Should I Just Take The Plunge...

Business By chefjulie Updated 23 Sep 2008 , 8:23pm by OhMyGanache

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chefjulie Posted 23 Sep 2008 , 5:44am
post #1 of 12

And buy a bakery?!? I am currently licensed to bake in the state of TX. HOWEVER, I only bake for a few local coffee shops and I DONT decorate cakes professionally. (I do cupcakes, cookies, candies, etc) I recently found a bakery for sale on craigslist and Im REALLY thinking I want to buy it. I wouldnt actually be buying the building, but all of the equipment and the business itself. I am going to look at the shop tomorrow and Im a little nervous. I dont know where to start!! I dont have a business plan, I dont know if I'd want to keep it open as a public bakery or just use it for the kitchen (im looking for one of my own) and eventually open it to the public when I feel a little more comfortable. The listing states that the bakery has a lot of existing commercial customers so that's definitely something that interests me. Am I COMPLETELY INSANE for thinking about this?

Here's the ad copy: I own and will sell my very busy specialty cake bakery. I am moving and motivated now with a rock bottom price. Extra nice build-out already completed one year ago. Fully equipped kitchen with 3 baking ovens (one convection), two mixers, two stand alone freezers, refrigerator, $20,000 professionally installed grease trap (Harris county requirement), upgraded water heater, triple sink, stainless tables for cake design, plenty of storage racks, 27 in. television, Toshiba laptop, and absolutely every tool, pan, and utensil needed for creating cakes. Front of house includes two lighted glass display cases, cash register, three brand new restaurant tables, tile flooring and more. Included is turnkey sale of built-out bakery currently serving all of metro Houston including several corporate accounts, trademarked name and customer base, website with already established and successful web marketing program, 2003 cake delivery vehicle, and commercial signage (installed on building with programmable timer, another in plaza signage in front of center, and front of house). Stop running your cake business out of your house! It is illegal in Texas to run a bakery out of your home! Harris county is allocating more resources to finding people baking illegally! They will shut you down and could possibly disallow a permit for you in the future. Make yourself legitimate now! This is owner direct, no realtor or salesperson. When you call, you are speaking to the owner of this bakery.

BTW- The "rock bottom price" is $55K

11 replies
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playingwithsugar Posted 23 Sep 2008 , 5:56am
post #2 of 12

Beg, borrow, steal, and jump on it - pending an inspection of the building.

I realize that you are not buying the building, only the business, but just because the business is in great shape doesn't mean the building is. You don't need a leaking roof to drip all over your inventory, and you don't need the code inspector coming in and saying something is wrong with the building, like a bad foundation or termites. It will be worth an extra couple of hundred dollars to be sure.

Theresa icon_smile.gif

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JoAnnB Posted 23 Sep 2008 , 6:06am
post #3 of 12

A few things to consider. Do you have funds, it may be very difficult to get a loan from a commercial source.

Can you produce enough income to cover the monthly expenses: rent, utilities, insurance are just the basics.

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OhMyGanache Posted 23 Sep 2008 , 6:10am
post #4 of 12

Times are tough right now. I bet if you waited a little longer, that "rock bottom" price might go even lower.

There was a bakery/cafe where I live that was going out of business and kept lowering their asking price. I just got an e-mail today from a real estate agent stating that they were now out of business and liquidating their assets. They went from $80,000 to $75,000 to $65,000 to $50,000 to $45,000 to out of business. I am hoping to pick up some of their equipment for cheap though - the e-mail said to "make 'em an offer!" icon_smile.gif

Food businesses are tough, and banks don't like to lend to finance them. Add to that the fact that banks are tightening up their lending requirements for ALL kinds of loans (including home equity) - and it's going to make it that much more difficult for them to sell.

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cakequeen50 Posted 23 Sep 2008 , 6:20am
post #5 of 12

"Times are tough right now. I bet if you waited a little longer, that "rock bottom" price might go even lower. " Yes, and someone else could come in and snatch that prize right up from underneath you!

I just put a big down payment on a cake business that has exclusives with a couple of wedding cake venues. You know, the kind that say, "use our cake person or we charge you a cutting fee," well I am one of those cake people now! I had a dream and now it has come true and I am willing to work had to make it fabulous!
You've got a steal there, if they are being truthful. If this is your dream, do it!

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CakeRN Posted 23 Sep 2008 , 6:50am
post #6 of 12

another the equipment all paid for or are there outstanding debts on them? She may be asking 55k for it but still owe on the majority of it. Don't get saddled with her debt to besides your own.

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Mike1394 Posted 23 Sep 2008 , 8:32am
post #7 of 12

The commercial customer base? I would get a list, and talk with those customers. See if they will still be around if you buy the biz. LOLOL on the rock bottom price. If he/she wants out there is never a rock bottom price. Keep this in mind that biz is useless w/o those customers. That equip is worth about a 1/4 of what it retails for at most. The person selling has an emotional tie to it you don't. Don't pay for his/her emotion.


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littlecake Posted 23 Sep 2008 , 3:12pm
post #8 of 12

wow that's a lot of stuff for the money, have you been by to look at it yet? it may not be as delightful as advertised....(or it could be) you never know till you see in person (kinda like internet dating...ha ha)

a friend of mine put her shop up for sale, and sold it in a week.....i was shocked it went so fast.

as far as sales go (for me), i'm UP from last the economy hasn't hurt my business at all.

go by, and report back and tell us what it's like!

good luck!

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chefjulie Posted 23 Sep 2008 , 3:17pm
post #9 of 12

He's dropped the price about $15K in a month, so since Im not in a BIG hurry I dont mind haggling a bit.
I do have the cash to buy the business. I promised myself when I started this that I would never go into debt and have stuck with that so far.
I have an uncle who is a commercial contractor so I know he could fix anything that is wrong.
Financially, Im not counting on any of the existing customers. I know I can justify it with my existing income HOWEVER it would be nice to have more money coming in. It would mean I would have to hire someone, and that scares the crap out of me.
Im going to look today with my parents and my uncle. They own several successful bars, so Im value their opinion. Also, my mom is a realtor, so I know she can handle all of the contracts.
At this point Im mainly worried about making the commitment to do the FOR REAL. When I was just renting a kitchen, it was more of a hobby. Also, my husband is in the Army and this would mean I would remain in Houston for the duration of his contract. He's been in for several years and has 3 more to go.
Im definitely going to take a look at the equipment and HOPE I know what Im looking at icon_wink.gif
Thanks for all of the advice and support- If I take the plunge, it'll definitely be a thrill!!!!

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tootie0809 Posted 23 Sep 2008 , 6:29pm
post #10 of 12

Okay, I'm going off on a little bit of a tangent here, but a "$20,000 professionaly installed GREASE TRAP"??!?? Do grease traps really cost that much???

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littlecake Posted 23 Sep 2008 , 7:17pm
post #11 of 12

yeah, if they do the kind that they dig up a giant hole outside, this is what scared me when i first thought about opening up, it seems like overkill for a small shop, isn't this mostly for grocery stores and places like that?

I just got a little box type under the triple sink...(500.00)

my mop sink and hand sink get plugged up in a hurry, it sure would be nice to have the whole place covered.

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OhMyGanache Posted 23 Sep 2008 , 8:23pm
post #12 of 12

I would email Darcy (spongemomsweatpants) and ask her advice. She purchased an already established business also and may have some helpful insight. I don't believe she is on CC much anymore so you'd have to contact her via her website.

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