Two of my sisters and I have been discussing and planning to open a bakery business for the last 8 months. We will carry pastries, coffee, but we are hoping that most of our sells would come from cakes. We have been doing lots of research but I find it really hard to come up with numbers. I have also been working with a representative from the SBA and we are planning to have the loaned backed by them. I'm also not sure if that's a good idea. I also know that most banks require you to have at least 20% of your own money, which is not a problem between the three of us. We're just having a problem determining the amount to ask for in a loan. Also, I tried doing the business plan but it's just a little too much for me, so I found a company that would do it for a fee but they still require lots of info from us to but in the plan. So, could anyone tell me roughly how much of a loan would be needed to get started?

TIA,
Cynita

The cost will depend on so many variables.

Do you have to build out the space-plumbing, grease traps, signage
multiple sinks
Equipment, new or used

Do you own or rent the building? insurance? taxes?

There are seveal long threads in the business form that describe many of the questions you need to answer before you get started.

I don't have an answer for you, but wanted to mention you might have better luck asking this in the business forums on here=) So if you don't have any luck in this forum, try posting here...

http://forum.cakecentral.com/cake-decorating-forum-18.html

HTH some, Jen

My business plan took over 9 months, a CPA, an attorney, and an orgz that helps folks put together biz plans. It ended up being over 40 pages and had a final price tag to me of $2500. Best money I ever spent.

THe most valuable part of your education is the process of writing the biz plan itself. You have to research your market, your competition, your advantages, why people will buy from you, the equipment you'll need and the cost, a list of your suppliers and more. The process forces you to think in 'business-mode' and not an emotional mode. It forces you to 'get real' with real information, facts and figures.

Yes, the orgz and your CPA is going to require numbers from you. they can't just pull numbers out of the air on what your expected sales are going to be. this is part of your education .... HOW do you expect to make your money? You state that you "hope" that "most" of your sales will come from cakes. Hope? The bank doesn't want to hear what you "hope" to do ..... they want to know what you are GOING to do.

The first bank I went to told me (and it's been repeated by other CC'ers on here) that if you are in the food industry, you can't get an SBA loan to open a business until you've been in business for 3 years.

A biz plan MUST have a break-even point (and chart); a pro-forma income statement, start up and capital requirements .... this is why I hired my CPA. These kinds of accounting requirements were way above my head. But he couldn't figure start up costs until I gave him numbers on rent, renovation, equipment costs, insurance costs, projected payroll, etc. He couldn't do a pro-forma income statement until I gave him what my projected sales would be and how I came up with those numbers.

To give you an idea on numbers, I worked with a kitchen designing firm who was able to secure some good used equipment for me. Equipment was $50K+, build out construction was in the $20K range. This doens't count the few thousands dollars worth of equipment that I already owned (mostly smallwares but some of it pretty significant). Since I bought the equipment from them, the design fee was waived.

I will be more than happy to help in any way I can if you have some specific or detailed questions.

edited to delete dupl post.