Muse Posted 1 Jul 2008 , 2:51pm
post #1 of

How big of a loan does it take, ball park, to start your bakery? $100,000? $150,000? What all do you take into consideration? I'm just curious.

TIA!

Darci

22 replies
Mike1394 Posted 1 Jul 2008 , 2:59pm
post #2 of

It depends on what you want to make, and at what volume.

If your looking into this for yourself. Your biggest expense won't be $$$ it will be time lost with that new baby that is in your signature. One day you'll wake up, and say OMG how did you get to be 15.

Mike

AllCakedOut Posted 1 Jul 2008 , 4:37pm
post #3 of

Have you done a business plan?

Opening a bakery is a huge undertaking. Even if you *could* get a loan that big without a business plan, I can't see why you'd want to

snowshoe1 Posted 1 Jul 2008 , 6:30pm
post #4 of

Here's a book that might give you some insight as to the various steps you need to go through to start up and you could figure your costs from there:

http://www.amazon.com/How-Open-Financially-Successful-Bakery/dp/0910627339/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1214936860&sr=8-1

The SBA also has sample business plans.

Good luck in whatever you decide to do! thumbs_up.gif

littlecake Posted 1 Jul 2008 , 7:01pm
post #5 of

i'm small potatoes...i opened on a shoestring almost 7 years ago...it was a little over 28k.

i'm a one man show, except for my cleaning help...i got about 1100 sq ft.

there are those on here that have invested hundreds of thousands.

i'm getting older, so i don't want to take over the world anymore....i don't think my shoulders are broad enough to have all the responsibility of a bunch of employees.

it would be a lot of work, just what i do, with a 4 month old baby.

snarkybaker Posted 1 Jul 2008 , 7:07pm
post #6 of

Ours is around 2000 square ft. We had to to a great deal of rehabbing, as the building was over 100 years old and was previously a clothing store, so didn't have adequate water, electricity etc. We spent over $500,000.

Muse Posted 1 Jul 2008 , 7:09pm
post #7 of

The reason I threw out those figures was because I honestly don't know how much is appropriate. I actually have a financial backer but am just curious how much a small storefront typically runs. I know it's different from place to place, though. I know I am not yet prepared to have a business of my own, but I just thought I'd browse for now and get some estimates.

Darci

SweetConfectionsChef Posted 1 Jul 2008 , 9:09pm
post #8 of

No one can tell you how much it will cost you to open a bakery...not even a ballpark. There are all different types of bakeries in all locations. You need to find out what your HD requires and then get online or go to restuarant supply stores and price out your neccessities. As others have suggested you need to start a business plan...which can take MONTHS to complete. There are way too many variables to give you a ball park. I started mine with $5k and TXKAT started hers with $500k...I'm sure that's not much help.

eiyapet Posted 2 Jul 2008 , 1:03pm
post #9 of

I was lucky enough to find a bakery that was going out of business and leased the whole thing - including all of the kitchen equipment. We are in the middle of taking it over and even though the kitchen is there and everything is to code the place was horribly decorated and FILTHY - I would not have eaten anything that cam eout of there. We are still looking at about 75k for remodoling and renovation as well as operating cost for the first 3 to 4 months. The SBA is the best place to start, they will hold your hand through the entire process and since they know your area personally they may be able to help with grant money and loans only available through economic development plans in your city or county. Good luck!

Muse Posted 2 Jul 2008 , 4:11pm

Thanks, guys! I knew I could count on you! Always there to help!

Darci

lardbutt Posted 2 Jul 2008 , 4:20pm
Quote:
Originally Posted by eiyapet

I was lucky enough to find a bakery that was going out of business and leased the whole thing - including all of the kitchen equipment. We are in the middle of taking it over and even though the kitchen is there and everything is to code the place was horribly decorated and FILTHY - I would not have eaten anything that cam eout of there. We are still looking at about 75k for remodoling and renovation as well as operating cost for the first 3 to 4 months. The SBA is the best place to start, they will hold your hand through the entire process and since they know your area personally they may be able to help with grant money and loans only available through economic development plans in your city or county. Good luck!



