don't know how long a custom design will really take, they compare their prices to supermarket cakes, and they leave labour and overhead out of the maths. If you only count ingredients, you're almost certainly undercharging. Your time, your packaging, and the cost of running your kitchen all belong in the price.
The formula that works
Use this, then add your margin:
Price = Labour + Ingredients + Supplies + Overhead
- Labour — Mixing, baking, decorating, cleaning. Your time has value. (Cooling or setting time is often left out of "billable" labour in formulas, but your active hours count.) The 2025 average baker's pay rate in Australia according to PayScale is around AU$25 per hour—but you can always charge more. Anything between AU$25–55 per hour is a good range for custom work.
- Ingredients — Every gram in the recipe: flour, butter, eggs, flavourings, decorations.
- Supplies — Packaging, boards, ribbons, labels;
- Overhead — The share of utilities (electricity, internet, mobile phone, licensing, marketing, website etc).
Price per serving or per unit so you know the true cost of every slice or cupcake before you set the final price. Then add your margin. That's how you price custom cakes without guesswork—and how you stop comparing yourself to grocery-store cakes. Custom work means custom time, creativity, and attention; it's not the same product.
A system that keeps the maths straight
If spreadsheets make your head spin, you're not alone. You need a place where you can import ingredients and supplies in the units you use in your recipes, keep those units consistent when you create recipes, and get recipe cost and per serving without redoing the maths every time. BakeSuite's Kitchen module does exactly that: you add your ingredients and supplies (cups, grams, whatever you use), then use Smart Fast Recipe—upload a recipe PDF or paste a recipe—and it auto-matches ingredients and supplies and calculates recipe cost and per serving. The Overhead Calculator helps you calculate the extra shared utilities so your price actually covers your work. One place for the messy maths; you focus on the dough.
Other Challenges Home Bakers Face When Starting
Beyond pricing, you'll run into a few more areas. Here's a quick map.
Legal and licensing
Requirements for selling from home vary by state and territory in Australia—and by jurisdiction elsewhere. We're not providing legal advice. Your can check the correct authority for your region (e.g. your state or territory food authority or government licensing page). In many places you'll need to think about food handler training, labelling, and which products you're allowed to sell from home. "Do I need a license?" → Check your local authority. Once you know the rules, you can get compliant, then factor this in your pricing and systems.
Time and labour
Counting your hours isn't mean—it's essential. Mixing, baking, decorating, and cleaning all take time. If you don't put a value on that time in your pricing formula, you're subsidising every order. Not to mention the time it takes to design the cake for the initial quote. Use your labour rate (and overhead) in the formula above so your prices reflect the real cost of making and delivering the cake.
Marketing and getting customers
Building awareness on a budget—social media, word of mouth, local networks—is another challenge. The point here isn't to solve it all in one go. Get pricing and legal in place first; then add a simple system for costing (so your pricing is repeatable); then work on marketing. Order matters.
What to Fix First: Pricing → Legal → Systems → Marketing
Trying to do everything at once leads to burnout. This order works:
- Pricing — Get the formula in place (labour + ingredients + overhead, then margin). Spend time setting this up in the beginning, once it's set up, everything else just falls into place and it works. You can stop comparing to grocery stores. Value your time.
- Legal — Check your state/territory or local authority. Get compliant. We don't give legal advice; direct yourself to the right source for your region.
- Systems — One place for recipe costing: your units, your recipes, true cost per serving. That might be a spreadsheet you trust, or a tool like BakeSuite Kitchen (ingredients and supplies in your units, Smart Fast Recipe for PDF or paste → auto-match → recipe cost + per serving, plus an Overhead Calculator). When your costing is repeatable, your pricing stops being guesswork.
- Marketing — Once pricing and systems are solid, focus on getting your name out there.
For a deeper walkthrough of the pricing formula and a system that does the maths, see How to Price Custom Cakes (Without the Guesswork) on the BakeSuite blog.
Conclusion and Next Steps
Your prices should reflect your value: labour, ingredients, and overhead, then margin. Fix pricing first. Then get legal sorted (using your local authority), then put a system in place so your costing is consistent, then work on marketing. Your value isn't defined by grocery-store cakes—it's defined by the time, skill, and care you put into every order.
Next steps: List every cost (ingredients, labour, packaging, utilities). Use one place for the maths so you can scale from six cupcakes to sixty without redoing everything. Price per serving or per unit, then add your margin.
Ready to price with confidence? Import your ingredients and supplies in the units you use, paste or upload your recipe, and get recipe cost and per serving in one place. BakeSuite—Kitchen module, Smart Fast Recipe import, Overhead Calculator; 30-day free trial, no credit card required.
External Links
- Food safety and licensing for your state/territory → FSANZ state/territory contacts — for reader's region; we are not providing legal advice.