I'm sure its somewhere on here, but I haven't found it:
I am working on a business plan. I currently rent a pretty expensive kitchen (I am looking around for other options) and have a home office. Can you tell me what a reasonal breakdown of expenses should be. I know it may vary from biz to biz and location to location, but some advise would help. For instance, what's a reasonable percentage of sales for
- rent
- ingredients
- Licenses/Fees/Insurance
- Paper/Packaging Supplies
- Equipment (new tools, small appliances like a new mixer)
- Savings
- labor
Hope this question makes sense and I appreciate any advice.
TIA!
AI find that it's easier to look at your cost from the ground up and compare your total cost for each product with the market price in your area instead of looking at each separate cost component as a percentage of top-line sales.
The cost for each product will consist of ingredients, labor (your hourly wage), and overhead (per order, based on annual overhead and estimated order volume). Generally markup for profit (which would be your business savings) is in the 15-45% range. If you rent by the hour I find it's easier to bundle that cost with your labor, but if you pay monthly you can allocate it as overhead.
- rent
- ingredients
- Licenses/Fees/Insurance
- Paper/Packaging Supplies
- Equipment (new tools, small appliances like a new mixer)
- Savings
- labor
Here's some numbers that might help you to begin:
- Rent in my area is around $1,500. per month & plus Utilities $400. per month
- Ingredients depend upon what I'm making but on average it should be 1/4 of the retail price of your item
- Licenses/fees/Insurance I don't have a store front, but insurance is $500. per year average. That's only on my manufacturing of product not health insurance or insurance on a location.
- Paper & Packaging: it's about $.65 per 10" cake box and cardboard
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