The very first sale I ever closed was on a treadmill.

This girl gets on to my left, and then her friend joins her, and they start talking about needing to order a birthday cake for one of their sons’ birthdays. And so I hit stop on the treadmill and I'm like, “Hey, I heard you mention that you need to order a cake. I just want to let you know, I own a baking business and I'd love to give you my card and I'd love to be a part of your son's special birthday,” and that became my first cake order.

Even though I was still brand new, I didn’t let that opportunity pass me by.

Sidebar: I didn’t recognize it then, but I want to share this here. I think my theme word, or internal anthem (without knowing it), became AUDACITY. It’s a GREAT word, and I hope you develop it! I hope you can push past the fear of beginner humiliation and step up to the challenge of tackling difficult, daring, and audacious things, my friend. BE FREAKEN AUDACIOUS!

Back to the story…

The woman’s son’s name was Joshua, and he wanted a strawberry-flavored cake, and somehow the design turned into a giant pink castle.

Mind you, up til this point, I’ve only made maybe four cakes in my entire life. So, in order to close the sale right there, I charged her $40 because I was just starting out and I was desperate.

I didn’t know what my ingredients were gonna cost me. I didn’t know how long it would take to make. I didn’t account for my overhead, labor, or PROFIT.

$40 sounded reasonable at the time, so that’s what I went with.

Would I ever charge this now? HELL NO.

Looking back, this cake probably took me about 15 hours to make.

If I were to pay myself a minimum wage of $15/hour to work on that cake, my labor ALONE would’ve been $225.

You see where I messed up?

The $40 I charged didn’t even include the ingredient costs or the “craft-store haul” for supplies. You guys, I essentially paid to make someone else’s cake.

While I didn’t make any money from the order, from the outside, it looked like I was in business.

I had a customer, I had PROOF of a product, and I did receive a form of compensation. But the business was operating as a financial liability at this point.

That is what I call survival dressed up as success.

Pricing From Vibes Is Not a Business Strategy

A lot of new business owners will price their products exactly like I did.

They choose a number based on what sounds reasonable, what other bakers are charging, what they think the customer will pay, or what they themselves would actually pay.

There is no real calculation behind it, just how they FEEL about the price.

And listen, your feelings matter- that’s what a therapist is for- but they do NOT belong in business.

A customer does not know what it costs you to produce your product.

They don’t know how much you’re paying for butter, flour, eggs, or vanilla. They don’t know how long it takes you to create a castle cake. They don’t know, or really care, how far you drove to get inventory, or how much sleep you did or didn’t get.

That is YOUR job to know.

Your customer decides whether the finished product is worth the price to them.

You decide what price your business requires.

Those are two completely different responsibilities.

Your Labor is a COST

The biggest mistake I made with that cake was not only underestimating the ingredients and supplies.

But I treated my time like it was free.

I never asked:

• How many hours will this take?
• What should I be paid for those hours?
• What happens if something goes wrong?
• What would I have to pay someone else to complete this order?

I assumed that whatever money remained after buying ingredients would be my profit.

But there was no money remaining. And even when there was money left, that does not automatically make it profit.

Your labor pays the person doing the work.

Profit pays the business for existing.

Those are not the same thing.

When I later went back and calculated what I spent and how many hours I worked during that first weekend of orders, I realized I was effectively making around negative $250 an hour.

Not zero.

NEGATIVE.

I was paying to work.

And plenty of business owners are doing a quieter version of the same thing every week.

They collect $500 in sales, spend $350 replacing ingredients and supplies, work thirty hours, and call the remaining $150 “profit.”

Friend, that is five dollars an hour before accounting for overhead, taxes, equipment, marketing, or anything else required to operate the business.

Money entering your bank account does not automatically mean the business made money.

The Difference Between a Hobby and a Business Is the Math

There is absolutely nothing wrong with having a hobby.

You can bake because you love it. You can buy expensive supplies, spend the entire weekend decorating, and charge whatever feels good.

But when you call it a business, the numbers have to work.

A business has to recover what it spends, compensate the person doing the work, contribute toward overhead, generate a profit, and MAKE MONEY.

That’s quite literally the point of running a business.

When you refuse to include your salary in the cost of your products, you are not only working for free.

You are stealing that unpaid time from somewhere else, whether it’s your family, your rest, your physical and mental health, or your future.

Someone is always paying for an underpriced product. And when it’s not the customer, it’s usually the business owner.

More Orders Will Not Fix Bad Pricing

This is where so many business owners get trapped.

They realize they’re not making enough money, so they decide they need more customers.

But more customers will not SAVE you from bad pricing. More orders simply multiply whatever is already happening.

If you lose five dollars every time you sell something, selling one hundred of them does not create success.

It creates a five-hundred-dollar problem—and a whole lot more work.

Being booked is not enough.

Being busy is not enough.

Even being sold out is not enough.

You have to know what remains after the entire product has been paid for- including the person who made it.

That Cake Was Expensive… but the Lesson Was Priceless

The Pink Castle Cake taught me that confidence can close a sale, but confidence alone cannot build a sustainable business.

It taught me that customers do not automatically know what my work should cost.

It taught me that a full calendar can still produce an empty bank account. And most importantly, it taught me that pricing is not about choosing the highest number you can get away with.

It is about understanding what the work actually costs and making a responsible decision based on evidence.

So before you accept another order, ask yourself:

• Do I know what this product actually costs me?
• Does the price include my labor?
• Have I accounted for my ingredients, packaging, supplies, and overhead?
• Is there enough money left for the business to make a profit?
• Or am I about to pay for the privilege of working?

Because affordable pricing is not the flex you think it is. And the difference between a hobby and a business? Is the MATH.

Stop Pricing From Vibes

Knowing you need to calculate your costs is one thing.

Actually keeping track of changing ingredient prices, recipe costs, labor, packaging, yields, and profit margins without building a spreadsheet that requires a PhD to understand?

That is a whole different struggle.

That is exactly why I created Costli.

Costli is being built specifically for bakers and food business owners who are tired of saying:

“I think I made money.”

It helps you organize your ingredients, calculate your recipe and product costs, include the expenses you have been forgetting, and make pricing decisions based on real numbers- not fear, competitor prices, or whatever number feels reasonable in the moment.

Because you are working WAY too hard to keep guessing.

Join the Costli waitlist and be the first to know when new spots become available.

JOIN THE COSTLI WAITLIST

Your business deserves better than $40 Pink Castle Cake math. 😭

Xo, Janelle