Sunday, August 18, 2013

Pay More For Smarter Workers

Interview with Ernest Lepore
Chef/Co-Owner Ferrara’s Bakery

With Jeff Yoskowitz, Jessie Riley and Kathryn Gordon of Food Startup Help

Kathryn:  Hi Ernest!  I met you a few years ago when you came to my French macaron class at ICE (Institute of Culinary Education), to be able to help train your staff on macaron baking consistency. 

I thought it would be interesting for our readers to talk to you, since you’re the steward of a bakery that’s been successful in NYC for 121 years.   It’s also fairly unusual, in my experience, for an established bakery owner to take classes!

Ernest:  I see myself as someone who teaches cooking, to my staff.  We have 30 people in our NY kitchen, and 30 in our NJ kitchen.  In NY, I oversee 2 production shifts a day.

I try to stay current and take baking and other classes.  I have to help our product evolve with the market, too.

Note:  Ernest has French style macarons on a red velvet cake slice – neither of which would have been featured when the bakery originally opened.

                                                   1926 Hobart mixer still going strong!

Jessie:  How long has your staff been with you?

Ernest:  Our bakers in the key positions don’t turnover.  We are on our 5th head baker in 120 years.  The production manager has 44 years in production, and will be retiring soon. 

Jeff:  What do you attribute to your low staff turnover?

Ernest:  I pay more for smarter workers.  If they get their health department certification, they get $1 more an hour.  I want people who know not to put the eggs in the wrong spot – and others who if they see the eggs in the wrong spot, identify the issue and know to move the eggs.

Kathryn:  How else do you keep a business going for so many generations?

Ernest:  Well, I have a great uncle and an aunt who will critique me if they think the honey syrup on the struffolli was cooked too long – even at a family funeral!

Each generation has to figure out how to “pass it along.”  I see myself as a steward of our retail bakery in Manhattan, our import/export business, and our wholesale manufacturing facility for sfogliatelle and cannolis (in NJ).  That takes several family members to act as “business men” – not all have to cook.  But everyone has to decide who wants “to be in” and the others buy out the shares of the family members who don’t want to work in the business. 

Jessie:  You sell breads and traditional Italian pastries, and you have added to your product line over time.  Do you know your food costs for each item?

Ernest:  You have to know your food costs, the price of flour and everything else.  Nobody taught me, I’m self taught.  But every Wednesday, before pay day on every Thursday – I know every dime I owe everybody.

Pastry shops used to make a lot of money.   The margin on pastry is good – and 50% of our sales are gelato, which is great (it has a higher profit margin).  But generally there is more competition now for good Italian and French pastry. 

I know not to overprice the café.  A café experience is not a steak dinner.  It has to be priced to ride out economic downturns – our traffic should stay constant.  And people like to come back to what they know – you can’t always change everything.  Keep to the matrix – it’s the experience people come back for.

Jeff:  What one factor do you attribute that keep your customers returning?

Ernest:  You have to be primarily service oriented. People want to have a good time.  Your front of the house staff are more important than the product – they have to first say good morning and then good bye to everyone. 

Kathryn:  Ernest, you keep just throwing out “keys for success.”  I’m just going to list them for our readers! 

·      You have to earn an “A” every day – performance grades are not a “given”
·      Cooking is a business, not just what you love
·      Pay and feed your staff well.  To be paid fairly is a reasonable request.  Family meal is served here daily from 12:30-1:30 and everyone takes a break

Jeff:  Do you have any other advice from your work in the 121 year old family run business that you would share with new entrepreneurs?

Ernest:  Owning your  real estate versus just renting helps balance out a bad food year.  It would be too much for us to rent now – it’s very good we own the (5 story) building.  It’s a difficult business to start in, and 90% of new businesses fail because they are undercapitalized.  I have heard that 70% of the remaining 10% who make it through their first year fail in their second year.

You need a business plan, and to be prepared for a weak (not great) economy.  Be conservative with your business financing and decision making.

Jessie:  Thank you Ernest so much for giving us a tour and for all of your valuable insight.

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