Four new independent bakeries have opened (or are about to open) in our county of almost 200,000 this year, more than doubling the number of bakery choices in Tuscaloosa. And that does not include the in-store bakeries at Publix, Wal-Mart, Brunos, Food World and Sam's Club. There are also scores of in-home bakers that sell cakes and other sweets.
While I wish them all well, I can't help but wonder if they knew how competitive the marketplace was about to become when they were planning their business.
We've blogged about this before. In fact we have an entire category of posts related to the business side of the bakery. But the questions keep coming...
So here are our top tips, and they apply to ANY new business:
- Make a good first impression. A few days before I opened the bakery, my sister (ever the marketing guru) reminded me I would have only one chance to make a good first impression. It may sound corny, but it's true. Everybody wants to try a new place -- have enough product and (trained) employees to make a good impression on EVERY customer EVERY TIME, with a great product and great customer service. I remember thinking, as I stood in line for almost an hour to buy sweets at a new shop last winter,"this better be worth it." My expectations rose for every minute I stood in line. By the time I got to the counter, I had no patience for the cool reception from the cashier and never went back.
As a side note, it sometimes takes more than simply mediocre food or service for people to complain. NEVER, EVER ASSUME your food or your service are great just because nobody complains. Find someone you ABSOLUTELY trust (and your employees do not know) to come in as a mystery shopper from time to time. Then listen to what they have to say with an open mind.
- Have enough cash. Nothing spells disaster faster than running out of money when you are just getting started. No matter how good your opening day (week... month... ) is, you will NOT recover your start up costs in the first month, six months or year. Be sure you have enough cash on hand to pay your personal expenses for the first few years, PLUS a contingency for the bakery. If you are renting space, pay the first year's rent in advance and put money aside monthly for annual expenses such as insurance and taxes. ALWAYS, ALWAYS have enough money in the bank to pay your employees, your suppliers, and Uncle Sam. And don't expect to be able to pay yourself much for at least five years.
- Know your market AND your bottom line. Plan to sell items people will buy, and make sure you know exactly how much it costs to make everything you sell. Account for spoilage and losses due to sampling, baking errors, and theft. It happens to everyone and it WILL happen to you. You will not always sell out every single item every day... Slow days, training new employees, under- or over-cooked items, mis-measuring, dropping stuff on the floor, power losses, donations. Never overestimate your yields. You need to be able to consistently sell items at a competitive price, despite all these challenges AND make a profit, or you may as well close your business.
- Learn how to say NO! This relates to #3. You will get lots and lots and lots of advice on what to sell, and at what price. You will also get lots of requests to donate items, buy advertising and otherwise give money or product away. You will also get occasional requests to accommodate special diets (sugar free, gluten-free, lactose-free, milk, egg, soy and nut allergies, vegan, etc.) You cannot be everything to everybody. Be as generous and accommodating as you can but do what is best for your business, know what you can afford, and LEARN TO SAY NO when you must.
- Unlearn the phrase 'Good Enough,' and never stop marketing. Just because you have a busy day, week, month or year, never assume everyone knows who or where you are. We've been in business five years and people still tell us they had no idea we were back here (we're in an alley). When we explain on the phone that we are located behind City Cafe (a Northport INSTITUTION for years and years), some are still clueless. There will always be new customers and new opportunities to make a good first impression. Customers move, go on diets, and find new interests. Treat every person who walks in the door as your new best customer. Because that's exactly what they might be.