I could use some advice. This morning, after delivering several samples to the manager of my local market, he & I came to a preliminary agreement on me baking breads for him. There is still quite a bit to be "ironed out" and settled on, but I'm thrilled to be given a chance to do this. My previous experience is having taken a practically empty space and turned it into a functioning bakery, producing breads and bagels . . . all done by hand from start to finish. I've never worked for someone else in the food industry, especially in this capacity. Here's the deal so far : I use his space, his equipment, his utilities. Who purchases the ingredients is one of the issues that isn't settled yet. I'll be baking there, not as an employee, exactly, but more as an independent contractor. Do any of you have advice / opinions on how to base my compensation? My thoughts are, until I've proven myself, an hourly compensation for my time ( wouldn't mind hearing what anyone thinks is fair here ), and a percentage of all loaves sold. I'm in a position where I can start out slow and gain his trust on bread quality and workmanship and not have to worry about income for a lot of bills. However, I don't want to under-cut myself, and not get paid what's fair. Thanks in advance for your time and thoughts. I'll keep you posted on my progress.
whats a "local market".. is it a supermarket?.. think about going on as a consultant or caterer or self employed.
you can think of yourself as self employed, you order the products, get delivered to his facility and you can reimburse him for electricity, etc.
whats the quantity of loaves will you be producing? if its low, I would go with him covering the cost because you won't be making enough bread to pay yourself. 200-300 loaves a day isnt alot of cash if you wholesale them. retail you may get 2.50-3.00 dollars depending on the loaf.
these are just obscure suggestions but make sure you cover yourself in whatever you do.
Sounds like a great opportunity for you. As far as compensation goes it's a difficult call to make not knowing all the factors, but I'd say if you have formal training and journeyman trades qualifications you should not accept 'anything less than the average of what your peers make'. The same applies if you don't have trades qualifacations. If you think you can get more ..go for it if your confident you can deliver the product. Good luck and keep us posted.
If you're using his space, equipment, utilities, (customers?)...you're not an independent contractor. At least in the building sense, an independent contractor comes with his/her own tools, own insurance and all of that stuff. I think it'd be easiest albeit less romantic to be an hourly employee working under him. He's got the wholesale accounts and the risk and insurance, so why not set an hourly rate that works for you and he can pay you for any time you're working for him. He buys the materials and anything you deem necessary for the job - then if it fails, it's his problem.
Maybe revisit the relationship at 3 and 6 months, then you'll see if you're both happy. If not, it'll be a lot easier to get out of; if so the relationship can adjust to meet your changing needs.
you are going to have to do some estimating: A) figure out how many pieces you can sell in a day/week/month. B) figure out how much you must be payed to give you parity with others in the field. Divide B) by A). So, if you can sell 100 loaves a day and you want to earn $150 a day, you need to be payed $1.50 for each loaf sold. That’s the labor cost per piece. Add on the cost of materials, overhead, and whatever profit margin your partner wants, and that is your retail price per item. Doing this exercise will also tell you if you can sell at a price that is in line with your competitors.
I would definitely make it an article of your partnership agreement that YOU choose and order all the supplies. Otherwise, he will control the quality of the final product. If he buys cheap, junk flour or yeast, etc. he can make it impossible for you to make good bread. So, to guard your reputation for quality, you buy the ingredients.
My mother worked this way for many years, quite happily and successfully.
I wish you the best of luck.
You should start with hourly and include a percentage of sales once your hourly is met based on volume. Example 13-15 dollars per hour, 8 hour shift you make 300-400 loaves totaling 1000 k gross average. Take 15% percent of sales and you and him have an incentive to produce more volume and even explore outside wholesale. Good luck!