Anyone here with their own pastry shop? I would love some tips on how to get started particularly how much I should invest in my kitchen. Dough mixers, refrigerators, ovens. Location is somewhat flexible, I am in Canada but I have family in New York state where I could try this as well. Any advice would be great as I am a "fruitcake" in this area ;)
How much money do you have set aside for equipment purchases, product testing, start up expenses, and cash flowing your business for the first year?
AReally truly the best thing I did was make a business plan. Jus the act I writing it answered so many questions.
you can start by doing online searches--"small business start up in _________ whatever county/state/province" and look for the government sponsored website--that will get you rolling--
you can get used equipment--you will still need a lot of money--i love to 'shop' bakery equipment on ebay
there will be a lot invested in getting the property to code--improving it enough in safety, electrical and especially plumbing--
it's like giving birth to twins every day
Investment wise I could finance 100K + additional 50K borrowed. How do you go about estimating the number of orders/customers you would initially get? That's the tricky part. Allot of assumptions I guess.
AAgain - business plan.
Some good material out there. I guess I have lots of research to do :)
AThere may be a lot of assumptions, but a business plan will make them educated assumptions. A good plan will take into account slow periods in a year, population of your target area, costs throughout a year (or more)... And so much more! Can't beat a good business plan.
AAm I selling something? That sounded like a pitch.
AHave you thought about putting together a business plan?
Seriously though, the starting points for your plan would be your competitive advantages, market research to determine the size and demographics of your target market, and a forecasted profitability analysis. You should also see if it's possible to do a test run with a home-based business (if legal in your area) or a rented commercial kitchen before financing $150K at what are probably not-so-favorable terms.
If you don't know how to do this and don't want to take business classes yourself, I strongly recommend working with a partner with a business background.
Here is an excerpt of a survey that you can Google about the bakery business. It is pretty dated at this point, and Modern Baking magazine has ceased publication, but you may still be able get some starting points that you can use to write a business plan for opening a pastry shop. Keep in mind though that not every bakery may have responded to the survey, and that to get a median $333,000 in sales, there were plenty with far lower than that number, and many with a higher amount of sales. Your location, the competitive landscape, your product offering and your business savvy will all contribute to what your sales could be.
"Retail Bakeries Strong Amid Pressures" by Edward M. Lee in Modern Baking, Vol. 19, No. 6 (June 2005). Gives the results of Modern Baking's Exclusive Retail Baking Survey. Survey results are compared to the last survey results in 2003. Highlights of the 2005 survey include: Median annual sales of stores surveyed were $333,000 while the median store sizes was 2,120 sq. ft, and the average bakery sale per customer was $12.51. According to a table on p. 38 retail bakeries are using more mixes/bases compared to scratch, frozen and ready to sell items. Includes starting wage comparison's for the position of baker, decorator, baker's helper, retail sales person and clean-up/dishwasher for 2003 and 2005. Notes that while wages stayed flat, more positions received benefits including paid vacations, health insurance, profit sharing, retirement plans and other benefits. Increases in utilities and rent or mortgage fees effected financial results. Also indicates the that some in-store bakeries are adding other products to increase sales including sodas, juices, teas, conventional coffee service, sandwiches, espresso/gourmet coffee, other deli and candy. Includes tables and graphs.
AAre you new at baking as well as the business side of things?