Starting From Scratch

Business By saberger Updated 12 Aug 2009 , 1:32pm by cakesweetiecake

saberger Posted 2 Jun 2009 , 8:26pm
post #1 of 27

Hi everyone!! This is sort of a side step from a previous thread I had started before in regards to buying a bakery.

This is about starting my own place/biz. Here is the deal.

free standing building behind restaurant
400 sq. ft upstairs & ground level (where the kitchen is)
Up to code (health & fire & zoning)
He would remove the equipment I don't need (grill, oven that doesn't work, etc)
Would leave a glass refrigerated display case, two door fridge, & counter with fridge underneath it.
already has 12 or 14 ft hood
A/C all ready there.

Rent $1500/month - one year lease - 2 months deposit
would install separate meter
sewer $180/quarter
percentage for landscape/plowing/tax
use of dumpster
help with getting zoning for street sign
place is NOT visible from street

I can set my own hours. Plus, the restaurant was willing to make a deal and have me provide cakes for weddings/parties/etc. at their location. We would need to work out the details.

Questions:
sound good?
What equipment do I need?
What should I buy new and what can I buy used?
Any other advice/suggestions?

TIA!!!!!

26 replies
tiggy2 Posted 2 Jun 2009 , 11:05pm
post #2 of 27

Sounds a heck of a lot better then the first deal you were considering.

mkolmar Posted 2 Jun 2009 , 11:37pm
post #3 of 27

WHEW! Glad you are checking into other options. The last business you were looking at I just couldn't help but shake my head and want to scream NOOOOOOOO.
This one seems a lot better already but remember to keep looking, crunch numbers and negotiate like crazy. Is your business plan done yet? I know you've been gathering info.

sari66 Posted 3 Jun 2009 , 12:34am
post #4 of 27

This sounds sooooo much better than buying the other place! I'm not sure about the rent check the going rate for the square footage and what's included in the price. Most of your equipment can be bought second hand check online at craigslist, ebay, or supply stores. It sounds like what you need is an oven, speed racks, mixers, cake pans, sheet pans, ss tables, 3 compartment sink, hand sink, dishwasher, and whatever else isn't in there.
Let us know how things are going.

saberger Posted 3 Jun 2009 , 1:17am
post #5 of 27

I figured you guys would be more pleased with this. icon_smile.gif It already has the sinks. But any recommendations on the equipment? I figured on one Hobart 20 qt mixer; speed rack; and the pans and stuff. %$#^ I didn't think of the dishwasher!

I am lost!!!! Please help on what equipment, brands, etc. I want to buy used for whatever I can, unless there are certain things that are worth buying new.

I figured with the rent, I could offer $1200 for the first three months, and then by 6 months, we can be where he wants to be. It seems so dark in there. I have to figure out layout and ambiance. DH definitely likes this better, as do I.

I am going to try to post a couple of pics I took with my phone.
LL
LL

saberger Posted 3 Jun 2009 , 1:19am
post #6 of 27

Here is the last pic
LL

FromScratch Posted 3 Jun 2009 , 2:38am
post #7 of 27

That is such a cute place... definitely crunch the numbers and finish up that biz plan, but I think this place will offer you much more opportunity to do your own thing.

Don't get too drunk on the fantasy (sooooooooo hard to do right???). Stick with the numbers... commercial business transactions have to have the emotions taken out of them. No matter how cute it is, if the numbers don't add up it's a no-go.

Good luck getting it all figured out.

jammjenks Posted 3 Jun 2009 , 3:57am
post #8 of 27

I don't have a shop, so I am really no help at all. However, just wanted to say that the picture of the outside looks like such a cute place. I think you would have a lot of potential here.

saberger Posted 3 Jun 2009 , 11:15am
post #9 of 27

Thanks. It looks really cute on the outside, but I am having SUCH a hard time visualizing it INSIDE. I am usually very good at seeing the potential of places and this one has me stumped. The upstairs is ice and open airy feeling, but the ground level feels so claustrophobic to me with no real space to decorate. And I don't know if I can see myself going up and down stairs with a cake in order to decorate. I think I might have my dad take a look at it on Sat. to let me know what he thinks can be done (he is good at that kind of stuff). If all 800 sq. ft. were on the same level, or if the lighting were reversed, then I think it would be easier.

