Bakers Journal

Concepts for Success: 5 Easy tips to increase profit

September 12, 2018
By Diane Chiasson

Quick ways to boost your bakery’s income

Improving profitability is one of the first steps to expanding and growing your bakery. Many of these easy tips can be done quickly to immediately improve your bakery’s profitability and sales, and these ideas can be implemented with great ease.

Don’t forget that these small changes can have a big impact on your budget.

Do your research properly
Wherever you are, you should always take a look around your neighbourhood. I am positive that you are not the only shop selling baked goods, as the bakery industry is extremely competitive. Do you know who your real competitors are? Your competitors are not always who you think they are. It could be a restaurant, grocery store, food truck, coffee shop, deli, health food store, or even a farmer’s market. Is there a supermarket down the street or a Walmart? Are you next to a Tim Hortons? Are you close to another bakery store?

Ask yourself the following questions: Who are my competitors? What are my competitors’ strengths and weaknesses? What are my competitors’ next moves? How can I set my bakery business apart from the competition? How can I differentiate my bakery from the rest and make it profitable? Should I talk to my own customers? How is my competition talking to their customers?  Learn to identify your competitors to better position and sell your bakery products and services. Take the time to visit your direct competitors’ stores and study their menus, prices, ads, brochures, promotional materials, website, and social media campaigns. You should also consider purchasing some bakery products at each location, incognito if necessary. By studying your competition, you will always find different ways to set yourself apart and find a particular niche in order to prosper.


Evaluate each product
You should always evaluate the profitability and sales for each individual bakery item to determine if it is priced properly. Instead of looking at prices monthly, try to watch your prices weekly to find changes that could decrease your profits. Your most expensive menu items may not be your most profitable. Breaking down the profit of each product on your menu is very important to see which of your bakery items are your biggest money makers. Train your staff to sell your most profitable items rather than the most expensive bakery items.

Monitor your expenses
You should always keep a close eye on your expenses. After all, you followed your passion, and you are now in business to make some profit. You should always know your prime cost, which includes all the things you pay for on a day-to-day basis to keep your bakery running. It’s not only your bakery products, but also the staff needed to keep you in business. Perform quarterly supplier reviews and compare with other local and national suppliers. You should identify and react to price increases quickly as this will have a direct and immediate impact on your profit. Understanding your food and labour costs should be a top priority for a bakery owner.  

Buy your ingredients in bulk
Do your research to make sure that you are getting your necessary bakery ingredients at the best price. Even if you are running a small bakery operation, buying food and packaging products in bulk can be a real money saver. Contact your local wholesaler, distributor, or manufacturer directly to ensure that you are getting the best deal. The larger quantity of any ingredient you buy, the cheaper it will be.

Do you have enough storage space? I am a big fan of proper food storage as it reduces your expenses and boosts your overall profit. Add extra shelves and storage containers to maximize the efficiency of your space. A good idea is to use clear air-tight bulk storage containers with lids that seal, so you can see what’s in them. Label each container with content name and date of purchase or use by date. 

Get more potential retail customers
Other than your regular customers, you should identify some other potential customers in your selected geographic region. Consider grocery and convenience stores, restaurants, schools and cafeterias, hospitals and coffee shops. You should research where these businesses are currently getting their baked goods. If I were you, I would find this information by personally visiting the locations or simply by contacting the purchasing manager. (Don’t forget to bring a small variety of your samples!) You should create a small proposal for the businesses you want to approach. Provide an overview of your bakery, your bakery products as well as the description of each item, packaging, delivery options, and testimonials.
Don’t forget to follow up with a personal phone call.

Diane Chiasson, FCSI, president of Chiasson Consultants Inc., has been helping foodservice, hospitality and retail operators increase sales for over 30 years. She is recognized as the industry leader in providing innovative and revenue-increasing foodservice and retail merchandising programs, interior design, branding, menu engineering, marketing and promotional campaigns, and much more. Contact her at 416-926-1338, toll-free at 1-888-926-6655 or, or visit

Don’t forget to follow up with a personal phone call.

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