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Offline waltertore

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Price increase-what an experience
« on: February 07, 2014, 03:17:06 PM »
I decided a few weeks ago to up our whole pie prices $1 each.  Most of our whole pie customers didn't bat an eye and many pay us $5-10 over our price per pie.  Yesterday I started informing the staff at our high school that starting Monday slices would go from $1 to $1.50 due to cheese prices going up and  up.  Over half our pizza business is by the slice during the 3 lunch periods.  I would say 50% were upset with the increase.  I had to hold my tongue, sort of did.......     I was like - what the heck is .50 cents to a person working full time?  The Donatos slices in the school cafeteria are $2.25 each.  One staff member suggested I buy cheaper cheese.  I said I would rather not make pizzas than use cheap cheese.  We shall see what happens to our sales.  I can't wrap my head around people being so frugel and today I got a lesson on  how many people out there are.  Whatever happens I am not changing our quality.  That is the downfall to most every food establishment.   I was at a high end restauarnt  a few weeks ago talking with the owner and helping him with their pizzas.  He was using american parmisan cheese.  I asked why he wasn't using imported Italian.  He said he has to cut corners all over the place with stuff like that.  This is a place that will cost you and your date a $100 to eat a full meal.   He is a award winnng chef and is frustrated beyond words with not being able to get decent help.   So, the food is mediocre IMO, the ambiane ritzy, and the prices high.  This is a typical scenario.  Amen.  Walter


Offline dmckean44

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Re: Price increase-what an experience
« Reply #1 on: February 07, 2014, 03:29:42 PM »
You live right in the middle of the country where people are most frugal. I wouldn't worry about it, they'll adjust to the new prices. The last thing you ever want to do is lower quality. If you give your customers low prices, your pizza sucks and then nobody will eat it. Pretty soon those Donato's slices will be $2.75. Food prices have gone through the roof in the last ten years.

Offline waltertore

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Re: Price increase-what an experience
« Reply #2 on: February 07, 2014, 03:37:17 PM »
You live right in the middle of the country where people are most frugal. I wouldn't worry about it, they'll adjust to the new prices. The last thing you ever want to do is lower quality. If you give your customers low prices, your pizza sucks and then nobody will eat it. Pretty soon those Donato's slices will be $2.75. Food prices have gone through the roof in the last ten years.

thanks!  This is my first experience living middle America.  It  is very different than my NJ upbringing and living in Austin, SF/Sonoma County, Brussels.  People there get into deep stuff with food culture.  Here it is more about who gives me the most for the least amount.   I am not knocking this but is stuns me to say the least.  I had to back up today because back home I would call out a person complaining as a cheap SOB.  Here they take being a cheap SOB very seriously.  Like I said, it is a culture shock on some levels.  I am in their town so I have to keep my mouth shut out of respect but I will never cut quality for quanity.  I will say next week if people complain " I am so sorry to have to raise prices but that is what it takes to keep the quality where it is at and it is against my religion to cut back on quality :)"  Walter

PS:  My principal came in and said " I hear you are having a price increase".  I told him yes and I couldn't belive people were complaining.  He said they do the same thing when the soda machines go  up a quater at school.  He said ignore it and they will accept it.  I learned a lot today!
« Last Edit: February 07, 2014, 03:46:28 PM by waltertore »

Offline bigMoose

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Re: Price increase-what an experience
« Reply #3 on: February 07, 2014, 04:04:35 PM »
Walter we are like that here in the midwest rust belt.  In the later years, I would always meet with the Dad's of the boys that helped around my Mom's home from Church.  I would tell them to just accept what Mom  would pay them, then call me, and tell me what they did and how much she paid, and I would make things right.  Till the end, she believed $3 was the appropriate payment for cutting her grass and trimming the hedges.  Not $3 for each, but for both!  :'(

Keep up the good work with the kids, and the quality of your Pizza!  I ate the last of your NY pie a few weeks ago, and am longing for more... have to make a trip some day, but reading your posts, I'll have to schedule it a few weeks in advance!   ;D  Happy for the business the article brought your way!  You and your team deserve it.

