Selling homemade cakes and pies is a way for a baker with a lot of passion and a few good recipes to make extra money or raise a full-time income. Cakes and pies are popular dessert items at all types of diners and restaurants, but few restaurants have a pastry chef on staff. It is to their benefit to find someone local who can provide them with the favourites their customers will like, instead of purchasing frozen alternatives. When you're first starting out though, deciding how much to charge for your creation can be intimidating.
Calculate how much it costs to make each item. Figure out what percentage of your bag of flour goes into making five of your chocolate cakes, for example, and then calculate the cost of that amount of flour. If you use half of a 10 pound bag of flour to make five cakes and the bag of flour cost you £2, then it cost you £1.30 in flour to make the five cakes or 40 cents in flour per cake. Do this for each ingredient.
Remember that the restaurant is going to sell the item too, likely per piece, so don't worry that you have to undercharge for your item. If your cakes and pies are tasty enough, the restaurant will be happy to buy them from you and make a profit of their own.
Figure in the cost of your labour, but remember that you can probably mix up the batter for three cakes in the same time you mix up the batter for one. If you can, for example, bake and decorate 10 cakes in an hour's time, then adding 60p to the price of each cake in addition to the cost of making it will net you £6 an hour for your effort.
Add a small amount in for the gas spent in delivering. You can figure out how much it costs you to drive out to different restaurants and then divide it up per item. So if it costs you £2 in gas to deliver 10 cakes, add 40 cents to the price of each cake.
Call other bakeries and ask how much they charge their wholesale customers for certain cakes and pies. This will give you an idea of what your competition is charging and what area restaurants expect to pay.