I'm in the beginning stages of business planning. My husband (and some friends) are encouraging me to start small by selling out of my home. If I do this we will be finishing our basement into a bakery space. The other option is to rent a storefront and have a full service bakery. There are currently no full service bakeries in my town (other than in chain grocery stores).
The full service bakery is what I really want to do but I also see the advantages of "starting small". I'm afraid of the inconsistancy that can come with custom cakes (busy months, slow months). I would feel limited to custom cakes/cupcakes if I had an in home bakery. I can't imagine people ordering bread, muffins, or donuts and picking them up from my house; am I wrong? I feel that if I had a storefront I'd be able to offer the smaller ticket items to fill in the gaps of custom cake orders. Plus I wonder if I'll get burnt out doing only cakes.
I'm obviously scatter brained trying to pin down what to do. I'm hopeful that outside advice might help me to get my head on straight and figure out which direction to go.
Full service bakery, from MANY posts here (not direct experience) murder seems to be the llloooooonnnnnngggg hours. Muffins and donuts, especially, are an early morning purchase. Staffing a counter, even at minimum wage, adds up. That extra labor pay, and the independent rent and utilities may be a tough nut to crack. It certainly puts a lot of pressure on you.
Establishing that your area needs/wants/supports an independent bakery is also an issue. There many be a real reason there is not a "real" bakery there. Will you be competing with 50 cent grocery/Costco cupcakes? Or are people ready/able to pay $3 for custom/gourmet cupcakes?
Will you be asked to make this:
For this price?
yes -- what she said
the cake orders not being consistent and that being a worry for you -- you can be assured that for the labor involved you will never make any money on breads -- you cannot survive on the pennies you make selling muffins cookies -- elaborate cakes is the money maker -- most of the full service bakeries i know of sell meals/lessons/parties to survive
why do you want to have full service bakery
you definitely need to have a marketing study done first like johson6ofus recommended
there is nothing sacred nothing protected in the baking business -- they sell cake deco products in my grocery store nice stuff i mean -- crunch numbers -- there's little there to stay afloat much less succeed in baking alone --
oh i saw a mold for a shell border yesterday! a 2 year old can push play dough into a mold --
so your next step is a professional marketing study in order to crunch the numbers -- you will start with at least two employees, a baker and a counter person --
but that's the value of working from home -- the overhead doesn't crush you as the work fluctuates --
anyhow -- early morning musings -- best to you
Would I be right in assuming you have never run a small business before?
Have you worked out a budget to see what your costs for running a full service bakery will be. Do some internet searches you will find templates and information to help you do this.
Are their any suitable premises in your area? What kind of condition are they in. Do you know what it will take to bring any premises up to scratch to comply with local and state health dept codes. Do you have the capital to setup a commercial kitchen and customer area. The most basic of fitouts will cost $50,000, using secondhand equipment and free labour (husband and friends). Unless major work is required to meet code then all bets are off. A friend of mine is setting up a café right now and it is costing an additional $32,000.00 in basic plumbing and construction on top of regular fitout costs to get the building up to code.
As you are starting a business from scratch, it is unrealistic to expect to reach break even point in the first six months while you are building your customer base. Do you have the capital to cover operating costs for the first six months. What if the business does not take off as your expect, do you have 12 months operating costs.
Have you spoken to an accountant about the financial viability of what you are proposing to do.
Have you investigated what is expected in a commercial lease and what a landlord will expect - 1x1, 3x3? What if things do not turn out how you anticipate, you will have to pay out the full amount of the lease even if you are no longer in the building.
As Johnson6ofus suggested why are their no full service bakeries in your town? Experienced operators can spot a hole in the marketplace and are quick to fill it, why are there none in your town.
This is the tip of the iceberg where small business is concerned, I strongly advise you to get professional advice.
There is a known issue in small business where people get so caught up in the emotion of the dream, that any sensible advice is ignored or does not apply to you, only all the other small businesses. Are your husband and friends able to see what you are not able to?
I strongly urge you to start small and use your free time to learn how to run a small business.
