Have you ever thought of making a living out of your baking passion? Turn your (sweet) skill into a revenue stream. Selling sweets is good business. Running a retail dessert franchise is even better. Bakeries are quite common; walk-in customers love popping in for a quick snack. Sadly, the financial aspect of running a fully-pledged bakery isn’t as sweet. Most hobbyists close in the first year for failing to break even. Just like other brick and mortar businesses, you must master managing your business. Here are five tips to set you off on the right foot:
Utilize Asset Financing
Cash flow is tight in any small business. This is the sad truth. Unlike conventional loans, bakery loans come at a lower interest rate. With a lower monthly contribution, you’re able to channel finances toward growing your restaurant. This loan will come in handy when you need to purchase supplies or equipment. Think of baking equipment, packaging tools, and utensils.
Identify the Perfect Location
There’s more to running a successful dessert franchise than mastering the art of baking. Sweets are among fast-moving consumer goods. Finding a strategic location might be harder than you think. They’re a lot of considerations to be made. A bakery in a busy street, bustling with foot traffic, might turn out to be a ghost town. Look for a premise with in-house parking. Consumers are lazy. They won’t walk a mile to your shop. This is more pronounced in rural areas where public transport isn’t as common. Consider renting a premise near a municipal parking lot if there are no designated slots. Install a huge neon light advertising your shop if it’s far from foot traffic.
Hone Your Craft
Give them irresistible doughnuts. Prepare a menu in advance. Price items appropriately so that you get a markup even in the worst-case scenarios. Most new bakery owners base their price list on the cost of supplies and labor. This is a flawed business model. Revise the prices and include packaging costs, storage fees, and cleaning up. Take time pricing your desserts.
Take a Professional Approach
Hobbyist bakers often give freebies to friends and family. “Family discounts” are the quickest way of running into bankruptcy. Make them understand that you cannot afford to provide freebies. You might run into financial difficulties after selling items at heavily discounted rates. Still, remember that they gave you support back in the entrepreneurial days. You don’t want them thinking that you’re selfish and ungrateful.
Keep Employees Motivated
Psychological studies suggest that motivation and productivity are inter-dependent. When starting, your business must attain optimum productivity to break even. Business owners often overlook employee communication. Let them know that they’re valued. Have face-to-face discussions whenever possible. This is the best way of showing appreciation for their time.
In the end, empower your employees. Speak to them and ask for suggestions on how you can improve business efficiency. Implement what’s workable. The best managers enable their employees so much that they can make decisions without prior approval from their overseer.
