Like many, I'm toying with the idea of opening a specialty cake shop in our town. There isn't one bakery that takes custom orders or uses fondant. Does anyone know if there is a checklist for a start-up bakery business? What licenses to get, what health department regulations are, taxes, etc. I know that much of this will vary from state to state, but is there a general check-list out there that I don't know about? Any input is appreciated!
I was told that you can click on your state website and get what you need off of it for permits, etc. I believe on the Cakecentral site there is a thread that tells you exactly what to do. Look in the forums and scroll down. I believe its there.
this looks like another case for...JANH...past posts hero...
I live in Texas, so I don't know if the information I have will be relavant to you.
Here's a link to all the information I've provided to other CCers:
For a checklist, see if your city has S.C.O.R.E. I know there is one in a couple different cities and if you click on the link I have inside the link I just posted for you it has a bit of a "checklist".
Here's a quick summary:
1- RESEARCH THE COST OF EVERYTHING YOU CAN POSSIBLY IMAGINE YOU WILL NEED. Not just the bakery equipment. Also think about:
phone service, extra line for fax, internet,
ask local businesses near your potential location about utility bills (if they are willing to share that kind of info)
garbage dumpster service,
front end displays,
tables & chairs if you will offer seating,
liability insurance, workman's comp insurance if you'll have employees,
printing costs for brochures, mailers, business cards, order forms, possibly menus
uniforms if you want them (embroidered aprons, printed t-shirts, etc)
building supplies to make it suitable as a bakery (kitchen approved flooring, scrubbable wall panels, kitchen approved lighting, correct plumbing & fixtures...)
2-Find a great location that is available.
3- Stalk said location to become familiar with foot traffic/potential customer patterns. Analyze parking, nearby businesses, 'feel' of the neighborhood (upscale, bargain stores, homey, modern, etc). Decide if the great location is perfect for your store concept. For instance, you don't want to try to do something with high-end prices next to a thrift store & McDonald's. The people who frequent those stores aren't likely to drop lots of cash in your store. Likewise, a homestyle crafty shop may not draw in sophisticated boutique shoppers, though who can resist the smell of a bakery?
3- Contact landlord to peek inside. Is it 'kitchen' ready or do you have to build? Is landlord open to you building in his space? Find out what electric service the space has. (100 amp, 220 amp...) You'll need to know this to make some decisions on equipment. How much work will be required by you to make it a bakery? Keep in mind that you are investing your time, labor and building materials in someone else's real estate. Will the space be large enough for you in 2 years when business has grown? 5 yrs?
4- WRITE A BUSINESS PLAN. CONTACT YOUR LOCAL SCORE OFFICE OR FIND A GOOD BOOK FOR HELP WITH THIS. IT IS WORTH THE TIME AND HASSLE TO DO IT. TALK TO THE BANK YOU INTEND TO SEEK FINANCING FROM, THEY CAN GUIDE YOU ON THE KIND OF INFORMATION THEY ARE LOOKING FOR TO LEND MONEY.
5- Contact health dept. for local certified/licensed kitchen requirements. Most go by the state codes, which are available online. Also, contact your city clerk's office to find out what type of business permitting is required. If you'll be building, contact the local building/zoning dept to find out what they require to issue building, electrical, plumbing, etc permits. Ask landlord if he has a to-scale (preferable 1/2" scale) drawing of the space, or contact an architect to draw one for you.
6-Take a Food Sanitation/Safety class and get your certificate.
7- Agree on terms on the lease. Don't be afraid to negotiate with the landlord. He needs you as much as you need him. For example, my landlord was willing to give me the first month rent-free if I prepaid 5 months of rent. I also negotiated that when I renew my lease in 1 year, landlord can not raise my rent more than $50/month from my current rate.
7-Get busy! The first thing I did when we started our build out was put a display in the windows to let people know what is coming. Contact any builders, electricians, plumbers for quotes/bids. Get your building permits and begin working on your 'dream store'! Don't go crazy with things that you don't need right away. Try to choose things that can be upgraded as your business grows rather than getting the super deluxe models immediately. Your start-up costs will be big enough, don't make it worse by buying (and probably paying interest on) something you won't need for 6 months or whatever.
8- Get your FEIN and state sales tax numbers. Once you have them, contact vendors to establish accounts/wholesale status with them.
That's as far as I've gotten so far, so maybe someone else can fill us both in on where to go from here!
edited to fix a typo & add step 8.
Wow! Not much that can be added to the above post! Great job!
I will reiterate GET A BUSINESS PLAN STARTED!!! It is not only needed for any financing you need to go after, but is a great exercise to get you thinking in the right direction. It is not a document that can be slapped together over a weekend....as I've mentioned before, mine took over 9 months and ended up being over 40 pages. You'll most likely need a CPA to do at least some of the financial requirements unless you have a good accounting background.
thanks for posting this.... do you think the same thing applies for someone opening a shop at home... it will be in a detached garage with a separate drive?
If by "same thing" you mean the business plan, I would strongly recommend it, just for the personal information and exercise it will give you. You'll be amazed how much you learn during the process and how it "gets your mind right!" on the whole business aspect.
