Freelance consulting

Discussion in 'Professional Pastry Chefs' started by momoreg, Jul 10, 2001.

  1. momoreg

    momoreg

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    I gave notice at my job, and will no longer be the pastry chef there after July.

    My boss and I have been discussing my coming in just to do cakes, on a part-time basis, and I told her I'd like to do this, if I'm paid hourly. She agreed, without actually talking about price.

    I don't want to settle for less than $30 an hour, and would like to start at $35, negotiable.

    Now, she comes to me with a project for a September wedding, and the client only wants to pay $5 a person, for individual wedding cakes (huh?). Not only that; she wants them all arranged in the shape and size of an actual wedding cake (for 250 guests). My boss said she would like to work out a flat rate for me with this particular wedding. No way will I bother with it, if it's less than $20 per cake. They want 5 different flavors, and 5 different designs as well!

    We left it hanging today, because I told her to discuss it with the client, and tell her that this idea just cannot happen for $5 a person.

    But does anyone here think that there is any way to do any cake project at a flat rate? I don't see how it would be possible to know exactly what the client is being charged. Which is why I want to be paid hourly. Plus, it is more realistic, especially in a company where last minute changes are the norm.

    My next issue is, should I remain on the company payroll, or become self-employed and pay my own taxes? And then there are contracts...

    Any advice would be helpful.
     
  2. isa

    isa

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    Being self-employed is not always a piece of cake, excuse the pun. First you have to think that you may loose some benefits like insurance, retirement fund investing, etc. There are time you have no idea when your next check will come in. On the plus side, you choose your clients, decide on your hours and salary. Only you know if this is the kind of life you want.

    Before quitting your job, you might want to look into your market. Here in Canada we have an agency who keeps statistical information on everything. You might want to go to your local statistical office, if you have one, and see what information they have on income spend on baked good per household per month. Also, you might want to look at the businesses operating in your area that offer products similar to what you’ll offer. That’s just a few of the things you should look into.

    Make a list of everything you’d like to offer and put a price next to everything. This list ifs for you, just to help you decide what services you want to offer and at what price. Take into account everything, from your equipment to electricity. Talk it over with some people in your entourage. You know what your work is worth so stick to your price. If you start discounting yourself right at the start, imagine what you’ll work for in a few months or years. Stick by your prices. Don’t discount yourself from the start, specially not with your soon to be former boss. Then she would expect a discount every time

    Clients sometime have no idea what things cost or how long it cost to make them. Expecting you to give a quality product for 5$ is utterly ridiculous. Why not call her, explaining all that goes into making cakes, insisting on quality ingredients and the professional look of the finish products if she won’t budge, suggest another type of cake that you could make for 5$ a head.


    Good Luck!
     
  3. kuan

    kuan Moderator Staff Member

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    Good luck on your venture momo. I'm sure you will find that the rewards of working for one's self are priceless.

    I think one thing a lot of us have learned in the catering industry is... who is your client? Is it your soon to be ex-boss or the person wanting the wedding cake? As a matter of principle, your boss should not be discussing the bride-to-be's budget with you, and you should only be discussing your price for this project with your boss. But doing things this way makes things very difficult in terms of communication. In normal circumstances the facility charges a cake cutting fee. This way everyone wins, and you can feel a little better about communicating directly with the future bride. Most wedding cake pros deal directly with the wedding party.

    Good luck!

    Kuan
     
  4. m brown

    m brown

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    I heard a sous chef tell me his fiancee was quoted $65 per mini cake. that is a bucket of cash even for a teeny wedding party!!!!
    the lowest i would go for such a service is $25 per cake, with a delivery fee and a holding charge in case thay change their minds.


    I charge per large cake at a per seving rate.
    ie:
    100 people, basic filling and icing with gum paste flowers,
    $6.50 per slice
    $650 fee plus delivery charge.

    Unles you are running a cake factory it does not pay to make less than $40.00 per hour.
    a house cleaner gets $20.00 per hour and mechanic gets $65.00 per hour so you can charge upwards of $40.
    This is for free-lance only.....
    :cool:

    [ July 11, 2001: Message edited by: m brown ]
     
  5. momoreg

    momoreg

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    Thanks for the replies.

    I believed that I was selling my services at an excellent rate, but today, I learned that the owner had hoped she could pay me $20 an hour. WAAAYYY less than what I quoted. So, deal's off, and I'm not budging from my price. I don't make bargain cakes!!

    mbrown, $65 for a mini cake? They'd better do stupid cake tricks at that price!!
     
