How an Analytics-Averse Bakery Owner Became a Data-Driven Success
Allyson A Bake Shop uses a data-driven approach to continually improve its business by using the Manage My Business app for both day-to-day decisions and long-term planning.
How an Analytics-Averse Bakery Owner Became a Data-Driven Success
Allyson A Bake Shop uses a data-driven approach to continually improve its business by using the Manage My Business app for both day-to-day decisions and long-term planning.
Allyson A Bake Shop is a bake-from-scratch bakery/cafe located in picturesque Mount Dora, Florida.
It was founded in 2016 by Terese Roth, who left a career as an Emergency Medicine physician to follow her passion for baking.
Her popular TEDx Talk shares this interesting journey.
www.AllysonA.com
THE CHALLENGE
Like many small business owners, Terese lacked a formal background in business but more than made up for it with her passion and grit. She always found dashboards and analytics to be intimidating, but recognized that a data-driven approach to decision-making would be far better than relying solely on her instincts – especially as she was just getting started.
She defined a list of requirements for the ideal analytics solution for her business:
- Be easy to learn and use (i.e., no spreadsheets).
- Provide a deeper understanding of her business’s performance.
- Focus on data-driven decision-making.
- Available on any device, including her iPad and phone.
- Be inexpensive.
To find this solution, Terese researched online and also asked for advice from experienced small business owners and advisers. The short answer was that nothing like this existed. There were expensive, feature-rich solutions designed for larger businesses. And there were free, but limited solutions provided by point-of-sale (POS) systems. But nothing designed for the needs of a small business owner like Terese.
THE SOLUTION
Fortunately, Terese’s husband was a former Google product manager and engineer that had founded a company that built apps. She convinced him there was an opportunity to create an app that could really help small business owners. After his company did extensive market research and design work incorporating input from dozens of small business owners like Terese, the Manage My Business app was born.
The Manage My Business app integrates with Terese’s POS system (Clover) to retrieve orders as they occur in her storefront. [Square and Shopify POS are also supported.] It also retrieves orders from DoorDash, GrubHub and Shopify (which powers her e-commerce site). The setup process took about 5 minutes.
THE BENEFITS
Terese describes the benefits of the product in terms of questions that it helps answer about her business:
How is my business doing today?
Whether working at the bakery or taking a much-needed day off, Terese always wants to stay on top of her business. She relies on real-time sales updates to see how her business is doing throughout the day, as well as the intraday forecast to see where sales will likely end up for the day. On occasion, she’ll look at other metrics like refunds, repeat customers or discounts – which are just a few swipes away.
The comparisons to previous periods – yesterday, last week, last month, last year, a custom date, or even past holidays – provide Terese with context for today’s results to measure improvement over time.
Are there any large or unusual orders today?
Terese loves the order timeline graph, which visualizes the day’s orders. A quick glance identifies busy/slow times and highlights large orders – which are an important part of Terese’s business and often require special attention. A tap on any order shows every detail about that order (products, quantities, discounts, tips, lifetime customer value, etc.).
How much of each product should we bake today?
In a baked-from-scratch business like this, forecasting demand is essential to avoiding loss due to unsold products. Terese relies on the product-level sales chart for recent days to decide how much of each product to bake each day. For holidays and other special events, the results for last year (and previous years) are essential to getting this forecast right.
Should I adjust my business hours?
Terese uses the Sales Heatmap graph from time to time to see if adjustments are needed for her store’s hours. This graph shows sales (or other metrics) for each day of the week and time of day, which offers a great visualization of the business’s performance.
For example, she can easily see that the first hour of the day is among the slowest. However, the Frequent Customer heatmap shows that many of her most loyal customers visit during that time (especially on weekdays). She has learned that viewing performance from multiple perspectives leads to well-informed decisions.
How did my recent price increase affect sales?
Terese finds the Trends section of the app to be somewhat intimidating, so she relies on a small business advisor to help interpret these results. For example, a Sales Trends report for a specific product shows the date and amount of each price increase for that product. This makes it easy to compare the sales – or order size, items per order, etc. – before and after the increase. This can help identify if customers are price sensitive or if there is an opportunity for additional increases in the future.
Which products contribute the most to my bakery’s profitability?
