How Much Does It Cost to Start a Bakery

Bakeries have been around for thousands of years and it has been a necessity ever since. It is a place where baked goods are sold. They were first famous in Germany, London, Paris, Rome, and much more. Today, baked goods are now part of every person’s daily life, especially in the United States. Almost everyone in the world eats bread and pastries. That is why opening your own bakery is one great business opportunity. Aside from bread, bakeries also make cakes, which are always in demand during birthdays, anniversaries, and many other special events. But before you can open one, you should first know the cost to start a bakery business.

Average Cost of Opening a Bakery

In the United States, bakeries are very essential. These are the favorite places of most sugar lovers. You should also know that everyone in the world consumes bread. So opening a bakery anywhere will surely let you earn money. However, opening a bakery might cost you a lot. And the total cost to start a bakery business varies on many factors.

But if you are really interested in opening one, here are the things that you should consider:

Average Cost of Opening a Bakery

  • This is the first thing you should consider when you are planning to open a bakery. You should think thoroughly about how much money you want to earn.
  • One important aspect in projecting your earnings is considering goods that already have a final price such as bread loaves, muffins, and other pastries. After this, you should consider those prices to be competitive. There will be a lot of competition available around your place. Make sure that you can compete with their price, yet earn a good income. The importance of planning your earnings is that it gives you an estimate on the average cost of opening a bakery of your own.
  • The cost of starting up. This will be the second factor that you should consider. There are many different startup costs whenever you open a bakery. You will need to buy all the materials needed for baking. You will also need to pay for the fees and permits that are needed for opening a bakery. The usual average cost of opening a bakery in the United States runs around $700,000 and that is a midrange bakery only.

Here is the breakdown of the price:

    • Business registration fee in the United States cost around $750.
    • Permits and licenses that are required cost around $15,300. The price also includes accounting services such as CRM software, Payroll software, and P.O.S machines.
    • Premium insurance for your employees and your property can cost around $30,400.
    • Rental cost in a busy location runs around $200,000 per year.
    • Establishment renovation and bakery construction can cost around $100,000.
    • Utility expenses such as gas, sewer, electric, and water run around $6,500.
    • Equipment needed for your bakery such as baking ingredients, Ovens, Mixers, Tables, Sinks, Slicers, Cake decorating tool, and much more can cost around $100,000.
    • Store equipment such as security, cash register, signage, and ventilation can cost around $13,000. CCTV installation can cost $5,000.
    • Furniture and Gadgets cost around $25,000
  • Expenses during operation. As long as your bakery runs, there will be unavoidable expenses that will occur along the way. This can be direct or indirect expenses. Direct expenses are expenses that are needed to maintain the operation of your bakery. On the other hand, indirect expenses are expenses spent other than any baking activities, such as advertising.

For a bakery that has just started, prepare at least $60,000 extra for the 3-month operational cost since the bakery is not earning money yet.

Extra Costs

Now that you have an idea on how much does it cost to start a bakery business, you should also know that there will be extra expenses that you will make along the way. These additional expenses can be avoided. However, these can help you make your bakery as a successful one. Here are some of these extra costs:

  • One extra cost that can add is the cost of marketing promotion. You can avoid this. But marketing promotion can help your bakery be known to people. Marketing promotion cost may run around $3,500 and this already includes printing of flyers.
  • Hiring a business consultant can also an additional expense and also a cost that can be avoided. However, a business consultant can be a great way to make your business successful. Consultants can also help you make your business plan. Hiring one can cost around $2,500. You can find a professional consultant at International Staffing Consultants’ website.

Extra Planning

Just because you are done opening your bakery doesn’t mean you will stop planning. Every business will surely experience unexpected and emergency situations along the way. When this kind of situation arises and you don’t have any backup plan, this might result in a ruined business.

You should always prepare and budget extra for these emergency situations. These emergency situations include sudden equipment breakdown, facility problems, and much more. The business consultant that you hired can help you with this kind of planning.

Tips for a Successful Business

If you are a beginner in the business industry, you might need tips to make your baking business successful. Here are some major tips:

Cost of Opening a Bakery

  • Quality is always greater than savings. If you buy equipment and products that have low quality just to save you some money, you might not satisfy your customers.
  • Do the right financing. Hire a consultant just to be sure what the right thing to do is, even if it will cost you money.
  • Advertise and offer promos. This is the best way to attract customers. You can either advertise physically by giving out flyers or posters or you can do it online. There are a lot of available Social Medias where you can advertise your business.
  • Do not brand all of your items directly. You should start slowly, branding one item at a time.

You can read more tips when you visit B Plans’ website.

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