Cookie Business In Austin, Tx - Where To Start?

Business By jrosebud Updated 16 May 2010 , 3:19pm by CNCS

jrosebud Posted 4 Feb 2010 , 10:08pm
post #1 of 14

I'm looking into starting a cookie business in Austin. I live in Williamson County, but it's possible that I might rent a commercial kitchen in either Williamson or Travis County.

Right now I'm trying to figure out if I would be able to make enough money to quit my day job (or, at least, not lose money). In the beginning, I would take orders as they came through word-of-mouth and internet (etsy and website) advertising, so the work would be inconsistant.

I'm at a loss at where to begin. What hoops will I need to jump through (and how much will they cost)?

I appreciate any help you can offer. Thanks so much!

13 replies
tulips_n_truffles Posted 4 Feb 2010 , 11:40pm
post #2 of 14

The biggest thing you have to think about realistically is how many cookies you would have to sell EVERY DAY to pay your bills. That's business bills and life bills. Figure out your profit on average per cookie and go from there.

You're talking about rent, licensing, employees, insurance, utilities, fees, etc...every month...plus your every day expenses of ingredients, marketing, boxes, yadda yadda.

So you know what you need to live on. Start with that. Then do some research in your area and see what it's going to cost to open/start your business. Then add about 30% for all of the things you're not thinking about.

Also...how much experience do you have? Have you run a business before? Have you researched how viable your business is in your market? Is there a lot of competition??

Just asking questions. I'm all for people chasing a dream...after all that's what we're all doing...I'm just NOT all for people losing their shirt because of lack of research and money!! icon_smile.gif

cakesdivine Posted 5 Feb 2010 , 2:54pm
post #3 of 14

The best person to talk to in Austin about all this is Kelley Masters. She owns Cake Boss Software, and is the driving force behind the Texas Cottage Food Law bill that we hope to get passed in Congress in 2011. She is a long time CC member.

But first you will have to rent a commercial kitchen, there is no way around that since it is illegal to bake out of one's home kitchen here in Texas.

Secondly, more than likely it will take a good 5 years to be able to turn a profit from your business, so don't go thinking about losing that day job just yet, especially since you will be competeing with Tiff's Treats which is an amazing cookie company that has several locations in Austin, and a couple now in Dallas.

Not meaning to discourage, but you must go into this well armed with knowledge and finances in excess of what you think you will need if you are going to be a success. Whatever costs and time you think it will take to open your doors, triple that, and you might have a fighting chance.

jrosebud Posted 5 Feb 2010 , 7:34pm
post #4 of 14

Thanks for the info. icon_smile.gif

As far as finances go, my husband's job covers our bills; we can get by on his income alone, so what I make is gravy. (But we like gravy, so I'd rather work.)

I don't think I'd be in dirrect competition with Tiff's Treats because I'd be making custom order decorated sugar cookies. It would be more of a cookie bouquet-type venture.

I'm looking into renting a commercial kitchen, but I'm unsure of what other costs there would be. I'm not sure that I want this to be a 40 hour a week gig, so five years to turn a profit sounds daunting.

I know that I'll need insurance of some kind (any ideas on what kind and approximately how much that will run?) and I'm sure that there's a liscence that has a fee attached to it. What other costs are there?

cakesdivine Posted 5 Feb 2010 , 7:46pm
post #5 of 14

Well you would have to get your own food business license through your local HD. Your own business insurance, and a state tax ID (no charge for those icon_smile.gif )
Wish you luck!

southaustingirl Posted 5 Feb 2010 , 8:03pm
post #6 of 14

I have looked into my own baking business in Austin.....still thinking about it.

The food permit is $310 for Austin ( I think) plus the cost of the inspection. Once you have located a commercial kitchen, the health inspector will need to pay you a visit.

Also, some jurisdictions will require you to take a food safety or food managers course. The one I would need to take was going to cost around $100.

I spoke to my insurance agent about a year ago and he quoted me a policy that would run about $70 a month. It was a policy that would satisfy the owners of the commercial kitchen I was going to rent.

The kitchen rental was going to be about $20 - $25 an hour to rent, depending on what time of day.

For now, I am still just thinking about it. We could survive on one salary but I sure hate to give up the health insurance I have with my job. There is no way we could afford to add me to my husband's policy. Not to mention his company has been laying off people!

kelleym Posted 5 Feb 2010 , 10:19pm
post #7 of 14

When I had my Williamson County Food Purveyor's Permit, it was $125 per year, but that was 2007, so it may have gone up.

You will need:

- Health Dept. Permit, either Travis or Williamson, depending where you rent
- Sales & Use Tax Permit (through the Comptroller, free). Even though there is no sales tax charged on bakery items, you have to have one.
- Liability insurance
- You should talk to an accountant about what business setup would be best for you (LLC, S-Corp, Sole Proprietor, etc.)

But all those things are not what your main expense is going to be - that's going to be the hourly rate that you pay for your kitchen. I found that the only way to make renting work is volume. It just is not feasible for onesie-twosie type orders.

jrosebud Posted 5 Feb 2010 , 10:25pm
post #8 of 14

Thanks, guys!

jrosebud Posted 5 Feb 2010 , 10:35pm
post #9 of 14

Oh, one more question:

Are church kitchens considered commercial kitchens in Travis County?

kelleym Posted 5 Feb 2010 , 10:41pm
post #10 of 14

Only if they are licensed.

My church is in Travis county and has a kitchen, but it is not able to be a licensed commercial kitchen due to something or other not being up to the fire code. Therefore it was not possible for me to use for my business.

angelina2740 Posted 15 May 2010 , 4:34am
post #11 of 14

Hi Jrosebud I'm looking for a comercial kitchen for rent as well I live in Leander Tx and I found some licensed kitchens in Austin area wich is king of far from my location but if you are still looking for one go to
thekitchenspace.com that is a gorgeous comercial kitchen and you can check out this web site as well ist a lot of information there for comercial kitchen rentals.
http://smallbitesaustin.wordpress.com/2007/05/02/commercial-kitchen-space/.
Well I hope you have better luck than me how I said before I looking for something more in the Leander o Cedar Park area.
I going to look at the nearby churches too and we see probably that will be the option for me.
well I wish you the best and I hope this help.

angelina2740 Posted 15 May 2010 , 11:31pm
post #13 of 14

Hi kelleym thanks for the post I already look at that kitchen rental in Cedar Park and their phone number is not working anymore but then yesterday I found some other numbers and I live a message I hope they call me back.
I have a question for you if you don't mind, What kind of permit do I need for establishing my own business cake decorating if I going to rent a licensed kitchen? It is a Food handler o a Food Establishment permit?
I really appreciate the information Thanks so much.

CNCS Posted 16 May 2010 , 3:19pm
post #14 of 14

I have family in liberty hill.

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