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Bakery Pricing and Why I Charge What I do

Posted on April 08, 2017 by Kathryn Alvarez

I used to get complaints - and sometimes I still do - about my pricing and why I charge what I do. This has always frustrated me and I've lost quite a bit of business to other bakeries and home bakers who charge less.

When I started out again I used to own my own bakery in 2002-2005 until my divorce when I lost everything - my home based bakery included) I again did my homework when I created my business plan - which now a days I feel I can do in my sleep. Pricing needs to be competitive, fair, in line with other bakeries (grocery store and big named placed excluded) and most of all - what it costs me to make that product. This is a business, not a hobby.

Even home based businesses if you're serious about it being a business has expenses. And though some home bakers want the business they undercharge thinking they are taking business away from bakeries and real bakery businesses - but what they are doing is really hurting themselves. Seriously, how much can you make off those cookies you are selling for $7 a dozen? It costs me almost $3 just for the butter that goes into one regular batch of my cookies!! Even if you're using a mix or prepared dough and cheap ingredients like margarine - you would still want to make money. The difference between myself and them are that I don't use that stuff. It costs more to purchase local flour, real butter, real vanilla, sugar, good quality chocolate chips and the list goes on. Shoot, even if they use a smaller brand name chocolate chip - the bag alone is about $2.38. If you take $2.38 and subtract that from $7 that leaves $4.62. You still have other ingredients, your time and utilities and taxes left to pay out of that $4.62. Get where I'm going! AND if a home based bakery isn't charging taxes - they aren't a business.

It is really frustrating to me because I want to make people happy and satisfy their sweet tooth but there is no way I can cheapen my prices or my product.

I'm sorry some people have such a hard time with my prices. But because other bakeries and home based businesses have low balled their prices so low - I did have to drop mine a bit. And I still haven't made enough to repay myself. I do want to make a profit. That's what I'm in the business to do! I believe that some of the issue is that they see the cost the grocery stores and big names sell their products so cheap for and think we can do the same. There's NO WAY we can do that!! You have to remember that they purchase such an extraordinary amount of ingredients or pre-made products that it affords them the luxury of being able to have such cheap products. But really, how good for you can that $3.97 pie actually be for you?!! And they use so many chemicals and preservatives its not funny.

When I had to add on a $6 delivery fee (more in some other areas) - I got a rather harsh email from a repeat customer saying she was no longer going to order from me because I now charge a delivery fee. Wow! That hurt!! When we start losing money because of delivery, we had to do something. Gas and maintenance are expensive and we had to cover that. Because of the rental house I rent from - we can't have anyone pick up from here. It really bites because we have to deliver every item!! But I understand why. If something happened, the homeowner would be legally responsible as would I. It wasn't a risk they wanted to take. Some don't like this and hang up. But it is what it is and I'm trying to continue doing what I love to do and make my business work despite the odds against me. At least I didn't give up on my business or quit when I had to move!!

The cost of ingredients keeps increasing and on top of that I pay self employment taxes, sales tax for each county and city I deliver to and each county and city I ship to within Kansas, water/sewer, repairs, any professional cleaning,  loan debt that I acquired when I went into the store front (please do background checks on your property owners!!!! that store front was a HUGE mistake at that location and under that property owner!!!!), gas, electric, insurance, donations, the extra cookies and any additional shipping costs to ship to soldiers (we charge a set shipping fee and anything over that we pay plus we add in an extra dozen cookies to them), cleaning supplies, point of sale/internet costs and fees, website fees, phone/internet, advertising, shipping cost, shipping/freight and taxes I pay on items I order, accounting, office supplies, dues and subscriptions, business cards, vehicle maintenance costs, printer ink and on and on and on of expenses.

I consider myself to be like a mom and pop store. I'm a small business owner. It costs us more to do business. We do everything we can to keep costs in check and keep them down but sometimes - its beyond our control. It would benefit other home based bakeries and small bakery store fronts to do their homework and be in line with their competitors. This would be a win-win for everyone. Yes, there are competitors - but they are also trying to do what you are doing and that's make a living. Sometimes they are in the same boat you are. That doesn't mean you hate them. I've even referred some people to them when I was booked up. Some are cut throat competitors - yes, I deal with them, too. But just stay focused on you and your business.