Offline waltertore

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Re: Price increase-what an experience
« Reply #4 on: February 07, 2014, 04:35:41 PM »
Bigmoose:  Your mother sounds like a real character.  Things are going great and thanks for the support!  You are welcome anytime.  We made bagels today for Mrs. Wexler, wife of the owner of The Limited or some such place.  Next week we have a team of the top school adminstrators for the county coming by for a visit. Things just keep getting better!  Walter
« Last Edit: February 07, 2014, 04:37:19 PM by waltertore »

Online scott123

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Re: Price increase-what an experience
« Reply #5 on: February 07, 2014, 05:56:27 PM »
Walter, from the appearance of your previous pies, I'd estimate that you're using no more than 12 oz. of cheese for an 18" pizza.  By going from 1.00 to 1.50, you're increasing the price of a whole pie from $8 to $12. There's no way the price of your cheese went up $4 for 12 oz. (an additional $5.33 per lb.).  If you were paying $3/lb for Grande by the case, that would mean that you're paying $8/lb for Grande now.

Your customers have a complete right to freak out, imo. 50 cents might not mean all that much, but a 50% markup on food items- especially in an economically challenged area, is excessive.  How much more are you paying for cheese? An extra 15 cents a slice would cover an increase of $1.60 per pound. Are you paying more than $4/lb for Grande?

An extra dollar for a whole pie to cover the cost of cheese is completely reasonable. An extra four dollars to cover it isn't.

Offline waltertore

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Re: Price increase-what an experience
« Reply #6 on: February 07, 2014, 06:11:27 PM »
Walter, from the appearance of your previous pies, I'd estimate that you're using no more than 12 oz. of cheese for an 18" pizza.  By going from 1.00 to 1.50, you're increasing the price of a whole pie from $8 to $12. There's no way the price of your cheese went up $4 for 12 oz. (an additional $5.33 per lb.).  If you were paying $3/lb for Grande by the case, that would mean that you're paying $8/lb for Grande now.

Your customers have a complete right to freak out, imo. 50 cents might not mean all that much, but a 50% markup on food items- especially in an economically challenged area, is excessive.  How much more are you paying for cheese? An extra 15 cents a slice would cover an increase of $1.60 per pound. Are you paying more than $4/lb for Grande?

An extra dollar for a whole pie to cover the cost of cheese is completely reasonable. An extra four dollars to cover it isn't.

Scott:  I think you misunderstood.  We use about 7-8 oz of cheese on an 18" pie.  At $1.00 a slice that is like the price we paid as kids.  Moving it up to $1.50/slice to me is no big deal and it keeps it to quaters so my kids can easily make change.  Grande is going for close to $3.60/lb right now.  Put the DOP P.R, imported oregano, 7/11 tomatoes, the multi day ferment in fridge, fresh basil topping, pavone pepperoni that is $90 for 25lbs, and you got a deal IMO at $1.50 slice especially when if you walk across the hall to the cafeteria and buy a slice of a 14" donatos pie for $2.25 that is like a piece of cardboard.  No one in this area is using ingredients/processes like we do and they charge a lot more than us.  We charge $9 for a 18"cheese pie in a box/$10 for a pep in a box.  Am I off base?  I bet we will not lose much business and like my principal said they like to moan but will keep coming and get use to it.  Plus the ones complaining are teachers making 40-70k a year not the classified staff-custodians and support staff who make more like 10-15 bucks an hour.   I have watched ingredients go up incredibly fast since we opened 2 years ago.  A 25lb of hersheys semi sweet choc chips that we use for our cookies was $46 two years ago.  Today it is $64.  Flour is one of the few items that has stayed steady. Walter
« Last Edit: February 07, 2014, 06:20:12 PM by waltertore »

Online scott123

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Re: Price increase-what an experience
« Reply #7 on: February 07, 2014, 06:34:23 PM »
Walter, I'm not talking about what your pizza is worth. If you want to tell your customers that your pizza is worth more- and that's the reason for the increase, then I think you'd have firmer ground to stand on, but, if you attempt to justify this increase solely from a perspective of cheese cost, even people that are outside the industry are going to have enough common sense to see through that and know that your cheese hasn't increased that much.