Emotions, for the most part, are out of it. Ok icon_wink.gif not totally, but my brain is quick to enter and take over. Esp. since there are various issues involved.

STILL need idea of equipment. Is a 30 yr old 20 qt Hobart mixer ok? Or is that too old?

-K8memphis Posted 3 Jun 2009 , 11:27am
post #10 of 27

I consider dumb waiters when I encounter (or imagine) opportunities with stairs.

I'd buy a newer mixer.

Deb_ Posted 3 Jun 2009 , 11:38am
post #11 of 27

I agree with everyone else this is SO much better then that other bakery.

I'm excited for you and look forward to seeing your plan.

I wish you the best of luck!
Deb icon_smile.gif

underthesun Posted 3 Jun 2009 , 11:59am
post #12 of 27

I think with something this important, you might consider hiring someone for build out. Doesn't seem like you need a contractor, since you're not moving walls and such. I think there are interior designers who specialize in restaurant build out. You'd have to search the web or ask the restaurant owner if he knows of a build out designer. I think they are usually archetects and contractors, but again, I think some interior designers also have the expertise. Build out is SO important and could make or break a business. I would at least find out how much something like that costs.

Such a cute building! Good luck!

Anyone out there have experience with build out who might have advice?

-K8memphis Posted 3 Jun 2009 , 12:04pm
post #13 of 27

It is better by comparison to the one that is twice as much. But New Jersey is not that much different than 10C. If you can find a little place that cute for that much you can find a place much cheaper that might not have as much eye appeal but would be a leaner monkey on your back and a better floor plan.

Keep looking.

saberger Posted 3 Jun 2009 , 12:51pm
post #14 of 27

Stupid question.....what is build out? Does that mean adding an addition to the building or something?

tiggy2 Posted 3 Jun 2009 , 1:28pm
post #15 of 27

Build out is finishing the inside to suit your needs.

mpaigew Posted 3 Jun 2009 , 1:47pm
post #16 of 27

IMHO, $1500 sounds a little steep for a bakery budget. When you take into consideration additional monthly fees (utilities, maintence, etc) you have probably eaten up a considerable amount of your monthly profits, before even paying for ingredients, payroll, etc etc etc. It is great that the restaurant will give you business with cakes, but the fact that it isn't visible from the street? BIG BIG BIG negative!!!!!!!! If people don't know you are there, how are they going to come to you, unless you advertise like crazy, which will also eat an huge bite out of your profits.

The place does look great, and maybe $1500 wouldn't be that bad for some businesses. Like others have said, really crunch numbers before you get to into this deal. IMHO!

MichelleM77 Posted 3 Jun 2009 , 6:02pm
post #17 of 27

I think the outside is just so cute! Best of luck whatever you decide!

snarkybaker Posted 3 Jun 2009 , 10:13pm
post #18 of 27

Here are the problems -

1-Since it is not visible from the street, you will end up spending a lot more money and time in advertising to get the word out about your business. That deducts from the overall value of the location.

2- YOU WILL NEVER get your money back out of a new business in 12 months. You should insist on at least a 36 month lease, but 5 years would be better. Wouldn't it be just awful to have 14 wedding booked for next September only to have him not renew your lease, and you are left looking for a new place in the middle of crazy wedding season ??

saberger Posted 4 Jun 2009 , 12:05am
post #19 of 27

Well, in the past day I have been very busy trying to find out if there is other space available. The average price is $30/sq.ft around here, average of 1500 sq.ft. So this place is definitely more in my price range. In regards to the sign, the owner of the restaurant (which this shop is behind) said we can arrange to have a street sign.

I guess I should correct myself and say that the shop is not on the street, but somewhat visible from the street. I would have to get a bright sign to be seen better. However, it IS next to a shopping plaza and bank, so it might not be THAT bad.

In regards to the lease....good point! I should have it include that I have the option to renew after some point. I will talk it over with the lawyers if/when we go ahead with this. Thanks for the warning on that. That WOULD suck if I get stuck in the middle of a large order.

I asked about building out an he said it is fine, but if I put up any walls or anything like that, it will have to be taken down upon leaving. Leave it as I get it. We would just have to figure out how it works if i make improvements to the place (do I get any 'credit'?) and if I have to start paying rent right away while I get the space ready. I have a feeling I won't have to, on the latter, but must be sure.

