I was chatting with a few friends who run bakeries about how their shops were doing, and before we knew it, we touched on a particularly raw and painful topic: "How much longer can your shop survive?" Actually, you don't need to look at big data-just take a look at the fellow bakers around you over the past couple of years, and you'll see the reality of the baking industry.
As for those stories on WeChat Moments and Video Accounts about "earning 100,000 a month" and "constantly churning out bestsellers"-just take them with a grain of salt. For those of us actually in the business, our daily focus is on one thing: how can we run our bakery successfully?
I've summarized it into four steps: survive, minimize losses, maximize revenue, and thrive long-term. Let's see which step our shop is currently at.
Survive
This is a step every bakery owner must face. When opening a bakery, don't think about how much money you can make just yet-first, focus on how to stay afloat and how to survive the initial launch phase and the subsequent competition from other shops.
There are two major pitfalls to avoid if you want to survive: First is the "I think I've got this" mindset-rushing into building a brand, franchising, or scaling up before you've even established a solid foundation for your store. Second is the "everything must be the best" mentality-insisting on high-end decor, the most expensive equipment, and stocking every product that's currently trending.
The first approach is overly idealistic and unrealistic; without a solid foundation, many ideas will ultimately fail to materialize. The consequences of the second approach are even more dire: you'll pour all your money into the business early on, but before revenue starts flowing, rent, labor, and raw materials will already be lining up to be paid.
The first key to a bakery's survival lies in "calculating" and "saving"-this is the best way to stay afloat. Keep your accounts in order, focusing primarily on calculating the "return on investment." Don't blindly follow trends; identify your shop's strengths and invest your money there. Even after you've done the math, when it comes to actual spending, cut costs wherever possible. Don't waste money on appearances-opt for simple decor, curate your product selection, and manage labor costs. Use the lowest possible costs to ensure your shop survives in the first place.
Minimize Financial Bleeding
For a bakery, surviving doesn't mean you can breathe a sigh of relief, because this is an industry "riddled with leaks." Waste, labor costs, and rent are all quietly draining your store's finances. If you ignore them, they'll come back to haunt you. So after surviving, don't rush to expand; first plug these leaks to minimize financial bleeding.
Keep tracking your numbers: How much bread does your store throw away each day? How many hours do your employees actually spend working? What percentage of your revenue goes toward rent? If you can't track or manage these expenses, by the end of the month, the profit you lose could be a hefty sum.
If you don't track these numbers, you won't identify the leaks that keep eating away at your profits. If you can't manage them-or manage them incorrectly-you won't be able to plug those leaks, and you'll just watch your profits slip away bit by bit.
Many stores aren't actually driven out of business by competition; they're bled dry by their own "generosity" and "negligence." They run promotions without keeping track of the costs, handing out freebies and discounts indiscriminately-which may seem to attract a large number of customers, but in reality, they're just "freeloaders." They schedule shifts based on gut feeling, thinking "good enough is fine," and neglect employee training, assuming that as long as there are no complaints, everything is okay. Over time, the team falls apart, and there's no way to talk about work efficiency or product quality. No one monitors raw material waste, assuming it's not a big deal-until the money has slowly drained away, and you still don't know where it went.
At this stage, you must be able to both "calculate" and "manage": calculate product costs and staffing levels accurately, and manage various forms of waste (unnecessary expenses) effectively to minimize losses. It all comes down to calculating and controlling costs-if you waste just a little less than yesterday, you'll earn a little more.
Increase Revenue
This is the key to running a successful bakery. Focus on three critical metrics: product mix, transaction frequency, and repeat purchase rate. These three metrics are the guarantee that will determine whether you can actually turn a profit.
It's a mistake to focus solely on total sales. For example, if your shop makes 5,000 yuan in sales one day but has a gross profit margin of only 30%, you might still end up in the red after deducting rent and labor costs. Meanwhile, another shop might make only 3,000 yuan in sales but have a 60% gross profit margin, leaving them with more profit than you.
Your product mix determines your profitability. Instead of carrying a wide variety of products, focus on perfecting two or three key items to generate the bulk of your profits. It's better to drop products that drag down your profit margins.
The number of transactions determines your foot traffic. Attracting more customers to your store at least indicates that your products and brand have appeal, but you must solidify this metric. For foot traffic driven by promotions, discounts, or advertising, you must have follow-up strategies in place to retain them.
Repeat purchase rates determine the influence of your brand (products and services). Stores that keep customers coming back have earned their trust through high-quality products and excellent service-only such stores have the opportunity for sustainable growth.
Keep this logic clear: selling more doesn't necessarily mean making more money. Therefore, when it comes to increasing revenue, don't just focus on sales figures-focus on profit. Adjust your product mix to prioritize quality over quantity; ensuring each product generates a solid profit margin is more important than blindly launching new items. To increase the frequency of transactions, you can run promotional campaigns to drive traffic, but the primary focus must be on "making customers want to come back next time," rather than simply organizing a lively event. Boosting the repurchase rate is the core task of the baking industry: delivering excellent products and service. Without these two elements, relying on gimmicks to lure customers won't last.
Long-Term Sustainability
This is the most challenging step, because as businesspeople know, "Making money isn't hard; the hard part is making money consistently." A bakery that survives the test of time doesn't rely on luck, but on systematic management-ensuring consistent product quality, a team capable of handling tough situations, and a steady cash flow, among other things.
Shops that endure aren't necessarily the most profitable, but they are certainly the most stable: their products meet consistent standards and don't rely on a single master baker; their teams have clear divisions of labor and don't depend on the owner to shoulder everything alone; and their accounts hold sufficient cash, so they don't have to dip into this month's revenue to pay last month's wages.
Shops that enjoy a brief surge in popularity before fading away do so because they focus solely on creating viral hits without building a robust system. Once the hit product goes out of style, the shop follows suit.
Implementing systematic management isn't as difficult as it sounds. It simply involves mapping out all the operational workflows within the store, establishing standards and processes for each one, and continuously refining them through practice. By integrating the principles of "calculation," "cost-saving," and "management" mentioned earlier throughout this process, the store can survive and thrive through its systems rather than relying on any single individual to solve problems.