  6. w.debord

    w.debord

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    Momoreg, I've got to tell you I find the whole pricing thing quite distressing.......I've never been one to beat around the bush so I won't. I'm salaried and I'm making less then $20.00 an hour, although I get cheap insurance and a little 401k matching. I get min. wage for overtime work (that's all thats required by the state for them to pay when the person is salaried) but I can't control the amount of work they book which might require 20 more hours over a reg. 40 hour week of my time. I did a bad job negociating my salary, I just didn't see alot of options, there aren't very many pastry chef jobs around here (and I'm in a big city).

    So, pricing..........? I was really shocked at the figure you want. Not that you don't deserve it, no, just shocked that there's that kind of money out there, really? Wow!
    I really need to get going in the same dirrection!

    Just my two cents again. If I was you (but I'm not) I would start with someone else as my base client not my old boss where we already have conflicts and I know this person will use and abuse me. It kind of an emotional black whole. Why not think about this in a fresh new way with new people who you can set limits with from the beginning...then when your strong if you want to go back and deal with a difficult person like your old boss then you'll really be doing it your way.
     
  7. foodnfoto

    foodnfoto

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    Welcome to the world of freelance Momoreg! I have a few suggestions for you.
    1. Decide either to be self-employed or not. Being sometimes self- and sometimes not can lead to incredible tax headaches. If you decide upon the former, you will gradullly learn that there are a lot of tax, and other advantages. Granted, health-. life-, and liability insurance are bears to deal with, but the IRS leaves some nice loopholes there for us.
    2. Regarding payment for services, settle on a method that makes you happy and stick to it. There are several to choose from in the world of wedding cake services.
    a. Cost-Plus: This method is determined by your costs, and you add a flat service fee on top of it. Show your client a cost breakdown (as detailed as humanly possible-including gas and mileage on your car for shopping trips) then add a fee for your skill and time on top of it. Keep that fee consistent among your clients. I know it's a pain to figure what something costs you to make, but it's worth the extra effort in the long run and once done, easy to figure as your raw materials increase in price. I found this method most advantageous as most clients have no idea what raw materials cost.
    b. Per Person Charging: This method is most popular and easiest for the client to relate to, but can make you seem expensive to the client in initial negotiations. I find this method confusing for us, the suppliers of a service. You still must figure your food and supplies costs, overhead, and reasonable profit; but then you must also deal with widely fluctuating guest counts etc. and deal with an extra level of mathematics.
    c. Event Fee: This seems simple up-front, but you need considerable marketing savvy to pull it off. You charge a flat rate to provide a wedding cake-as simple or elaborate as the client wants. The advantages are that you always get a fair price for your work, you weed out those who will "nickel-and-dime" you to death, and you regularly do the kind of work that is satisfying to you. The ingredients, detailing, and service you provide has to be the absolute finest, because word of mouth makes or breaks you, especially, with this form of pricing.
    A few other tips-
    3. Always add in the costs of seperators, cardboard cake rounds, cling wrap and such into your food cost and charge up from there. Those costs can eat up a considerable amount of profit and the IRS considers them inventory.
    4. Market your self and your service in the highest end publications that cater to the wealthiest readers. These are the folks who will drop a year's salary on their daughter's wedding and will give you the best word of mouth. Try society magazines and publications-like the Westchester (NY) Wag and whatever one floats around Greenwich CT.

    I know it is very scary going out on your own! I did it a year ago and still worry, but the terror fades as you start doing the work you really love, making the money you deserve and take ownership of your own talent and skills instead of supporting someone else's reputation.
    Good Luck!
     
  8. kuan

    kuan Moderator Staff Member

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    Hey Momo, I don't think asking $35 an hour is too much. In fact, I think it's too little. Consultants rarely bill 2080 hours a year. I'm not sure what the exact number is but I'll hazard a guess that it's closer to about 20 hours per week on average for a first year consultant. So if you charge $60 per hour, that's only $62,400 a year. Not much when you deduct cost of food, insurance, phone bills, and other costs. The other thing to remember is although you bill only 20 hours a week, you have to work to get those 20 hours! And don't forget, you can charge as much as you want until someone tells you it's too much. When you hit that point you will know, your clients will make sure of that! :D

    Kuan
     
  9. angrychef

    angrychef

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    momoreg, I have to agree with Wendy about being surprised that one can charge that much(yeah, I get less than 20/hr.too). But at the same time we all have the tendency of underselling ourselves when we are not sure. So go for it. I asked a friend of mine that did some consulting and she said she charged about $35-40/hour for helping set-up a bakery. But then again, she didn't have to buy supplies and look for a kitchen to work in, the bakery paid for that. I wish I could give you more info.
    What about the clients of your former boss? Will they be missing your pastries when you leave? Maybe something can come out of that...
     
