Episode 16: Why Skilled Bakers Stay Underpaid (And How to Stop)

You're good at what you do. Your customers love your work. You might even be fully booked. So why aren't you making the money you deserve?

In this episode, we get into the real reason — and it's not your skill level, your location, or whether the market will pay. It's identity. And that's actually good news, because identity is something you can change.

You'll learn:

• The "skilled but underpaid" cycle and how bakers get stuck in it
• Why the gap between a skilled baker and a well-paid baker isn't talent — it's how you see yourself
• What the identity shift from hobby baker to business owner actually looks like in practice
• One exercise to start making that shift today

Want to go deeper? Week 3 of the March membership at The Home Baking Business Academy is dedicated entirely to this — the Identity Shift. You'll create your own Professional Identity Statement, identify one boundary to implement straight away, and get a decision filter you can use every single week. 👉 https://anniebennett.co.uk/the-home-baking-business-academy/

The Profitable Baker Live:

A live training session happening on Tuesday 31st March at 7pm.

In one evening we'll work through the five key shifts that take a baking business from a source of stress to a source of real, sustainable income.

Just £7 to secure your place.

Find out more and register at anniebennett.co.uk/register/the-profitable-baker-live/

For regular delves into baking business matters, including taking part in podcast episodes:

https://anniebennett.co.uk/#subscribe

For free tips, insight and real-world business talk:
Follow me on social media

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https://www.linkedin.com/in/annie-bennett-hbba/

For her website with all this and more:

