Selling a homemade cake alongside coffee can be a nice side income. Many café owners underestimate the price, causing them to lose money on every cake. In this article you'll learn step-by-step how to calculate the right selling price.
Gather all ingredients and costs
For fair pricing, you need to include all costs, not just ingredients. Energy, packaging, and your time cost money too.
💡 Example apple cake (12 slices):
- Flour, butter, sugar: €3.20
- Apples and spices: €2.10
- Energy (oven 1.5 hours): €0.80
- Packaging per slice: €0.15
Total costs: €6.25
Cost per slice: €6.25 ÷ 12 = €0.52
Calculate your desired margin
For bakery products in hospitality, a margin of 65-75% is standard. This means your ingredients should cost 25-35% of your selling price.
- Café with self-service: 30-35% ingredient costs
- Restaurant with table service: 25-30% ingredient costs
- Takeaway: 30-35% ingredient costs
💡 Selling price calculation:
Cost per slice: €0.52
Desired cost percentage: 30%
Formula: €0.52 ÷ 0.30 = €1.73 excl. VAT
Selling price incl. 9% VAT: €1.73 × 1.09 = €1.89
Compare with the market
Check what similar businesses charge for homemade cake. Your price should align with local expectations, but not too low.
- Café/lunch room: €2.50 - €3.50 per slice
- Restaurant: €3.50 - €5.50 per slice
- Bakery: €2.00 - €3.00 per slice
⚠️ Note:
Always calculate with the price excl. VAT for your cost price calculation. The price on your menu is incl. 9% VAT.
Account for waste
Not every cake sells completely. Factor in 5-10% waste in your cost price, especially for seasonal flavors.
💡 Including waste:
Cost per slice: €0.52
Plus 8% waste: €0.52 × 1.08 = €0.56
Adjusted selling price: €0.56 ÷ 0.30 = €1.87 excl. VAT
Test and adjust
Start with your calculated price and monitor sales. Selling well? Then you're on the right track. Not moving? Then your price might be too high or the quality not convincing enough.
- Week 1-2: Monitor how many slices you sell per day
- Week 3-4: Adjust price if needed (€0.25 increments)
- Month 2: Evaluate if it's profitable
How do you calculate the price of homemade cake? (step by step)
Calculate all costs per cake
Add up ingredients, energy, packaging, and any extras. Divide by the number of slices you cut from one cake.
Determine your desired margin
For cake in hospitality, 25-35% ingredient costs is standard. Use the formula: cost per slice ÷ desired cost percentage.
Convert to price incl. VAT
Multiply your price excl. VAT by 1.09 for the final menu price. Check if this is realistic for your market.
✨ Pro tip
Take photos of your cakes and display them prominently. Nice presentation justifies a higher price than a slice of cake in a display case.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include my time in the cost price of cake?
For small quantities, not necessarily, but for daily production, yes. Calculate €15-20 per hour for your time and divide by the number of cakes.
How often should I adjust my cake prices?
Check every 3 months if your ingredient prices still add up. Butter and eggs can increase significantly, especially in winter.
Can I charge different prices for different cakes?
Yes, expensive ingredients like nuts or chocolate justify a higher price. Calculate each cake separately and round to logical prices.
What if my calculated price is higher than competitors?
Focus on quality and the 'homemade' story. Customers pay more for authenticity, as long as the quality justifies it.
Should I list VAT separately on my menu?
No, in hospitality all prices are standard including VAT. Just note 'all prices include VAT' at the bottom of your menu.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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