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6 Essential Tips for Small Bakeries to Reduce Cost

Anastasia Brown | Updated On November 24, 2023

Small bakeries usually have a different budget and resources when compared to the larger ones, but when it comes to freshness, taste, and quality of the baked products, they are competing and how.  However, with the growth of competitiveness in the confectionery business, it has become quite stressful for these small bakeries to maintain costs. 

From maintaining the high cost of ingredients to recruiting staff, it has become a more difficult task than ever for bakery owners to make profits and enhanced their business. If you are fighting to keep the cost low and profits high, it is the perfect time to understand how to manage your overall cost. Because if you do not take action, it can quickly add up and cut into business profits. 

Therefore, if you are here to learn how to minimize your business cost, we understand your pain and has got some relieving solutions. Today, reducing costs can make all the difference in allowing a small bakery to remain successful.

 In this article, I will acknowledge some key tactics for small bakeries to minimize costs without affecting quality or customer contentment. From minimizing food waste to buying items and packaging in bulk, there are many ideas and ways for small bakeries to cut expense charges while supporting their delicious baked goods. Get to learn every detailed information regarding this vital topic.

For small bakeries, everything counts, and ingredients are no exception. Wasting even a single gram of sugar can add to costs over time. This may not seem like a big deal initially, but you will notice a cut from your profits when you add all the expenses.

 What if I tell you we can track and manage food waste and overstocking? For this, measuring everything is imperative, and you require to invest in some measuring tools, such as digital scales, cups, and spoons, to get exact measurements of every ingredient. It will help you forecast your sales and production needs.

You can keep track of inventory by panning your recipes in advance and knowing what ingredients you require to prepare them. Knowing this, you can prepare just enough products that meet your customers’ demands. This will vastly save a lot and reduce various redundant costs, that were earlier going to waste. Moreover, you will not overstock; you know what you already need and have. 

This way, you can minimize food waste, and overstocking, and build a more sustainable business model. Planning every inventory detail with maintained data and list can ward you off from any cost-related struggles.

Now that you know how to track your ingredients, buying them in bulk will be cost-efficient for your small bakery. Buying in huge proportions saves money, cuts waste, helps with inventory management, and ensures that you always have enough supplies on hand. Also, ensure that the ordered mass amount is pivotal for your daily or weekly baking finished products else you will end up wasting large piles and costs simultaneously.

If you are wondering where to buy your ingredients, you need to look for dealers that offer discounts when purchasing large quantities. You can search online for wholesalers to deliver the ingredients to your doorstep. You can also visit markets where you can buy them in volume. Having a clear analysis of the various varying prices and finding the best option could save is vital. Doing so will provide you with a considerable amount of money you never knew you could actually reserve.

In bakery packaging, you can save money by purchasing Cake, Donut Boxes, or bags in bulk. Many related suppliers like OXO Packaging or Custom Boxes Lane offer businesses to order or customize their boxes in bulk. Yes, you can add your labels, logos, or designs on the outside, making them appealing to customers. Buying the covering items in mass can also help you reserve a huge amount as Bulk buying saves money. 

But the bigger benefit is that it conserves money on branded packaging and lets you customize the sturdy covering to keep your baked items fresh for your customers to enjoy later.

It is no surprise that running a bakery requires the use of refrigerators, ovens, ranges, gas ranges,  grills, and whatnot. All this equipment runs on electricity, and receiving a huge monthly electricity or gas bill as a small business can be a little discouraging.

That is why energy conservation is one of the main goals for bakeries today. So, until you have an awesome way to keep the bills low, Investing in energy-efficient equipment can be a game-changer. It is an excellent idea to reduce business costs for your small bakery. There are various websites that offer energy-efficient equipment that encourages saving large piles of energy, helping you reduce the cost. 

Compared to traditional equipment, energy-efficient equipment uses fewer energy resources to operate, resulting in cost savings over time. So, if you are wondering what you should get, invest in high-quality ovens, LED lighting, ceiling fans, heating & cooling systems, and smart outlets. You will be surprised how many bucks you could save by just replacing equipment. 

Also, regular maintenance will ensure they are operating at peak efficiency to avoid waste of energy. Taking necessary care of the equipment and ensuring their regular maintenance can assist the baking owners to save a huge amount that might get spent if negligence is done.

Today, many small bakeries need help to maintain a balanced revenue stream, especially in uncertain economic times when everything is expensive. However, your small bakery businesses can create new revenue streams in other ways. One way to do this is by diversifying your offerings. When customers know that they will get limited options to choose from, they are more likely to buy from bakeries that have to offer more. 

Therefore, you can expand your product line to cater to your customer’s unique requirements.  You can analyze the market limitations in the baker’s world around you, and scale the inventory table, with respect to your efficiency and availability.  It will help you create a new revenue stream and boost your profit margins. 

Another way to enhance profits is by providing catering and services for birthdays, weddings, corporate events, baby showers, etc. Most customers in the market are always searching for small bakeries who offer such services as they also do not want to spend a fortune hiring event managers that do everything extravagant with exorbitant charges. 

All they gauge for is good taste and stupendous customer service. Lastly, you can present baking classes or workshops for people who admire learning baking. This will surely result in a fun way to build extra income besides selling delicious treats at events or with customers in person.

Like any other business, small bakeries also need help with high overhead costs, especially regarding non-essential services. In this regard, outsourcing non-essential services can be a game changer. For starters, you can outsource your accounting and bookkeeping functions. 

It will save time and ensure that your finances are in order and you keep track of all the expenses. This is one of the best methods of saving your small bakery from exaggerating bills and costs and focusing on the real growth points and ideas to flourish.

Plus, you do not have to employ a person for a full-time position. Secondly, you can deploy your marketing efforts to make certain you are promoting your brand and creating a robust online presence without spending a plethora of amounts. Finally, you can outsource other non-essential tasks to certify you are focusing on building delicious bakery items for your customers to relish.

Labor cost is one of the most significant expenses you face as a small bakery owner. Sure, you need highly-skilled and professional staff to run the operation and entertain customers, but it can get out of budget sometimes. So, to keep your expenses in check and profits high, optimizing staff scheduling can help reduce labor costs.

Do not worry, it will not affect your customer service or the quality of your product, it will optimize the way your staff operates. Staff scheduling options can clearly ward off many high-cost expenses and help your small bakery business save large amounts and therefore reduced unessential expenses. 

First things first, you should start using employee scheduling software. You require to create a schedule for each employee using this automated software. However, when creating schedules, consider your employee’s availability, skill set, and workload demands. 

It will ensure you are never over or understaffed. Secondly, encourage cross-training among your staff members to increase their skill set of managing and handling different tasks. This way, you will need to hire a separate person for each task that does not even require hiring.