Should the Profits of a Bakery Being Sold Be Increased?

We 're selling the firm .

The thermostat theory

The question asked in the title: Is it not possible to increase the profits of a bakery sold? who wouldn't want to get more money into their account every month?

So it's been almost half a century, and now we're witnessing a process that's commonly referred to as generational change — bakeries are being sold or passed on to children — and whatever happens, it's going to be a turning point in the life of the owner and his company.

The most important indicator of the value of a bakery or a candy factory is its ability to make long-term profits.

If the bakery owner does not want to simply liquidate his business, he can simply choose one of three ways:

if she wishes to pass on the bakery to a child, her finances must be strong enough to pay the other children and to pay him a regular fair pension;

if a sugar refinery is to be sold, the sale price should be high enough to allow a decent living for the interest on the sugar beet generated after its sale;

There's a third way, and the bakery can be turned over to a new board that will increase its profits, but to hire a new board you have to have the money right now, which means you have to increase your profits right now.

So all roads lead to the need to increase cash flows, and in order for the owner to leave the bakery, he has to find ways to keep increasing his income.

It may seem trivial and unimportant to urge candy and bakery owners to do this, but if it were that simple, everyone would do it, and we would have a millionaire society.

A mature bakery achieves certain defined and well-established turnover because it has entered a defined course of business. A bakery or bakery stops at a certain level and does not achieve higher turnover because this would require a break from a stable business pattern.

This would also mean the need for additional investments, new people, and new loans, all of which involve the risk of new unknowns and a new, troubled scale of business, and reasonable entrepreneurs avoid rapid, risky growth for sustainable development.

It's the official, often-quoted version of why you shouldn't take the risk of increasing profits.

Or maybe the real barrier to breaking through the glass ceiling of income is the mindset of the bakery owner.

I've been working on improving the value of many private companies, where it took just one small step to double their revenues, so that companies could double or triple their profits within a year, and the owners were well aware of that potential, but they didn't want to push the red button that was lifting their companies to a higher level of economic dominance.

In management psychology, there's something like the theory of financial thermostats. A thermostat is a device that keeps the temperature constant in a room. If the temperature drops, the thermostat turns on the heating. If the temperature is too high, the thermostat turns off the heating.

The theory of financial thermostat says that everyone has their own level of earnings, where they feel comfortable, and people subconsciously avoid making too much money, and when earnings fall below the individual thermostat's threshold, people feel bad, they mobilize their strength, and they raise their earnings, and that's the kind of financial thermostat that everybody has.

I've also noticed this kind of dependence on myself — to earn less, but calmly, without going out of your comfort zone, without risk.

The famous stockbroker Jordan Belfort once said that he feels lost and upset when he earns only $7 million a year. Belfort feels bad when he earns over $580,000 a month.

But it turns out that's not true. He really feels bad when he doesn't make enough money. His financial thermostat is set to such unfathomable amounts of money.

Any business owner can check the scope of their financial thermostat, and just ask themselves a few simple questions:

And what would happen if I sent a few new traders to the new neighboring markets? We all know how the revenue increases when the bakery opens up to the new markets.

W-MOSZCZYNSKI-2019-11-09

© Would I like to suddenly own a competitive candy?

® Would it be if I added a few new bakery outlets?

® Would I want my company to suddenly become twice as big?

What do you feel when you ask yourself these questions? Do you feel fearful and anxious about finding obstacles? Or do you feel like you've found hope and ways to do these things?

Wojciech Moszczyński — graduate of the Department of Econometrics and Statistics of Nicolaus Copernicus University in Toruń; specialist in econometrics, finance, data science, and management accounting. He specializes in the optimization of production and logistics processes. He conducts research in the area of the development and application of artificial intelligence. For years he has been engaged in the popularization of machine learning and data science in business environments.