Buying An Existing Bakery

Business By Sweetface421 Updated 4 Jun 2013 , 7:39pm by howsweet

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Sweetface421 Posted 31 May 2013 , 10:13pm
post #1 of 11

So, I'm in the beginning process of buying an existing bakery. icon_eek.gif


My husband & I met with the owners and they gave us a walk-through.  It's really fantastic - they've put a lot of work into the business and it's running like a well-oiled machine, as far as we can tell.  It's a cupcake shop that has expanded their business to include specialty cakes, macarons, cake pops and box lunches.  I would be bringing in the custom-designed cake part of the business.  The location is phenomenal - It's in a high-traffic area, right in the middle of a very busy shopping hub with a high-end mall and it's minutes from our downtown/metropolitan area.  Truly a dream location.


We have talked finances and projected income, as well as lease issues, employees, etc.  We are in the process of getting their financials and having our CPA look them over.  I am planning on going in and working there over the next month to see how the business runs without having the employees know of the possible "take-over."


Knowing that there are so many experienced and knowledgeable people here, I'm asking for any and all advice:  What would you have done differently?  What have you learned along the way that might help me make this transition with my eyes wide open?  Should I even consider it?


Thanks in advance!!!

10 replies
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Stitches Posted 1 Jun 2013 , 1:10am
post #2 of 11

It seems to me your doing a great job exploring this. Working there under-cover is BRILLIANT!!! You'll have a chance to really see things.....good and bad. You'll be able to see what needs improvement and what works well. If you could work there for a longer time period that would even better.


Do you have any previous experience in baking and owning a business?

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LKing12 Posted 1 Jun 2013 , 1:43am
post #3 of 11

Make sure that all taxes are current.  Buying a business does not wipe out tax debt for the new owner if the previous owner.  Your CPA should be able to help with this.

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jason_kraft Posted 1 Jun 2013 , 2:49am
post #4 of 11

AI would build into the contract a trial period where you can back out of the purchase after working there a few weeks if you notice anything off.

Why are they selling?

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lorieleann Posted 1 Jun 2013 , 3:48am
post #5 of 11

(if you truly want to be undercover, you probably should make your profile location more vague and remove your photo from your profile pic.  As far away as the internet and the world of Cake Central seems, you never know which employee is a member and looking at these boards. That would pretty much blow your cover and get things off in a very weird way) 


and good luck with it! thumbs_up.gif

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Sweetface421 Posted 1 Jun 2013 , 12:41pm
post #6 of 11

Thanks so much for the replies.


Jason, they're selling because the owner is happy with the success of the business and they want to spend more time with family. And I think they've done a great job with this business - it's still doing well because they've expanded their offerings and, if I take it over, I would be adding the high-end cake element to the repertoire so we would be covering all bases.


I do not have experience in running a bakery other than the past four years running my own specialty cake business. This is my crash-course, if you will :)  Honestly, I am using this opportunity over the next month to see how they run their business on a daily basis to see if I am cut out for it.  It would be a lifestyle change for us.  But it is a fantastic opportunity for me and for us as a family and I think we'd kick ourselves if we didn't at least explore it at a serious level.


Keep the advice coming!  Thanks :)

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Benzy55 Posted 3 Jun 2013 , 4:14pm
post #7 of 11


 I also looked into an existing bakery in Texas, everything looked GREAT but then I wondered why are they selling within

6 months of starting their business? I noticed that they were located in a fabulous location BUT they were within a few

blocks of a high end grocery store such as Central Market, Whole foods type market that had bands that came and played

on the weekends, had all kinds of kid's creative things to bring out their parents for all the holidays and how was I going to

compete against that? 
My small business manager suggested I drive around the neighborhood with fresh eyes and see WHO I would actually be

competing against? Box lunches type places, coffee shops, ice cream shops and bakeries and see who was within a few

miles of the business I was wanting to start.  I counted over 20 businesses within 1/2 - 1 mile and my biggest competition

would be the very new Central Market type store I was talking about up there.  After I thought about it for awhile I decided

to not invest, I am just giving you a suggestion to drive around the neighborhood and see who your major competition is.

Good luck!! :) Bren

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howsweet Posted 4 Jun 2013 , 2:49am
post #8 of 11

Interesting, Bren. I've yet to see a grocery store that didn't go great lengths to squash any bakery competition. I would be terrified to open a non niche market bakery in Houston. Even Sprouts caries delicious white bread.

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kikiandkyle Posted 4 Jun 2013 , 2:48pm
post #9 of 11

AI've just moved to Sugar Land and there are cake shops everywhere. Having been to a couple of the grocery stores here, I'm guessing the cake shops are doing OK (i wouldn't buy cake at any of the Krogers round here), although with Costco coming soon maybe that will change.

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Stitches Posted 4 Jun 2013 , 2:49pm
post #10 of 11

I guess it depends upon where you live and how much you enjoy good food. We've got high end grocery store in my area but the baked goods are horrible. Their breads ARE good, but the sweets are stale, too sweet and tasteless. I actually think a great location would be right in the middle of all those high end grocery stores because they attract the clients that are willing to pay for quality. I don't think of them as competition. When they first open they get swamped with purchases but it doesn't take that long for people to realize their cakes taste horrible and they stop buying them.


Make sure you have all their recipes written in: all weights with good directions. They should also be available for you to contact them after the buy if you have additional questions. Ideally you could learn how to make all the product yourself under their tutelage before they leave.

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howsweet Posted 4 Jun 2013 , 7:39pm
post #11 of 11

Yes, I agree. Stores like Sprinkles thrive in locations like that.

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