Starting your own bakery is an exciting prospect! Unfortunately, you could be the greatest pastry chef in the world, but if you don’t have the business sense and financial backing, your business can flounder. Running a bakery can be a costly endeavor, especially in that vital first year; according to Entrepreneur, it can cost $10,000 to $50,000 to start a bakery. Here are a few important financial tips you can follow from your friends at Flores Bakery Service that can help your future succeed.
- Secure separate financing for your equipment
One of your first purchases (after the lease of your building, of course) will be for your essential equipment. This could include dough proofers, depanners, ovens, fridge, and point-of-sale systems. It’s a good idea to gain separate financing for your equipment over putting the cost on a personal credit card or bank line you plan on using for every day purchases. The reason? Keeping multiple lines of capital as liquid as possible will be essential as your situation changes. You’ll always need flour and sugar, but you won’t always need the same amount every day. This will also help you prepare for unforeseeable circumstances.
- Don’t brand absolutely everything right away
Yes, developing a brand is an important step to any business. But you don’t need to brand everything right from the get-go. If you have to package your muffins and cupcakes in white paper bags for the first few months until you get a good sense of your store’s daily sales, it’s not a bad thing at all. There’s not much need to print dozens of branded t-shirts, bags, boxes, and coffee cups until you see a demand for them. After all, things can change drastically within your first year, including the design of your logo.
- Learn what your “break-even” point is
After considering all of the labor, equipment, and supply costs of your business, knowing the amount of sales you’ll need to break even is important but sometimes difficult to nail down. To help, you can and should price your recipes on a per-item basis. Cost out items you plan on using on a daily basis (including packaging and cleaning supplies). Calculate the costs of the equipment you’ll need and set aside as much as you can for future repairs, especially if your equipment is used. Once you know where your “break-even” point is, you’ll know how much you’ll need to profit.
We’re excited to help you establish and maintain a successful bakery! Whenever you require replacement parts, refurbishment, or bakery equipment service, consider the experts at Flores Bakery Service. Contact us today at 1-201-437-0221.