I was just running some numbers real quick (start-up costs, payroll, rent....ok, it wasn't real quick, lol) and it seems as though if I opened up a shop I would need to make at least $7,000-$8,000 a MONTH just to break even - does this seem right?!

(I figured in a 1520 sq ft for $18,240/year with 4 full time staff, supplies, etc.)

This seems.....um, not do-able!!

What kind of shop are you opening? A cake business that is appointment only or an actual cafe type place where people can come in and sit and have coffee and a cupcake kind of thing? This would require you have stock in a case and that is extra overhead for someone working the counter as well.

If it is just cakes by appointment, a staff of 4 seems a bit large for a beginning cake business. I would think you as the primary decorator and maybe 1 person part time to help until you get your business really established.

When I did a wedding cake tasting with a friend. We went to all shops that were cakes by appointment. These were very well established bakeries that had a pretty strong name and reputation in Dallas. Through the discussions we always ended up talking about the staff. In 3 out of 5, it was a husband wife team. With just the 2 of them running the show for the majority of the time. One had a 3rd full time employee and one of them had a single part time employee.

But again none of these were cafe style businesses. There was a great thread on here a couple of days ago about a woman and her partner who had started a cake business and were barely able to pay the bills. The general consensus was they were over staffed (2 decorators +1 full time employee + 1 part time employee) and they might have expected too much too soon. Every post specified that you probably won't be taking a salary out of the business for the first 3-5 years. The money you make ends up going right back into the business until you get a really good consistent client base. I'm sorry I don't have a link to the thread but I didn't post. Hopefully some of the wonderful bakers will pop up and give you some feedback.

Hi sillywabbitz & thanks. I plan on opening a custom cake (birthday, wedding, etc) shop & also have cupcakes & coffee, etc. I am not starting off paying myself a lot at all. Me, probably dh, if not, someone else doing the baking on full time. I cut it down to one other full time person (cashier, helper, etc) and went down in space size and still coming up with $6k per month. Although, if I go down in my sq. ft. then I can probably cut back on other start up costs. But still...walk-in fridge, display cases, ovens, oh my! I didn't even figure it utilities yet!! I'm starting to wonder if I'm wasting my time!?

I agree that a staff of four is a LOT! I didn't have a showcase biz, but I did have a 300 cookies per day cookie order AND wedding cakes AND my catering.

I had 2 high school girls come in for about 2-3 hours after school, 3 days a week, to make cookie dough balls to put in the freezer for the cookie order. I'd grab the dough balls and throw them in the oven during the day, and then we'd box up the order when the girls came in that afternoon. with 2 commercial ovens, I could bake 300 cookies in 10 minutes.

You may think you need a staff of 4 based on how long it takes you to bake at home. you can't figure on that. Working in a commercial kitchen is WAY more efficient and much faster than what you can do at home. A 5 tier cake that I baked at home took me over 7 hours just in baking time. I baked a 5 tier cake in my comm'l kitchen and it took about an hour or so.

My home dishwasher takes over an hour to cycle. My comm'l dishwasher took 55 seconds to cycle.

(Sigh! I MISS my big kitchen!)

I was recently looking into opening a shop too. I was looking at 2 spaces, one would have been more suitable for custom orders and the other for dine-in. I came up with $8000 in costs with only 1 full time person and no pay for myself. Your labor can be your biggest expense. I decided to keep my kitchen rental situation as well. Right now, I am not willing to put in 12 hour days, 7 days a week. I do still plan to get a shop, but my plan is to first build my business to the point that justifies it- like when I am paying rent equal to what a lease would be. You can count on equipment costing at least $24,000 if you buy it used.

My sister and i are just about ready to open our shop. We bought all our equipment second hand..except for the oven. Family and friends have helped us with the reno's to our shop. Our space is 900 sq ft with most of that being kitchen.
Our plan right now is for just the 2 of us to work it with my niece coming in if we get to busy. we will only have seating for 10 so hopefully we can mange with that. Most cc shops i've been in is take-out.
Our baking will be done in the am before we open hopefully leaving one of us to work the frontend and the other to do any cakes and custom orders.

