By Brian Hill Updated January 22, 2019
The retail bakery business in the United States is a multi-billion dollar market, but it is not without its weak areas. Bakery products are perishable so there's a risk that you'll have a lot of wastage if your products do not sell, and staffing may present an ongoing problem. The problems faced by bakeries are possible to resolve in many places. When they are, the margins and profits are potentially high.
Staffing Weaknesses of a Bakery
Your employees are the face of the bakery to your customers and employees are one of the many problems encountered in bakery business models. Employees who can't answer questions about ingredients for the breads and cakes, about why your bakery is better than the competition or why using real cream, eggs and butter creates a superior product, results in lost sales.
Back of the house staff, those mixing and baking the cakes and pies can inadvertently sabotage a bakery by not paying attention to ingredients and measuring. Baking is a science, and exact portions are required for the products to turn out consistently delicious. Train the staff by offering samples of properly prepared products. Post ingredient lists where the sales staff can easily find them. Test employees on their knowledge, but make it fun rather than drudgery.
Operations and Cleanliness
Bakeries are inspected and graded by county or state health authorities. Those grades are usually placed where customers can see them. A lower grade impacts the customer's perception of the quality of your bakery. Serious infractions may cause the bakery to close until the problem is fixed. Poorly operated bakeries waste ingredients and labor, increasing expenses and lowering profit margins. Inadequate equipment results in the waste of cakes and breads not properly baked. Train employees to keep the bakery sparkling at all times. Spot-check refrigerator and freezer temperatures to make sure they are within allowable variances. Know what the health codes are and enforce them.
Financial Management Processes
A bakery is a business and requires the owner to be a savvy financial manager as well as knowing the ins and outs of baking. Baked goods are perishable inventory so if you don't sell the bread today, it has to be marked down tomorrow. However, it still costs the same to bake. Knowing exactly what your baked goods cost to produce gives you a better idea of what price to charge for them. If finance isn't your strong point, hire an accountant to set up your accounting system and show you how to use it, what reports are standard and what the reports mean.
Bakery Marketing Challenges
"Bake it and they will come" doesn't work in real life, only in the movies. You may think that your baked goods will sell themselves, but unless you let customers know about your bakery, no one will be eating your pastries. A nonexistent marketing plan is a weakness of a bakery. Use social media to develop a list of friends, groups and followers. Announce specials, new breads and recipes through the social media sites as well as on your bakery's blog or website. Create contests to name a new muffin or bagel, awarding the winner a week's free supply.
FAQs
Some of the strengths of a bakery business could be the quality of their products, unique recipes, or exceptional customer service. However, weaknesses may include a lack of consistent product quality, inadequate market research, or weak financial management.
What are the disadvantages of owning a bakery? ›
Baked Goods Require Expensive Ingredients
Bakery items are expensive because they require a lot of costly ingredients. For example, cakes have butter, eggs, chocolate, and sugar that altogether make great-tasting desserts. The higher than average ingredient costs reduce your bakery's profits.
What are the challenges of bakery? ›
One of the most significant challenges facing the bakery industry today is the lack of qualified personnel. The production of artisanal bread and high-quality baked goods requires technical skills and specialized expertise in bakery equipment operation, as well as knowledge of ingredients and fermentation processes.
What is a SWOT analysis of a bakery? ›
If yes, then you need to develop a detailed SWOT analysis for your bakery project. A SWOT analysis is a strategic management tool entrepreneurs and businesspeople use to assess a project's internal strengths, weaknesses, external opportunities and threats.
What are the weakness of a food business? ›
Weaknesses are internal factors that put a restaurant at a disadvantage compared to its competitors. This may include factors such as poor location, limited menu options, inconsistent food quality, high employee turnover, lack of marketing or promotional efforts, outdated decor or facilities, and financial challenges.
Why do bakery businesses fail? ›
Common Reasons Why New Bakeries Fail and How to Avoid Them
Some new bakeries fail because they don't have an experienced person on staff with a background in baking or running a full-time kitchen operation. It's important to do your research to create a workable business plan.
What are the risks of a bakery business? ›
Property damage: Bakeries face a high risk of property damage due to the presence of ignition sources such as stoves, ovens, and fryers. Fire caused by malfunctioning electrical equipment or carelessness can spread quickly between fuel sources, putting your property and any equipment, materials, or supplies at risk.
What are the risks of bakery business? ›
If bakery workers do not take good care of their personal hygiene, the baked goods can end up contaminated with biological and physical hazards directly or through cross-contamination. Every staff member in a bakery should be trained in personal hygiene.
How can I improve my bakery? ›
How To Improve Bakery Production
- Assess & optimise the production line.
- Provide training & development workshops.
- Implement quality management systems.
- Invest in reliable processing equipment.
- Review ingredient processes & suppliers.
In each episode, the amateur bakers are given three challenges based on that week's theme: a signature bake, a technical challenge, and a show-stopper. The three challenges take place over two days, and the filming takes up to 16 hours a day.
Bakeries traditionally would be considered low risk because the product cannot support the growth of microorganisms but bakery products with cream can. Flour, however, cannot be a high care ingredient in its raw state as it has not undergone a kill step sufficient to kill off pathogenic bacteria.
What are the strengths and weaknesses of a bakery? ›
For instance, strengths may include artisanal baking expertise and a loyal customer base, while weaknesses could involve limited marketing resources or dependence on seasonal ingredients.
What are the strengths of bakery business SWOT analysis? ›
Identify your bakery's strengths
Consider factors such as your delicious recipes, high-quality ingredients, skilled bakers, loyal customer base, or strategic location. These strengths will serve as a foundation for your bakery's success.
What are threats in business? ›
Threats. Threats include anything that can negatively affect your business from the outside, such as supply-chain problems, shifts in market requirements, or a shortage of recruits. It's vital to anticipate threats and to take action against them before you become a victim of them and your growth stalls.
What are the strengths and weaknesses of bakery? ›
For instance, strengths may include artisanal baking expertise and a loyal customer base, while weaknesses could involve limited marketing resources or dependence on seasonal ingredients.