Your initial price of $1 was too low and didn't/doesn't reflect the quality of your product.  I can definitely understand your desire to want to rectify that, but, unless you want to really anger your customers, you should consider increasing the price incrementally.  It doesn't matter what a product is worth (your pizza is worth way more than $1), if people are used to paying a particular price for your wares, you really can't increase it by that much without expecting considerable pushback.

I'm sure that you'll keep selling pizza just fine and, in a few months, this will all be history, but angering 50% of your customers may not be the way to go.

Offline waltertore

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Re: Price increase-what an experience
« Reply #8 on: February 07, 2014, 06:47:33 PM »
Scott:  I hear you.  I work via my gut and not my  head.  My gut told me to do this.   50% may have been a high estimate of complainers.  This is the first time I have encountered a negative response to our food and 10 might have seemed like 50 to me ???.  Many people said that price was still a deal.  Like you said in a little while, like my principal said about the pop (soda out here) going up in the vending machines, it will all be  history. 

The good news is sales outside our school are really picking up.  We had a great article a couple weeks ago on the front page and we got to sell our pies at a recent basketball game.  The basketball team is right up there in the state rankings and about 1,000 people come to the games.  The booster club that sells snacks said our pies sold out almost immediately vs. the donatos/little ceasar pies that moved very slow.  They want me to make pies for all the games and several big fundraisers.  the problem is the games are at night and I am too tired and getting kids in there to help is iffy at best. Most of my students parents are cognitively delayed and don't own vehicles and if they do are unreliable at best. The fundraisers are weekends and again I have the same problem.  One lady ordered 5 pies today and I asked her how she found us.  She said they ate our pie at the basketball game.   Anyway, you can't please everyone.........  Walter

PS  We made bagels today for the Wexners.  They are big time out here - owners of the Limited and donate millions to Ohio State University and other charities.  Mrs.  Wexner is coming to Granville HS for a breakfast Tuesday and the chef there, who we sell cookies and bagels to, asked us to make them.  We froze them today because there is no way we can make them fresh to be ready that early in the morning.  They are putting a flyer next to them. 

Online scott123

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Re: Price increase-what an experience
« Reply #9 on: February 07, 2014, 07:20:05 PM »
They want me to make pies for all the games and several big fundraisers.  the problem is the games are at night and I am too tired and getting kids in there to help is iffy at best. Most of my students parents are cognitively delayed and don't own vehicles and if they do are unreliable at best. The fundraisers are weekends and again I have the same problem.

Walter, not to sound like a broken record here, but these opportunities for increased sales (opportunities that seem to be increasing rather than decreasing) should be less about "I can't keep up with this" and more about potential chinks in the bureaucratic armor.  Every time someone asks you to do something that you don't have the time for, tell them "well, I would LOVE to do this for you, but my schedule is jam packed.  I could definitely swing it if I had an assistant, but bureaucracy is in the way.  If you could talk to the powers that be about how wonderful this will be for the school, perhaps we could get through some of this red tape, I could get an assistant and we can make this happen." Booster clubs typically have some pull.  Maybe they, on their own, couldn't resolve the assistant issue, but, over time, if you get enough powerful people saying "get this guy an assistant already (the 'right' assistant)" it could happen.

You should really have a strong enough assistant to completely cover your duties in the PM, with some overlap midday- perhaps something along the lines of you working from 8 am until 4 pm, with your assistant working 1 pm to 9 pm.


