busy home bakery, empty bank account. what am I doing wrong??

Home Bakery Business ProfitCostingBurnoutBusiness model

Second year of custom orders. Working most days, turning down some work, and my bank balance has barely moved. On paper this is a successful small business. In practice I'm exhausted and broke ๐Ÿ™ƒ

I don't think it's purely pricing because I did raise prices last year. Something structural is off and I can't see it from inside. What should I be looking at?

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4 replies

check your product mix before your prices. I found ~70% of my orders were the most labour-intensive lowest-margin thing I made, purely because it's what I'd become known for. I was busiest on my worst product

also check customisation. every bespoke request adds time that appears nowhere in your price. I moved to a fixed set of designs with a clearly priced customisation charge - hours dropped meaningfully, orders barely dropped at all

Meera, the two replies above are the most common causes and they usually appear together.

A diagnostic worth doing this week: take your last thirty orders. For each one write the price, your true cost including wastage, and the honest hours from enquiry to handover. Then calculate profit per HOUR, not per order. Almost everyone who does this the first time discovers their most popular product is their worst one, and that a small number of high-touch customers consume a disproportionate share of the week.

The fixes follow directly - retire or reprice the loss-making line, standardise designs with priced customisation like Vikram did, minimum order values on things that only make sense at volume.

One more thing worth naming because it's doing real damage: you said you're turning down work while being broke. That's a strong signal your capacity is going to the wrong orders, not that you need more of them. More volume won't fix this. It'll accelerate the burnout.

This is squarely what the business module of our programme exists for, but you don't need a course to run the thirty-order analysis. Do that first.

profit per hour rather than per order. I have never once looked at it that way and I already know what it's going to show me. thank you, all three of you ๐Ÿ™

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