Ok, in regards to advertisement. There are two free things that I can count on. The local paper features a new biz every week and I can get a write-up in that for sure. The local magazine does the same (but probably harder to get written up in). And I was part of a wedding cake challenge which will be aired in the fall. It is right near a synangogue (for my Passover cookies) so that is easy enough to advertise (heck! all I have to do is have my folks attend a service and I am set! icon_wink.gif ). I am not saying that those two items will bring in ALL of my biz, but it is a start. There are also other ways to advertise for relatively low cost/free.

FromScratch Posted 4 Jun 2009 , 10:19am
post #20 of 27

Same thing around here as far as rents go... if you want a shop in anything that resembles a populated area anyway. Even in my teeny town the rents are $15/sqft. Sucks. I didn't catch the 1 yr lease before... that is something that would make me think twice. See if you can lock into at least 3. You should be able to negotiate that... explain what Snarky said about the wedding season... if they can't see that 36 months would be better for everyone involved... move on.

I think you could make this work if you REALLY wanted it to. You will definitely not be making money out of the starting gate and when you do start to break even it won't be a huge paycheck so you have to make sure that you have enough in savings and that your spouse can hold up the bills for your home. The biz will be a vacuum for funds in the beginning. This is the main reason I am staying away from a shop right now and focusing on converting my garage into a commercial kitchen instead. I can't risk it right now. At least here at home there's no rent to pay on top of my mortgage.

Good luck with whatever you choose.

mombabytiger Posted 5 Jun 2009 , 9:15am
post #21 of 27

Do you have a Business Development Center nearby? (Or something like it). They will help you write your business plan and sometimes provide some funding. I seem to remember that the most important figures you should determine is your daily cash flow. Once you add up all your monthly expenses, capital expenses, etc. you need to know how many cakes you have to bake per day to make those costs. If you are just making enough money to keep the business going and nothing to pay yourself, it's pretty much just a really, really expensive hobby. As for decorating the inside, find a friend who just LOVES to do stuff like that, and turn her loose.

cakesweetiecake Posted 18 Jun 2009 , 4:59pm
post #22 of 27

OP, how are things going?

leah_s Posted 18 Jun 2009 , 5:48pm
post #23 of 27

The average rent is $30 a foot in your area?
::drops to floor in a faint::

I turned down an offer at $15/foot 'cause I couldn't make the financials work . . .

kandu001 Posted 18 Jun 2009 , 5:49pm
post #24 of 27

Sounds like a good deal to me and the place is absolutely adorable!!!

leepat Posted 18 Jun 2009 , 10:26pm
post #25 of 27

You are going to have to bake a lot of cakes just to make expenses. Seriously think about this before you sign anything.

saberger Posted 19 Jun 2009 , 1:45am
post #26 of 27
Quote:
Originally Posted by leahs

The average rent is $30 a foot in your area?
::drops to floor in a faint::

I turned down an offer at $15/foot 'cause I couldn't make the financials work . . .




Yup! I called a lot of other places around here to compare and see if I could find anything cheaper. Not in my town OR even the immediate towns surrounding me. That is why I had originally just wanted to rent kitchen space.

Update: I really don't have one. Right now it is a wait and see. My DH finds out the status of his job at the end of July. He may not have one or might be relocated to Indy or San Fran......SO.....can't make any commitment until we know his status. icon_redface.gif

So, I feel like all of my research has been for nothing, BUT (don't kick me yet) I know it isn't worthless. It is just getting me prepared for when and where ever I DO open my doors. icon_wink.gif

I have to say that one really positive thing that has come from this (besides getting great info from all of you and my research), is that I really put my pricing into perspective. Everything figured out in terms of my costs and where I buy things, the brand, and how much profit to make.

I am still researching commercial equipment since I have no experience with that.

Thanks for your support!!!

cakesweetiecake Posted 12 Aug 2009 , 1:32pm
post #27 of 27

I've enjoyed this thread so much that I had to come back to it.

I've been researching just to get a feel for what's out there. I found a space in my area that peaked my interest. Currently, it is a non-food related business. Prior to the current business, it was an ice cream shop. This place would be just for baking, not a storefront. It is available for sale and for lease. (The listing states the annual lease price as 4800.) I have been considering going to see it just for curiosity. At a minimum, how much space do you really need if you are not using it as a storefront?

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