Terese knows the importance of product-level profitability from her recent experience selling custom cakes. The local market had capped the price of an 8” cake at about $50, so Terese needed to determine if it was profitable to continue selling cakes as costs continued to rise. After estimating the cost of each cake (including the baker’s time) and comparing it to alternative products like cupcakes and gift boxes, the Manage My Business app provided the data to support her decision to discontinue offering custom cakes to focus on more profitable products.
THE BENEFITS
For Terese, the Manage My Business app has become so intertwined with her day-to-day management of the business that it’s difficult to quantify many of the results, but here are some of the most tangible improvements:
- Increased confidence. When Terese first opened the business, it was difficult to confidently make decisions based solely on her instincts. By getting a much deeper understanding of her business from using the app, she has gained confidence that her instincts are often correct and has learned a great deal from times when they were incorrect.
- Reduced losses due to food waste. More accurate forecasting of product-level demand has resulted in a significant reduction in discarded products. Terese was not comfortable sharing specific numbers, but it is many times lower than industry averages – which is remarkable for a bakery that does not use preservatives.
- Optimized staffing levels. Terese has adjusted employee schedules to stagger start times for each day of the week based on expected order volume. She also adjusted break times based on when it was most likely to be less busy (which also varies by day of the week), resulting in better customer service.
- More effective price increases. Like almost every small business owner, Terese struggled with how to increase prices due to rising costs. By analyzing past price increases from different perspectives, the price sensitivity for specific products became more clear. As a result, the improved timing and size of recent price increases have limited any negative impact on the business.
- Improved profitability. Terese found the cake example mentioned above to be an eye-opening experience. Terese is now starting to measure profitability for every product, which will help find additional opportunities to adjust prices, find lower-cost recipes, discontinue unprofitable products and take other actions to improve profitability.
It is difficult to calculate the Return on Investment (ROI) for “better decision making”, but just the reduced loss and improved profitability described above resulted in tens of thousands of dollars of increased profits and an ROIwell over 40X the cost.
NEXT STEPS
Allyson A Bake Shop continues to be wildly successful despite challenges coming from every direction – rising costs, staffing, competitors, supply chain issues, etc. Much of that success comes from offering amazing products and great service (as evidenced by the bake shop’s 4.9-star rating on Google), but Terese attributes some of this success to a source she never expected when she started the business – an analytics app.
Looking back, Terese’s use of the app evolved along with her growth as a business owner. She started with just monitoring performance, but gradually moved into more advanced aspects of the app.
Going forward, Terese plans to continue this evolution by focusing more on trend and profitability analysis. At the same time, she’ll continue to provide new feature ideas and suggestions for making the app even better.
THE CHALLENGE
Like many small business owners, Terese lacked a formal background in business but more than made up for it with her passion and grit. She always found dashboards and analytics to be intimidating, but recognized that a data-driven approach to decision-making would be far better than relying solely on her instincts – especially as she was just getting started.
She defined a list of requirements for the ideal analytics solution for her business:
- Be easy to learn and use (i.e., no spreadsheets).
- Provide a deeper understanding of her business’s performance.
- Focus on data-driven decision-making.
- Available on any device, including her iPad and phone.
- Be inexpensive.
To find this solution, Terese researched online and also asked for advice from experienced small business owners and advisers. The short answer was that nothing like this existed. There were expensive, feature-rich solutions designed for larger businesses. And there were free, but limited solutions provided by point-of-sale (POS) systems. But nothing designed for the needs of a small business owner like Terese.
THE SOLUTION
Fortunately, Terese’s husband was a former Google product manager and engineer that had founded a company that built apps. She convinced him there was an opportunity to create an app that could really help small business owners. After his company did extensive market research and design work incorporating input from dozens of small business owners like Terese, the Manage My Business app was born.
The Manage My Business app integrates with Terese’s POS system (Clover) to retrieve orders as they occur in her storefront. [Square and Shopify POS are also supported.] It also retrieves orders from DoorDash, GrubHub and Shopify (which powers her e-commerce site). The setup process took about 5 minutes.
THE BENEFITS
Terese describes the benefits of the product in terms of questions that it helps answer about her business:
How is my business doing today?
Whether working at the bakery or taking a much-needed day off, Terese always wants to stay on top of her business. She relies on real-time sales updates to see how her business is doing throughout the day. The intraday forecast shows where sales will likely end up for the day. On occasion, she’ll look at other metrics like refunds, repeat customers or discounts – which are just a few swipes away.
