Running a bakery requires more than just baking skills. Bakery owners must handle several aspects of the operating process to keep the bakery profitable. You can’t really sacrifice quality to compensate for costly equipment and supplies. However, you can reduce the operational costs of your bakery while maintaining product quality. Here are 4 ways to do so.

What's inside this post?

1. Set monthly budget

2. Balance price and quantity

3. Manage inventory closely

4. Control labor costs

Let’s put these tips into practice

1. Set monthly budget

One of the first steps to control the operational costs is to set budgets. Setting budgets allows you to decide where your dollars go and be mindful of your spending. To create realistic budgets, track the expenses every month to see how much money the bakery needs to stay afloat.

2. Balance price and quantity

The quantity produced each day or week affects how you price your baking products and how you order supplies. Choosing the right pricing approach helps you attract customers with matching expectations, demand, and budget.

You can either produce more at lower prices or increase the quality of your baking goods and sell them at higher prices. If you go for the high-quantity, lower-prices approach, you can still profit more. If you go for the artisan approach-special products at higher prices, make sure to calculate the costs of special ingredients so that they don’t exceed your budget. Pricing Baked Goods can help you with making calculations.

3. Manage inventory closely

Bakeries are often over-prepared, which leads to more food waste and higher costs. Tracking ingredients closely can help you better manage your inventory, avoid last-minute replenishment, and limit food waste.

Checking your inventory regularly can give you a good idea of how and how quickly your food is being consumed or wasted. You can calculate how many baked goods you can create each day, and then stock just what you need. Use checklists and preparation sheets to keep ingredient inventory organized. Label your ingredients with their expiration dates to use up them timely and minimize expired items.

Another way to optimize the use of ingredients is to use the same ingredients in multiple items on your menu. You can also make recipes that you can repurpose unused food so that nothing is thrown away.

4. Control labor costs

Labor costs in a bakery might range from 20% to 30% of overall operating costs. When managed properly, this can lead to a significant cost reduction.

To control labor costs, you need to schedule the right number of staff for each shift while paying attention to attendance and overtime. You can use a scheduling app or workforce management app to view employee attendance and hours to avoid unnecessary overtime and time theft.

Let’s put these tips into practice

Operating a bakery is challenging and demanding. Try out the 4 tips above to reduce the operational costs of your bakery and keep expenses in check while maintaining the quality of your baked goods.