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The 5 Biggest Problems Faced by Bakeries are (obviously), a little different than those in other businesses. Bakeries are unique because there underlying problems (apart from government), are an almost constant daily issue.
- This Article will focus on 5 of the Main Problems Unique to Bakeries.
- A Bakery is a Good Business if You can Avoid these 5 Mistakes.
- Mistake No.1 - Not Specializing
- Mistake No2. - Not Offering Additional Products for your Customers.
- Mistake No.3 - Not Reviewing the Wastage Percentage in your Profit Mark up.
- Mistake No4.- Not Understanding the Disadvantages of a Small Bakery
- Mistake No 5. -Buying Ingredients at Retail Prices and Labor Costs.
This Article will focus on 5 of the Main Problems Unique to Bakeries.
- Product Specialization
- Customer Retention
- Understanding your disadvantages
- Ingredients and Labor Costs.
- Money. In the rush to escape the kindergarden for well-behaved adults (the 9-5 😉), many solopreneurs don’t fully assess the true capital costs of setting up the business.
- Uniqueness. Offering the same as other stores usually becomes a race to the bottom unless you are offering something special or unique.
There are courses you can avail yourself of which don’t take years to complete or cost an arm and a leg.
A Bakery is a Good Business if You can Avoid these 5 Mistakes.
Running a business is not a sprint, it’s a marathon.
Even if you have gone into your business properly resourced you cannot be complacent and think everything will flow smoothly.
It won’t, they never have, and probably never will.
You have opposition. You have good customers as well as bad ones, who will do their sneakily best to ruin your reputation.
Those are the easy problems to solve.
Mistake No.1 – Not Specializing
You don’t Focus on particular product lines to specialize in, or to perfect the recipe and the baking of it.
Get that right and you will have customers flocking to your bakery.
An experienced baker will generally know all the tricks to produce a tart, pastry or pie without breaking the bank and serving up something that tastes like a warthogs rectum.
I won’t mention the kitchen cat.
Ok, serious again.
You have a large range of options, including an almost endless variety of breads, pastries, cakes, brownies and pies to select from and not all recipies are the same.
Don’t forget baking competitions, so get out there and test your skills, having a winning certificate for a loaf of bread, cake or pie is something you can proudly display in your shop.
It shows you are a professional who takes pride in his products. This can flow onto other businesses as well.
Not all bakeries sell coffee, but all coffee shops sell bakery products.
Also there are unique styles of bread not sold by many bakeries that can also be a profitable line for you.
Mistake No2. – Not Offering Additional Products for your Customers.
Although cakes may not be one of your usual items, letting customers know you do special treats for various occasions is a good way to add to your profitability.
While they may not be consistently ordered, those are things you can get a premium price for.
You can always tell your customer they can get it cheaper at XYZ bakery, however if the customer is a regular and likes the service and products you make, pricing should not be a problem.
Provided it is not outlandish.
Selling more to existing customers is cheap advertising.
All it takes is a sign in your shop.
Mistake No.3 – Not Reviewing the Wastage Percentage in your Profit Mark up.
A percentage of wastage should be included into your final selling price. If you are wasting more than you allowed for you have two options.
1. Raise your prices.
That is the easy option and it can also backfire on you. Don’t be inefficient.
2.Get innovative with your wastage.
I have a friend who visits a bakery every afternoon to collect what they didn’t sell during the day. He takes bags of bread, rolls, buns and other products home and feeds them to his cows. Keeping some bread for himself of course.
I used to stare in amazement at the quantity and wonder how on earth they made a profit, or if they sold it all, how much additional return their business would have.
Instead of throwing good food away or feeding it to cows, get creative and think of other ways it can be used. A who, where, and how question.
Giving to charities is actually a form of advertising and their may be some benefit for your business in doing that.
There are other avenues of course, much will depend on what you are selling.
Mistake No4.- Not Understanding the Disadvantages of a Small Bakery
You should have reviewed this before you opened your shop. However it is important to keep reviewing and strategizing, and there is no better time to start than the present!
Staffing is an issue for bakeries. Early morning starts, personality clashes, and attitude problems are just some of the issues facing bakery owners.
Understand employees are not there to benefit you, they are there because it means a pay packet.
Finding and keeping dedicated employees can be an ongoing issue. Try not to let it become one.
Customers are fickle, and having an employee with a bad attitude at the front counter is not going to help things.
You are in business to make money, if something is costing you money then you need to find out why, and either lose it from the inventory or roster!
Mistake No 5. -Buying Ingredients at Retail Prices and Labor Costs.
Since the Covid drama, costs have skyrocketed for just about every commodity (and, running costs, power, labor etc), so there is no way to avoid a price hike across all of your items.
Finding the fine line between affordability and profitability is the challenge many small businesses face, but particularly bakeries because of their unique position in society.
Review all of your purchasing, and any items you are paying retail prices for, check to see where you can get them at wholesale prices.
It may require extra storage space, but you should be able to work around that with little expense.
One of the pros of running a bakery is you have control of the products you provide, and there is a lot of bakery products to choose from.
If you haven’t looked at any new equipment lately, then it may time you did to try and reduce your power, labor costs and ingredient wastage.
“If you love to bake and if you love to bake for other people — feeding the world, so to speak — there is no better profession than being a baker. There is so much satisfaction every day and doing your best to achieve perfection in all the breads and pastries you bake. And you get to do this every day. I have never regretted a minute of it!”George Eckrich, founder of Sourdough: A European Bakery (which he sold to Whole Foods Market) and co-owner of Dr. Kracker, Austin, Texas
Bakeries are popular solopreneur businesses. Unfortunately many fail before they reach their potential.
Doing the proper research is vital before you go into any business, but bakeries have a uniqueness about them that make them an attractive business idea, although they are not regarded as very profitable.
Like all business minimize the mistakes and the profits will run.
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