Initial Investment To Start Bakery?

Business By cuteums Updated 9 Sep 2010 , 11:22pm by loriemoms

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cuteums Posted 9 Sep 2010 , 1:14am
post #1 of 12

For those of you who have done it, how much did it cost you to set up a store front bakery? Equipment, etc. I'd like to do custom only but you need the same equipment as any bakery. Thanks.

11 replies
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jsmith Posted 9 Sep 2010 , 1:32am
post #2 of 12

Ours was about $15,000 plus about $1100 rent every month plus an exhorbitant amount for electricity. Ours is a custom cake only shop and we got bought most of our equipment used.

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cuteums Posted 9 Sep 2010 , 3:49am
post #3 of 12

Did you set the place up from scratch, or was there an existing restaurant or bakery in place before you started? (i think I have to factor in plumbing/grease traps, etc.) I know the electric bill will be ridiculous. I am trying to make a business plan up and crunch some numbers to see if this will be possible. Thank you for your input.

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jsmith Posted 9 Sep 2010 , 4:04am
post #4 of 12

Ours used to be a restaurant so fortunately it already had a grease trap, floor drains, and a bathroom. We still had to install sinks but we spent far less than most people have to in order to open a food place.

Here are some before pictures:[email protected]/3902308014/[email protected]/3902307578/[email protected]/3902307788/

We remodeled a little when we had more money:

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loriemoms Posted 9 Sep 2010 , 9:23am
post #5 of 12

We renovated an old Subway Shop, which also had a grease trap, but didnt have a hood ($$$!) contractor, equipment and permits, etc ran us about 50K. Which is very low for this area.

A word of advice: Our operating costs aren't too bad as our rent isn't bad, (as well as we have a low tcam) and the electric is omg crazy, but still not too bad considering we are running an oven, 2 reach ins, 1 freezer and a walkin and AC going....what bits my butt every week is payroll. Not only pay to employees but taxes are crazy.

Will have to post before and after photos myself when I get a chance! Made quite a dramatic difference!

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tokazodo Posted 9 Sep 2010 , 9:35am
post #6 of 12

@ catums, jsmith and loriesmom:

what was it, that made you take the final step and take the risk? My husband and I are considering, but it's hard to take such a big risk. Is it easier to purchase the building, or rent? We found a place for sale for 200K, beach resort area, great location, not a bad price considering. But we'd have to gut it to set it up, to bake heavy, 6 months out of the year for tourists, lighter the rest of the year for locals. It's a big decision.

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cuteums Posted 9 Sep 2010 , 3:08pm
post #7 of 12

Thanks for all the advice, and the pictures! Tokazodo, I haven't taken the final step yet. I have been thinking about it for 2 years now. I don't know what I should do. I can't be legal in my house where I live so I have been thinking about stepping out in a big way. So I am trying to see if I can justify the initial expense as well as the monthly overhead and figure out an approximation of what that would be. Rents are high near me and we have some of the highest electric rates in the country so that bill will probably rival my rent bill. I know I want to do this. I see an open store for rent and I get excited. It's only when I think of all of the details and the money and and the actual logistics of everything, that I get scared and overwhelmed and shelve the dream for another year.

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jason_kraft Posted 9 Sep 2010 , 4:45pm
post #8 of 12

If you're only doing custom orders I don't see why a retail storefront is will help grow your business, but it also greatly increases your overhead costs as well as the time investment in keeping a walk-in location open.

We are renting a commercial kitchen for about $500/month (average of 40 hours/month), our non-recurring startup costs were about $2000. Mixers and a walk-in fridge and freezer are already provided.

Renting also gives you more flexibility...if we feel like taking a month off, we can do so with no problem, since we only pay for the time we use at the kitchen. We did the numbers, and we could have opened a retail bakery, but we would have had to do several times the amount of work to make the same amount of profit.

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scp1127 Posted 9 Sep 2010 , 5:26pm
post #9 of 12

I will be legal in about three weeks in my house... just finishing construction. Mine is also orders only. Here is something to think about. My husband's physicians office is just a mile from my house. If this home separate kitchen didn't fly, I was going to set up in his finished basement. My point is, you don't need a storefront. He would rent to anyone. Think about non-traditional places to set up. Knock on some doors and ask. Like him, many building owners don't use all of their space. There is an unmarked door on his building and it has about 800 sf of great space for a bakery. That one could even be a storefront, just not on a main street. He has never bothered to rent either space, but he would. This building is only one mile from the mall. So look around. If I didn't have this setup, I would definitely look for some lower rent alternatives.

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jsmith Posted 9 Sep 2010 , 5:49pm
post #10 of 12

I'd wanted to open my own shop for a while but never thought it was financially possible. My friend and I figured if we had three people to split the rent with but still retain our own businesses then it might be possible. It's worked out well. I'm still barely breaking even every month so there's no way I could have done it on my own. But it's been a good learning experience. Just know that instead of getting paid, you'll be paying to work like crazy for a couple of years. I get pretty jealous sometimes of the kids who work at mcdonalds because they make more than I do. This is definitely a labor of love with little financial benefit.

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amycakes22 Posted 9 Sep 2010 , 8:22pm
post #11 of 12

hey everyone,

I too am in the beginning stages of opening up a store front bakery. I will be opening up a bakery & coffee shop. Open in the mornings for the AM coffee/pasty rush and appointment only tastings and cake deliveries in the afternoon. We have to start from scratch with our location. We got a good rental price because it is literally a bare space. It adds up QUICK when you look at everything that goes into making an empty space operational!

It is definitely expensive! I'm still looking at start up costs upwards of $50,000 and 65,000 once all is said and done. They're only so low because my husband, inlaws and my father are all licensed contractors who will be doing the work in exchange for a lifetime supply of baked goods. If you have a solid business plan and your anticipated sales look good, you should go for it! Good Luck!

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loriemoms Posted 9 Sep 2010 , 11:22pm
post #12 of 12

These are all good tips and a lot does depend on your area. We orginally were going to do a warehouse space, but zoning would not allow us to have food in many of these areas, as well as we were required to have a greasetrap. Again Zoning issues. I didnt want to do a storefront (and still dont really want to do a storefront, so I have a very limited one..just a bakery case, with a few tables and chairs, and we just put out cupcakes and small cakes they can buy and then we decorate. Most of our stuff is custom orders. We looked for about 2 years for a space and ran into this one by had been sitting vacant for four years and the landlord didnt want to put any money into we got it for really cheap rent.

I have to tell you, if you have ANY doubts at ALL, walk away. This business consumes your life, and money. You have to LOVE IT and be wiling to really work hard at it. Its expensive and its time consuming to get started, and you can't "take a day off" because you have to pay your overhead!!

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