  10. momoreg

    momoreg

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    Hey guys, thanks so much for the advice. I think the future of my dealings with my boss will depend on 2 things:

    1. Who succeeds me in the position. If it's somebody who is capable of doing cakes, and willing to take what she offers, both good and bad, then she will have no use for me.

    2. Whether she is willing to pay me what I ask, without negotiation. Yesterday, she told me that she had thought about my offer, and decided to no longer work cakes into the party price, and instead charge per cake. This way, she can hire me out, if she needs to. She then proceeded to tell me about a cake she needs for October.

    I know all of this will evolve a thousand more times in the next few months, as they go through adjustments with the pastry dept. My former assistant may take the job. I hope she does.

    Let me just say, that I think what I'm asking, as a freelance consultant, is fair, and actually on the low end, for the work that I do. But because I have worked there for 5 years, I know the BASIC budget, and how much the pastry shop can earn for the business. I think that $40 would be too much, and $20 is just not worth my while, especially if I am an independent contractor. If I were working for myself, I might pay myself slightly more, if I had enough business to warrant it.


    Foodnfoto, you brought up a lot of good points. I agree with you about marketing in those high-end publications. My boss was never one to advertise. She says it cheapens the company's image. I strongly disagree. I think she just doesn't want to grow the business.

    I agree with you, W. I would really rather do this on my own, and not deal with my employer in the future, but if we can work out an honest and virtually snag-proof arrangement, it can at least get me started.. I know the environment, which may help make the transition easier.

    In the meantime, that is not my only plan. First and foremost, I need to speak to a CPA, and figure out the best plan of action. This is very exciting.

    W., I hope you go in that direction, too. You do nice work.

    Angrychef, as a salaried employee, I make a lot less than $35 an hour, but that's the difference between being a full time employee, and being an independent contractor. Nobody has to employ me full-time at that rate. And they can take me or leave me at that price.

    Kuan, it may be too little, but I think it's a reasonable place to start.
    :)

    I appreciate all the input!
     
  11. w.debord

    w.debord

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    After my couple of attempts at self-employeement I have a baised view of pricing. Although I know the idea/product should be flexible enough to let you business take you where the money is...if you price yourself wrong they might all descide to leave you and not take you, so a high rate can ruin you before you get started.

    I found pricing to be a major issuse (at least with fine art) that could (should) carry over into baking in these ways...if you come in too high you offend potential clients, then if you ever do lower you prices many of those people won't give you a second chance. They do remember you. It is a small world out there.


    I believe it's critical to come in at a meduim priced rate, for these reasons.......it leaves you approachable to potential fat cats who might want to negociate their own high volume/lower rate deal with you. A middle of the road rate also gives you room to raise you rates if you do develop a great reputation and then need to weed out the bottom dwellers.

    A couple other things that I discovered....it cost alot more money for those ad's in magazines then you would believe! I was coming across rates like $20,000. for a 2"x2" black and white ad's 8 years ago (the kind in the very back of a magazine) for any magazine that has a national mailing list. Local magazines were around $5,000. for the same. I did some advertising (mailings) and many wholesale shows. There are reasons why businesses don't do the obvious (advertising) most of it doesn't work. But there are things that do....like dirrect repeated mailings you can customize from home...net-working...probably doing those brides shows...etc...


    I would be happy to make some phone calls for you (on my day off) and price what some local decorators are asking for their cakes. If we could get several people to do the same it would be helpful for all of us (for many obvious reasons). Anyone think that's a good idea and want to particapate?

    I don't think we should publicly post our homework pricing results, instead we could use the private e-mail they offer us here. Since this will take some effort I think only the people willing to do the labor should benifit from the results? Is that fair and understandable?

