Scaling up a bakery business can be a challenging task, but with proper planning and execution, it can lead to significant growth and success for the company. One of the key factors to consider when planning the expansion of a bakery business is the product portfolio. This includes the types of baked goods offered, as well as the quantities produced and sold.
When expanding the product portfolio, it is important to look at the availability and cost of raw materials, as well as the equipment and space needed for production. For example, if a bakery is considering adding a new type of bread to its product line, it will need to ensure that it has access to the necessary ingredients and equipment, such as a commercial-grade mixer and oven. The bakery will also need to examine the cost of these items and how they will impact the overall price of the new product.
Another important factor to acknowledge when scaling up a bakery business is the throughput, or the amount of baked goods produced and sold on a daily or weekly basis. This can be affected by a number of factors, including the availability and cost of raw materials, the efficiency of the production process, and the capacity of the equipment and storage space.
To increase throughput, a bakery may need to invest in new equipment or expand its production space. This can be a significant financial investment, so it’s important to carefully consider the potential return on investment before making any decisions. For example, a bakery may need to purchase a larger commercial oven or expand its storage space to accommodate the increased production volume.
In addition to the product portfolio and throughput, there are several other factors to consider when scaling up a bakery business, like the availability of suppliers, the cost of raw materials, and the necessary storage and production space and equipment.
One way to manage the availability of suppliers is to establish long-term relationships with them, which will help provide consistent and reliable delivery of raw materials. This can ensure that the bakery has the necessary ingredients on hand at all times, and can also help to negotiate better prices.
Another way to manage the cost of raw materials is to purchase in bulk. This can help reduce the cost per unit of raw materials, and can also ensure that the bakery has a sufficient supply on hand at all times.
It’s also important to have a budget and a clear financial plan to help in the decision making process, and should always be updated as the business grows. A bakery should also look at hiring professionals such as accountants and financial consultants to help with financial planning and budgeting.
Planning is Key
Enterprise resource planning (ERP) software plays a crucial role in managing and growing a bakery business. It is a type of software that helps businesses to manage and automate their operations, including accounting, inventory management, and production planning.
When growing a bakery business, ERP software can help to streamline and automate many of the processes involved in production, inventory management, and accounting. This can help to increase efficiency, reduce costs, and improve the overall management of the business. For example, an ERP system can help a bakery to better track inventory levels, monitor production schedules, and manage orders from customers. This allows the bakery to quickly respond to changes in demand and to make more informed decisions about production and inventory levels.
In addition, an ERP system can also help a bakery to better manage its finances and accounting, like tracking expenses, managing payrolls, and generating financial reports. This can help to improve the overall financial health of the business and to make more informed decisions about growth and expansion.
However, there are also some risks associated with using ERP software, especially when starting out. One of the biggest challenges is the cost and complexity of implementing an ERP system. Implementing such a system can be a significant financial investment, and it can also be time-consuming and complex. This can make it difficult for a bakery to fully take advantage of the benefits of an ERP system.
Another potential challenge is the risk of data loss or corruption. An ERP system stores a lot of important data about a bakery’s operations, and if this data is lost or corrupted, it can have serious consequences for the business. This is why it’s important to have a plan for data backup and recovery in place before implementing an ERP system.
You can read the rest of this article in the January-February issue of European Baker & Biscuit, which you can access by clicking here.