A Business Owner Should Really Be Better With Math

I sell baked goods to a local coffee shop. I have been doing it for over a year. They recently got a new owner and they are trying to make some changes.

The new owner has made some questionable choices already, but it’s really none of my business. I just show up a few times a week and drop off various items for them to sell. At the end of the week, I drop off an invoice, and they pay me. All is well.

For a while, I was bringing a cake each week. Each cake is pre-sliced so the staff has no work to do. A couple of relevant details: one, the cakes always sell out, and two, the cakes have the highest margin for [Owner]. I sell her a cake that is twelve servings for $40, and she sells it for $5.25 a slice, so she makes about $1.90 per serving. For most of the other items, she is only making $0.85 to $1.00 per serving.

One day:

Owner: “Stop bringing the cakes. They’re too expensive.”

Me: “Okay.”

Instead, I’ve been bringing cupcakes. I bring twelve of them and I charge her $3.15 each. They sell for $4.00 a piece, so now she only makes $0.85 a serving.

No cakes, though, so she is happy!