Overcoming the Hurdles of First-Year Bakery Ownership
As with most new small business owners, those entering the world of bakery face a variety of challenges, both in the process of starting the business and in the critical first year. You may have heard many different numbers tossed out about the failure rates of small businesses, but there’s also value in knowing that the bakery industry has grown an average of 1.1%over the past five years, per IBIS World,
So while those first months and years are often make-or-break, there is money to be made in the industry, for those with the motivation and skills to get their bakery off the ground. Though some don’t make it, there are still many thriving businesses out there who once weren’t sure they’d conquer that first, overwhelming year.
We spoke with Lucy Foley, founder and owner of Scrumptious by Lucy, a UK-based brownie operation, about the challenges she experienced as she transitioned into the role of a full-time baker and business owner amidst the pandemic in 2021. Her small business, which began selling baked treats in markets and open-air events, made a big adjustment to eventually become a thriving online bakery in the height of the pandemic.
These are a few of the common hurdles bakery owners may run up against in year one.
Deciding what focus and business model will be best for you
Ultimately, there are a few business models a bakery can use. Gone are the days when a brick-and-mortar shop was the only way to sell products and services. Now a bakery can be more mobile, operating at markets, as a food truck, or online, with products express-shipped to customers around the country, broadening your potential consumer base.
A key step, but a potential hurdle in the first year, is determining which methods your bakery should use to get baked goods to customers–you may find different levels of success depending on the style of bakery you set up. Location, local demographic, and type of product can all contribute to this decision.
Choosing and establishing the right product line
Early in Lucy’s bakery business, when she was selling exclusively at in-person events, her sales were split evenly between cakes and brownies. But when she decided to move exclusively online, she had to reevaluate her product selection. She says, “My fear was sending my cakes by post or courier–would they survive the journey and arrive in the same condition I had sent them?” After a few rounds of trial and error, Lucy quickly realized that she’d have to focus on brownies.
Likely your first year in business will include the challenge of refining your menu or list of offerings. This involves some trial and error while assessing which products sell best and which fall behind. The key here is being flexible. Don’t stay hung up on a bakery good that isn’t working for your customers or business style.
Keeping the product as fresh as possible
A small hurdle to be aware of is simply keeping baked goods fresh for purchase. This challenge is unique to bakeries, as many baked goods lose quality very quickly.
To ensure freshness and quality for your baked goods, investing in enclosed display cases, refrigerated cases, and covered trays is key. In the case of an online shop, it means the best airtight shipping boxes, quick shipping times, and clear delivery instructions.
Establishing a web presence for new and existing customers
A critical challenge of any small business in that first year is to establish a solid online presence. It’s not enough to rely on word of mouth and the quality of your product, to get new customers. Instead, things like social media accounts, Yelp reviews, and a clear, easy-to-use website are crucial.
Maintaining your web presence can feel like a hurdle at times but there are countless online tools to help you save time and focus on what’s most important–the actual business.
Handling specific requests like gluten-free and vegan baked goods
These days, most bakery owners will be expected to offer gluten-free, vegan, or other diet-friendly desserts. While your business may cater specifically to one of these needs, most classic baked goods are neither vegan nor gluten-free. Still, overcoming this hurdle has the potential to bring new business and satisfy a greater range of customers.
Finding the time and energy for the tasks and growth
Truthfully, it will never be just about the products you offer. Lucy summed this up perfectly, “Running a bakery business is so busy and takes so much time, not only in the actual baking, but things such as meeting the daily 2 p.m. pick up by couriers, monitoring the delivery app to see that all of yesterday’s brownies were being delivered, checking ingredient stock levels … keeping up with wholesale and corporate orders … oh, and feeding my husband and kids.”
Ultimately, it’s everything you put into your bakery that will decide its outcome–the more passion, skill, planning, and attention you can dedicate, the more sweet the reward.
Find the right POS for your bakery
There are a plenty of bakery challenges when navigating the first year, but finding the right equipment doesn’t need to be one of them. SumUp’s POS is tailor-made for bakeries and other small businesses with a comprehensive customer loyalty programs and other programs to keep your business running smoothly.
Book a demo today to learn more about how we can help your new business.
