5 Pitfalls About Starting A Bakery Business

Many peopleĀ  talk about starting a bakery business. Even my wife. She told me once about her fantasy of owning a bakery cafe that serves both coffee and pastry. I was like…COME ON. SERIOUSLY ?!

Everybody thinks that starting a bakery business and running it, is a bed of roses. No thanks to movies and publicity, that portray a carefree life of a bakery. I recall a former banker describing the reasons he jumped head over heel into starting a chain of retail bakeries during a magazine interview. Well, according to this guy, he wanted to get away from the stress of banking after retirement. Therefore, he thought the cafe bakery would allow him to spend his retirement years just, sipping coffee and eating croissant daily. He realized he had made a terrible mistake when his GM came to him every few months to ask for funds to keep the chains from going under.

These are the things people never tell you about running a bakery.

1. Your Baker Could Leave You When You Need Him Most
Don’t be too happy when you have hooked in a distinguished baker to run your bakery’s setup. A good baker is highly on demand and you can’t count on him to work for you till eternity.

Many bakers love the freedom to express their creativity. However, if left unchecked, the owner will face a lot of challenges when the baker leave for greener pasture. Imagine, your customers disappointment when they realize that their favourite rolls and baguette have different taste after you find somebody else as replacement.

Inexperience bakery business owner will sometimes allow their beloved baker run wild in the production kitchen. A good baker will make the kitchen his/her pride. Unfortunately, there are black sheep that give the profession a bad name. I have the privilege to meet both types of baker. The former’s enthusiasm in their baking profession exudes positive energy for us to push harder with them. The bad ones are few. I met one guy who told me that a real baker would never need to measure his ingredients during baking. Although this guy was much older, I lost my cool and gave him a piece of mind.

2. Ingredients Could Create Havoc In Your Life
Among the basic ingredients used to make your loaf of bread are flour, water, oil, sugar, salt and yeast. Under normal circumstances, if you purchase your ingredients from reputable suppliers, these ingredients will carry your products well into the palate of your customers. However, baking is not always about a walk in the park.

Among the ingredients stated, flour does give some challenges at times. Sorry to my friends in flour mills. There are some issues that you may come across like:
1. Flour too green
2. Flour with inconsistent protein quality
3. Flour that underwent hard grinding

Apart from flour, other ingredients might sometimes pose some hiccups to your daily baking. Usually they are quite rare. Other contributing factors come into play most of the time like a baker’s forgetfulness. Human errors happen a lot in a bakery’s daily operation. Sometimes, bakers forget to add salt or yeast or yeast put on top of salt during ingredients scaling etc. I mean these are part and parcels of running a bakery, and you need to learn to enjoy them if you want to succeed.

Read about how bread improver can be used to solve some of the problems above in Why Use Bread Improver.

3. Other Bakeries Are Not Your Only Competitors
If you stay in any country in South East Asia, you will find out soon enough that people in this part of the world do not eat bread as their staple food. In fact, we forgot about bread most of the time unless we have a special craving for them.

In Malaysia, your corner shop retail bakery will be competing with all the hawker foods and coffee shops surrounding it. Imagine your bakery in a war, flanked by enemies of different sizes and shapes, vying for the taste bud of similar customers. Even the occasional durian and other fruit seasons will dampen your sales.

Your sausage rolls and egg tarts would sometimes take a back seat when festive seasons come. Asia countries are rich in festivities and mind you, you will be fighting for attention again with other kinds of food. Chinese New Year, Malay Fasting Festival are some of the festivities that will definitely hit your sales hard. Therefore, plan your inventories ahead, both for raw materials and finished products during these trying times (for bakeries). You don’t want to end up with too much raw materials or unsold products because if you are careless, these could hurt your cash flow.

4. Your Choice of Equipment Today Could Save Or Break You Tomorrow
It is understandable to support your local equipment manufacturer. After all, these guys are copying the models from overseas and most important, they are cheap. Before you give yourself a pat on the back, there are crucial issues that you need to consider before making those important capital expenditure.

I am tempted to mention that brand name that once gave me terrible nightmares for the machines’ breakdowns. For God’s sake, these were European brands, but they didn’t live up to their reputation. My company owned three units of an Italian brand bread moulder. Every month, the maintenance boiled down to nearly $ 5000 just to keep these machines operational.

A baker not only must understand ingredients, he should understand the equipment as well. Imagine making use of all my knowledge in bread improver and getting the best yield through optimizing my dough water content, and yet, my dough could not pass through the dough divider. Planning a retail bakery is completely different from calculating all that we need for a mass production plant. You better know whether you want a grand tunnel oven or 8 units of rotary deck oven.

5. Leftovers And Returns Could Derail Your Bakery Business
You see the crowd daily. However, your P&L still shows loss at the end of the month. What went wrong?

Stay back and check the unsold items in your display at the end of day. If you are doing wholesale, ask your accountant to work out the daily returns as soon as possible. If your material cost is around 50% of your sales, any return that is more than 25 % might put a dent in your profit.

In my years of experience running and serving the bakery business in the region, truth be told, I have seldom come across a cheerful owner. Most are stressed due to reasons I mentioned in this blog post and more.Really, there are more pitfalls that I could ever finish in this lone blogpost. Nitty gritty things like delivery containers, you need to put that into your annual planning as well because, people love to steal them.

There are bakery business owners who could relate to what I have written here, and maybe even regretted the decision.Therefore, if you really looking forward to starting your first bakery business, do yourself a favour. Put your heads together and do a detailed bakery business plan. In spite of all these challenges, we should soldier on. Behind every hurdles that we see and don’t see, there are successful stories too.

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