2K a week for 5 people working full time is not very much at all...you should be able to produce WAY more than that...

that's too many on staff...you and a part timer should be able to do more than 2K a week.

people who haven't worked in a bakery don't realize how much you gotta put out...speed is the name of the game, doing this professionally is light years from working at home.

Thanks so much for your feedback everyone, especially IndyDebi!!! I always love hearing what you have to say! And you're right...I was totally figuring on how long it takes me to do things at home now.

Any other good advice you've got to give off the top of your head?! I went to an online store (webstaurant.com I think?) and priced stuff that I would need...I didn't even finish yet & I'm up to about $30,000!?

Also, any advice about square footage? I'm thinking I could get by with an extremely small space since my home kitchen is REALLY small.

I was given some very valuable advice when looking for a new space. Always get more square footage than you think you need. You want a space that allows for growth, otherwise you'll find yourself moving in a couple of years. Make sure you have enough space for storage. When you start buying wholesale, you'll be buying in bulk. 25 lb bags of sugar, 50 lb. containers of shortening, etc., take up a lot of space. So if you think 600 sq. ft. will work, go for 1200. You'll be happy you did.

Ok, then, that answers that question! I've been wondering if I should start in a small space & when the time comes, move to a bigger space. Looks like I need to start off with the right amount of space! (Which, I've had my eye on this one space....omg, I'm in love with it! 1800 sq. ft.)

I've started making my shopping list...my local restaurant supply store said to bring them the list (their catalog doesn't have any prices) and they'd give me a total amount of the cost of everything. I do plan on looking at Craigslist for everything too. But I'm going to need a loan to start all of this...so I'm guessing that I should list everything at new prices, and just try to buy used? WOW, I wish I could get some deals like that ($50 for a comm. fridge?!)!

i got a 20 qt hobart on ebay for 200.00 last year.....i hope you can find some deals too....

Ok so i can only speak from a personal view as all of us are different and r in different parts of the country. My family opened the bakery we have on a whim and as a sort of hobby. All of the employees were family and there was a total of about 6 to 8 of us. My uncle was the only baker. We opened from 7 am to 930 pm ( its a hispanic bakery where its the norm to be open that long). I think we spent about 8000 in equip all secondhand and have added along the years. We have currently 1500 sq foot establishment that does a sort of self service store front. Person comes in gets tray and gets what they want then cashier bags and charges. All of our bread was 3 for a dollar or 50 to 75 cents a piece. At the beginning we would make about 300 to 500 dollars a day. It was hard at first but we stuck with it and pulled through. We thank God that we have this bakery because who knows where we would all be without it in this crazy economy. So all i can say is if u have family that u can count then they would be # 1 help. Don't get discouraged if its something u wanna do then do it!

ok- yes, I got one of my comm'l fridge's for $50--- one of the other's I got for $5.00!!!! and the $5.00 one was full of beer and wine (which my DH dutifully disposed of- he said it was his contribution )

It took me 1.5 yrs to get to a staff of 4 people. It is amazing how much more you can get done with more people, so doing 2k a week is definitely possible.

Have you talked to other bakeries in your area to find out what level of business they are doing ie- How many wedding/occasion cakes etc?

OMG!!! How in the world did you end up with TWO comm'l fridges for $55?!?! I want to be you LOL

I haven't talked with other bakeries...here's the thing...I'm in a pretty rural area. If I open up this shop I'll be the only one in my area that does what I do. I do cakes now (legally) out of my home, and do about one wedding cake per week from May through October. I'm always turning people away because I simply don't have the time or room or transportation to do more than one wedding each week. Another problem I have right now is I am a member of this wedding company & I have to clear it with them to use their meeting room & meet with potential clients to have tastings. Of course I have to use their schedule as well & they are not open on Sundays. I think getting a shop will help me get my name out there - a lot of people still don't know me around here, and if they actually drive by my shop & see beautiful dummies in the windows, that would be of great help. Also, where I'd like to be is on the main street in my city. A lot of businesses around & a big high school nearby too.

