Are you worried you might be making some mistakes with your bakery shop? Find out in this article. Opening a bakery is very different from opening other types of food businesses. They have different management styles and structures and require specific experience to work properly. Here, I’ll show you the top mistakes that might be harming your bakery’s profits and keeping you from having a successful business. Also, I’ll show you the simplest solutions you can apply to each case. Let’s get right into it!
1. Not having proper management and inventory handling practices
The main reason why bakeries are hard to manage is that they go through inventory quickly and on a daily basis, which can cause other problems. They usually maintain a constant level of production every day, which means inventory runs out as fast as it comes. This in turn creates other problems. Not creating standardized processes to handle inventory and supplier relationships is a common mistake. Another bad practice is that some bakeries don’t make bulk orders directly from producers or suppliers, but buy their ingredients in retail stores at a higher price. That can cause two main consequences – late orders and failure to restock supplies, which in turn causes the bakery to stop producing and selling. And buying directly from retail stores can make profits disappear because the price of ingredients is most certainly higher. Those two issues are common in small bakeries and can cause economic problems quickly.
How to avoid this problem?
Making sure that you’re both keeping a good eye on the inventory and managing supplier relationships efficiently can fix this issue. You can do so by assigning an inventory manager to handle the whole process for your bakery. Also, instruct the inventory manager to have a transparent relationship with your accountant to keep track of costs properly. Finally, make sure to always have a slight surplus of inventory so you can be prepared for busy times. If everything sells out, the last thing you want to do is blow away your profits by buying ingredients at a retail store just to cover your sales.
2. Not creating processes and standardization
Something that’s far too common in newer bakeries is not creating standards for every process. This is a good practice that allows you to save your bakery from making numerous other mistakes. Standardization helps you avoid losses, theft, and inventory mistakes, and gives every preparation in your bakery consistency. Additionally, it helps you improve the training of new employees and quality control. If you don’t have standards in your bakery, you can incur losses that can destroy your business in the long run. This is an issue that’s sometimes overlooked because new business owners often only see sales as a growth indicator. That is a mistake because losses can be unaccounted for.
How to avoid this problem?
If you’re first opening a bakery, you must create processes for everything! For cleaning the working areas, removing garbage, handling ingredients and products, and much more. It will make your life and your employees' lives easier while saving you time and money. A good way to do this is to simply pay attention to the things your bakery does every day and think of ways to reduce losses or bad practices with new tools or training for your employees. This can be as simple as buying a new dough mixing machine that takes less time and uses fewer ingredients. Or as complex as redefining every process in your bakery and creating a guidebook or recipe book that every employee must follow.
3. Not hiring employees with enough experience
A bakery is a business that specializes in making bread and pastries, which require recipes, exact measurements, and specific practices to ensure the end product is of the utmost quality. That’s why hiring people based on their experience is crucial. Plus, something that’s not often recognized is that it is manual labor that requires proper technique and teamwork. Hiring employees that have little or no experience in a bakery environment is sure to cause a high turnover rate in your business, which can disrupt its productivity a lot.
How to avoid this problem?
You must hire experienced bakers or at least make sure to hire people who are willing to put in the work and have a good work ethic. Asking for a thorough resume and interviewing employees in depth before hiring is a good practice that will help you avoid this mistake. Additionally, you can also ask your main expert baker to put together a team to work with him, as the most experienced baker will know what it takes to run a successful operation near the oven.
4. Not having a well-defined offer
The fourth mistake is simple – not having a good offer will make your customers go elsewhere! When you have a bakery you are rather limited by your customers to offer a specific type of bread. Still, even though a bakery seems like a straightforward business, figuring out the right menu for it is a bit tricky and takes a lot of try and error.
How to avoid this problem?
A good rule of thumb to have a good initial run is to start with the basics. What are the basics? That’s something you must figure out when creating your business plan. Why? Because every city has specific bread and pastry taste. Wherever you go in the world you’ll notice that different bakeries in different cities offer different types of baked goods because that’s what the custom is in that specific part of the country. Some places have commonplace bread recipes, while others prefer modified versions of the recipes to make the bread softer, whiter, browner, yeastier, faster to produce, cheaper, and so on. There are also local recipes that are a staple and irreplaceable for local customers. To put it simply, you must figure out what your city likes before opening your bakery! After figuring out a base offer – meaning at least 60% of your daily production – you can start experimenting with new recipes to test your customer base. Make sure to do it carefully to avoid having losses too big to handle. Keep in mind also that even though you must stick to a base offer at all times, not having a supplementary offer can make your business a bit dull when compared to your competitors. Also, if you’re always selling the same recipes, you wouldn’t be able to discover new recipes that make your bakery the best in town simply because you offered said recipe first. That’s also a good way of differentiating from your competitors.
5. Not marketing your bakery
Finally, not marketing your bakery can hurt your business more than you think. A lot of owners just assume that if they open a bakery customers are sure to come, which isn’t always the case. Unless your bakery is at an excellent location, you must apply marketing strategies to attract customers. For bakeries, it’s common to create offers and promotions to attract customers, but there are more marketing strategies that can help your business grow.
How to avoid this problem?
Strategies like geo-location marketing, offering free wi-fi, and other online marketing strategies can benefit your business. Also, don’t forget that bakeries are flexible in that they can offer their products to other businesses. That means creating marketing strategies to target restaurants, stores, and other food businesses can be a good idea. You have numerous options to market your bakery. The good thing though is that most bakeries use very simple and traditional marketing methods, which gives you a lot of space to innovate and create marketing campaigns that surprise your customers and make your business more attractive to them. All things social media, influencer marketing, and even email marketing can make your business stand out. You can diversify your offer as well by creating promotions, catering events, selling ready-made breakfast options, and much more. These ideas can help your business improve its profits. Check out our blog to find more great marketing practices!
How Common are These Mistakes?
These mistakes are common when new and highly passionate owners open a bakery. Passion is an incredible ally when it comes to opening businesses. However, good organization and discipline mixed with said passion is the best way to have a successful business. The good thing is that these mistakes are easy to fix and spot, all you need is common sense and a highly critical eye. If you’re not seeing any profits after six months or a year, and you’re suspicious you might be making these mistakes, hiring a professional consultant can help you a lot too. Do you think you’re making these mistakes? Hopefully, this article will help you fix them!