anniebennett.co.uk

Transcript

SPEAKER_00 0:04

Hello and welcome to the Profitable Baker Podcast, the show for bakers who mean business. I'm Annie Bennett, founder of the Home Baking Business Academy, and every week I'll be sharing practical lessons, mindset shifts, and inspiring stories from bakers who are building businesses they love. Because success in this industry isn't about who bakes the fanciest cakes, it's about who builds the strongest business foundations. Let's get started. Hello and welcome to the Profitable Baker podcast with me, Annie Bennett. Now, just before we get into today's episode, I want to tell you about a live event that's happening at the end of the month. And I'm really excited about it. The Profitable Baker Live is an online event on the 31st of March at 7 pm. Now it's going to be a practical session where I'll be talking you through the five shifts you need to ensure your business is profitable. And there will be mini tasks and checklists and a workbook. I love a workbook. Now it's only£7, and to secure your place, just find the link in the show notes and I'll see you there. So let's get started on today's episode. Now I want to ask you something, and I want you to sit with it for a second. When was the last time you looked at your bank balance at the end of the month and thought, yes, that reflects exactly what I put in? Now, if it was recently and you do it consistently, then brilliant, you're doing really well. But if not, then this episode is for you. And here's what makes it so frustrating. Because I know you're good. You put hours into your craft. I know your customers love what you make. Your cakes are stunning, your flavours are better than half the baker is charging twice what you charge. So why aren't you being paid like it? That is what we're talking about today. Why skilled bakers stay underpaid, and more importantly, what you can actually do to stop it. Now, this isn't an episode about raising your prices by 10% and hoping for the best. We're going to go deeper than that. We're talking about the reasons that underpayment is happening. Because until you understand the root cause, any pricing strategy is just a plaster. So let's get into it. So let's talk about the skill and income disconnect. Here's something that doesn't get said enough. Skill and income are not automatically linked. They should be, but they're not. In most industries, and when you're employed, as you get better at a job, you earn more. You get promoted. You go up the ladder. That's the deal. But when you're self-employed, particularly with the baking business, and particularly with a home baking business, there's this strange phenomenon where someone can be extraordinarily skilled and still be charging less than the supermarket down the road. Why? Because baking skill and business skill are two completely different things. Most of us were only taught one of them. You learnt to bake, probably from parent, grandparent, years of practice, courses, YouTube, trial and error, and you got good. But nobody taught you how to price. Nobody taught you how to talk about your value. Nobody taught you that your time is a finite resource that needs to be protected. So what happens? You charge what feels fair, which usually means you charge what you'd be willing to pay. And most of us, if we're honest, we would feel guilty paying a lot for something we know we could make ourselves. So we undercharge habitually. And then the business grows. More orders, more hours, more skill. And the prices they might creep up slightly, possibly, but they never catch up. And there always seems to be a reason to wait. Oh, there's a quieter season coming. Oh, there's a new customer that I don't want to scare off. Oh, there's an order it's not worth arguing over. And I see this all the time. Bakers who are producing genuinely incredible work, celebration cakes that people cry over, wedding tears that are works of art are earning less per hour than the minimum wage. And that is not a reflection of your skill. That's a reflection of a gap in business education that nobody warned you about when you decided to turn your passion into a business. Now, let's talk about why this keeps happening. Even when bakers know they're undercharging, because most of you already know. You don't need me to tell you that your prices are too low. You know, so what's keeping you stuck? I will tell you about three traps that you can fall into. Trap one is the comparison trap. You're pricing based on what others charge. You go online, Instagram, Facebook, TikTok, wherever it is, you see what the baker in your town is doing, and you use that as your anchor. Now, what's the problem with that? Some of you are shouting this out as I speak. You have no idea what their costs are. You have no idea if they're profitable. You have no idea if they're running a sustainable business or burning themselves out for£8 an hour, but just not talking about it. Pricing based on your competitors is like trying to navigate your finances based on someone else's bank statement. It tells you nothing useful. And don't get me started on the how much would you charge for this posts in Facebook groups. I would never allow them in mine, and I'd go so far as to say that any group that allows it is not looking out for the interests of their members. They are setting up businesses to fail. Your prices need to be based on your costs, your time, and your profit margin, not theirs. As you can tell, I am quite passionate about this one. Okay, let's go on to trap two. Trap two is the kindness trap. I covered this a little bit in last week's podcast. This one is more personal. A lot of bakers, and of course I say this with a lot of love, got into this because they love making people happy. The look on someone's face when they see their birthday cake, the message after a wedding. They repeat customers who feel like friends, and that's fabulous. It really is. But it becomes a trap when it starts costing you money. You discount for a friend. You throw in extras because you feel guilty charging for your time. And when you say yes to a last-minute order because you don't want to let someone down and then spend your Sunday night in the kitchen resenting everything. Being kind is not incompatible with charging properly, but the two have got tangled up in your head and you need to unpick them. Charging your worth is not unkind. Undercharging and burning out is not kind to either you or your customers. If you want more on that one, listen to last week's episode. Trap three, the identity trap. This is a big one, and honestly, it's one that underpins the other two. And the fact is that a lot of bakers don't think of themselves as business owners. They think of themselves as bakers who happen to sell cakes. And there is a massive difference between those two identities. A baker who sells cakes apologizes for their prices, feels lucky when someone places an order, competes on niceness because they're not sure they can compete on value. However, a business owner who bakes knows their numbers. They set their prices with confidence. They say no to work that doesn't serve the business. They treat their time like the finite valuable resource it is. The gap between where you are and where you want to be financially, mostly that lives in this identity gap. So, what actually changes things? Let's have a look at that. I'm not here just to describe the problem. I want to help you work out how to do something about it. So, first of all, know your actual numbers. And I mean really know them. Not a rough idea, not oh, I think I make a profit. Know what it costs you, your ingredients, your packaging, your time, your overheads. Now, your overheads are the only thing that you calculate that have an element, and I say an element of estimation in them. Um, in the academy, I have a very comprehensive training on how to calculate your overheads, and there is an element of estimation in there, but that's it, everything else is calculated. So, all these costs you need to know to produce every single thing you sell. Because you cannot price with confidence if you don't know what your floor is. If you haven't done a proper cost breakdown for your products, that is your starting point. So if you don't know that, do that this week. Yeah, it's not very glamorous, but it's the foundation of everything. And once you've done it, have it there, and you just need to tweak it when perhaps ingredients go up or your overheads go up, but you'll have your basic costs. Secondly, price for profit, not just coverage. A lot of bakers price just to cover their costs, and then they add a bit on top, and then they call it a day. But coverage isn't a business. Coverage is survival. Coverage is an expensive hobby. Your prices need to include your costs, plus a profit margin that actually makes running this business worthwhile. That profit is what lets you invest in better equipment, invest in training. It's what stops you quitting in year three because you're exhausted and can't see the point. You are allowed to make money. I'll say it again. You are allowed to make money from this. Third thing, start talking about value, not just the product. And here's a shift that makes a real difference to how customers respond to your prices. Stop describing what you make and start describing what it does. I see this all the time online. People posting, here's my cake, do you want to buy it? Posts. Here's what I have on offer, here's how you buy it. No, no, no, no, no. Another example. You don't want to say, here's a three-tier wedding cake with buttercream and fresh flowers. What you want to say is, here's a cake that photographs beautifully, that your guests will still be talking about, that makes the moment feel as significant as it is. People don't pay more for ingredients, they pay more for a feeling, an experience, a memory. When you understand that, you stop justifying your prices and start owning them. And fourthly, deal with that identity piece we talked about. This is the ones people skip because it feels soft. It isn't. Your business will only grow to the level that your self-perception allows. If you think yourself as a hobby baker who got lucky, you're gonna price like one. If you think yourself as a skilled professional running a real business, one that serves real customers, deserves real income, that will come through in every interaction you have. It will come through in your messaging, on your social media, in every communication that you have. And this isn't about fake confidence, it's about genuinely making the shift. Deciding consciously that you are a business owner and not one day, now. You're a business owner now. Now, everything I've just talked about, the identity shift, the boundaries, the pricing confidence, this is exactly the type of thing that we dig into inside the Home Baking Business Academy membership. This month in particular, the March programme is built around this. We've talked already about boundaries as a business strategy. That training is already in our training library. And not just feeling better, but actually protecting your time and money. Another session we're going to be having is looking at the identity shift in full from hobby baker to business owner. We'll be going deep into what it really means to move from one to the other, and you leave with a professional identity statement and a decision filter you can use every single week. Those are the practical things that I'll be giving my members. Now, if you're not in the academy, but this is sounding good, the doors are open. Have a look in the show notes for the link. Come and join us this month, and we would love to have you there. Now, before I go, I want to leave you with this. Being underpaid is not inevitable. It is not a fixed feature of the handmade food industry. There are lots of bakers building genuinely profitable businesses, charging what they're worth, turning down work that doesn't serve them, finishing the week proud of what they made and what they earned. And that is available to all bakers. Not because you're going to become a different person, but because you're going to start treating yourself like the skilled professional you already are. The skill is there, it always has been. Now it's time to build your business around it. Thank you so much for listening today. It's been lovely to have you here. Now, if this episode hit home, share it with another baker who you think might need to hear it. And if you're enjoying the podcast, please leave a review. It really, really does make a difference. Thank you so much for listening, and I'll see you next time.