Gerhard’s blog: Business evolution

Gerhard
Gerhard Jenne: thoughts on business evolution
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From pruning the product selection to a decision to exit the wholesale arena, Gerhard Jenne finds his business moving into autumn with a renewed vigour. 

Gosh, I can’t believe it is October. Well, I shouldn’t be too surprised; after all what’s happening right now has been in the planning stages for some time. Still, it creeps up on you and as you make one change, the next one is also only a few weeks away.

As the leaves start falling and the days are getting shorter, we made some seasonal changes; gone are summer berries in favour of apples, and lemon tarts make way for pumpkin and pecan pies.

This time round, even the classic ‘Coffee Walnut’ was given the chop to make room for ‘Carrot Passion’, a moist carrot & hazelnut sponge with a new mascarpone-based aromatic passion fruit frosting. There will no doubt be protests from the Coffee Walnut’s die-hard fans – there are a few – but without being strict, we will either never have room for anything new or will end up with a range that becomes unmanageable, and bewildering for the customers too.

Getting rid of some of the ‘dogs’ and allowing ‘stars’ to shine is what it’s all about, according to the Boston Matrix management tool, on which we have been busy plotting our products during the summer. It’s a tough exercise and not for the emotionally faint-hearted or those who can never say “no” to a customer! On the other hand, if you’re that sort of person, you probably should get the secateurs out and give your business some much-needed pruning.

It’s not just products but our business activities that have also come under scrutiny. Wholesale is something we did historically to break even, to make use of surplus capacity, or to maintain a higher staffing level in the bakery – all very good reasons for continuing, one would think. But when we looked at it closely, with the combination of lower prices and slim margins versus the high cost of ‘free’ delivery, especially in traffic-clogged London, suddenly it didn’t make that much economic sense and would only work if we were able to crank up volumes.

Credit control, from invoicing to chasing payments, can be very time-consuming and treacherous for a small business too. Many years ago, when we first took our financial control in-house, we employed a book-keeper, who was overwhelmed by the sheer complexity of it all. We realised something was going awry when we discovered a huge stack of unprocessed paperwork under his desk. He took the pains of covering it up with some well-thumbed copies of the Sun. Needless to say, we parted ways and, thankfully, our finance department as evolved since. Credit control is externally managed and our in-house accounts department runs like clockwork and is worthy of praise.

However, because of the increased demand from high-margin retail customers and pressure on production to deliver the goods, our wholesaling activity is also coming to an end very soon. All this just as we opened a temporary pop-up brownie shop in Old Street Tube Station, with a further one coming on stream in Spitalfields Market. The evolution of the business continues... and long may it last!

www.konditorandcook.com

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