Ok, I've been a home baker (not for pay) for a long time....and for years I've heard "You should open a shop"...well I've been hearing it more and more lately, with the last cake I did for a friend (as a gift) resulting in 3 calls from friends who thought it was the best cake they ever tasted (and pretty too)...and would I please make them cakes. I've always said no, I couldn't due to CA's rules about home bakeries...(except for one friend, who I did a cake as a wedding present) I recently had a local coffee house ask me to bake for them...but no commericial kitchen.

So....I've been looking into renting a commericial kitchen..and lo and behold I stumbled onto a (tiny) storefront - just minutes from my home, with a full commerical kitchen (currently houses a chocolatier/frozen yogurt/coffee place)

I have no rep beyond friends...and no "real" experience...but what I bake at home is good......I have a ton of recipes I've developed..incuding alot of speciality recipes (vegan/non-dairy/organic...etc)

So I'm figuring with 1 part-time employee to help, with rent, utilities, WC, liability, utilities...(bare-bones) I need to make about $200 a day in sales (planning for 5 days a week - 4 weeks a month) (not including the cost for making the goods) I would initially make nothing at this rate...but I'm hoping I could get my name out there. There are no bakeries in the immediate area (save the local grocery stores / Costco)

The area is reasonably affluent, and I'm being encouraged by several of the local shopkeepers to go for it...that the area needs a bakery...and could well support it. (There was a bakery in the area a decade ago..until the owner died...family liquidated)

So for those of you with storefronts....is this do-able? I'm willing to invest some from home equity to get it off the ground...but I need it to break even pretty quickly, and hopefully turn a profit.

I'm probably crazy.....but am looking for feedback before I look more into it.

Jill

does that $200 cover cost of:
ingredients?
packaging? (all those boxes!)
advertising?
accountants fees?
lawyers fees?
licenses?
taxes (property, sales, income -- remember you have to contribute to employees FICA and Medi taxes and pay self-employment on yourself)?
loss leaders (aka sample cakes, etc.)
cleaning supplies?
delivery vehicle and gas & insurance for it?

and only 5 days a week? more realistic is 6. Mon.>>Sat.

In the particular area, most of the businesses are closed either/or/both Sun & Mon....so my thought were Tues-Sat with Sun & Monday "By appointment". (I had a problem with this for my Sunday wedding, had to arrange to p/u Sat...which sucked, and rent a fridge..not fun.)

As most of my competition in the greater metro area do not deliver, I wasn't considering a delivery vehicle...though I may add that service - at an additional fee.

As I said in my initial post, that $200 did not include the costs to make the baked goods, ( Ingridients/Boxes, or any other consumables) nor did I mention advertising. I did include all costs to have an employee (WC, FICA, Medi) Lawyer is covered, didn't consider an accountant. Property taxes are the landlord's responsibility, Sales tax would be added to orders, and income tax....well that only applies once I start making a profit, right?

Can a small bakery "break even"? ...part of my concern is the rent....my metro area is very expensive...although the employee cost is the highest expense. I'm trying to figure out if I can make this pencil...especially since 1 year leases are the norm...and I personally saw a boss's business fail/close....and still owe big $$$ for "rent."

Jill

You might want to gather all the expenses, including the ones Doug listed above, and have an accountant to a break even point for you. This will give you a true number of how much you need to do a day/week/month to cover the bills.

The best advice I got about opening a shop was...
make a list of everything you will need. Get an estimate.

Now double it.

And yup, they were right. But it's very doable if you hire someone to track the money, and help you budget. And it's okay to not start out with everything. I'd rather have to buy something, rather than never use it.

Thank you so much for bringing up this subject. I know there are so many of us that have been concidering this and wondering what goes into it. I wish you all the luck in the world and I look forward to hearing other opinions.

You know I always here at first that you might not break even with a new business. I hope that is NOT the case with you! It sounds like you are making a plan and don't have anyone or anything in your way! You should go for it! Good luck to you! Let us know when your shop opens!

I've been researching this for about 6 months now, and like you my city does not allow in-home bakery services.. My goal was to rent the commercial kitchen for at least a min. of 6 months and then see how it went and go from there. I'm able to rent a kitchen for 4 days a week 12 hours a day for $250.00 all inclusive. Which I think is a good deal.
I'm going through a program that teaches you everything about self- employment, and doing a business plan.
I think that is the most important thing... you need to have a business plan in place before you start anything IMHO.
I am currently looking for a store front, but I will not be a full bakery, no pastries, donuts, bread.. just cakes, cookies and cupcakes.. by appt. only.

Can you do it by yourself for a while, before hiring anyone, as that would save you alot. What about doing your original plan? My business advisor told me there will always be something else, (as I wanted a storefront right away)..If you do rent a commercial kitchen and then see where it goes from there?

I wish you good luck in whatever you choose to do!
But please check into doing a full out business plan first.

Such a salient subject...I think everyone's advice is very good. It is well known that the restaurant/bakery business is very high risk. That being said, how big a risk taker are you? How motivated? How much do you really want this? I believe that motivation is extremely important in the success of a business. It sounds like the area could support the type of business you are proposing. I would talk with area business owners, then look inwardly. Is this your passion? If not, walk away. If so...go for it!!

Are you doing a storefront with seats/tables? Will you provide beverages? Perhaps a "coffeehouse"/deli type atmosphere. Most places I've heard about have to add extras to their menu to make the extra buck and to round out the service. Most people want milk/coffee with a yummy cupcake. Or would it just be cake/cookie sales? Just curious and offering extra considerations.

Where in CA are you located?? I'd come and help for free!

Good luck to you - it sounds like such a great opportunity.

I think maybe your venture should be like the CC mascot, we can watch you grow and flourish!

my husband sells for one of the largest companies that supplies the food service industry, and several of my husband's largest clients are some well known movie chains. my husband said that the biggest room for profit is, by far, the drinks. you're charged 1. 50 or way more (especially at the movies!), and they have around 3-10 cents in it. i'm not sure if this runs the same for milk, but coffee is the same also, since my husband has many coffee chains clients, as well.

Yes, the same at my jobs where I've worked, Dennys and Domino's. We always pushed the drinks, its the biggest profit by far.

Another thought .... if you sell food to be eaten on premise (any indication of restaurant style set-up), then there are add'l costs and requirements ... different health dept rules, you must have a public handicapped restroom access (but since I don't have that, I can just have a regular restroom in the back of the shop, rather than pay $9,000 to move it to the front of the shop and make it handicap accessible.)

rather than 200.00 a day...it's more like

00.00
50.00
200.00
500.00
1800.00

all the work is on friday and saturday...

saturdays are really rough....as was said by another poster who's husband is in the biz...i'm transitioning into drinks...frapps etc...while i still have an arm left...ha!...

you can do it...but it really is alot more work than you'd think

I would look for a friend or someone just wanting to learn more about cake decorating to work for free until you get up and running. I also would not buy anything until you find you need it.

I think you could do it. I think you SHOULD follow your dreams and give it a go.

Where in CA are you?