For customers, I'm truly sorry. I wish I could charge less but I just can't. I can promise you that you are getting the best product I can make using local, natural, simple and wholesome ingredients and everything is made from scratch by hand with my heart and soul in it. And I truly appreciate and value as customers.

Posted in pricing

Licensed and Copyrighted Cakes

Posted on April 07, 2017 by Kathryn Alvarez

I get all the time requests for cakes and cookies to be decorated using licensed and copyrighted themes or characters. When I say "I apologize, that is not an item that I can do because its copyrighted" - people can get real cranky with me. That's because they don't understand the legalities of it. I do try to explain but sometimes - that's not what they want to hear about.

I do go through a licensed supplier to be able to use the licensed/copyrighted things that I do make. Because I'm such a small bakery - I don't always have that stuff on hand and usually you have to purchase so much at one time that it really costs more than what I'm getting to do the cake. Though some have paid what it would cost me just because they really want that character or theme.

So many times I've read about a bakery being sued because they made copyrighted items that they didn't have the rights to. It really doesn't matter the size of the bakery or where you're located - if your caught - its expensive and in some cases it has been known to destroy a bakery and even home bakers. This isn't something I'm willing to risk my bakery on. Oh yeah, I know other bakeries will do it and I do lose money to them because of it. In the long run though - I would rather lose $45 than everything I have not including the hassle, distress and everything else that comes along with a law suit.

When you're dealing with local schools - you still have to get their consent to use their logos. The elementary, middle and high schools are easier but when you want to use college logos - it can be costly. Cost is why I'm not licensed to use our local college's mascot or logo. The only way I can use them is when I buy edible images through my licensed supplier. I'm not talking the bakery that will print them from the computer and resell them either - that's a HUGE no-no by the way!! I use DecoPac.

I came across an article that was in "bake" magazine. My issues come via email and its a website I refer to often. I really LOVE "bake". This is really informative and what also motivated me to write this blog post. The blog post was a long time coming. Once I saw that I took it as a sign to go ahead and write about it. Here's the link: http://www.bakemag.com/Trends/Bread-Winners/2017/4/Licensing-Issues-in-Cake-Decorating.aspx

Now you know why I don't do licensed and copyrighted cakes and why I don't use photos or business logo's or even military logo's without written permission. It's not worth the risk. So please don't get upset with me when I say I can't and won't do it.

Thank you "bake" for the motivation and informative article.

Posted in copyrights, licensed cakes

Being #4 of Kansas Best Bakeries

Posted on March 02, 2017 by Kathryn Alvarez

I learned from a Facebook post tag that Never Better Bakery was #4 out of the 10 Best Bakeries in Kansas in February by Best of Kansas - BestThingsKS.com. WOW! This was something I had no idea was happening. I was and still am extremely excited!

With the way the past few years has gone, this was truly a welcoming validation that my bakery is a good one.I'm really proud of myself. Its not often a small, woman entrepreneur, lone wolf and a person with disabilities get recognized. This is really personal for me and that makes the acknowledgement even sweeter.

I'm very humbled, grateful and appreciative to have been chosen and picked over a lot of big bakeries. Thank you, thank you, thank you!

I work very hard to try and get past the negative of the last few years. I also work very hard at customer service and continuing to make sure I continue to improve my recipes and products and create really good old fashioned bakery items. Old fashioned meaning old school - the way we grew up eating bakery items.

Making everything from scratch takes more ingredients and more time but in the end - its truly worth it.

It's an honor and a privilege to provide my customers with products that are local, natural, simple. Wholesome. Hand made from scratch.

Posted in Kansas Best Bakery

Supporting My Local Communities by Delivery and Shipping

Posted on March 01, 2017 by Kathryn Alvarez

One thing I'm really proud of is being able to support my local communities. Not just from the community I started the bakery or only the community I live in.

I started my online bakery in Manhattan, Kansas in October of 2012.  I've always been a delivery and shipping bakery. My main areas of delivery are Manhattan, Fort Riley and Junction City, Kansas. But we also deliver in between and around those areas to Chapman, Ogden, Milford, St. George, Wamego and Belvue. And we ship not only within Kansas - but nationwide and overseas to soldiers.

