The Baker's Peel

Judson Lovering thought he had followed the recipe for success to the letter when he opened his specialty bakery, The Baker's Peel, in 1994. He had read everything he could about business start-ups, applied his baking expertise to create a distinctive line of delicious breads, cookies, and pastries, and remembered the lessons learned when he and his brothers ran a bakery several years earlier.

But two years later, Judson sensed that something was wrong. Problem was, he didn't know what. The Baker's Peel seemed popular enough among residents of the small New England community, but Judson was never quite sure what to expect from one day to the next. "I knew that nearly every business experiences ups and downs," he recalls. "I felt that I was doing everything right; the results were just not what I had been counting on."

Judson decided to talk things over with the banker who had arranged his SBA loan. That conversation led to a call to the best business sounding board of all: SCORE. Volunteer Counselor Bob Herlihy, a retired small business owner and the former executive director of New Hampshire's liquor commission, examined the meticulous accounting and financial records that Judson's wife, Suzanne, had been keeping since the business opened.

Bob spotted a trend, but not the one that Judson had feared. "Bob saw a lot of strengths in the business," Judson says. "He explained that I was experiencing things that happen to 99 percent of new businesses. It was a relief to have someone say that everything's OK; but I was also glad I had sought out this advice early, rather than waiting until later when there might have been serious problems."

Instead, Bob suggested that Judson look for ways to improve the bakery's bottom line. Using the ingredient lists and recipes, Bob created a program that automatically calculates product costs and profit margins.

"Now I can plug in a new price for an ingredient like butter, and the program immediately readjusts all the recipe costs and unit prices," Judson says. "When Bob told me that he spent about 400 hours creating this system, I was flabbergasted! I was really impressed that he would do so much to help me get a better handle on my operations."

Bob also advised Judson consider making some other changes such as capitalizing on the bakery's most popular products and eliminating low-profit offerings. The latter step required a change in Judson's thinking. "When you're a start up, especially in the food business, you want to make money any way you can. I had accepted a lot of specialty orders in hopes that these customers would keep coming back. It's hard to say no, but once I realized that I would lose money trying to be everyone's personal baker, I understood why it's necessary."

In the years since that first call to SCORE, The Baker's Peel has consistently shown steady growth. Judson's sales are four times those of the bakery's previous owner. But while business is good, he's not taking things for granted. Judson maintains that there's always room for improvement; thanks to SCORE, he's learned how to find it.

"I didn't have a specific goal or idea in mind when I called SCORE," he says. "I just needed guidance in developing a strategy. Bob did that by teaching me to constantly watch for things that will help keep my business growing."

Brought to you by SCORE "Counselors to America's Small Business."
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