For those of you who own your own bakeries (not home-based), would you be willing to share how long it took you before you started to make a profit from your business? I'm toying with the idea of opening my own place. I've been stockpiling equipment now for almost two years (gotta love craigslist). I have a commercial fridge, a 20qt hobart, a deluxe oven and lots of s/s tables and other supplies. When/If I do find a space all I will need to purchase is my sinks and storage shelves. I will not be taking out any bank loans as I have been saving for this for a very long time. I've written a business plan and I'm just waiting to find the right location. I'm hoping to turn a profit within 6 months...is that unrealistic?
In general, (not talking just cake business here) the first year you won't make money. I'd put the time line at 2+ without hesitation.
You have to consider rent, heating/cooling, electric, payroll, taxes (property and sales), credit card fees (if you'll accept them), food costs, supplies, gas for delivery....the list is nearly endless.
6 months might be a good estimate if operating out of a rental kitchen, but if you are opening your own retail shop I think 2 years is more realistic.
Don't forget to take into account the opportunity cost of using your savings to build the business instead of in other investments.
6 months is pretty unrealistic, sorry, i have been open since october and am just below breaking even point, most business are breaking even at 1 year and turning profit at 2 years. HTH
I agree, 6 months is really pushing it for a profit. I did not have a bakery, I owned a sandwich/pizza/beer establishment. The mortgage, insurance, utilities, supplies, license fees, accountant fees, just because fees, take its' toll on your finances. I did not have a payroll to worry about as this was my family business, but if you hire employees the payroll and taxes, workers comp., ss...well the list goes on and on. Two or three years maybe, if you can stay in business, by the fifth year you should be doing well. I can only add, location location location. That was my downfall.
I opened my shop in spring of 07 and it looks like we may just finish the year in the black. That is if things continue on as they are.
For me, 6 mos. to break even BUT 6 more years at break even! NO Profit. Finally realized I was killing myself for everyone else to make their money.