Delivering and shipping helps us to support these communities. Sales tax is collected based on where we deliver to and if we ship within Kansas, sales tax is collected for that area it is going to. Anything shipped outside of Kansas - there is no sales tax that is collected.

Many people don't realize that we not only want to provide a service, we want to help support our local communities and other small businesses in the process and we do that by delivering and shipping within Kansas.

The sales tax that is collected goes back into those communities. We are really proud of helping to make a difference and be supportive.

It really bothers me when I hear "oh you are based out of there and we want to support small businesses in our own community". That hurts me because people don't realize that it doesn't matter where I'm based out of - its where I deliver to that counts.

For a while now I've been on a mission to inform people that it doesn't matter where I'm at - it matters where I deliver to.

Please keep that in mind and don't discriminate a business based on where they are based out of if they deliver to your community. Helping them - helping me - helps all of us!

Posted in delivery, sales tax

Making Luke Bryan's Birthday Cake 2014

Posted on February 28, 2017 by Kathryn Alvarez

June 2014 I received an email from Country Music Television (CMT) about a birthday cake for Luke Bryan who was coming into Manhattan, Kansas for the Country Stampede.

It feels like yesterday! Email and phone calls to get Luke Bryan a surprise birthday cake was like an awesome dream! They wanted one custom cake and then decided on a simpler cake.

I took great care into making his cake personally from start to finish. Seems like I fussed over decorating it for hours. This cake is something I really wanted to be special for him.

We delivered the cake to a hotel as instructed. No, we didn't get to see or meet him which was a bummer, but we understood.

CMT was gracious enough to send pictures for us that we could use and put the bakery's name under the credits on the CMT Country Stampede show they filmed.

What an honor it was. I really enjoyed being part of the planning and surprise. WOW!! I still can't believe I made his birthday cake!!

We did submit a press release to the local newspaper and put it out through the Manhattan Chamber but the press release and information never made it out to the public so not many people know we made his cake that year. The community really wants to keep us their best kept secret I guess.

Posted in CMT, Luke Bryan's Birthday Cake 2014

Continuing after Tough Transitions

Posted on February 25, 2017 by Kathryn Alvarez

In almost any business there seems to be all sorts of transitions. Some easy, some mild and some are just tough. My whole life has been about continuing after tough transitions. Very few have been easy. I've learned over the past few years to make every effort to pause before I react. Its a hard lesson and I've still not mastered it. Pausing allows me to stop and think about the situation or issue at hand. Since I started the bakery, there have been several transitions and more than less - unexpected tough transitions.

It's normal to have doubts and fears when starting a business. When I decide to do something, I go all in and push the doubts and fears to one side. With even the best business plans - sometimes things come up that you just can't see coming.

One of my biggest fears was doing this alone. I don't have a support system per say or family to back me up. Its always been on me and I've had to be very independent. One person has been there to help me and I am truly grateful and appreciative which is why I fondly call her my sister from another mister. My second fear was doing this with my disabilities. I don't have the type of disability you can see. I do have physical disabilities. My goal was to get to store front and have help to do the labor intensive part and I run the business. I wanted to prove that people with disabilities can do almost anything. It may just take us a bit longer and we have to work around them but we are capable.

Transitions - starting the business, store front, back to home, paying the store front debt and continuing. These have been the toughest transitions for me in this business.

I managed to get to store front. I pulled out of the store front location March 1, 2015. To this day its still difficult for me to talk about because it was so stressful and traumatic for me, I believe I have PTSD from it. The many factors of dealing with a bad location, bad landlord and feeling like a failure from choosing the wrong location and landlord. Boy did I learn my lesson the hard way! It wasn't until it was too late did I start finding things out. Not to relive or go into too much detail, I will just say that it I had a very difficult time and things were happening beyond my control. Things that really hurt my business, employees and products. A few - no adequate a/c as it was 85 and no heat at all in which we were trying to work at 34 degrees inside!! I finally got permission to fix it in January.

I sought the help of a lady who taught me techniques to use in order to get through it. What I never anticipated was not being in a store front location long term. In retrospect, I should have listened to my gut and followed my intuition and just kept looking. What's done is done and I had to find a solution as to what I was going to do. Because of the issues, it cost me a lot of money. Not only with the location and issues, but I didn't have any time to even start building up. Finding another location with little to no money was just not happening. I had no choice but to take the bakery back home. Now I had to choose how I was going to continue after this tough transition.