The comparisons to previous periods – yesterday, last week, last month, last year, a custom date, or even past holidays – provide Terese with context for today’s results to measure improvement over time.
Are there any large or unusual orders today?
Terese loves the order timeline graph, which visualizes the day’s orders. A quick glance identifies busy/slow times and highlights large orders – which are an important part of Terese’s business and often require special attention. A tap on any order shows every detail about that order (products, quantities, discounts, tips, lifetime customer value, etc.).
How much of each product should we bake today?
In a baked-from-scratch business like this, forecasting demand is essential to avoiding loss due to unsold products. Terese relies on the product-level sales chart for recent days to decide how much of each product to bake each day. For holidays and other special events, the results for last year (and previous years) are essential to getting this forecast right.
Should I adjust my business hours?
Terese uses the Sales Heatmap graph from time to time to see if adjustments are needed for her store’s hours. This graph shows sales (or other metrics) for each day of the week and time of day, which offers a great visualization of the business’s performance.
For example, she can easily see that the first hour of the day is among the slowest. However, the Frequent Customer heatmap shows that many of her most loyal customers visit during that time (especially on weekdays). She has learned that viewing performance from multiple perspectives leads to well-informed decisions.
How did my recent price increase affect sales?
Terese finds the Trends section of the app to be somewhat intimidating, so she relies on a small business advisor to help interpret these results. For example, a Sales Trends report for a specific product shows the date and amount of each price increase for that product. This makes it easy to compare the sales – or order size, items per order, etc. – before and after the increase. This can help identify if customers are price sensitive or if there is an opportunity for additional increases in the future.
Which products contribute the most to my bakery’s profitability?
Terese knows the importance of product-level profitability from her recent experience selling custom cakes. The local market had capped the price of an 8” cake at about $50, so Terese needed to determine if it was profitable to continue selling cakes as costs continued to rise. After estimating the cost of each cake (including the baker’s time) and comparing it to alternative products like cupcakes and gift boxes, the Manage My Business app provided the data to support her decision to discontinue offering custom cakes to focus on more profitable products.
THE BENEFITS
For Terese, the Manage My Business app has become so intertwined with her day-to-day management of the business that it’s difficult to quantify many of the results, but here are some of the most tangible improvements:
- Increased confidence. When Terese first opened the business, it was difficult to confidently make decisions based solely on her instincts. By getting a much deeper understanding of her business from using the app, she has gained confidence that her instincts are often correct and has learned a great deal from times when they were incorrect.
- Reduced losses due to food waste. More accurate forecasting of product-level demand has resulted in a significant reduction in discarded products. Terese was not comfortable sharing specific numbers, but it is many times lower than industry averages – which is remarkable for a bakery that does not use preservatives.
- Optimized staffing levels. Terese has adjusted employee schedules to stagger start times for each day of the week based on expected order volume. She also adjusted break times based on when it was most likely to be less busy (which also varies by day of the week), resulting in better customer service.
- More effective price increases. Like almost every small business owner, Terese struggled with how to increase prices due to rising costs. By analyzing past price increases from different perspectives, the price sensitivity for specific products became more clear. As a result, the improved timing and size of recent price increases have limited any negative impact on the business.
- Improved profitability. Terese found the cake example mentioned above to be an eye-opening experience. Terese is now starting to measure profitability for every product, which will help find additional opportunities to adjust prices, find lower-cost recipes, discontinue unprofitable products and take other actions to improve profitability.
It is difficult to calculate the Return on Investment (ROI) for “better decision making”, but just the reduced loss and improved profitability described above resulted in tens of thousands of dollars of increased profits and an ROIwell over 40X the cost.
NEXT STEPS
Allyson A Bake Shop continues to be wildly successful despite challenges coming from every direction – rising costs, staffing, competitors, supply chain issues, etc. Much of that success comes from offering amazing products and great service (as evidenced by the bake shop’s 4.9-star rating on Google), but Terese attributes some of this success to a source she never expected when she started the business – an analytics app.
Looking back, Terese’s use of the app evolved along with her growth as a business owner. She started with just monitoring performance, but gradually moved into more advanced aspects of the app.
Going forward, Terese plans to continue this evolution by focusing more on trend and profitability analysis. At the same time, she’ll continue to provide new feature ideas and suggestions for making the app even better.