When we first started in our bakery business, we made icing decorations for Christmas. We also made a selection of Xmas cakes. I rented a unit on a one month contract and made 2500 icing decorations and about 30 cakes. We paid for a stall at the Plymouth Xmas market and it cost us £35 per day for 30 days. Choosing The Right Product For Your Bakery Business is key.
When we opened for trading we thought we would nail it with our product choice. But we were wrong. The product was a miss. Instead, though, we sold many birthday cakes! We didn’t expect this at all.
So we got the product wrong but had the skills and background to rescue the situation and not make a loss. No profit either.
Get your product right: Choose The Right Product For Your Bakery Business
When I was decorating the unit, I thought that we could make pizzas there. I don’t know where the idea came from but it just came to me. I looked into the town I was living in and there were a couple of takeaways that did pizza but no one delivered unless you paid for a taxi. Being a town cut off by the Tamar river (access by car ferry) and a long drive to another town, none of the large pizza chains delivered there.
The market was open. I sniffed out an opportunity and went for it. I didn’t spend much time planning and I completely trusted my instincts. We ordered the oven, minimum equipment, and I designed the branding and got the menus printed off.
Our Gamble Paid Off
As the end of January approached, it was all or nothing. We had spent all out money on the business and it had to work or we wouldn’t be able to pay our mortgage. It was a big gamble and perhaps a stupid one.
We had 3 days to make £600 in sales. The first day we launched and made about £120, second day £200, and the 3rd over £300. It worked! We rebounded from the disappointment and made immediate money, just over our target.
The next year I improved the menu and we really had fun. We employed a great team of delivery staff on a contract basis so no employees. I started to bake cakes and slices to sell to cafes and restaurants. It wasn’t big business but it made extra money. The pizza business made decent money and covered the unit and all our expenses for any other ideas we had, whilst giving us enough to love on.
Invested In The Business
I gradually kitted out the bakery and we invested big on a £7500 oven. At the time this was a huge investment for us but we went for it. Having a top of the range oven meant we could do so much more in much less time.
With our Foxy Pizza business, we nailed the product. It was the perfect product for the right customer. We saw a gap in the market and we filled it with the right product and solution. All this was done without using the principles I cover in the 8 p’s here. I believe it was part luck but mostly instinct, confidence, and all out positive hustling.
As the business morphed into the first Mr Buns shop, my instinct for the right product was bang on again. The cupcakes were perfect at the time and we nailed it again. In our second month of opening, we sold 30,000 cupcakes in just one shop!
Here is the first ever tray of cupcakes we made!
But as time went on, I kept adding products, trying to capture every possible customer. I didn’t get the products right. This was a big mistake. I should have owned the cupcakes and only focussed on them. If I had promoted them more, then I think we would have been better off 2 or 3 years down the line. Hindsight is great though isn’t it?
It’s Not Down To Luck
So now I know choosing the right product is not all down to luck, but you do need some! If you spend time designing your perfect customer, then you can build and develop your product around them.
That’s what I did when we overhauled our business. I used my perfect customer workshop myself and I mapped out everything about them. I then looked at my products and chose the 20% that made the 80% profit. Then I pushed that product to those people with everything I had.
6 years after we sold 30,000 cupcakes in one month, we sold about 100. But we sold higher priced custom celebration cakes instead. These would be one sale at an average order value of £60. I would have to make 15 sales of our 4 for 4 cupcake offer to make that.
I would also need more staff and it cost more to make £60 of cupcakes than celebration cakes. Now it was easier and we made more profit. I had found a product that was perfect for my perfect customers and it paid off. I didn’t guess, or use instinct, I planned and executed.
Going by the seat of your pants is great for a short-term business, but if you are planning to expand or establish as a credible brand, you have to plan. As soon as I started to plan and work smarter rather than harder, my business and my life changed dramatically.