I googled business plans and I found this site that has over 500 examples of plans to look at. That might get you started or give you some ideas on it. I made one and it had about 25 pages and it felt like it took me forver. Good luck with your new ventures.
edit- forgot to add the website link.
I have started writing my business plan for my catering business. I agree that it really helps you "think clearer". You have to realize that this is not a sit down and do it over a weekend type of project. There is research to be done - target population, competitors, etc.
Good luck on your new venture. I am a business owner myself (not bakery, but hair salon) and I know all the trials and hardships that come along with these very early stages. Please don't forget there will be far more good in the future that will outweigh the tough times, so don't fret when these things come up. Just smile and know that good things are coming your way. There is nothing better than being your own boss.
Good for you for going for it!!
Thank you so much for your input - very helpful! I've been working on a business plan for about a month now, and that's probably the biggest challenge, being so time-consuming. The storefront that I'm looking at is in a newly developed downtown area surrounded by boutiques and specialty shops, and the lease is unbelievably low. However, it's one very large room with a small bathroom, but there isn't any sort of kitchen in it. We would have to build everything, and that makes me a little nervous. This isn't my area of expertiese, so I'm trying to be level-headed and ask the pros lots of questions. I appreciate everyone's help and encouragement!
When you are ready to negotiate the lease, ask the landlord to cover some costs, such as bringing the amps up to 400 or 500 to meet your equipment needs (most stores are in the 200 range .... not nearly enough for a kitchen); ask them to cover the cost of flooring or ceiling treatments to meet your health dept requirements. The worst that can happen is they say no.... but negotiate it.
Thanks very much for this comment. It help me to think about my ideals.
Tks again and pls keep posting.
This is an awesome thread!!! We are moving in that direction, and trying to get all the info and knowledge we can! Thanks for posting this!
A full buildout in raw retail space, about $100k and up. If you have no business experience and no personal money, you may want to talk with a bank first, as they are very unlikely to loan in this situation. From the original questions you asked, my guess is that you need much more experience and business knowledge before you look for retail space. 85% of new businesses fail in the first year due to lack of experience and lack of backup funds. Even if you have the cash for the buildout, you are still very likely to lose it the first year from lack of basic business knowledge. I have seen this happen more than a hundred times.
I am not trying to be negative, just very realistic. Someone with business knowledge does not ask basic questions. They know where to go to get the information and they can already navigate the process. Starting with a storefront is much different than a separate or rented kitchen.
I for one appreciate the input in this thread. Thank you.
alot of great info. Thanks for saring.
Great advise on page 1. I would also add that it helps to work with a commercial broker. I was lucky I found a good one. There is a lot of homework you can do yourself without one. My broker told me that he had never seen someone as prepared and as knowledgeable as I was. But he also was able to get me into a lot of sites that I would not have been able to do on my own. He was paid commission from the commercial owner, so it was no cost to me. And most, if not all, commercial owners work with them also. I never encountered an owner who stated that they did not like to work with commercial brokers.
He also gave us valuable information that we could put into our business plan. They can tell you the lease rates of the area you are looking at, the traffic volume, the income level of the households, and other pertinent aspects of each area you are exploring.
I don't want to get into much detail. But had I not worked with a broker I would not have the site I have today. I might even still be looking for a place. Just like home real estate brokers, you have to be careful. I am not saying don't trust them. But if you intuition is saying one thing and your broker is saying another, go with your intuition. I got lucky with my commercial broker. Just like any field, there are goods ones and there are not so good ones. I would suggest a sit down with them to get a feel for how they work.
I did find a lot of sites on my own, but they were not as ideal as the one I have now (one was in the same plaza as Panera Bread who had a noncompete clause in their lease that no other food establishments could be in the plaza. The plaza owner was willing to get a waiver, but I would have been very limited on what I could sell, including no coffee and no seating ever!)
Good luck and have fun. This is the best thing I have ever done for myself. I could not be happier.
I came across this great link with a Power Point Slide with info on a Developing a Successfull Business Plan and thought I would share it with folks http://www.paloalto.com/assets/sba_course/player.html
I've had my custom cake business open for almost 2 years now and we are in the process of opening our retail storefront and adding a full retail side. So, I'm going through this for the second time.
1. A good business plan is a must. I had several copies of business plans to use as guides and the one I had when we opened originally. I still spent about 3 or 4 hard months on it. I spent one entire day working on the menu and prices. If nothing else, if makes you realize how much you actually have to think about and do to get open. When I went to the bank, I was completely prepared and they gave me the loan we requested without a second glance almost. It was well worth it.
2. It's good to get a commercial broker. It was something I had never thought about before and he was able to work miracles for us. Our city is now requiring a minimum of a 1000 gal grease trap and this site, which was a caterer until January, only had 100 gal grease trap. The site owners are putting in the grease trap for us. We would never have been able to make that happen. We also got a great rate.
Good luck, but really it's not about luck. It's about hard work and being prepared.
Good luck, but really it's not about luck. It's about hard work and being prepared.
save, great links and info