Hi, what does SBA stand for?

Mike1394 Posted 2 Jul 2008 , 5:17pm

Small Business Assoc.

CoutureCake Posted 2 Jul 2008 , 7:53pm

Like another said it's impossible to give a range because it all depends on what you're going for with your business' focus and how new you want your equipment to be. At the minimum you're going to need to research the requirements for both your local, county, and state. That's going to dictate pretty much 98% of what you do to the space. On the low end, it can be a $30,000 investment, or it can go into the millions depending on what you're going for with the space.

For me, I'm building a building on the property which we live and because of the size of operation I am I will be allowed to connect in to our septic as it is. I've also been purchasing SMART for all of my equipment and supplies with the main focus being on not going into debt to own it.

The other thing is you really NEED to create a real world business plan. Not the frilly ones they have with the SBA or a university course, things like licenses, inspections, staffing situations (the more staff you add the more responsibility YOU have), insurance, what it REALLY costs for a hood/ansil system with installation, what it REALLY costs for the commercial floor, what it REALLY costs for staff, electricity, paper towels, toilet paper, and how many cakes you realistically need to sell in a month to pay all of those expenses plus when times are good saving that money to pay for the lean months. You can't tell people "I'll pay you next month", you've got to have money on hand to survive 5-10 years without making a dime yourself. You've also got to include what the costs are going to be to your relationships. With a storefront you can't just take the weekend off, you've got to have someone working and if they call in sick, you're SOL on your vacation you planned for 6mo. Same goes for what happens when your kids get sick and you've got cake orders up the wazoo.

This is why I had my kitchen set up as a "made to order" operation. I can plan to take a weekend off and I can control EVERYTHING how I want it to be. I don't have to take an order if I don't want to. You've got to really consider what you're willing to pay. You've also got to have your time management mastered along with an area set up for efficiency. The other major thing to remember is this is a BUSINESS, it's not "for fun", The only reason to be in business is to MAKE MONEY. Your drive is what will get you up in the morning after working for three days non-stop to deliver the cake on time.

snarkybaker Posted 2 Jul 2008 , 7:55pm

I should add that we went WAYYYYY over the top. All of my counters both for serving and for decorating are south american granite ( the most expensive kind) All of our equipment is new, and we had an 18 foot long 91/2 ft tall solid Mahogony bar for service. That alone was 20 plus thousand, so you can definitely do it much cheaper than we did.

KoryAK Posted 2 Jul 2008 , 7:58pm

We are in probably 175k. 2000 sq ft, previous pizza place so not much remodel.

littlecake Posted 2 Jul 2008 , 9:41pm
Quote:
Originally Posted by txkat

I should add that we went WAYYYYY over the top. All of my counters both for serving and for decorating are south american granite ( the most expensive kind) All of our equipment is new, and we had an 18 foot long 91/2 ft tall solid Mahogony bar for service. That alone was 20 plus thousand, so you can definitely do it much cheaper than we did.




it really looks lovely, i bet it makes you happy just comming in every day and seeing how pretty it is.

snarkybaker Posted 2 Jul 2008 , 10:23pm
Quote:
Originally Posted by littlecake

Quote:
Originally Posted by txkat

I should add that we went WAYYYYY over the top. All of my counters both for serving and for decorating are south american granite ( the most expensive kind) All of our equipment is new, and we had an 18 foot long 91/2 ft tall solid Mahogony bar for service. That alone was 20 plus thousand, so you can definitely do it much cheaper than we did.



it really looks lovely, i bet it makes you happy just comming in every day and seeing how pretty it is.




