The business of food

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Joined Nov 27, 2001
W. DeBord mentioned in another thread about being in a depressed area and leary about pricing too high. I have found this to be true in my part of the midwest, also, and wondering what the rest of the country is like.

I have a couple of specific concerns (re: the business end) and would like some feedback from anyone out there.

I have a very small business (90% wedding cakes) and am looking to double my business (and am making a move to get more space) in the next 12 months. This would still make me a very small business. I believe there is plenty to go around and am not looking for huge volume. Business is slow however and my calendar is not booking nearly as fast, nor does it seem, the sheer volume of brides are out there. I am chalking this all up to the economy. What I am worried about is some of the business owners who are similar to mine. I have found some pricing so rediculously cheap that they can't be making more than pennies. This seems a foolish move to me because although they may get the business, where is the profit? And not only do they make the rest of us look like money hungry grubers ("if she can do it for that cheap how come you can't"?) but they cheapen their own work as well. Some of these same business people are blatantly lying to clients who don't know any better ("I bake your cakes just hours before the reception"). Is there any professional way to approach them on either subject without screaming "What's up with that???!!!!" ? And similary, how do you get clients to do an apples to apples comparison- of course I charge more than the grocery store, have you tasted their cake?

How would you deal with these situations?

And any added advice on marketing techniques would be welcome, also. (Just when I decided to take on a larger mortgage for more space, business slows down. AAAAAGGGGHHHH!!!!!)
 
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Joined Sep 21, 2001
What you are talking about is the same for any small business that makes things. Before I owned a restaurant years ago, I worked for a glassblower. A remarkably talented individual that got thousands of dollars for a piece of his art glass. And he was that good. Unfortunately, even though he was well represented (having a very good business manager) he made most of his money on a number of "items" that ranged in price from $125. to $500., which is cheap in comparison to his larger work. BUT, that paid for his overhead, labor and a decent living to boot. When he told me he made the equivelent time-to-money as he made on his larger pieces, it made sense to me. He was always busy.
Now that I run a restaurant/catering business I bear in mind what he told me. I have several "items" (bread, soup, cookies) that I have the same time to money ratio, if not better to make my overhead, labor and product cost on, and caterings are my "large" items, which add significantly to my bottom line. But how often do people want the full-blown catered event? Not often enough in my town to make the money I want to make and support the lifestyle to which I am accustomed. This year we have had a definate increase in bookings, which will mean a record year for us. But it is nice to know that I have a consistant market for my "small items" day in and day out. It is reassuring, as we build our business plan for our next restaurant that we serve 100+ people per day even on that slowest day of the year. Keeps the lights on, my staff busy and my kids in clothes.
And how do I compete with other restaurants and grocery stores since I get $3.75 for a cup of soup when you can get four times as much elsewhere for the same price, if not cheaper? THE OBVIOUS DIFFERENCE IS QUALITY. And I do give away free samples. Do what you do best, don't compromise on quality, let the other guys play the cheap price game, guarantee customer satisfaction, and eventually you will garner a following. Good luck.
BTW- the economy out west is bad, too.
 
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Joined Jul 2, 2001
Great advice, Peachcreek. It is my firm belief that quality will win out in the long run everytime. I also agree that business is off here in the west. Our actual number of weddings is down slightly but the quality of our events is nicer with actual per person costs up 27% over last year. The over all result is a 19% increase in revenues.And while we are on of the most expensive places in out area we are cheap in others and as a result have booked several wedding from over 200 miles away. It is cheaper to put their guests up in a hotel and shuttle them to our place than to have a wedding in their home area plus they get our wonderful weather, blue skies and ocean vistas. Go figure.
 
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