Just like all other businesses, a bakery business has its own financial needs, and it is extremely important to know the numbers. If you want to run a profitable bakery business, you need to be aware of your sales, profits, and loss. Most of the time, bakery owners take their business as a hobby and end up losing a lot of money because they don’t understand the importance of bookkeeping and accounting.
No matter your love for pastries and cakes, at the end of the day, it is still a business, and everything needs to be accounted for. If you want to expand your business, you need to cater to its accounting and financial needs for increasing overall revenue generation and profits. Regular documentation and keeping it up to date is essential to know your expenses and profits.
Important Financial Tips for a Successful Bakery Business
If you are an owner of a new bakery business or are thinking about starting one, the first rule is to treat it as a business with financial needs. To help you run a seamless and successful bakery business, below are the top 5 simple tips that you can follow today.
1. Provide Different Payment Options
In this modern and digital era, your customers are carrying their money in various forms like traditional debit and credit cards, mobile apps with QR codes, and eWallets. Therefore, if you want to have a successful bakery business, make sure to provide your customers with multiple payment options for their ease. This way, they will not have to worry about their spending due to limited cash.
Accepting different payment types is a proven method that leads to a drastic increase in bakery and food-related business income and revenue. Similarly, there are around 2 billion mobile phone users in the world, and smartphone payments are increasing worldwide. When you offer credit cards and other payment options, make sure to process these receipts daily.
2. Control Your Inventory Cost
When it comes to food-related business, managing inventory is a headache and is costly. Some of the most common costs involving inventory are warehouse costs, breakage, quality control, etc. For a successful bakery business, you need to have a close check on your inventory costs. To decrease inventory costs, you need to forecast your demand for the next month from looking at past sales data.
This way, you can get vital insights into sales patterns and project inventory for next month. But for that, you need accurate accounting records and books. So, get in touch with the best accounting firms in Dubai today to have up to date and most accurate data and numbers that will help you control your inventory costs and make sure nothing goes to waste.
3. Keep a Regular Check on Expenses
When it comes to bakery businesses, you require fresh ingredients every day, which can lead to huge business expenses and cost overruns. Therefore, for running a successful bakery, you need to keep your daily expenses in check. Make sure you record daily expenses and close all accounts weekly. For example, at the end of every week, make sure you have paid your suppliers their dues and cleared all accounts.
According to First Research, there are over 6,500 bakeries in the US, with total revenue of around $4 billion as of 2020. The bakery business is very profitable indeed, but if you cannot keep your expenses in check, it will lead to a decrease in profits. Instead of monthly records, opt for weekly and daily accounts to ensure on-time payments to the suppliers.
4. Opt for Small-Business Loans
If you are a new bakery owner and can’t seem to manage during low sales value, don’t panic! There are plenty of financing options available for small business owners. You can apply for a small business loan from any bank or government institution. If you are confused regarding funding options and have trouble regarding which type of funding will be best for your business, you can always consult a professional.
If you don’t want loans, you can also sell shares of your business and have enough finances and capital to run a successful business.
5. Outsource Accounting
Every business needs a proper accounting system in place for effective running. Are you keen on keeping your bakery space and shop to yourself and don’t want any other in-house employees? You are in luck because you can always consult the best accounting firms in Dubai and outsource accounting services for your business.
Instead of hiring full-time accountants for your bakery business, you can now outsource accounting services. Depending upon your business size, you can either outsource full time or part-time accounting services that are also way cheaper than in-house accounting.
Get Your Bakery Business Organized!
One of the essential elements of running a bakery business is accounting and finances. It is essential to know your numbers for understanding your business expenses and income. If you understand your revenue stream, you can look for areas to enhance your business and see areas that need your special attention. Organized finances and business records will provide you with an accurate representation of where your bakery business stands and its weak areas.
If you think you cannot deal with numbers, then outsource the accounting services of a professional to cater to all accounting and financial requirements of your bakery business and look for areas to boost sales. Happy baking and accounting!