Our Biggest Bakery Business Mistakes

Over nearly 15 years of running our cake business, we've been consistently named as one of London's Best Bakeries by various publications such as TimeOut, Vogue, CN Traveller etc, and even as one of Europe's best bakeries by the Evening Standard. While these accolades are delicious they weren’t earnt overnight.

Through the hard graft of navigating the usual setbacks and hurdles that every other small business has had to - the likes of BREXIT, pandemic, cost of living crisis, we've also had our own run of rotten luck including financial scams and seeing our bakery go up in literal flames. Yup, that's a photo of our bakery burning in a fire a few years ago.

And of course, we've also made some stupid mistakes along the way. BIG mistakes. Tens of thousands of pounds mistakes. Mistakes that caused us much hardship. Mistakes that had me crying, suffer panic attacks and made me consider throwing in the towel.

Yet here we are, still baking cakes and delighting our loyal customers on their birthdays, weddings, and all other special occasions over a decade. I often think learning about business through mistakes is as expensive, and possibly as effective, as learning through an MBA. Through it all, I can certainly say my business-gut has a much needed sharpened instinct. I'm much better at cutting through sales-speech, too-good-to-be-true promises and KPIs, and learning when to say no to money and opportunities.

Whilst I'm a big fan of schadenfreude, I do also believe in sharing my learnings. It's good juju. Furthermore, I'm empathetic towards any small business owner and don't want to gate-keep my precious, expensive, and painful learnings.

So here are our biggest bakery business mistakes:

1) Opening A Retail Premises

I was young and naive. So so naive. When I started the business it was a literal kitchen table business - I was making macarons in our tiny Notting Hill kitchen and selling them door-to-door to businesses in W8 and supplying weddings and events. We then made a website to sell them online. Soon I had to move production out of the flat and into professional catering premises. And that's where my narcissism took over and I started believing in silly things like, "Wouldn't a cake and coffee shop be great!" without ANY real retail experience. We found an old Ottolenghi premises in Kensington and signed the lease paying through our nose, never once thinking WHY Ottolenghi decided to leave.

Well, I think I now know why they left! Not only was the foot fall rubbish. The neighbouring businesses were mega-b!tchy - the gift shop owner next door referred to me as "the exotic one", the across-the-street cafe owner would hire a massive van to park outside our shopfront so we didn't nab their coffee trade, the hairdressers would leave bin bags of hair outside our shop adding to our waste disposal bills (and having pests rip the bags open spilling hair everywhere). There was just so much bad energy around with zero sense of community. And that was just the neighbouring businesses...I'm not even going to dredge up the trauma of having to serve the general public in person. We closed the shop after just under two years of running it with me very close to a breakdown.

Lessons to Learn: Never head into any major financial commitment without experience or without consulting those WITH experience. You need more NO-people around than YES-people.

2) Hiring a PR Agency

Once the shop opened I was spread very thinly between the shop and the production premises, and I was barely ever home. I worked 7 days a week. I missed important social occasions like weddings, hen dos, birthdays and baby showers. I worked the longest hours as the owner, severely underpaying myself, and I was getting burnt out frequently. Some people suggested hiring a PR agency to drive marketing and sales and naively, again, off I went to look for one online.

Reviews of the agency were GLOWING with no negatives. But like an idiot, I didn't consult EX-clients and believing the reviews I saw I signed a LOOOOONG 10-page contract with the tiniest small print locking me in for an eye-watering retainer for months on end.

We were promised the sun, moon and stars in coverage and KPIs and unsurprisingly, they were fluffed. It was tens of thousands of pounds in the cesspit and many years of disputes over it. However, very recently we received an email from another business who had a bad experience with the same PR company and whilst it didn't make me feel "better" per se, it felt like justified vindication. And some closure to my closure.

Lessons to Learn: If it sounds too good to be true, it is. Also, as a small business owner, the founder is best placed to sell their story and is their own best PR agent.

3) Accepting Red Flag Orders

We use Shopify as our e-commerce platform for our online bakery. It has its pros and cons but we've been with them for more than a decade now.

One of the useful things it does is surface risk information on orders. We learnt the expensive way that a high-value order deserves proper review rather than blind optimism.

One form of chargeback abuse is often called "friendly fraud": a genuine cardholder makes a purchase and later disputes a transaction they did in fact authorise. A different situation is genuine payment fraud, where stolen payment details are used without the cardholder's knowledge. Those are not the same thing, and a merchant cannot reliably decide which one has happened from a single odd-looking detail in an order.

After being hit by several chargebacks, we became much more cautious. Cancelling a valuable order can sting, but so can producing and hand-delivering a cake only to lose the payment afterwards.

Lessons to Learn: Treat Shopify's risk indication as a prompt for review, not proof that a customer is fraudulent. We look at the order information available to us, use the platform's risk and payment checks, and contact the customer when appropriate before deciding whether to fulfil or refund. An unusual email address, a billing/delivery mismatch or a typo may justify a closer look, but none of those things on its own proves fraud.

4) Participating in Bake-Off: the Professionals

Ahhhhh Bake-Off. Such a wholesome brand. After years of being poached by their scouts and casting teams I finally succumbed and thought, "ooh what a great opportunity".

Thing is, people love GBBO. It's relatable, warm, cute with supportive and positive energy between the contestants, judges as well as presenters. Bake-Off the Professionals was a completely different experience for me - cheffy egos battling it out in a very sterile and tense environment. It was really not for me at all and I felt tokenised and very salty after sinking thousands of pounds in ingredients and prep courses to keep up with the competition.

Lessons to Learn: If someone is begging you to sign up to something while claiming how amazing the opportunity is, question WHY they are having to beg. This goes for any "opportunity" such as advertising or other stuff that involves considerable time and/or money investment.

And never ever succumb to someone stroking your ego. You're really not that amazing (and by you, I mean me).

5) Trusting Social Media Polls

I'm beginning to think Instagram polls are trolls! About 50% of the time, the polls say something completely different to what our sales say. For example, I had asked if I should make a floral cake in black buttercream or white. The polls came in overwhelmingly in favour for white BUT the one in black outsells white by a looooong way.

Similarly, I threw out a poll asking if people would be interested in buying a mug with our cult favourite HERO Sponge recipe on. Again, we had more than 5,000 responses for YES. I ordered 500 to be made. We were then left with hundreds of them taking over our office. I love the mug; the poll was not a purchase order.

Lessons to Learn: Don't be a mug. Social-media interest is not the same thing as paid demand. We learnt to validate merchandise with smaller runs rather than treating enthusiastic poll responses as guaranteed sales.

These are my painful top five business life lessons. I hope they're useful to you. Or relatable! Let me know in the comments.

Muggy Love,

Reshmi xoxo