We often have the opportunity to talk with the owner of the bakery about the bakery's reasonable profits, we feel that there are many owners of the bakery's costing and profit goals are not much of a concept. They only know that the product is made, sold, as if there is money to be made, the store will not be short of money to meet. On their own to make out of a variety of products and their price should be how reasonable pricing and no principles, just look at how others sell, as long as the simple decision to sell cheaper than others or to be slightly more expensive on the completion of the pricing. For this way of doing business bakery has no money only to the end of the year when the boss himself a person know. It is difficult to talk to them about how to increase the profitability of the bakery because they have no way of knowing how much profit they are currently making and how to increase it.

The cost structure of a bakery

What is a bakery's profit? Simply put, it's what's left over when a bakery deducts some of the costs of raw materials, production, labor, and sales from its daily income. In the introduction of how to increase the profitability of the bakery before the introduction of some of the cost structure of the bakery, with these clear concepts of the bakery's operating costs after the actual calculation and management, and then introduced some of the methods to increase the profitability of the bakery to work.

(A), production costs

Production costs include the following aspects:

1. Direct raw material costs: the cost of all raw materials needed in the recipe, such as flour, fat, sugar, milk powder, salt, improver and other additives.

2. Indirect Raw Material Costs: Includes the cost of lining paper used for baking trays, plastic bins used for baked goods, and various containers used for weighing raw materials.

3. Wastage: Includes the loss of baked goods due to improper operation of workers and damage caused during packaging and transportation or the loss of products returned due to non-sale.

4. Direct labor cost: refers to the direct use of the production of baked goods is the master's wages and raw materials such as weighing the wages of workers, etc.. It can be calculated in terms of hours and production quantities.

5. Indirect labor costs: refers to the part of the staff not directly involved in the production of wages, namely, management, sales staff, general affairs, cleaning staff and other related personnel wages.

6. Depreciation of equipment and plant: This refers to the investment in the beginning of the plant and equipment belonging to the immovable assets, after years of use and operation, its original value will diminish year by year, so in accordance with its useful life year by year to give the rationality of decreasing as part of the cost of expenditure.

7. Site rent: This is the fixed cost of renting a production site.

8. Cost of packaging materials: is the cost of materials used for packaging the bakery products.

9. Water, electricity and gas expenses: are the expenses of water, electricity and gas consumed for the production of bakery products.

10. Miscellaneous Expenses: refers to the cost of purchasing cleaning supplies, advertising and promotion of products, repair and maintenance of machines and equipment, public **** relations i.e., participation in various labor unions and social activities.

(ii), marketing cost expenses

Marketing costs include the following aspects:

1. Personnel costs: including the salaries of managers, marketing staff, cleaning staff.

2. Rent: This is the fixed cost of renting a storefront for the bakery.

3. Depreciation of equipment: the value of the bakery's display cabinets, air conditioners, and other fixed investment facilities are reasonably assessed on a declining annual basis.

4. Recycled products: bakery products that are not sold on the same day or damaged due to human reasons.

5. Transportation costs: the cost of transporting bakery products from the factory to the bakery.

6. Promotional costs: the costs incurred by the bakery to carry out some promotional activities to expand the visibility of the bakery and its products.

7. Tax expenses: the income tax paid by the bakery according to the state.

8. Miscellaneous expenses: expenses on public **** relations, insurance for vehicles, gasoline for vehicles, cleaning supplies, etc.

(3) Profit

What is left after the bakery pays some of the above expenses is the pre-tax profit, and after deducting the tax payable is the actual profit the bakery can get.

We can understand from the above analysis of bakery costs that in order to increase the profit of the bakery without increasing the price of the product, it is necessary to work on the costs and reduce the waste so that the remaining part of the profit can be increased. At the same time, we can also understand that bakery is not a high profit, high income industry. It is not possible to use the cheapest raw materials to make the most expensive products and earn the highest profits. Therefore, the profitability of a bakery is dependent on each and every employee, working together, paying attention to every detail at all times to minimize waste and achieve the goal of making more with less.

These methods of creating or maintaining profits depend on time and the efforts of all staff. In particular, the concepts and daily habits of the staff have a great deal of influence. How to educate the staff so that they develop good working habits and attitudes is quite important to us to improve the profitability of the bakery

This is the first time that a bakery has been in operation.