Friday, January 25, 2013

Start a bakery business : Do you have what it takes?

Hopefully after reading this post, it makes you think whether being the boss of a bakery is what you really want. Being a bakery owner is not all that glamourous, as the media sometimes makes it out to be. Don’t be discouraged when you get to the end of this post. This post is meant to give you some insight into what goes into running a bakery. Being an entrepreneur is challenging and hard work. It takes up all your time; it consumes you! But the rewards can be plentiful! 

So, do you have what it takes to be a successful bakery owner?  

Pastry Arts School
There are many successful bakery owners out there who have not attended a single day of pastry arts school. So even if you are a homebaker who does not have a certificate in Pastry Arts, you can still make it as a successful bakery owner.

Enrolling in a pastry course helps you to learn in a structured way with a proper syllabus and with formal instruction from a certified trainer. This increases your chances of success when you open your bakery in the future. In school, you learn many techniques. It is to your advantage to be able to bake a variety of products. And to understand the science behind the baking. Because this helps when you want to create new flavours/products in the future. Before you enroll in any diploma/degree course, check if there is a module on bakery business management. This will be very useful in your bakery entrepreneurship.

All that said, is it a must to get formal qualifications first so as to start a successful bakery? No, it is not. Because there are so many other attributes that a successful entrepreneur must have, besides qualifications. 

Food hygiene course
In Singapore, all food handlers (that includes you) must attend a one day food hygiene course taught by an accredited agency. The employees you hire must also attend this course.
Google ‘food hygiene course’ and you should be able to find a host of agencies who conduct this course. It is good to ‘shop’ around because the course fees among these agencies can vary quite a lot.

Experience
Do you need experience working in a bakery first before venturing out to start your business? It is not a necessity but it is highly recommended that you do so. Because then you will get to experience many aspects of the job from ground-up. What equipment does the bakery use? What are the good work procedures to follow? How does your boss react in difficult situations? There is so much to learn and observe by working in a bakery.  

Partners
Do you intend to start your bakery business with a partner? You may be the best of friends or that person could be your spouse, but it does not mean that you can work well together. As for the split of profits/shares and other money matters, it is advisable to go to a lawyer and have the terms properly written out. Also, put down in writing who is to take care of which aspects of the business.   
Money
You set aside a sum of money to start your bakery business. Don’t forget to set aside a separate sum to tide your business through unexpected tough times, eg health scare SARS, etc.  At home, be thrifty. Save up for rainy days so that should your business fail, the livelihood of your family is not in danger. It is irresponsible to compromise your family’s livelihood if you spend all your savings (plus your family’s savings) and even mortage the house, etc to raise money for your business. You are highly driven and ambitious, and you tell yourself that you will do everything in your power to make the business work. My business will never fail, you say. But the future is unpredictable. Sometimes bad things happen which are beyond your control and they can cause you to lose your business. So always keep aside some savings, never take out every cent to use on your bakery.  

Numbers
Do you have a head for numbers? Are you familiar with tax matters? Do you know how to do accounts? Have you prepared profit/loss statements? Running a bakery business is not simply bake, sell and at the end of the day, count money. It is more than that. You have to be good with numbers so that you know where the business is headed. How much should you price your products so that you can maximize profit? Is the business making money every month or are things starting to go downhill?

Also, spend some time poring over IRAS’s website (Inland Revenue Authority of Singapore). Familiarise yourself with things like filling up Form C and ECI (estimated chargeable income), etc. Go to their website and sign up for their one-day courses on taxation matters for businesses. You will learn a lot plus you get to ask questions at the end of the session.

Also read up on CPF matters online, because you need to contribute to yours as well as your employees’ CPF.  

Employees
Do you think you can be a good boss? Have you ever been in a leadership position? How would you handle difficult employees? How will you treat your employees fairly? If you have employees who slack, do not turn up for work or do not get along with one another, what would you do? Employees may get upset over who has to do more work and who has to do the ’dirty’ work such as cleaning/washing up. (Tip: have a roster where cleaning up duties are clearly written and who to do what on which days.)

