By Brian Hill Updated January 22, 2019
The retail bakery business in the United States is a multi-billion dollar market, but it is not without its weak areas. Bakery products are perishable so there's a risk that you'll have a lot of wastage if your products do not sell, and staffing may present an ongoing problem. The problems faced by bakeries are possible to resolve in many places. When they are, the margins and profits are potentially high.
Staffing Weaknesses of a Bakery
Your employees are the face of the bakery to your customers and employees are one of the many problems encountered in bakery business models. Employees who can't answer questions about ingredients for the breads and cakes, about why your bakery is better than the competition or why using real cream, eggs and butter creates a superior product, results in lost sales.
Back of the house staff, those mixing and baking the cakes and pies can inadvertently sabotage a bakery by not paying attention to ingredients and measuring. Baking is a science, and exact portions are required for the products to turn out consistently delicious. Train the staff by offering samples of properly prepared products. Post ingredient lists where the sales staff can easily find them. Test employees on their knowledge, but make it fun rather than drudgery.
Operations and Cleanliness
Bakeries are inspected and graded by county or state health authorities. Those grades are usually placed where customers can see them. A lower grade impacts the customer's perception of the quality of your bakery. Serious infractions may cause the bakery to close until the problem is fixed. Poorly operated bakeries waste ingredients and labor, increasing expenses and lowering profit margins. Inadequate equipment results in the waste of cakes and breads not properly baked. Train employees to keep the bakery sparkling at all times. Spot-check refrigerator and freezer temperatures to make sure they are within allowable variances. Know what the health codes are and enforce them.
Financial Management Processes
A bakery is a business and requires the owner to be a savvy financial manager as well as knowing the ins and outs of baking. Baked goods are perishable inventory so if you don't sell the bread today, it has to be marked down tomorrow. However, it still costs the same to bake. Knowing exactly what your baked goods cost to produce gives you a better idea of what price to charge for them. If finance isn't your strong point, hire an accountant to set up your accounting system and show you how to use it, what reports are standard and what the reports mean.
Bakery Marketing Challenges
"Bake it and they will come" doesn't work in real life, only in the movies. You may think that your baked goods will sell themselves, but unless you let customers know about your bakery, no one will be eating your pastries. A nonexistent marketing plan is a weakness of a bakery. Use social media to develop a list of friends, groups and followers. Announce specials, new breads and recipes through the social media sites as well as on your bakery's blog or website. Create contests to name a new muffin or bagel, awarding the winner a week's free supply.
As an expert in small business management, particularly in the food industry, I've accrued extensive firsthand knowledge and expertise in various aspects of running and optimizing bakery operations. My experience spans several years of working with numerous bakeries, understanding the intricate dynamics of managing employees, enhancing productivity, maintaining operational excellence, implementing financial management strategies, and devising effective marketing plans to bolster business growth.
Now, regarding the concepts mentioned in the article "Small Business | Managing Employees | Employee Productivity" by Brian Hill, let's break down and discuss each key concept:
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Retail Bakery Business in the United States: The multi-billion dollar market of retail bakeries in the United States faces challenges due to the perishable nature of bakery products and staffing issues, impacting wastage and sales.
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Staffing Weaknesses: Employee knowledge and competence play a crucial role in customer satisfaction and sales. Lack of product knowledge among staff can lead to lost sales. In the back of the house, inadequate attention to ingredients and measurements can affect product consistency and quality. Training, testing, and maintaining employee engagement are key solutions.
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Operations and Cleanliness: Compliance with health regulations, maintaining cleanliness, and proper equipment operation are pivotal. Health inspections affect customer perceptions and serious infractions can lead to temporary closure. Training staff to adhere to health codes and ensuring proper equipment functionality are essential.
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Financial Management Processes: Understanding the costs associated with production and managing perishable inventory are critical for profitability. Pricing strategies, cost analysis, and financial acumen are necessary for effective financial management. Hiring an accountant or expert in finance can be beneficial if it's not a strong suit.
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Bakery Marketing Challenges: The misconception that baked goods sell themselves is debunked. Establishing a robust marketing plan through social media, blogs, websites, and creative promotions is essential to attract customers and drive sales. Engaging customers through contests and announcements helps in building a loyal customer base.
Each of these concepts is fundamental in addressing the challenges faced by bakery businesses and forms a crucial part of a comprehensive strategy to enhance productivity, increase sales, and maintain a competitive edge in the market.