The first few things I had to do was to feel what I felt. Angry, devastated, disappointed, hurt, lied to, taken advantage of, alone, depressed, stressed, sick, embarrassed and I felt like a failure. Though I had so many feelings to deal with, there was little to no time. I took responsibility. One thing I knew was that I was going to have to continue through this tough transition - I had to continue. There was no giving up or calling it quits. I had creditors and a loan and I had to take care of the businesses who entrusted me to make good on my debts and I had to get tax debts paid. You see, as a person with disabilities and hardly any equity, I was truly given a chance. Despite the lies and defamation and store front, I had to shift the focus from me to taking care of them. Trying to figure out how I was going to do all this.

Some how, some way, I managed to pay off half the debt in a year. I had not taken any income for myself and I still don't.  It all went back into paying the debt. Over the past few years, that's been my focus. This past year was the most stressful of all because sales started dwindling. I believe that its due to a few factors but the one that really stands out is that the bakery is out of site out of mind. The other is that there are now more visible bakeries and the other is my bakery sign is at the location that was demolished.

This year terrifies me. I know how much I have to bring in every month to pay the bills.

Why am I putting my personal business out there when we've been taught that you keep your business to yourself and you have to make it feel like you're doing so well? Because - there are probably so many small businesses going through the same thing. Because - this is real. I'm a small business owner. A lone wolf. A woman with disabilities. And because  - there are things that I had no control of that led me to where I'm at and the choices I had to make. This is real life and how I have dealt with the tough transitions - in my perspective - has been to take the high road. My business was built on morals, integrity and honesty and that's the life I also try to lead. But I want others who may be dealing with this or who have had their own struggles in small business and in life to know that you can continue after tough transitions. And if you can learn from my mistakes - do it.

My goal is to get my food truck (how I got that is another story) sold. Pay off the loan because that's the last thing I have left to pay on and start rebuilding my business - saving what I can in the hopes to be in a store front again some day. And you may say - Kathy, you are nuts!! Maybe. But I don't want to let crappy experiences keep me from my dream.

Experiences, especially the ones we experience personally, are lessons we learn. At least they should be. We should be learning from those mistakes. Its how we choose to handle them. It's figuring out what we want to do next. It's finding a way to continue after tough transitions - which could be blessings in disguise.

Hang in there. Keep your head up. Grab a cup of coffee and a piece of cake and sit in the sun. Feel the warmth of the sun on your face and savor the moment. It will all work out.

Home based Bakeries

Posted on February 23, 2017 by Kathryn Alvarez

I started off as a home based bakery on a wing and a prayer with $100 in October of 2012 that I used to secure a domain name, website, ingredients and open a business checking account. Over the years that I've been in business - it came to my attention that home based bakeries have a stigma to them and some people view this as a negative. Believe me, people have actually hung up on me when they learned I did not have a store front especially when I tried to explain I'm an online and delivery only bakery. There have been many bakeries who have started as a home based business and moved to a store front and some you would recognize today because they are big named businesses.

A few things that I've experienced over the years I just feel I need to set straight or explain.

