Why bakeries fail

Opening your own business is one of the biggest risks one can take in life — especially in the foodservice business. But if you do succeed, it can be very rewarding.

In this article, we will take a look at a few key areas to concentrate on to improve your chances of success!

Not Calculating Food Costs Properly Take the time to cost out how much each and every single product you use and purchase for your bakery will be, how much it costs to produce every single item in your bakery and whether or not you are making a profit on each item. Once you have analyzed your food costs properly, you may need to adjust your recipe, change the packaging, or remove that product from your bakery altogether.

One thing I would like to ask you. You want to increase your IT business and keep baking as a hobby or you will use baking as a retirement option?

Definitely in Pondicherry but elsewhere also. I don't know where precisely you are in India but if you could visit them, maybe you could pick up some tips? They might be open to letting you work some shifts either in the bakery proper or in the cafes that are usually attached. I think your biggest obstacle might be red tape which I'm sure you know much better than myself is a huge problem in India. Taking the route of least resistance to getting started is often a good way to build solid foundations.

May I also suggest some alternatives to the coffee and cake route you're thinking of taking? Can you run a small bakery from your family home? Or scrounge oven time from a restaurant during the hours it is closed? If so, you could build a small loyal clientele which could then be a step towards building something bigger and better. There are quite a few examples of successful bakeries here in the UK who have followed this route if you can access BBC iPlayer content then look up the Radio 4 Food Programme archive, there are several reports on micro-bakeries and artisan baking you might find useful.

That said, until a bakery is large enough to take trade orders, the real profit is in hot drinks, pastries, and cakes. So maybe you are already taking the right approach. It is extremely difficult and will tax you physically. Bakeries fail for a variety of reasons: look at successful businesses and what they do that is different from small failing businesses to see the difference.

Bigger businesses spend a lot of money in order to make more money; small businesses are afraid of spending. Big businesses advertise usually , small businesses "can't afford it. If you want to open a retail shop, consider that without employees, you will need to bake everything and run the store, which means you will be working all the time.

I don't recommend it. Before I went into business, one of my counselors, who had started an egg business just a few years prior, basically told me it was hell and not to do it. I did it anyway and he was mostly right. It is a LOT of labor and no rest. Without a co-owner by my side taking care of most of the administrative tasks, I would have failed just months in.

Remember, you have to make a LOT of baked goods to make real money. By the way, I don't regret doing it. But it certainly wasn't easy. I came up with a business axiom a while ago which has proven true in every case: everything is hard. Even if it seems easy, it's always hard. I watched a video I believe of Richard Bertinet where he says in every single class he teaches there is someone from the "tech" world that really thinks they want to be a baker.

He goes on to talk about the long hours, the hard physical work and that loving your home baking and being a professional baker are worlds apart. IT workers, myself included, get frustrated with the fact you never really seem to create anything, and the praise and appreciation is rare and often backhanded.

Oh yeah, and our jobs keep getting more and more rare. Where I work Where Ken Forkish worked too we are on our 4th round of layoffs. It is hard to decide who has it worse: those laid off, or those of us left to pick up the pieces and make up the slack.

However, when we hand someone one of our loaves, it is a clear "I made something" and the light on their faces is often more appreciation than we see for months on the job. I am making bread on the side for a small cafe and the owner's eyes light up when he sees me come in with my bread. One, he knows he just sold as many sandwiches as I brought bread for, and two he knows he gets first dibs on the ends!

Agree completely. There is something very satisfying in creating something. That seems to increase when it is something like food that others can enjoy. To take the raw materials and create a lovely and delicious loaf of bread is one of the more fulfilling endeavors to my mind. The urge to return to using our bodies, eating something more natural and sharing with that is strong and I am happy there is a growing appreciation and base of customers for those goods.

Just a thought on the dialogue. It seems the discussion starts from the loaf up instead of looking at the process from the customer down. I've seen many businesses fail because the proprietors failed to provide and satisfy the customer's expectations. Remember we first feast with our senses Some market research might help.

I traveled in India a few years ago. It seemed to me that if one could tap into the special needs of the ex-pat community one might make money. Natural gas, which is often used to bake the products, can see price fluctuations of by as much as 25 percent. These price fluctuations can have serious consequences for the bottom line of a bakery business, as profit margins become slim, and sometimes the bakeries are forced to pass some of those costs on to the consumer, to avoid going out of business.

A common way to avoid the risk of price fluctuation in your bakery business is to negotiate contracts so that you buy all of your raw materials in bulk and at fixed wholesale prices. This allows you to budget for the future and also to be able to accurately and consistently forecast your costs and profit margins for the future. There are already a lot of bakeries in the U. A specific characteristic of the industry is that a lot of bakeries specialize in specialty breads, which are more expensive than regular breads.

Consumers may or may not be willing to pay that premium for specialty baked goods, depending on how the economy is performing at that time.

The bakery industry also happens to be limited by population growth. With a growth in population there will naturally be more people to buy baked goods. Unfortunately, it is a slow process and the bakery industry is still growing by single percentage points annually. For most bakeries out there, growth opportunities come in the form of opportunities to buy out competitors or stealing their market share for a specific product.

With the health consciousness spreading around the country, bakeries that make breads for a gluten-free diet are in demand. This is actually a helpful situation for small bakeries because they are more nimble and flexible than larger bakeries and better able to adapt to the evolving tastes of the population. Now, on the one hand, it may seem like an advantage that a small bakery does not have to comply with some regulations that large bakeries have to comply with health and safety.

However, there is a serious risk component to all of this if you think a little more deeply about it. There was a time when bakers had a widespread belief that the very high temperatures applied in the baking process could eliminate any pathogens that may otherwise find their way into the bread.