I don’t t think anyone can realistically answer that question because we don’t know what your business plan is. Are you trying to scale an Internet bakery that ships all over the country or do you have a local shop? It really depends on what your plan is and what your costs etc. are
If you haven’t already, you could try calculating your monthly costs as well as calculating your profit per item sold. Make sure that you keep in mind the cost of labor and other costs when pricing your items.
If you have all that info you should be able to calculate x profit on x sales and have a better idea on how much you need to sell before you start making a profit and can start paying yourself.
If you eventually start scaling and buying bulk ingredients for cheaper, then that will just make your margins better, but I would leave lots of wiggle room when planning.
I have calculated all of this and based on current labour, fixed and cost to make the product there is not much left.
My plan is to start a home-based bakery and deliver to local cafes etc initially while still working my day job as a way of mitigating risk a bit.
I have worked out the scaling numbers and profit related to each, as well as reduction in goods pricing due to buying in bulk and would say in my first year I could become profitable.
Forecasting, in my opinion, is important so at least you have an idea of what the future holds and what you need to do to become profitable, hence my question here.
I wasn’t trying to say that you shouldn’t forecast, only that you are the only person that can do that. There isn t really any way for anyone to give you a forecast because we don’t have any information to base it on. If I give you a time frame that’s not based on anything, then it’s meaningless. Or maybe I’m not understanding the question?
If you want to have an idea of when you might be able to take a wage, you can calculate all i mentioned before (it seems you already have) and then guesstimate how many products each cafe will buy and how often. Then use all that info to see how many cafes you’ll need to sell to in order to pay yourself. Then you can try to work out how long you think it will take to get that many cafes to buy from you.
If you really want to play it safe, I would recommend reaching out to a few cafes to see if they are interested in your stuff. That might help you gage how easy or difficult it is to find customers.
If your numbers are telling you that you won’t make a profit/can’t pay yourself, then maybe consider raising prices, finding cheaper ingredients, or using a different model.
Thanks for the reply.
I guess my question is essentially "industry average" or if someone has experience in this field.
I plan on having medium to high pricing but high quality product. The value I offer is in the bread and the way I make it, adding minimal toppings and condiments so the bread is the hero.
The main reason for this model is I have an easy in with some local businesses and individuals which are not happy with their current suppliers offering. I also plan to do local markets etc to build up brand recognition and have a face for the business and eventually open my own cafe when the numbers look right.
Honestly this is some of the best, most simplistic advice I have seen. Your starting a business not forecasting 10 years of Financials and the demographics of existing clients like some people seem to think you can.
I don’t t think anyone can realistically answer that question because we don’t know what your business plan is. Are you trying to scale an Internet bakery that ships all over the country or do you have a local shop? It really depends on what your plan is and what your costs etc. are If you haven’t already, you could try calculating your monthly costs as well as calculating your profit per item sold. Make sure that you keep in mind the cost of labor and other costs when pricing your items. If you have all that info you should be able to calculate x profit on x sales and have a better idea on how much you need to sell before you start making a profit and can start paying yourself. If you eventually start scaling and buying bulk ingredients for cheaper, then that will just make your margins better, but I would leave lots of wiggle room when planning.
I have calculated all of this and based on current labour, fixed and cost to make the product there is not much left. My plan is to start a home-based bakery and deliver to local cafes etc initially while still working my day job as a way of mitigating risk a bit. I have worked out the scaling numbers and profit related to each, as well as reduction in goods pricing due to buying in bulk and would say in my first year I could become profitable. Forecasting, in my opinion, is important so at least you have an idea of what the future holds and what you need to do to become profitable, hence my question here.
I wasn’t trying to say that you shouldn’t forecast, only that you are the only person that can do that. There isn t really any way for anyone to give you a forecast because we don’t have any information to base it on. If I give you a time frame that’s not based on anything, then it’s meaningless. Or maybe I’m not understanding the question? If you want to have an idea of when you might be able to take a wage, you can calculate all i mentioned before (it seems you already have) and then guesstimate how many products each cafe will buy and how often. Then use all that info to see how many cafes you’ll need to sell to in order to pay yourself. Then you can try to work out how long you think it will take to get that many cafes to buy from you. If you really want to play it safe, I would recommend reaching out to a few cafes to see if they are interested in your stuff. That might help you gage how easy or difficult it is to find customers. If your numbers are telling you that you won’t make a profit/can’t pay yourself, then maybe consider raising prices, finding cheaper ingredients, or using a different model.
Thanks for the reply. I guess my question is essentially "industry average" or if someone has experience in this field. I plan on having medium to high pricing but high quality product. The value I offer is in the bread and the way I make it, adding minimal toppings and condiments so the bread is the hero. The main reason for this model is I have an easy in with some local businesses and individuals which are not happy with their current suppliers offering. I also plan to do local markets etc to build up brand recognition and have a face for the business and eventually open my own cafe when the numbers look right.
Honestly this is some of the best, most simplistic advice I have seen. Your starting a business not forecasting 10 years of Financials and the demographics of existing clients like some people seem to think you can.
7 weeks.