I "heard" that the other main bakery in town isn't doing well. (I'm not surprised since they don't keep up on their website & have heard customers complain about how rude they are.) There is only one other place in town that does wedding cakes. Then it's a half hour drive to another cake place. I'm in the biggest city of this rural county & I *think* I would do well if someone could help me out ($$)!

I've got to finish this dang business plan!

Forgot to say...

I really don't have too much family around that is willing & able to help me out. I've figured that it could just be me and one other person at the shop to start. My dd is 13 and can help after school.

This crazy economy...I keep going back & forth as to whether or not I should do this. I've been searching for a job for about a year after my dh got laid off. We both have. So this makes the most sense. BUT...we'd have to take out a huge loan & I'm not too happy about that. I mean, what if it DOESN'T work?! Then what?!

Then I go online & see all these places needing RNs, LPNs, CNAs & are willing to train you for free. Yes, it's a totally different direction, but it's security.

I just don't know which way to go! Of course friends & family want me to do cakes, but it's not like I'm never going to make a cake again if I go in another direction!

I don't know!!!

ETA: And that is even IF they give me a sm. biz loan!

How about go with the rental kitchen route for now? That way you don't have to fork out a lot of money in the beginning. And you already have a helper (your husband)!! Would it be possible in your area?

I consistently see two door coolers for $200 on CL. Single door for $100. Three bay sinks for $100.

Walk in coolers 800-1200.

I began shopping for my convection oven, before I needed it. Got it for $50. Yes it works fine.

Just keep watching.

I can't image trying to run out bakery with out the four people I have working for me. Unless you are talking very low volume? I have three decorators, and one girl who works the front, answers two very busy phone lines and takes orders. We have a large wedding business and doing all high end cakes. We leave the sheet cakes and such like that to the grocery stores..not worth our time.

A couple of thousand a week will NOT keep you running. If you are planning on just doing a small business, no walk in traffic, and just "appointment only" cakes ,I wouldn't waste my money with a commercial space. Find yourself a rental kitchen.

Sure, you can bake faster and clean faster, but you can't decorate any faster in any kind of space. Especially sculpted and wedding cakes. (It will take us half a day to do some wedding cakes...!) I don't know how you do that with two people! (the paper work alone in running a business is a full time job!

If you and your husband are both out of work, I would not recommend investing in a retail storefront unless you have a significant cash cushion, as it will be very difficult to get loans with reasonable rates. Starting small with a rented commercial kitchen is possible, but there will still be significant overhead and you will probably not be profitable for the first year or two.

My wife and I run a small appointment-only bakery in CA (no retail storefront)...she does all the baking and decorating along with an intern, and I handle the business side (which probably takes 4-8 hours/week). If I didn't also have a separate full-time job we wouldn't be able to afford to keep the business, as it doesn't bring in enough profit by itself to meet living expenses.

Dont get discouraged, it's just realistic, I want to open a retail store front as well in CA, however, I can't...I can however rent commercial space and make money and do what I love, just can't have everything i want right now! I think everyone is just trying to help you look at things realistically good luck and you will never know if you dont try! That's what my mom always said, it may be scary but you can't loose if you try!

Thanks Kimmerly I do work out of my licensed home kitchen...so I guess I will keep on doing that.

And you are right - I have to try!

Dont' give up your dream...just sometimes you have to put it on hold. I've been waiting for 3 years to open up my own shop. There isn't another bakery around here for 45 miles (unless you count the retail chain and grocery stores). I just did cakes for friends and family to practice. I kept telling myself that one day when things were supposed to happen they would.
I have had my eye on this one spot right in the middle of town within walking distance of all the municipal buildings, lawyers offices, pharmacy, etc. and have been waiting patiently. Well, patience paid off. I got the phone call last tuesday that the building was available and I went to see it on wednesday. I spoke with the owner on thursday and he know's I want it. I'm just waiting for the paperwork to be drawn up!
When the time is right....you'll know it. I've been a nurse far too long not to go with my gut!!

Your welcome!! And lucky enough to be able to work out of a home kitchen we can't do that here in CA, i wish we could!!