My wife is a Homebaker. She is a self learner. Never went to a baking class nor did any professional course. She is multi -Talented. More thoughts on how real talent does not really need any professional coaching, if there is passion, in a later article perhaps. This post is about Business and what are the basic facets of running a business
She bakes all types of breads, kulchas (An Indian Bread Variety see picture by the side)
and some specific cakes & Muffins.
Ask any Chef, they will tell you it is harder to perfect the art of making breads than cakes and that is why women who are homebakers mostly go for baking & selling cakes, not breads.
Also in India Bread is not our staple food – Rice or Roti (Indian Bread) is; so it is hard to find mass customers for Proper Breads. Majority of Indians prefer to buy breads at cheaper prices as just any plain bread will do. Only a select discerning few would be willing to pay for high quality costly breads. Anyway let me continue with my article here.
She is owner of her business. She takes all decisions about:-
- Product Development/ R&D. She does experiment with recipes and improvises as different raw materials make different results. Not just raw materials but even different baking parameters also, like temperatures of room, of dough, time, kneading style etc etc.
- Product Mix: Products to be released to market finally.
- Pricing & packaging: Size of breads and price sensitiveness
- Distribution Channels & Customer Segmentation:Whom to sell. How to reach the customers.
- Capital Investment: in tins, trays machines as reqd. Not that she buys anything but she knows what is required. Here I come in as money is from me so some decisions get postponed.
- Finances. Here her idea is simple. She just sees how much her purse has. If it has more means she has made profits. What a Basic and Simple Accounting system!!
In this last one now I come in as I am the Financier after all. So I have tried to add some more simple trackers in one simple excel workbook or rather two, which have following elements
- Recipes that carry costing and times and MRPs. Recipes are exactly like those in an ERP package- it has Bill Of Material -(BOM) and also the master Recipe [ ERP terminology] that consists the process. Studying this we can think of improving our process and save costs.
- Sales Registerthat records sales customerwise with margins for us
- Cash Registerjust debit and credit and balance
- Purchase Registerthat has RM purchase and capital investments.
- Waste Register that records returns from shops if not sold and wastage when baking [ like say power goes off so the bread cannot be sold as it falls]. Of course the recipe page also tells us where we can improve
Net of all these is our profit.
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The above actually gives how a Business is run “for Dummies”. Any business needs these basic elements to set up and succeed. My wife has no MBA degree either and what she is doing is natural in her mind. Much before MBA colleges came into existence business did happen in the world and Theories that we learn in colleges have been built from real life experience by people who have observed and put their observation into words and mathematical analyses. If you come to think of it it is not tough to do a business as long as you have an IDEA, and can work hard enough to develop the market for that.
Before I end I shall leave a thought on waste management which was my last tracker listed.
Since you cannot increase prices to increase your profits you need to cut costs and one major source of cutting costs would be if you can track waste in your organisations.
How many organisations are geared up to track all sort of waste and how efficiently they do that forms the foundation of their future growth in ever increasing competitive markets. And it is not just the organisation, each employee must care about waste and think of reducing the same.
Two things happen if we log the wastage.
- We can arrive at our REAL Profits.
- We can try to reduce the wastage. [ for eg if we see our loss, in our homebaking, from power going off is too much then maybe we can invest in a gas powered oven which will not depend on erratic electricity- in other words we change our source of energy. Likewise we can change our process also to reduce wastage]
We do have product returns accounted for. We do have losses accounted for. And many other negative cash flows we do account for. But think is it possible to account for every single drop of wastage in a large company ? Not really.
And we do TALK BIG of process changes … or adopting IT in organisations…………
But if people do not have basic concepts clear how will we ever decide what process change is good for us? We will just pay Consultants and make them rich.. 😉
So many other thoughts follow from this article.. maybe to be shared later.w I go on to my second Sunday Thought.
Have I been able to Provoke you into thinking?
As a senior my duty is not just to teach a junior the business processes. That anyway one will learn; when thrown into the water we all learn to swim by our natural survival instincts. But what a senior needs to teach his junior is how to think.
That is something which very few seniors teach.
Check the Timelapse here …if you are curious to see how cookies rise in an oven.
