So, you want to open your own bakery? How exciting! A small bakery is one that has less expenses to start up compared to the larger bakery franchise, but it’s still going to be quite the cost. The very first thing to know about opening your own bakery brand is that you need to have the right amount of funding to cover you for the first six months. This is so that you have enough of an income to support you until you turn your first profit.

The Costs To Consider

To work out how much it will cost to open a bakery, you need to work out how much money you are planning to make with your baked goods. You can then work to distribute all of those estimated costs on your offerings – it’s how the best bakeries figure out their costs. Being able to price correctly is important, and you can use the tips below to price your menu items properly:

  1. Start with a list of all of your ingredients for all menu items in one big list. You can, from here, calculate the cost of each individual item and work out what your pricing will be. You can also figure out how much your ingredients will cost you on a regular basis.
  2. Think about setting fixed prices on your menu. You can then guarantee the costs of those ingredients and you can add these as regular fixtures into your budget.
  3. You can make sure that your prices are competitive when you take all of your costs into account. Your prices need to remain competitive compared to other bakeries out there, and the more competitive they are, the more people will come to your place!
  4. Make a list of all the equipment that your bakery will need and shop around for the best prices. You can then ensure that you have the right equipment ready for food production. This should include your built-in equipment like the ovens and dishwashers that you will need to have installed.
  5. Remember to add in all of your overheads. You need to remember your baking supplies, the packaging options you choose, the rent of the premises, the utilities – it all adds up and all should be in your budget.

This is not an exhaustive list. The right commercial kitchen will be able to churn out the right foods and be known as the best bakery around. For a startup, your equipment will likely cost around $35,000 – that’s down to the spoons and aprons. Brand new equipment is usually recommended, and you have to remember to insure it all, too. You need to choose new to avoid the risks of equipment failure, too. You need to understand how important the maintenance of all of this equipment is, too. Equipping your kitchen should be for the long haul, and if you choose for your bakery to have an eat-in option, you also need to think about tables and chairs for people to use, too.

Licensing Costs

You’ll have to consider the costs of the rent and utilities in your bakery, but you’ll also need to think about the licensing costs, too. These can set you back around $1,000, too, and you need to have some cash set aside for these.

Operational Costs

A huge chunk of this will be in the costs of labor. You need to have excellent suppliers – including delivery trucks – to help you to get your baked goods out there. You have to think about advertising in the local area and on social media, and you have to think about the costs of outsourcing accounts and other admin services, too.

Staffing Costs

Startup bakeries usually don’t hire a huge staff. In fact, you’ll find that as the business owner you’ll likely be choosing to bake everything and sell it all yourself. You can offload some of the tasks involved in the creation of your baked goods, such as your accounting and marketing, administration and IT security. As long as you account for it in your budget, you should be okay to cover it all.

A Back Up Plan

Every single business, bakery or not, needs a contingency fund for those unpleasant surprises. You may not think there will be a problem, but no one saw a pandemic coming, either!

When it comes down to it, you should make sure that you leave no stone unturned in the effort of figuring out your costs. From the equipment and ingredients to the marketing, you need a clear idea of what your bakery costs will be.

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