How Does a Bakery Make Money?

  1. General Overview

    • A bakery is a business that provides pastry and custom cakes to customers. Types of pastry include cakes for all occasions, cupcakes, croissants, bread, pies, rolls, bagels, donuts, danishes, and other types of pastries. The staff usually consists of several bakers, a manager, and the cashiers who process the orders. The business will typically open early in the morning, although the bakers will come in a little before the opening to begin baking a fresh batch for the day. The doors will officially open to the public about an hour after the bakers arrive. This ensures that the bread and pastries are fresh and warm straight from the oven.

    Advertising

    • As the bakers take care of producing quality pastries and breads, other employees work to ensure that the business makes money. Even a good bakery cannot survive on word of mouth alone, and that is when a good marketing campaign comes in handy. Advertising in local newspapers and magazines is highly effective in getting the word out and bringing in customers. Giving out coupons, handing out free taste samples, and having bake sales in the neighborhood are also great ways of building buzz for the business. A good advertising campaign ultimately helps build a strong and loyal client base.

    Making a Profit

    • A bakery makes money just like any other business - by making a profit. Cost, expenses, and income are calculated to determine if a bakery loses money, breaks even, or gains money. A bakery's costs include ordering and purchasing supplies such as sugar, eggs, flour, cream, ovens, and other necessary ingredients or products. Expenses include advertising costs, maintenance of the bakery, payroll, and other miscellaneous expenses. Finally, a bakery prices and sells its baked goods to customers. Goods are usually priced at a higher percentage than it cost the bakery to make them. A higher sales volume equals more money for the bakery. A bakery profits when the sales of goods exceed the manufacturing costs.

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  • Photo Credit http://www.makro.co.uk/servlet/PB/show/1054161_l2/bakery3.jpg

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