Ditto to what the others have said but I also picked up something...you said, 'Plus I wonder if I'll get burnt out doing only cakes.'. If you go 'full service' bakery - how burned out do you think you will be after making up your thousandth bread roll? Or piping the top on your 100th pumpkin pie for thanksgiving? I would always say to anyone to start small and if it works, you can grow and all is well. If it doesn't you are minimising your losses and your situation is recoverable. Store-fronts are big deals and most where I live have gone under very quickly because the owners didn't do their research. I know it's the dull stuff but it has to be done. Good luck x
Everything @810whitechoc said!!! There are no storefront bakeries(that do everything from bread to cakes) where I am and the reason why is heartbreaking to say the least :( We started small and will remain that way for the foreseeable future for several reasons but we have a plan for our business to grow. If your priced right you can get by on cakes alone in the slower times. We've not experienced much of the slow down we've remained steady since we opened 5 months ago. We have a separate commercial kitchen in our home. I love baking other items and I would love to do them more often but there are occasions that I do get to bake more than cakes. I do cookies often. And this weekend I'm doing a coconut cream pie so there is variety. We took almost a whole year doing exactly what the others suggested before we opened our business. And it is a very cutthroat business to enter in. I hate to be a dream crusher but running even a small business is not for the faint of heart and you'll be dedicating almost everything you have into running it and that's even starting small.
I'm sure there are others who took the plunge and went big right from the start but that wasn't feasible or wise for us. I look at my business similar to my marriage it always takes a lot of dedication hard work and sacrifice. And to be honest I have no desire to deal with other personalities by having employees at this stage of my business lol. there is sooooo much more to having a bakery than baking. And if you are a first time business owner there is a lot to learn and manage. I always suggest if you really really want it you'll learn everything you possibly can before you make one move. You can never know too much and even as I type this I'm learning something new about running a business so you never really stop :)
I hope that whichever route you choose its successful for you bc this can be a really great business to be in!!
Another thing to consider, is who says a custom bakery cannot offer more things? That is what I do, working in an all natural niche. I offer both sweet and savory items, but it is to order, and I require a 3 week lead time for my basic bakery items I sell. This would allow you to offer more things through a start up without taking the road as a store front, should you find that it might be too big a venture to go with.
Johnson, WHERE are those cheap tiered cakes being sold?!?!
@mymama ... that is Sam's Club in Austin, TX
What about 3 tiers for $60?
I saw these at my local Sam's Club and asked a few questions. The baker (or is it "baker"?) gave me a sample. It tasted fine if you like cake from a mix. The texture was soft and airy. They were simple, well done, and attractive. Sadly, for most budget-minded brides, Sam's Club is a front-runner.
Right as always Mimi, and for a start up business, you have to know you will not get a leg into the "budget bride" market. You gotta know that as you make a business plan. Jwoom cannot count on getting cake orders from budget brides when Sam's delivers this product (and I agree- not bad stuff--- but not gourmet either).
I like how those cakes are iced with something called Butrcreme. Is that even food?
You are struggling with the question of starting a retail bakery business, so I am responding from a business viewpoint. You wrote a few things that are troublesome.
1. Most consumers view supermarket grocery store bakeries as a full service bakery. So by your account, your town does have a bakery. 2. You wrote "I feel that if I had a storefront" but feeling is not a plausible substitute for a business plan, which can show if your idea is viable. You need to be looking at numbers, not how you feel. 3. You wonder if you will get "burnt out doing cakes." I guarantee that it's easier to get burnt out running a full line bakery.
I owned a bakery and cafe for many years, so I understand the desire and appeal to owning a retail bakery. But without realistic preparation and consistent hard work, reality can quickly turn the romance into misery.
My husband and I bought a full serve bakery and I thought it was going to be wonderful, it was nothing but a headache, we had pizza businesses before and the profit margin allowed for more employees and for the bakery we couldn't find help that cared anything about the products, so we ended up working 20 hr days and doing it ourselves, it was well established (31 yrs) when we bought it, but it just wasn't for us...it took us about a year and a half to sell....only reason I'm telling you this is...I wanted it soooo bad until we got it, so as they say be careful what you ask for