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Inflation has been brutal on the industry. Saved a 4-location retail bakery chain in my hometown from collapse in mid-2020. Converted 2 locations from "bakery c

Inflation has been brutal on the industry. Saved a 4-location retail bakery chain in my hometown from collapse in mid-2020. Converted 2 locations from "bakery cafes" with 60-80 seating to no-seating, quick pick-up locations with much larger production capacity and an online order focus. Shutdown one location that was not in a neighborhood that was going to support 2-3x increased prices. Turnaround has been going great and we've managed to save 100 jobs and go breakeven on our original investment 18 months following re-opening. We treat the 4th location which has the most upscale geography as our lowest margin "loss leader" by retaining the bakery cafe model and have used it to move the brand upmarket significantly. Total input costs are up 70-80% and in response we've moved pricing on staple items up 2x and tacked on upsell to increase AOV from $14 to almost $50. A lot of you are going to dislike what I wrote above, but this is how we survived. Even after all that, the business has only 8% margins vs. the 40%+ margins in our B2B SaaS portfolio (what I did before taking this project on). And we had planned out this upscaling playbook before inflation was even a concept. Rents are up, energy costs are up, water costs are up, and we're now paying our average employee 50% more. If we had tried to preserve what was there, we'd probably be out $2M+

nyokodo 4y ago
> A lot of you are going to dislike what I wrote above I don’t know who would dislike a story of hard work urgently forming a sustainable business during a series of black swan economic impacts and saving so many (now) higher paid jobs in the process! Perhaps people whose opinions you oughtn’t concern yourself with anyway?
- BearFunds 4y ago
  Appreciate it sincerely. I was describing the project to an (admittedly very young) former colleague who I wanted to hire on to do our social media. She told me I was hollowing out the middle class with my overpriced muffins. Had another tell me I was "destroying third spaces" in under-served neighborhoods when I described the renovations and shutdowns.
  - jmccaf 4y ago
    What you described sounds much better than one of the default alternatives, which is : the business would be closed with 0 locations.
    - im3w1l 4y ago
      Trying to put myself in their shoes, I think what they would have wanted is a zoning law requiring the business there to provide a third space. Landlords would have then be forced to lower the rent until it became profitable to run a bakery-cafe or similar.
  - nyokodo 4y ago
    > I was "destroying third spaces" in under-served neighborhoods Whoever it was is free to create that space themselves and if they succeed long term great but they won’t have such a smug ideological point of view once they’ve had to struggle to make it work.
nicbou 4y ago
I really like what you wrote above. Experts rarely chime in, especially not with numbers and other details.

nyokodo 4y ago

> A lot of you are going to dislike what I wrote above I don’t know who would dislike a story of hard work urgently forming a sustainable business during a series of black swan economic impacts and saving so many (now) higher paid jobs in the process! Perhaps people whose opinions you oughtn’t concern yourself with anyway?

BearFunds 4y ago
Appreciate it sincerely. I was describing the project to an (admittedly very young) former colleague who I wanted to hire on to do our social media. She told me I was hollowing out the middle class with my overpriced muffins. Had another tell me I was "destroying third spaces" in under-served neighborhoods when I described the renovations and shutdowns.
- jmccaf 4y ago
  What you described sounds much better than one of the default alternatives, which is : the business would be closed with 0 locations.
  - im3w1l 4y ago
    Trying to put myself in their shoes, I think what they would have wanted is a zoning law requiring the business there to provide a third space. Landlords would have then be forced to lower the rent until it became profitable to run a bakery-cafe or similar.
- nyokodo 4y ago
  > I was "destroying third spaces" in under-served neighborhoods Whoever it was is free to create that space themselves and if they succeed long term great but they won’t have such a smug ideological point of view once they’ve had to struggle to make it work.

nicbou 4y ago

I really like what you wrote above. Experts rarely chime in, especially not with numbers and other details.