Offline waltertore

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Re: Price increase-what an experience
« Reply #10 on: February 07, 2014, 07:33:15 PM »
Thanks Scott and I agree.  I have asked more times than I can count for an assistant.  Each time the answer is- You ran yours out, we had to put her in another room, no budget to create a new position, and it is a union shop.  If I did get the budget for one I would not even be included in the hiring process.  First the job would go out to all current employees in the district -people like bus drivers, custodians, classroom aides- all of whom will most likely have 0 experience in what we do.  They would try the job and if they liked it they get it and if they didn't the next in seniority would try it, etc. .  If none of them wanted the job then it would be offered to everyone whose job was cut within the past 5 years.  If all of those people said no then it would be posted to the general public.  The school system is a monster in waste and inefficency.  As long as I can pull things off I can continue.  I can also tell my principal that I am burnt and want to go back to teaching paper and pencil stuff to my kids.  He couldn't argue with me.  The only way I will get a culinary person in here is via some sort of grant/outside funding so as not to take away a union job so to speak. Plus they would have to undergo local and federal criminal backround checks, and take a bunch of meaningless training to be legal to work with kids.   I continue to reach out to people I meet but to be honest have no extra energy to persue it on my own.  This thing could be huge if people thought right IMO.  Our dog biscuits are huge hits and you can make them anywhere. No coded kitchen needed.  Just a yearly license of 50 bucks has to be paid.  This means every special ed class in the USA could be making/selling them in their local.  I have given our recipe, labeling info, to several teachers who came to observe our program.  All they need to do is come up with customers.   I could even see walmart and the big pet chains carrying them and be supplied regionally by schools in the area.   Not one of the ventures I helped start has taken off.  All you need is a pasta roller machine, rolling pin, cookie cutters, a mixer, a few trays and an oven.  It is pretty fail safe to make, has unlimited shelf life, and dogs love them.  Comon sense makes no sense in school systems.  This is why our best minds never go into teaching.  I often wonder what the heck am I doing in this system.  It never ceases to frustrate and the hoops I have to jump to keep this thing going are beyond anything I experienced in the private sector.  Then my students come in smiling, get their uniforms on, and go to work.  How could I abandon these poor kids that have finally found something they can do that has meaning in our culture?  Walter
« Last Edit: February 07, 2014, 07:42:03 PM by waltertore »

Offline pythonic

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Re: Price increase-what an experience
« Reply #11 on: February 08, 2014, 06:36:02 AM »
$1.50 for an 18in slice?   Where do I sign up?  That would cost $3.50-4 by me.

Nate
If you can dodge a wrench you can dodge a ball.

Offline waltertore

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Re: Price increase-what an experience
« Reply #12 on: February 08, 2014, 07:28:51 AM »
$1.50 for an 18in slice?   Where do I sign up?  That would cost $3.50-4 by me.

Nate

thanks Nate!  We are almost up to overnight shipping :-D  Walter

Offline gabaghool

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Re: Price increase-what an experience
« Reply #13 on: February 08, 2014, 01:45:07 PM »
Walt
Stick by your guns.  Your pizza is obviously tops.  You are dealing with teachers, right??  I would think so, and teachers are the worst of the worst as far a cash is concerned.  I know it sounds like a generalization, but 30 years in the business has shown me that it is a just generalization.  Teachers are tough....but, the gravy train has passed.  A buck fifty for a slice is absolutely fair.  Their just ticked they dont have a bargain any longer ( at a buck fiddy, its still adeal).  They will simply have to get used to it.  Believe me, those that leave will realize that a buck fifty is STILL a cheap lunch and they will be back.

Walt, you know, your situation differs from a normal commercial setup.  I can bet my life that most of your customers see themselves as MORE than CUSTOMERS....that somehow, they are in a different position than a normal customer.  They feel they SHOULD get special brakes, becasue they are employed by the same people as you, right?
I worked at espn.   You should have heard the complaints on FREE coffee and 95 cent PINTS of soup (we were contracted as a non profit unit).  They simply saw the ESPN cafeteria as a BENEFIT to their employment, just like insurance and all.  Any hint of you trying to balance the books looks to them as you gouging.   Its pretty commen.  But, the good news is that they get used to change, after a while.

Sorry about your situation. People look at food service operations as DIFFERENT from most business anyways.  And it gets toughter if your involved in a food service place within  a closed enviornment.  But don't worry, if your prices are fair, your quality is good, your service is supporting, people will eventually fall in line.   I have no reason to beleive you are anything but an asset to your situation.  It will work itself out.