  • I run a full fledged business in which the goal is to earn an income. Someone once said to me - "you are home based so this is just a hobby for you, you don't need the money". What?! WOW! That couldn't be farther from the truth for me. There may be people who bake for a hobby or to have something to do - but that's not me.   
  • "I could get this cheaper from the other home bakery - why do you charge so much?" I reply that its because I am in the business of making money. I have not only studied business since the 6th grade, I've done business plans and feel like I could do them in my sleep. And they aren't small plans either. They are very detailed. I know what it costs to make a product. I know what the current market is and what my competitors charge. As a serious bakery, you can't undercharge or you'll be working for nothing and it will cost you more that what you sell it for. This is a touchy subject for me because some bakers feel that they need to undercut another bakery in order to get the order. But at what cost? Its only hurting them, not me. Know your worth and know what your products cost to make. I bake everything from scratch so it costs me a LOT more time and money for ingredients. This is my business.
  • "Home based businesses are dirty and don't practice safety." That's not true for all of us. I have seen some pictures on Facebook of home based bakeries who are posting their item to show off the item and its near a kitchen sink that has dirty nasty water and a bunch of dirty dishes and dirty stove tops. YUCK!! The light bulb clicked and I then realized this is one reason why home based businesses get a bad rep. Not me. I've always been OCD clean freak and food safety cautious my whole life and I still am that way. I personally have studied and taken food safety courses. And I created the food safety binder I have that I used in the store front. For me, its common sense not to put ANY food item near a sink and you have to continuously change your dish water. I thought every one knew that!! I'm hoping people also know when they need to wear gloves! And my oven, it's the cleanest stove and oven you've ever seen! Any time I had a cleaning crew come in to help me, they always ask me "what do you want us to clean, its already clean?" LOL! No kidding! I clean as I go. I deep clean my oven and my fridge whether they need it or not monthly. I clean every night. My carpet cleaners come every 6 months to clean the carpets in the bedrooms whether they need it or not. (I have wood floors in this house throughout the main areas).  I'm overly cautious. That's who I am. And when I had my store front, inspectors always commented that I had one of the cleanest facilities they had ever seen!!
  • "Why can't you make this cake for me, the other bakery said they would." Referring to a copyrighted cake. Simple. I do NOT want to be sued. Copyrighted logo's, characters, cakes and pictures can not and should not be reproduced or copied without the written consent of the owner. Logo's - especially team logo's you have to pay to use UNLESS you are a registered business purchasing say an edible image from your licensed distributor. When you do this, you have to make the cake exactly how they have it on their site or how they show you. You can't alter it because they are licensed to sell it to you with the intent of it being reproduced how they presented it in their application. I've studied copyright laws and bakeries because as a bakery owner, these are things I need to know. If other bakeries want to risk it, that's no business of mine. My obligation is to my bakery and following the laws. So if you see an item on my Pinterest page, its because I had authorization to make them.
  • "You're hiding something if I can't pick my item up." Not at all! Depending on zoning and in my case zoning and my lease, I am not allowed to have people pick up or come to the house. Because I lease, if something happened, the actual homeowner would be held liable. The traffic I would have would be a nuisance if people picked up to my neighbors. I'm only following the rules and regulations I have to.
  • "You can take off anytime you want." Nope, not me! With an online bakery, orders come in 24/7. There are times I get done cleaning at 11 pm for the day, take my shower and climb into bed and hear "cha-ching!" That's my phone going off saying I have an order. There have been numerous times people will order even 1am and want the item at 9 or 10am. When that happens, I have to get up, get dressed and turn the oven on and start baking again. There are times I have deliveries set already and won't have time in the morning so the only time is now. Then, I get done about 3-3:30 am - clean up, change and go to bed to get up at 7am. Or I'll get orders in the morning and they want it that afternoon. I'm always on call. There are times I try to take off and sometimes I might get a day and sometimes I don't.
  • "All you do is bake." Nope, that's not all I do! Being home based, you can't hire anyone that doesn't live with you or isn't family. I'm a lone wolf. Not only do I bake, but I create bake lists, clean, take orders, print labels, attempt to get something posted to at least one social media page, scan in paperwork, prep sales tax and other things for the accountant, budgets, update the website, shop, order supplies, inventory, respond to emails, deliver, plan the routes and...Whew!
  • "Why do you collect tax if you're home based?" Because I know business and I run a business and I know that you have to have an EIN (Employment Identification Number) with IRS and you have to register with the Kansas Department of Revenue (or whichever state you live in). You report your sales to the Kansas Department of Revenue and collect tax for them that you pay to them monthly, quarterly or yearly based on how you are set up. I've been set up since day 1!

There's probably so much more but these are the ones that I get the most often. And this is my personal experience and knowledge. I've always been proud of myself on running my business with integrity, morals and honesty. I want to combine what I love to do with providing a service to my customers and community, supporting my local communities (sales tax is collected by where I deliver, not where I'm located and that money goes back into their community) and trying to earn a living. As a woman entrepreneur with very little to no support system and with disabilities, I do the best I can. Its my responsibility to do all I can to make sure that what I do is within the law, rules and regulations including food safety. I take my business seriously so I can enjoy it.

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