Human Resource matters can sometimes be very distracting and frustrating to a business owner. But these are part and parcel of business. If you can manage your employees well, they are happy working for you and they get along well with one another, then I say you are a very successful business person.  

If you have the opportunity, attend a short course on HR or read up on this area. The information will come in very useful.

Visit the Ministry of Manpower (MOM) website to find out more about hiring employees (local and foreign). There are regulations you must follow. Do not be ignorant regarding these regulations because the penalties can be quite severe.

Customer Service
Providing excellent customer service is a must if you want to succeed in the bakery business. But are you a hot-tempered person? Are you sensitive by nature and do you get upset over what people say about you? Are you patient and ‘thick-skinned’ enough to serve tough and unreasonable customers? What do you do when customers take advantage of you, eg. insist on huge discounts or refunds and complain about your cakes? If you are argumentative and loud-mouthed by nature, it will be hard to resolve confrontations. But if you are too soft, the customers may walk all over you and you end up feeling lousy.

When customers get good service, they may not spread the word around, but when they are angry and are put off by your rudeness, you can bet they will talk about it, maybe even use social media (eg. facebook, etc) to vent their anger at you.

Whatever it is, you must not let all these get to you and discourage you. It is part and parcel of running a business. But from my experience with previous customers, most of them are really nice people. I’ve had more good experiences than bad experiences when it comes to handling customers.  

Social Media
It is good to be active in social media (facebook, twitter, blog, website, etc) because that’s how you can get more people to know about your bakery within a short time. The downside is that it can take up quite a lot of your time. So in the day and evening, you are baking and tending to the business and at night, you are engaging in social media activities. Where is the time for family and friends? One good tip is to get a timer and set yourself a time limit every day on the amount of time you spend on social media. Another way is to use your travelling time, eg. on the MRT or bus, to update your facebook, etc. 

Family time
If you are a parent, you will find that after starting your business, you have much less time with your children. You may have to work full days on weekends because birthdays and special occasions are mostly celebrated on weekends and that’s when customers want to collect their cakes. That means  you not being able to attend all your friends’ and family’s special occasions whenever you wish. So are you able to strike a balance between work and family?

Most people have the mistaken notion that if you are the boss, you can come and go any time you wish, work anytime you want and take off whenever you feel like it. It is true to a certain extent. But if you add up all the hours you work, including the administrative work you do at home, it is most likely that you end up working seven days a week. At the start of the business, you will find that this is the case – working during almost all your waking hours. But this is not healthy; its leads to burnout. You must plan a time-table and block out periods where you give yourself a break away from the bakery. You need time and space to recharge.

 Health
How is your health? Are you tough? Can you stand hardship? Can you work long hours with very short breaks (sometimes no breaks)? If you are a sickly person who takes many days of MC, then you should build up your health and strength before embarking on such a strenuous venture.

You must be physically strong because in a bakery, you may have to carry 25kg bags of flour, sugar, etc. The working hours are long. You are on your feet the whole day, working next to a hot oven. You have to multi-task and do a few things at the same time. If you are the type who gets sick easily from flu, colds, etc, where will you get the stamina to work and to persevere? From today onwards, exercise regularly and eat healthily.

Are you a morning person? Because bakeries start functioning in the morning, you have to get up bright and early to go to work.  

Tough-minded Entrepreneur
So you can bake very well. But are you an entrepreneur at heart? Once your business is up and running and you’ve hired bakers, you may find that your work consists mostly of administrative work and matters dealing with day-to-day operations. Making difficult decisions, hiring/firing employees, dealing with tax matters, accounting, expansion, franchising, etc. So you find that you end up not baking much at all. Which is quite ironic because the reason why you started your bakery is because you love to bake.

Do you quit easily when the going gets rough? When your business hits a rough patch, you must be resourceful and decisive. You may start off enjoying baking at home, finding it very relaxing. Your family and friends praise you for your creative works and they all proclaim that you should start a bakery (sure make money one!). You feel good. You feel that this is what you want to do for the rest of your life. Then the harsh reality sets in after you start your business. You may even get bored baking the same cupcakes day in and day out. And things sometimes aren’t all that rosy. Will you quit or will you persevere?

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