Offline gabaghool

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Re: Price increase-what an experience
« Reply #14 on: February 08, 2014, 01:52:31 PM »
Just to show you how right you are.  I opened my first restaraunt in 1989.  So, from 1989 to today, every SINGLE time Ive raised prices, I have almost NEVER had a complaint.
The amount of complaints, I could count of one hand.  But thats because I have a normal commercial set up.  You you have a unit within a confined enviornment, like an office building, a school,, a church, etc....people simply think they are MORE than customers. Bars deal with it all the time.    The hospitality industry constantly strives to make the customer feel that they are MORE than simply paying patrons, so when a business decision leads to bad publicity, patrons rebel.  Its a tough go.

Offline waltertore

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Re: Price increase-what an experience
« Reply #15 on: February 08, 2014, 02:55:56 PM »
thanks for the response gabaghool :)   You nailed things pretty good.  I learned right off to say no to students and staff coming in and asking for things like plates, cups, silverware, towels, use the ovens to heat up things, etc.   Many saw it as central depot for getting things for free.  Also when we first opened many staff members came to me and wanted to use the room as a place to prepare meals for fundraisers and such.  Luckily the board of health inspector was there when one asked and he stated that a certified food handler has to be on site at all times.  I had to educate the staff that although I am a teacher and this is a classroom, it is really no different than using the school cafeteria for such things (which never will happen) and unlike everyone else we do not get a dime of funding so everything used is paid for by us.  This took awhile to sink in because it is so contrary to how a school works.   That was the biggest jolt I laid out and the price increase is small potatoes next having to deal with that one.  We now have enough contracts with outside businesses and enough pizza customers from the community to not have to count on staff sales to survive.  These outside customers are nothing but thankful, generous, and work with our crazy schedule.   Most of the staff are great as well. I just got rattled by what I saw as such a simple thing.  I was looking through my eyes.  If I could get our pizza for $1.50/slice from an 18" pie (cheese and pepperoni the same price) I would be thankful.  Walter

Offline pdog

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Re: Price increase-what an experience
« Reply #16 on: February 08, 2014, 03:10:24 PM »
thanks for the response gabaghool :)   You nailed things pretty good.  I learned right off to say no to students and staff coming in and asking for things like plates, cups, silverware, towels, use the ovens to heat up things, etc.   Many saw it as central depot for getting things for free.  Also when we first opened many staff members came to me and wanted to use the room as a place to prepare meals for fundraisers and such.  Luckily the board of health inspector was there when one asked and he stated that a certified food handler has to be on site at all times.  I had to educate the staff that although I am a teacher and this is a classroom, it is really no different than using the school cafeteria for such things (which never will happen) and unlike everyone else we do not get a dime of funding so everything used is paid for by us.  This took awhile to sink in because it is so contrary to how a school works.   That was the biggest jolt I laid out and the price increase is small potatoes next having to deal with that one.  We now have enough contracts with outside businesses and enough pizza customers from the community to not have to count on staff sales to survive.  These outside customers are nothing but thankful, generous, and work with our crazy schedule.   Most of the staff are great as well. I just got rattled by what I saw as such a simple thing.  I was looking through my eyes.  If I could get our pizza for $1.50/slice from an 18" pie (cheese and pepperoni the same price) I would be thankful.  Walter

Sorry to hear you are getting so much push back.  I think you were fair to not move from 1 - 2 dollars.  Honestly what does 0.50 buy you these days.  2 gum balls???

Offline waltertore

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Re: Price increase-what an experience
« Reply #17 on: February 08, 2014, 03:26:23 PM »
Sorry to hear you are getting so much push back.  I think you were fair to not move from 1 - 2 dollars.  Honestly what does 0.50 buy you these days.  2 gum balls???

pdog:  that is how I saw it.  The number of complaints were a lot smaller than I originally posted.  I was still at school when I first posted this and guess I was shocked to have any complaints about such a small increase on a still cheap price and a few complaints felt like a lot more.  A lot of people said no problem and they understand costs going up.  thanks.  Walter
« Last Edit: February 08, 2014, 03:30:18 PM by waltertore »

