Hi everyone,

My name is Stephanie and I currently live in NYC. I started baking about 3 years ago just after graduating college. I've had a small baking business for about a year and half now, mostly for family and friends. I want to open a Bakery. I understand the various responsibilities of opening and operating my own business (rent, health department, legal, tax, employees, etc.) and am not looking to do all the baking myself. I would hire at least two bakers and a decorator, plus counter staff. I am more of a baker than decorator so I would jump in when needed or when I have time. 

Right now, I am looking at retail spaces, starting at 800sqft. 

I already have my business name incorporated, I'm working on a business plan and have my Food Safety Certification from the health department.

The question is, am I on the right track? I'd like some feedback on what I'm doing right, need to work on, etc. 

Thanks!

Normally a business plan is completed before the hunt for retail space, name incorporation, etc.  A business plan isn't just a map of how you plan to open and operate your business, but a necessary submission for a business loan.  A friend of mine operates a very successful business to business baking business. She left a very successful business career to bake.   She still needed a loan of $100,000 to get it going.

It's not clear if you developed a product line.  Commercial production isn't the same as home production; are your products designed to commercial production specifications?  Have you tested all your recipes in a commercial kitchen to ensure quality control and correct workflow process? Product quality control and workflow are these critical aspects of profitability. Have you identified and secured necessary vendors for ingredients and equipment?  

 What you state in your post deals with later phase business development.  

Absolutely write a full, detailed business plan. As previous poster stated, if you will be applying for any type of business loans, it will be  required.  It's also very helpful in mapping out your short and long term goals.

I'm in the process of opening my own cake studio right now (in Southern NJ) after 15 years as an employee in the industry. From sitting down and writing my business plan to signing my lease last month, it was a three year process. 

I was turned down for 3 different loans, despite impeccable personal credit.  Food businesses are high risk lending category and start up costs incredibly high. Even if you're incorporated, you will likely be required to sign personally for everything..a lease or loan...so make sure your personal finances are in order.

 I was fortunate to be able to operate my business on a mobile basis in additional to my full time job, renting time in a commercial kitchen for the past 2 years, building up equity and my name, saving every penny and creating my future retail business on paper in the meantime...incorporation, tax ID, state tax registration, mission, product line, production schedules, menus, policies, procedures, marketing and advertising, web presence, payroll projections, income and expense projections, etc, 

Even after signing a lease, it's still been so much work and money just to get the doors open and I haven't baked a single cake there yet. Even working as an executive chef for the past 11 years, this has been quite an experience.  A good one, my dream come true, but still head spinning sometimes :-) 

The best advice that I can give is that you don't know what you don't know, so surround yourself with people who do know. Talk to an small business mentor (I went through SCORE and WBEC) . Use every free small business asssitance resource available. See if your township/municipality has a Small Business Liason. Mine does and they'd were incredibly helpful walking me through the permit and licensing processes. Last but most important, don't jump into any lease before you've done all of that.

best of luck to you! 

Listen to @SugarplumStudio ‍ - "you don't know what you don't know" really is the best advice.

This venture will be the hardest journey you ever traveled. Best of luck.

And permits.  Oh, the permits and inspections!   A small bakery near my sister had their opening delayed SIX MONTHS (he built out a storefront location from scratch) because of permits and inspections. That's six months he was paying a mortgage/lease with no income coming in.  Of course that's in Chicago where that's pretty much par for the course.   Also, it cost over a hundred thousand dollars.

I guess my two cents is to have cash set aside for worst case scenario. My two cents.  Cash set aside.  See what I did there?

I'll see myself out.

Just a thought: I wonder how much of the permit/inspection problem came from difficult inspectors; and how much came from a new business charging ahead without researching requirements. I've owned several bakeries and a bakery/cafe, so I understand potential difficulties.

Valid observation.  Here it's lots to do with literal scheduling, I think.  As in, okay here's a problem, fix that. Owner takes the time to fix it and then has to schedule a new inspection which can basically be whenever , etc., etc. Maybe they just don't have that many inspectors. But those weeks spent waiting can really add up.

Hi everyone,

Thanks for your advice. In terms of money, it's not an issue.

In terms of permits and inspections, from what I understand that is all up to the buildings and health departments but a good contractor can expedite the process. 

In the meantime, I am continuing to work on the business plan and fine tune all my recipes.

Hi there, 

I am new to CakeCentral and everything that I have read so far has been so helpful and intriguing! I am looking for some business expertise. I am in the Hospitality industry and I am looking to make some extra income. I want to start an out of home bakery doing small items for start. I am 26 and have been out of college for a few years now, but I do not have an establishment income yet. Will I need a loan, and if so how much? How did everyone else start off their small businesses? I know it takes a lot of work, time and money! 

Thanks! 

Many of us started out as hobby bakers....got bit by the bug taking lessons - usually Wilton classes where you buy equipment as you go.  After a few years it just grew from there. 

Things have changed a lot since then, and now some states allow what they call 'cottage bakeries' whereby you can sell certain baked goods out of your home under certain requirements.  I suggest you check with you local health dept to see if there are any requirements in your area.

Kakeladi -- Thanks for the info! I've looked at my states heath codes and laws for cottage bakeries and we don't have to many restrictions, which is helpful since I am so new to this! I do have a background in culinary/baking, the only thing I lack is decorating skills (specifically cakes). Is it worth hiring just solely a decorator once things get moving? 

Your state is extremely lax in regards to home kitchen production. Good luck with the new venture.

MimiFix -- Thank you so much! I am very excited and nervous! 

Is it worth hiring someone?   It depends.   When I had my bakery & I looked into hiring it ended up costing me 3X the persons pay in taxes, insurances etc :(  Just couldn't afford that. 

The cost of learning the trade I don't think is that bad but it does take time. 

Awesome, that is good to know. I will not be able to afford that for sometime, but I figured I'd ask just in case! I'll just take my time perfecting my decorating skills and go from there!