Concepts for Success: 6 Easy Ways to Cut Costs

A penny saved is a penny earned. There are many ways to lose money in your bakery business. It could be in the kitchen, storage areas or in the office. There are also dozens of small changes that can save your bakery money every year such as taking proper inventory, re-evaluating your food orders, and using your bakery products creatively.

These small changes will definitely make a major impact on your profit margin. Here are six ways to cut costs at your bakery.

1. Keep your employees informed
It’s very important that you share all the facts with your staff first, including the cost of your food, what your new cost-effective changes are, and how much money they will save your bakery business. Your staff should understand everything about reducing waste, being aware of potential problems, improving efficiency and understanding overall profitability. It’s also important to acknowledge and reward your employees for helping you to meet your goals.

2. Start in the kitchen
Cutting bakery costs starts in the kitchen. Food waste is often the leading cost in bakeries, as bakers tend to over-prepare. You should always buy only what you need. If you consistently prepare too much then your waste and food costs will rise. You should prepare a daily prep checklist sheet, which will help you and your staff learn how much prep you should do every day. This prep sheet will help your kitchen staff to properly plan and control food
production.

3. Set a monthly realistic budget
As they say, you can’t improve what you can’t measure. Your monthly earnings will depend on how effectively your bakery is run. Preparing a budget will serve as a road map to continue building a successful bakery business. You should know where every dollar of your budget goes. You must map out a realistic budget and approximate about how much money your bakery business needs on a monthly basis to stay afloat.

4. Check your inventory levels on a regular basis
Over ordering food is another common habit for many bakeries and very often they have more food on their shelves than what they really need. These bad habits will leave to food spoilage and food waste, and will prevent you from cutting your bakery costs. Controlling the portions of each bakery item is also an excellent way to reduce waste. Checking your inventory on a regular basis will give you a good idea of how and at what rate your food is being used or wasted. Try to evaluate and optimize your inventory levels product by product, and be creative by using the same ingredients throughout your bakery menu. Turn stale bread into house-made croutons, breadcrumbs, and bread pudding. A lot of food is thrown away past its expiration date. Train your staff using the FIFO method (First In, First Out). You should definitely label your food with its expiration date so that the oldest ingredients are in front to be used first. You should also start taking inventory on a daily basis, as this will reduce the chance of employee theft and food waste.

5. Cost out every menu item and recipe
You should set up a menu and recipe master inventory cost template on an Excel spreadsheet to help you prepare an accurate costing for all your menu items and recipes. Using your spreadsheet inventory will help you calculate the cost of every menu item and every recipe for comparison with the selling price of each menu item. You should also use your POS system to track the sale of each menu item in order to identify the worst sellers. This will give you an immediate opportunity to replace them with some more popular items.

6. Use recipe cards at each station
As you know, baking is more like a science since it has a lot to do with chemistry. Ratios are very important to achieving the desired result. It’s also very important to measure the ingredients properly, and as such, I highly recommend getting a professional digital kitchen scale. The right amount of flour, liquid, and fat will make or break a pie crust, a cake, or other baked product. A great method for ensuring consistency is to follow a recipe accurately when baking, and you should definitely have recipe cards at each station. Each recipe card should contain a list of the ingredients and portions for each menu item. The most important thing in any foodservice business is consistency, and the only way to get consistency all year round is through well-written and accurate recipes with detailed methods and
good photos.

© 2019 Chiasson Consultants Inc. All rights reserved.

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 chiasson@chiassonconsultlants.com, or visit www.chiassonconsultants.com