Will A Cake Shop Make Profit?

Business By montanabaker Updated 3 Aug 2010 , 11:41am by minicuppie

montanabaker Posted 29 Jul 2010 , 9:43pm
post #1 of 6

I live in Montana, therefore I can't have my home kitchen licensed. I need to rent a space and set up a commercial kitchen. My question to all of you who sell cakes out of actual shops rather than from home...are you making money? Let's pretend that rent would be $400 per month in a town of 40,000 people. My cakes get rave reviews from my family and friends, but does anyone think I will make more money than I'll pay?

5 replies
bakingpw Posted 29 Jul 2010 , 9:56pm
post #2 of 6

Well, let's pretend my shop rent was $4500. a month (nope, not pretending - actually was!) plus utilities, insurance, food costs, boxes/packaging, advertising, and a ton of other misc. expenses I've repressed.

So, in answer to your question, add up ALL the expenses ~ thinking of everything you can imagine and estimate more than you think it will cost, then double that amount. Now, divide that number by cakes. In other words, how many cakes will you have to make to reach that number? Then, the most important question: are you capable of making that much product??

Also, consider the competition: how many other bakeries (be sure to include grocery store bakeries in that count) are in your 40,000 population town?

Doug Posted 29 Jul 2010 , 10:22pm
post #3 of 6

many threads on this in the business forum

here's one from just a few days back that has lots of info.

no way to tell you if you'll make a profit based on just the monthly rent.

there is SO MUCH MORE to consider.

LindaF144a Posted 29 Jul 2010 , 10:53pm
post #4 of 6

One word - location, location, location. What would work for me here where I live may not work where you live. This is something you need to pursue locally.

littlecake Posted 31 Jul 2010 , 1:13am
post #5 of 6

i been makin a living at it for the past nine years...you gotta be fast tho...i'd take a job at a bakery for awhile if i were you to see what it's like...working a shop is light years from making cakes at home.

minicuppie Posted 3 Aug 2010 , 11:41am
post #6 of 6

Small towns are notorious for baking at home with a rare sheetcake for a kid's bday party. Are you a suburb of a large city that you can draw business from?

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