It's actually kind of funny, because we get asked about our granite and the paint color on ours walls as much as we get asked about any of our recipes!

summernoelle Posted 2 Jul 2008 , 10:40pm

The one this I know is that (in TX) a vent hood a grease trap are about $12,000. For doing an install yourself, that would be one of your biggest purchases.

eiyapet Posted 2 Jul 2008 , 11:39pm

one of the biggest things you need to keep in mind when you go for finacing is are you going to be able to do enough cakes to meet your loan and other bills. In order to pay a 75k loan for remodeling as well as all of the utilities and lease and payroll and insurance and whatever else may arise you would need to generate 10k in income.

SweetConfectionsChef Posted 3 Jul 2008 , 12:32am
Quote:
Originally Posted by summernoelle

The one this I know is that (in TX) a vent hood a grease trap are about $12,000. For doing an install yourself, that would be one of your biggest purchases.




I'm in Texas and my vent hood cost about $200 and the grease trap was already there and it (grease trap) also was not required by the HD. This is exactly the reason I am saying to contact your own HD and find out what they require....it's the only way to get the accurate info for your location.

indydebi Posted 3 Jul 2008 , 1:25am

Well, as you're finding out, it's a big range of costs with lots of variables. So just to add to your file of generalizations.....

I have 1150 sq ft ... rent, including common area (parking lot paving, snowplowing the lot, lot lights, prop taxes, etc) is $1500/month. It started an an empty room ... no kitchen, no plumbing, no nothing. Construction was estimated at $12-$15K and came in at $28K. Equipment was $45K. Used walk-in refrigerator; used commercial dishwasher ($15K new ... I got it for $7K), used 20 qt mixer, everything else was new. I do catering so I have a 6-burner stove and a deep fryer that you probably wouldn't need and a food warmer that you probably wouldn't need. I also got a heat booster on my dishwasher ($1000) but I never have to spend money on chemical sanitizers. (Pics on my Flickr site).

Hood system (which also includes your fire system) was $1000 a linear foot and I needed 8 feet of it. The grease trap was omitted from the original plan so add an add'l $1000 for purchase and installation. Fire extinguishers were omitted from the original plan ... add another few hundred dollars.

If you can find a place that already has significant plumbing, you'll save a LOT!! Trenching thru concrete to install water pipes is very expensive. A pizza parlor, former restaurant, even a hair salon will save you some bucks.

Then the smallwares ... a baker's rack to hold the 18x26 baking sheets. Oh yeah ... the baking sheets!! Box of 10 for $125. Parchment paper at $40 a box. NSF containers to hold your sugars, flours, choc chips, baking soda, etc. Stainless steel shelving ... you always need more than you think you do! icon_lol.gif

Seriously, start with a biz plan. One banker told me they don't really read those (the other banker read it in detail!) but it's a great exercise for us to go thru ... and he was so right! Doing a biz plan takes away the passion and the emotion and forces you to look at it in hard numbers. A GREAT exercise.

And also know that the SBA considers us all a "restaurant" (i.e. food industry) and in that category, you can't get a loan to open your business until you've been in business 3 years. (Don't try to figure it out ... just go with it! icon_confused.gif )

sweettoothcakegals Posted 6 Jul 2008 , 12:35am

Hello Everyone!
My sister and I are considering the same thing, and I am normally just an onlooker of the site, but I had to get in on this post and learn from the masters.

We are wanting to set-up with our cupcakes in food-court"ish" type place in the primary entertainment district in our city. The traffic is great in the market(locals and tourists) and we have had fantastic reviews on the products we have been working on for years(we used to just do cakes). The space is only about 150 sq. ft and 365 per month, its open M-Sat 7a-6p. There are all kinds of vendors in the market hall(no cake or cupcake tho) and we think our biz concept would fit well and so does the market hall manager. We are fortunate to come from a family of restauranteurs and have access to the major equipment(convection oven, display and refridgeration) WE just don't know how much money to ask for or to expect to make??? And is this the best site for our start-up? We want to start small, with a cart even and become known and build up from the bottom. Any suggestions will be greatly appreciated!

April & Kris

Cakenator Posted 6 Jul 2008 , 12:56am

We built our bakery two years ago and it cost $250,000.

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