Monday, November 3, 2008

the pricing dilemma

yep, it would be GREAT if everything were just free and money didn't exist.

don't you think?

I've run into another pricing dilemma. The cost of wheat flour has come back down - not down to what it used to be, but down from the stupid price it went up to in the spring. This is a good thing. It means that now, maybe, we're actually turning a profit on bread products, where we have been barely covering costs for the past 8 months. Am I evil to think that?

A big part of my brain says, "now hold on, missy - if your costs are going down, then you have to put your prices back down"... which conflicts with the other big part of my brain (yes, my brain IS that big) that says, "but, but, we were finally maybe going to start making enough money to pay to be here!"

I guess what I'm looking for is some kind of absolution - from our customers, ultimately... is it ok for us to make a decent living doing what we're doing? or are we cutting our throats by charging enough and thus going to lose customers because our prices are higher than the grocery store or the joint down the street.

Since we started this adventure we have NOT made any money.
The first year we covered our regular bills... more or less. There was nothing extra. Then we had to get a new vehicle, and to do that had to remortgage our house... that meant bigger payments, more payments... which we thought we could handle. Suffice to say, we made some mistakes.

So that's where the guilty part of my brain comes in - it's not our customers fault that we made some financial mis-calculations and they shouldn't have to be penalized for that by us putting up our prices.

At the same time, that other side of my brain says... "ya, but if we don't put up prices, then we'll have to not exist, because we CAN'T exist on what we're making now."

So - what to do??

We've since found ourselves in a less than pretty position, with the bank on the verge of taking our house away, behind on the rent for the bistro, wolves at every door and a few windows too... and I'm questioning what the heck we're doing.

We do this because we love to do it. We love the sense of community that we've built here at the bistro. We love our customers and the fact that we know so many of you by name (and your grandkids names, and what your sister's husband's brother's son is doing next weekend). We love that we are providing quality, delicious food as an alternative to the chain restaurants up the road. We WANT to be able to offer you more - like community dinners, and opportunities share and connect like we did at thanksgiving this year.

Problem with it all is this - we have to put prices up by 20% in order to actually start seeing some improvement.

Alternative solutions:
- reduce portions but keep prices the same - i can't see ANYONE being happy with THAT idea - we all hate it when chocolate bars get smaller... it would feel the same for nanaimo bars and sausage rolls
- hold some fundraisers... hard to do for a "for-profit" business, but not out of the realm of possibility.
- attract some investors... not our ideal situation, as that usual means they get a say in what we're doing, but then if they're experienced in this business, that might be a GOOD thing.
- leave the bistro in the hands of some $9-10/hour employees so ian and i can go get real jobs that pay actual money so we can become our own investors.
- find other revenue streams - I currently do web & graphic design still on the side, which helps, but it's exhausting to stay and do that for 4 hours a night after working for 12-14 hours in the bistro already.

We're very open to ideas... so if you have one, don't hesitate to share!

There's one other place where we have a pricing dilemma...
wheat vs. gluten-free products.

Brown rice flour currently costs 5x more than wheat flour.
so, in theory, gluten-free products should cost significantly more than wheat products... right?
but how is that fair? I have a real problem penalizing people for their diet, which in most cases they wouldn't choose if they didn't have to. Why should a gluten-free muffin cost $3 when a wheat muffin costs $1.85? It's the same problem i have with organic pricing... as far as i'm concerned EVERYTHING should be organic and it should all be affordable.

Perhaps we'll take an in-store poll... that worked for the bread pricing... the large majority voted to get the identical product but pay more.

ugh. why can't it be an easy, obvious, no-brainer solution?

see you on the wild side...

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