Posted by Gerard on May 11, 1998 at 12:16:10:
In Reply to: Opening a bakery business--can I do it alone? How do I start? posted by Enigma on May 10, 1998 at 16:48:01:
Marg,
We did it that way but we had over 30 yrs experience between the 2 of us and we went full scale with a complete product line.
Not something you want to get into without experience, lots of it.
But you can wholesale cookies with no problem, as long as your cost is under control.
My brother was doing a cookie business last year, all cookies sold for .60 ea wholsale price, the retailer was encouraged to sell them for $1.00-1.25 ea.
Small cookies are a bit excessive on labor.
Muffins tend to be much higher in food cost unless you make lil cupcakes.
We wholesaled muffins for a while but dropped them due to too many negatives.
Heres what we found, prep time is excessive, breakage is always a problem, they take too long to bake and buyers want them large which makes them expensive to make.
You couldn't find a cheaper recipe than the one we have but still its a no go.
Scones are MUCH better, costs less, bakes a LOT faster and requires no molds to prep.
In comparison I wouldn't even consider doing muffins again.
Just walk in the door with a box of samples and a price sheet. I've seen too many slick brochures that are a front for crappy products so it wouldn't impress me.
Also part of your appeal is non production plant quality. Image is nothing, product quality and service is everything.
There should be no deal you can't walk away from, if they say "we pay accounts every 21 days" quickly walk away.!
Your policy should be minimum orders (2-3 doz in a box for example) and COD.
I had a big wholesale sideline and dropped them all when I got tired of chasing the money.
I now have just 4 accounts who take products every day, they all pay cash or we don't do biz.
If you let them run up a bill you'll get screwed somewhere along the line, its certain.
My brother had a restaurant account ( an account I walked away from!) go chapter 13 and he lost a few thousand.
I asked why he took them on, "we needed the money". Many of my vendors require a check on delivery, its not unusual or odd for you to have that policy.
Also be very carefull of big accounts, we were asked by Neiman Marcus to bring some samples, they told us they only pay every 60 days. They wanted approx $100 worth of product daily to start.
I laughed in their face and walked away, the quick math shows they would be into you for atr least $6000 before they looked at the bill and probably by the time a check arrived they'd be into us for another $6K.
Small accounts are much safer, they can't push you around like one big account will.
It just makes sense to spread the risk around with 10 smaller accounts than 1 big (slow paying) account.
Forget consigment, after a few days they'll complain the cookies aren't fresh.
Small scale from home is not a good comparison with running a retail shop, I don't own a bakery.
IT OWNS ME.
Keep cost from going above .35% and you've got half the battle won, packaging ought to run 3% and don't let em con you into providing retail bags for them.
I've herad that more than a few times.
Set up a delivery schedule, say, deliveries are 2 or 3 times a week and set minimums.
Cheers, Gerard
http//go.boston.com/savoybakery