In the previous article, I briefly described how I opened an internet Bakery. I didn’t go into the details on how I kept it running on a day to day basis or what products sold the best or even what kind of profits I made. Suffice it to say that my little domestic kitchen more than paid for itself and made some profit as well, but just a few short months after my grand opening, I had to close it down.
When you go into business for yourself, there are a lot of factors to consider. Most businesses are started to turn a profit and hopefully support the owners. I initially opened my internet bakery just to supplement our existing income. I didn’t plan on becoming a quick success. My business plan didn’t encompass the possibility of growth. That was my first mistake and my worst mistake.
I found out that owning a business somewhere else and owning a business in your home are two very different things. Especially if that business is a domestic kitchen. When I was using my kitchen for the bakery, I couldn’t use it for myself. I couldn’t cook anything for family meals and we couldn’t eat in it. Those were part of the rules from the Department of Agriculture. It takes several hours for loaves of bread to rise and cook. My kitchen was being used at all hours of the day and night. We ate a lot of fast food meals in the living room and we didn’t much like it.
I put in a lot of hours. When you figure in a dollar amount for the number of hours actually worked, I was making less than minimum wage. However, the overhead for the business was very low. There was no rent, the customer paid the shipping costs and the cost of electricity and water only went up a small percentage. The cost for supplies was low and factored into the price of the item. So was the bakery really making a profit if I was getting below average wages? I enjoyed all the cooking and the challenge of the day to day operation of the bakery, but was it worth it to me and my family?
Another thing I didn’t consider when I opened the bakery in January, was the coming hot summer months. I didn’t even think about the weather having an effect on my freshly baked items. As June approached, I was forced to consider the issue of what the summer heat would do to my products. I shipped priority mail which guaranteed delivery in 3 days anywhere in the U.S. That was three days that my fresh items sat in a hot warehouse or truck. Melted chocolate and moldy bread was not what I wanted my customers to receive. I had to decide if I wanted to invest in a method to keep my products cool and fresh while they were shipped to the customer. I had to decide whether the business would eat the additional cost or whether the cost could be passed on to the customer. I was all ready charging a premium price for my products and didn’t think the market would stand a price increase.
We sat down one night and laid everything out on the table. We looked at the pros and cons of the internet bakery. Yes, the money was nice, but we didn’t need it to survive. My husband has a good job. The bakery was supplemental income to help us become debt free faster. Yes, it was exciting to sell products that I made by hand from my own recipes. Yes, it was profitable and fun. But…we needed a better business plan and better projections. We needed a way to grow and we just were not ready for that.
So, as the weather turned hot, I decided not to invest in a method to keep my products cool. I decided not to invest any more into a business that we weren’t ready to pursue head on and full time. I shut the doors and disappeared from the internet. That was a difficult decision to make. All of a sudden, it was just like my internet bakery had never existed at all.