I think you are by far underpricing TeamEdward.
£40 is the lower end of what you should expect to pay for a 'quite plain' 8" sponge, IMO. Even a plain cake will take at least 3 hours (usually more) to make when you take everything into account such as time spent liasing with the customer, researching and designing the cake, mixing and baking, cleaning up, decorating the cake, then the cost of the ingredients, board, box etc, insurance, a proportion of equipment costs etc. Even at minimum wage, you've soon got your £40.
Sugar flowers can mean a lot of different things. A simple cut out sugarpaste flower takes seconds to make, a realistic looking large wired rose can take an hour to make, or more, so flowers could add a lot onto the cost too.
There are some cake pictures on my profile if you want to look, but I am 'only' a hobby baker at the moment, although I'm considering making it a business.