    P.S. As far as pricing high to balance out the fact that you won't have enough business to begin with as Kuan states, in my oppinion that will probably kill your business before you get your feet off the ground. That's like starting high and then lowering your pricing, it doesn't work unless you physically change your market. Yes, you have other factors to add into your costs but I think you'll find that the people you call on pricing have added in those costs and you discover that what their asking is all the market will pay, you can't go above that to get started...not until you've proven yourself and have a client base. Just my two cents, for what-ever that's worth...... ;)
     
  12. lotuscakestudio

    lotuscakestudio

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    Wow Momo! To me, that's a lot of money! Even Colette Peters only makes $25/hour. But if you can get it, woo hoo! For airbrushed Sam's Club/Costco/Price Club type of work, those decorators get between $12 - $14 an hour and strangely enough, supermarket decorators get slightly less, and more gourmet grocery stores and even fine dining restaurant decorators get even less than that. When I worked in a fine dining restaurant/caterer, I think the pastry chef there who also did all the wedding cakes couldn't have made more than $35,000 a year. Then again, this was Baltimore and you're in CT and the more north you go, prices for everything just go up up up. Anyway, good luck on your new career path. :)
     
  13. momoreg

    momoreg

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    Consulting is a different thing altogether. It means that I am at their disposal, and I'm not working full time at that rate, so it makes sense that my hourly wage is higher than a full time employee.
     
  14. cape chef

    cape chef

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    Momoreg...First of all I would like to see if you would like to prepare my mothers birthday cake for a suprise party on 8/5 for about 25 people. I have seen your work and feel it is some of the finest pastry work in the tri state area. I also want to comment on what a "free lance" whatever makes. They are not on a 40+ hour a week schedule,they pay there own benifits and they have to prove why they are better then the rest.Not many pastry chefs make $35 an hour or can charge $7.00 a slice,"for a wedding cake" But if you hire a upscale caterer where I live and plan to have a wedding for 100 people you can pay $400-$1000 for just the cake,Now think of the cost that goes into the cake..weather it's basket weave or rolled fondant with gold leaf,no cake made of flour,suger,eggs and what not cost that much money.....it's the hands!!!!it's the hours spent baking,cooling,storing,rebuilding,finishing,travel ing etc...I want to be sure that the person that I entrust to prepare something as special as a wedding cake is compensated for it.The pastry chef at a caterer will recieve his/her hourly wage plus maybe a tip
    If a cake cost 75 cents per slice for 100 people so the cake is worth $75.So if it takes a pastry chef 6 hours at $35 an hour to prepare a cake thats $210 labor cost plus $75 food cost..it cost the caterer $285 for the cake, In my neck of the woods like I said before you can't touch a wedding cake for under $400 so thats a bare minamun profit of $115 for the caterer of the top. I say come up with a fare pricing stradigy plus add an hourly transport and on site fee.
    cc

    [ July 19, 2001: Message edited by: cape chef ]
     
  15. lotuscakestudio

    lotuscakestudio

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    I have an issue of Pastry Art & Design that has an article with Colette Peters. She said herself that when she broke it down, she makes $25/hour. This article was written in 1999 so I'm sure (I hope!) she is making more by now. But still... considering who she is and what she can do, $25/hour for 1999 is depressing.
     
  16. momoreg

    momoreg

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    Quite depressing indeed. I don't believe her, though! :p Anyway, if she's not making more than that, she should be!!! Much more.
     
  17. momoreg

    momoreg

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    Thanks for the sweet compliment, capechef! I am looking forward to making the cake. Talk to you soon :) .
     
  18. w.debord

    w.debord

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    I haven't seen much written by you lately Momoreg, how's this avenue going?
     
  19. momoreg

    momoreg

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    Thanks for asking, W.

    Today is my last day. I came home for a couple hours, and I have to go BACK to work later tonight for a tasting. Then it's farewell. They made a nice Moroccan meal for my 'last lunch' today.

    My boss has a few cakes lined up for me to do in September, so in the next few weeks, I'll write out a contract for us to sign, so that there are no surprises.

    I was looking at a kitchen in Westport, CT. It is small, but fine for my needs. They wanted to rent it out on a per diem basis, but they will not drop the price, if I'm willing to take it on a lease basis. It's much too expensive to rent out that way, so I had to walk away from that one.

    My husband was just called to take a job in the UK for 10 weeks. Maybe I can spend a few weeks over there, and find some temp. work.

    We shall see...

    :D :D :D :D :D
     
  20. w.debord

    w.debord

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    So your still going to begin your own business then...


    My last day is the 11th, I wish I was as collected as you! I'm a wreck inside......