Doin’ the Math.

Having been buried alive in an excel recipe costing model for the better part of the last 6 weeks, I’ve developed a renewed appreciation for granular level details. Let’s call a spade a spade and not sugar coat it. This is not the fun side of small business and living the dream.  Recipe costing and other tangential  projects such as inventory valuation, auditing recipes, and stalking vendors for updated pricing require an intense laser focus and frankly can be a bit mind-numbing. There is a reward though for this work: the big picture takeaways that bubble up to the surface are providing serious a-ha clarity.  I thought I’d share a few of my learnings.

“Are You Kidding Me?” Example:
In 2007-2008, when I made cupcakes in my apartment while I was writing the bizplan for Sweet Revenge®, I used self-rising flour. Guess what. For the last 5.5 years since I’ve been open, we’ve used self-rising flour in our cupcake recipes. Guess what else. Self rising flour costs double what AP flour does. Guess what again. To make self rising flour you add the nominal costs of baking powder & salt to AP flour. I literally could’ve saved thousands of dollars each year. And there’s no guessing what we’re up to: converting all our recipes STAT.

“A Rose By Any Other Name is Still a Rose” Example:
We purchase the creme de la creme of Greek yogurt and use it in many of our cake and sauce recipes. It is outrageous, and my lovely patrons are hooked on it for breakfast. But guess what. In our cake and sauce recipes, we can sub out substantially cheaper yogurt or sour cream with no noticeable taste or texture differences. And guess what this means. We will save a bundle over the course of the year.

“There Are Other Fish in the Sea” Example:
After 5.5 years of being underwhelmed and overcharged by Verizon for telephony & internet services and dealing with their frequent outages we are switching to Time Warner. In addition to having spent a lot of money for unreliable service, when our Verizon internet goes down (which happens many times a year), we can’t process credit cards, so we lose patron business. I’m hopeful Time Warner will have no down-time and if they do, they will operate with urgency to fix their issue, as opposed to the lethargy and lack of care we’ve experienced.  By switching service providers, I’m also expecting to save $1200 buckaroos a year. Takeaway: its good to go fishing around.

So there you have it. By not having much fun with numbers for the last month & a half, I feel pretty damn good about the direction I’m taking my small business. I don’t have it all figured out yet, and I’m sure there will be more whopper eye-poppers that will make my head spin. I can’t change the past and although I have regrets on not being on my a-game on managing costs, I’m tackling this responsibility full-on and no-holds barred. It is making me a better business manager in the process. Attending the school of hard knocks isn’t cheap, but it is invaluable.

Cheers to a-ha moments,

Marlo

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