Forty products, and a feeling about some of them
The range started with a dozen breads. Now there are forty products, including a spelt loaf one cafe asked for, a special roll for a pub, three kinds of cookie and a cake that only sells in summer. Each was a good idea at the time. Some take a long time to shape, some need their own oven slot, some come back more often than they sell.
The owner suspects a few of them lose money but has no way to be sure without a week with a spreadsheet.
Why the numbers are never done
The information to cost a bakery product sits in different places: recipes in files, ingredient prices on invoices, labour in the night manager's head, sales in the invoicing system and returns on the delivery notes. Putting them together is a big job, so it is done rarely or never.
- Ingredient costs are not linked to recipes.
- Labour time per product is estimated, if at all.
- Oven and prover capacity used by each product is not measured.
- Returns and waste are not tied to products.
- Prices differ by customer, so average price is unclear.
What not knowing costs
The effect is easy to miss because the bakery as a whole may be doing fine. A few strong lines can carry several weak ones for years, and the weak ones take up the hours and oven slots that would let the strong ones grow.
Products that lose money keep being made, using night-shift hours and oven slots that better lines could use. Prices are left too low on labour-heavy products. Customers asking for new specials get them without anyone checking what they will cost to make.
The product margin view we build
- Recipes are linked to ingredient prices taken from supplier invoices in Xero, QuickBooks or Sage, so ingredient cost per product stays current.
- The night manager sets rough labour time per batch for each product, and oven or prover time where capacity is tight.
- Sales by product and customer come from your invoicing records, at the prices each customer actually pays.
- Returns and credits by product come from your delivery and returns records.
- For each product, the view shows ingredient cost, labour, returns and actual selling prices, and a margin per unit and per week.
- You can model a change, such as a new price, a change of recipe or dropping a line, and see the effect before deciding.
| Product type | What often shows up |
|---|---|
| Core bread | Steady margin, high volume |
| Laminated pastry | Labour heavy, sensitive to butter price |
| One-customer special | Small volume, own oven slot |
| Cakes on sale or return | Margin reduced by returns |
The table shows the kinds of pattern people look for, not your figures. Your own view will show your numbers.
Decisions you can make with it
Which products to reprice, which to change and which to drop. Whether a customer's special is worth making at their volume. Where the night shift's time goes. And, when butter or flour rises, which products it hits hardest.
It can also point to quick wins: a product whose margin would recover with a small recipe change, a heavier batch or a price move at one customer.
The view keeps itself current. Because ingredient prices come from invoices and sales come from your invoicing system, the margins move as your costs do, and the next review starts from this month's numbers.
Is your range like this?
- You suspect some products lose money but cannot prove it.
- Specials for single customers have multiplied.
- Labour-heavy products are priced like simple ones.
- Returns are not linked to products.
- The range has not been reviewed in years.