As the new president of the Retail Bakers of America and co-owner of Creative Cakes in Tinley Park, Illinois, Beth Fahey understands the pain that bakery owners often feel when it comes to maintaining a profitable business in the face of rising – and often unrealistic – expectations from customers.
Email and the internet have opened the floodgates for consumers shopping around for great products at bargain prices, so it behooves you to get a handle on the staff time you spend on everything from quoting cake prices via email to decorating elaborate specialty cakes.
“Identify the time wasters in your bakery,” says Fahey, who spoke at an April 4 session during the Atlantic Bakery Expo in Atlantic City, New Jersey. “Establish ahead of time what you will and won’t do.”
One of the most useful practices she recommends is observing your staff through a time study. Knowing how long each task requires – from responding to emails to decorating an animal print cake – will go a long way toward helping you maintain profitability in business.
For instance, Fahey shared one example of a decorated cake that cost $55.99 in ingredients, $146.23 in direct labor and $122.40 in overhead contribution. This adds up to a total direct cost of $324.62.
“When you get to a high-end cake, it costs a lot of money to produce it, so you have to charge accordingly,” Fahey says. “Once you do a time study on certain things, it’s going to open your eyes.”