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eKapija |
Tuesday,
09.08.2016.|
15:46
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Copy linkBakeries adjusting offer to citizens' purchase power – How profitable is the production and sale of baked goods in Serbia?
(Illustration) Bakeries have been one of the most common choices for starting a business in Serbia for years now. There are shops on nearly every corner, but they are also closing at an increasingly fast pace, especially those smaller ones, as well as local producers.
Business consultants and advisers for the development of entrepreneurship say that, to open a bakery, a space authorized by the sanitary inspection is needed, as well as the appropriate equipment – a rotating rack oven, a pizza oven, a dough mixer, various pans, a cash register and raw and processed materials.
Minimal initial investments amount to around EUR 6,000 and the additional expenses are made up of monthly obligations like disability and pension insurance and health insurance for owners and employees. These expenses depend on the basis, but the optimum amount is around EUR 160 per individual. As for additional workforce, experienced bakers need to be hired.
Experts cite as one of the advantages the fact that production and sale of baked goods can be done throughout the year, and are not seasonal in character like some other activities.
Entrepreneur competence crucial to successful operations
In Skroz Dobra Pekara, which has been operating for 17 years, they say that it's hard to determine the amount of the investments so far, but they point out that the amount needed to open a retail shop nowadays is, according to the precisely defined standards of the company, for the most part determined by the premises and the expected turnover.
(Illustration) – The budget ranges from EUR 40,000 for small shops to EUR 90,000 for large ones. The investment includes, in addition to the premises and the equipment, the lease of space during the construction work or securing the necessary technical conditions, such as, for example, amplification of electricity. I must note that our production is centralized, which eliminates production equipment expenses in opening retail shops, which is an important financial factor – says Jelena Jakovljevic from Skroz Dobra Pekara for eKapija.
According to her, the optimum time period for the completion of administrative procedures and getting all the necessary documents, provided that the competent institutions respond within the legal deadline, ranges from 30 to 60 days.
As for the profitability, in Skroz Dobra Pekara they believe that the profitability of any business is reflected in hard work, keeping track of trends and meeting the demands of the market.
– We have opened seven shops this year, but have also witnessed the opening of numerous bakeries in Belgrade which close down quickly due to lack of profitability. This is why we believe that there are no good or bad professions, merely competent and incompetent entrepreneurs. Keeping in mind the ever increasing market demands and stricter legislations, the conclusion is that the level of entrepreneur competence must constantly be raised in order to secure the survival in the market – Jelena Jakovljevic points out and adds that it is also necessary that a company define its goals clearly, as well as a system for tracking their accomplishment.
Large drop in purchasing power
(Rival 14) Nevertheless, the director of the Belgrade bakery Rival 014, Dragan Pantovic, says for eKapija that the situation is currently disastrous, primarily due to unfair competition which sells bread at prices below any logical level.
He believes that, financially, this is possible only if flour comes from questionable sources and says that inspections aren't doing anything to put a stop to it. He also points out the fact that market conditions and the business environment are in general very challenging and demanding, especially for smaller companies.
– There's been a great drop in sales of bread, which reflects on other products as well. People's purchasing power is significantly lower this year and we have noticed that the turnover in our shops is 30-40% lower than in the same period last year. This is partly a consequence of the fact that the turnover is always lower in summer, but certain experienced colleagues claim that the effects of the election year and the accompanying uncertainty and expectations are also significant – Pantovic says.
Although Rival 014 opened a new shop in the Belgrade neighborhood of Brace Jerkovic in August 2015, in which nearly EUR 15,000 was invested, eKapija's interviewee notes that he's noticing, when talking with large producers and suppliers, that even the supermarket sales have dropped significantly this year.
– We are waiting for September, for the vacations to end and the school year to begin, because that's when the turnover grows, and that's also when the uncertainties related to the formation of the new government will be resolved. I hope that all this will contribute to better results – Dragan Pantovic concludes.
Marko Andrejic
Business consultants and advisers for the development of entrepreneurship say that, to open a bakery, a space authorized by the sanitary inspection is needed, as well as the appropriate equipment – a rotating rack oven, a pizza oven, a dough mixer, various pans, a cash register and raw and processed materials.
Minimal initial investments amount to around EUR 6,000 and the additional expenses are made up of monthly obligations like disability and pension insurance and health insurance for owners and employees. These expenses depend on the basis, but the optimum amount is around EUR 160 per individual. As for additional workforce, experienced bakers need to be hired.
Experts cite as one of the advantages the fact that production and sale of baked goods can be done throughout the year, and are not seasonal in character like some other activities.
Entrepreneur competence crucial to successful operations
In Skroz Dobra Pekara, which has been operating for 17 years, they say that it's hard to determine the amount of the investments so far, but they point out that the amount needed to open a retail shop nowadays is, according to the precisely defined standards of the company, for the most part determined by the premises and the expected turnover.
(Illustration) – The budget ranges from EUR 40,000 for small shops to EUR 90,000 for large ones. The investment includes, in addition to the premises and the equipment, the lease of space during the construction work or securing the necessary technical conditions, such as, for example, amplification of electricity. I must note that our production is centralized, which eliminates production equipment expenses in opening retail shops, which is an important financial factor – says Jelena Jakovljevic from Skroz Dobra Pekara for eKapija.
According to her, the optimum time period for the completion of administrative procedures and getting all the necessary documents, provided that the competent institutions respond within the legal deadline, ranges from 30 to 60 days.
As for the profitability, in Skroz Dobra Pekara they believe that the profitability of any business is reflected in hard work, keeping track of trends and meeting the demands of the market.
– We have opened seven shops this year, but have also witnessed the opening of numerous bakeries in Belgrade which close down quickly due to lack of profitability. This is why we believe that there are no good or bad professions, merely competent and incompetent entrepreneurs. Keeping in mind the ever increasing market demands and stricter legislations, the conclusion is that the level of entrepreneur competence must constantly be raised in order to secure the survival in the market – Jelena Jakovljevic points out and adds that it is also necessary that a company define its goals clearly, as well as a system for tracking their accomplishment.
Large drop in purchasing power
(Rival 14) Nevertheless, the director of the Belgrade bakery Rival 014, Dragan Pantovic, says for eKapija that the situation is currently disastrous, primarily due to unfair competition which sells bread at prices below any logical level.
He believes that, financially, this is possible only if flour comes from questionable sources and says that inspections aren't doing anything to put a stop to it. He also points out the fact that market conditions and the business environment are in general very challenging and demanding, especially for smaller companies.
– There's been a great drop in sales of bread, which reflects on other products as well. People's purchasing power is significantly lower this year and we have noticed that the turnover in our shops is 30-40% lower than in the same period last year. This is partly a consequence of the fact that the turnover is always lower in summer, but certain experienced colleagues claim that the effects of the election year and the accompanying uncertainty and expectations are also significant – Pantovic says.
Although Rival 014 opened a new shop in the Belgrade neighborhood of Brace Jerkovic in August 2015, in which nearly EUR 15,000 was invested, eKapija's interviewee notes that he's noticing, when talking with large producers and suppliers, that even the supermarket sales have dropped significantly this year.
– We are waiting for September, for the vacations to end and the school year to begin, because that's when the turnover grows, and that's also when the uncertainties related to the formation of the new government will be resolved. I hope that all this will contribute to better results – Dragan Pantovic concludes.
Marko Andrejic
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