Baking Business Plan

1. BAKE FOR PROFIT
YOUR BAKING BUSINESS PLAN
STEP 3

2. 1. Business
Planning
2. Buying
ingredients
3. Baking
4. Selling
In the previous steps, we looked at the four activities of a baking
business:
In each activity, an exchange of money occurs and this is called a transaction.

3. A transaction which brings money into a
business is called income.
Selling = income
A transaction that takes
money out of a business
is called expense or
cost.
Buying = Expense
Every activity in
the activity cycle
results in money
transaction.

4. Look at the table below and look at the transactions that take place in the
business activity cycle:
Activity Cycle Income Expense
Business
Planning
Telephone
Stationery
Advertising
Your Salary
Buying
Ingredients Ingredients
Transport
Baking Electricity
Equipment
Help in the kitchen
Selling
Sales Help to sell your products

5. Keeping business records means that you must write down:
 Your income ( how much money comes in)
 Your expenses or costs (how much money goes out)
Shows you information about all
your transactions. This means that
you can keep track and control all
your activities in rands and cents.

6. Why is it important to keep record of how much money is coming in and how much
money is going out of your business?
You have records
• To keep track and control all your activities
• To control your ingredients
• To price your products
Without proper
records you cannot
manage and plan
the success of your
business.
You must always know:
o The income and expenses of your business
o The salary your business has paid you
o How much money you need to keep aside to
run your business next week
o Whether your profit is increasing or
decreasing
Your business records will give
you this information

7. Profit is the money that is left over once you
have taken your expenses away.
Profit is the difference between income and
expense.
To calculate your profit, you must take your expenses away from your income.
Income Expenses Profit

8. Calculating Profit:
Income R100
Expenses - R40
Profit = R60
But you have not paid yourself a
salary, so you call this R60, profit
before salary.
If you pay yourself a salary of R40, your business records will show the following:
Income R100
Expenses - R40
Profit before salary = R60
Salary - R40
Profit = R20
Can you see that your salary is not the
same as profit?
• Your salary is a business expense
• Your profit is the money left over after
all the expenses….your salary is also an
expense.