Offline wheelman

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Re: Price increase-what an experience
« Reply #18 on: February 08, 2014, 05:39:07 PM »
Walter it's a crime to pay less for your pizza than for donatos!  I can imagine what a side by side comparison would reveal.  if you can't keep up with demand, you're not charging enough.
bill

Offline waltertore

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Re: Price increase-what an experience
« Reply #19 on: February 09, 2014, 07:46:19 AM »
Walter it's a crime to pay less for your pizza than for donatos!  I can imagine what a side by side comparison would reveal.  if you can't keep up with demand, you're not charging enough.
bill

Bill: Thanks!  I went into this venture cheap because where I live people are use to paying $5 for a pizza from little cesars which is on the corner adjacent to our school and also the staff had decades + of buying their lunches at certain places around the campus, the cafeteria, or bringing it from home.   Our pizza looks so different and with it being made by special needs kids we had lots of hurdles to overcome.   People think special needs and anything but good food comes to their minds.    You wouldn't believe  how hard I had to work to sell our pizza.  A few staff members are from the NY/NJ area and they bought right away but they are considered forgieners here as I am :).  Slowly, and very slowly at that, a few more trickled in usually because they were in a jam - forgot their lunch/didn't have enough/had no money to buy a cafeterian lunch.  I give credit.  If a staff member comes in and is hungry but forgot their money we give them what they want and they write how much they owe on a dry erase board. 

This has grown to people giving us a large sum of cash and posting it and then they deduct as they use it.  This is a good example of how we have grown over the past 2 years.  I started this with a Mayberry vibe as my goal.  Where I grew up in Bellville NJ there was a small Italian market on our corner called Jerry and Joes.  When people came up to pay they added everything up on the grocery bag. If people didn't have enough, Jerry or Joe (the only ones I ever saw working there other than their wives and kids) would write it down and tack it to a large wooden pole behind the register area.   That really made an impression on me.  They knew everyones name and never seemed to have a bad vibe in the place.  Between experiences like this growing up and watching the Andy Griffith show so many times, I knew as a very young boy this is how I will always run things.


People now come in regular and happy to get a slice.  I felt it time to raise the price to where we could make a bit more money.  I reminded people that we are not funded and have to be 100% self sufficient which is another thing that is the complete opposite of how schools run.  If they want to stop buying that is fine because we make enough to not need their business.  Our pizza orders are coming in at a pace that makes it exciting but not stressfull.  This is where I want to be with this endeavor.  I have lots of teacher paperwork and managing 6-15 special needs kids and regular education at risk kids is quite taxing.

I have done a similar thing with our largest commercial clients (2 school districts and a college) in that I started so cheap they figured what the heck lets try them.  Recently I compared our prices to GFS's and raised ours to just a hair below what they charge.  One clients corporate office sent me a reply that said that too large a price increase and submitt a smaller one.  I replied that was the price and if they compare it to GFS/Sysco they will find we are still cheaper and use pure ingredients with no preservatives.   They responded ok and the other 2 customers never batted an eye.  We are now moving at a steady pace that has put more money in our account than any other club in the district.  This includes the band/athletics who traditionally are top earners.  I really had no formal plan with all this.   As I look back I can say I did this and that and I did do that but it was all from my heart not my head. 

If I ever open my own place around here I will charge more for my pies.  As long as I work for the schools, work for the students is the main goal and profit needs to be just enough to have a nice cushion to replace things like mixers, freezers, washers(just did that) dryers, etc.   We have to pay cash. No credit or payments allowed.  I recently dropped close to 2k on a  new heated/humidity controlled 18 sheet pan proofing box that has made proofing our breads/bagels a piece of cake.  It also keeps pizza warm for large orders.  Up till then we had a heavy plastic cover over a rolling sheet pan rack with a big pot of boiling water on the bottom rack to create humidity and heat.

Anyway, this  has been another great learning experience for me in many ways but at the same time it is just another time of my heart telling me what to do.  I hope I always follow my heart because it never has done me wrong.  My head has done me wrong more times than I can count- there is a song in there somewhere :)  Walter
« Last Edit: February 09, 2014, 09:13:22 AM by waltertore »


 

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