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How much does it cost to start a bakery business

Summary

Starting a bakery can be costly, from securing a lease to stocking up on high-quality ingredients. Not to mention hiring workers and buying (or leasing) commercial equipment. Bakery startup costs often range from $10,000 to $50,000. That’s not to say you can’t make money if you do it right. The U.S. has around 6,000 retail bakeries with total annual revenue of approximately $3.8 billion, according to First Research.

Summary

Starting a bakery can be costly, from securing a lease to stocking up on high-quality ingredients. Not to mention hiring workers and buying (or leasing) commercial equipment. Bakery startup costs often range from $10,000 to $50,000. That’s not to say you can’t make money if you do it right. The U.S. has around 6,000 retail bakeries with total annual revenue of approximately $3.8 billion, according to First Research.

The first thing you’ll want to think about is whether to lease or buy your bakery equipment. In the short term, it might make sense to lease, since it’ll be cheaper in the short run. However, if you want to keep your costs low over a longer period of time, it might make sense to utilize equipment financing.

Equipment financing to get started

When you’re considering equipment financing, your first question should be, do you want to own it? Will it be useful to you longer than you have to make payments? If not, just lease it. A bakery oven can cost you around $200/mo. 

Breaking down the costs

As with any business, the first thing you’ll need to have is a legal entity (usually an LLC or a S-Corp), then take care of all the local legal requirements. This can cost anything from $200 – $2000 depending on where you’re living. 

To get started, you can select your state from this list to find out which licenses and/or permits you will need, as well as the information to guide you through the application process.  

The most expensive part is going to be: 

  1. Store Lease
  2. Equipment and Ingredients 
  3. Staff

All in all, assuming you’re leasing your equipment, have a nice location, and have your staff set, you can look at spending between $10,000 – $50,000 depending on where you’re at. 

 

Quick Tips

Don't brand everything right away

If you print up hundreds of bags, boxes, coffee cups and T-shirts, you might find that one of the bags isn’t the right size. Or you decide to switch cups to 16 oz. instead of 12 oz. You’ll be tempted to brand everything you can. And it’s not a bad idea. But just be patient and see what you really need before you place a huge order. You go through a lot of changes in the first year. 

Make sure you set up Local SEO

People are searching online more than ever. Make sure you have a website, make sure you’ve done your SEO, or if you’re not a computer person, feel free to see our SEO services at an affordable price. We’ll take care of developing and optimizing your website for you, and will make sure you’re in all the search engines like Google, Yelp, Bing, and Apple Maps. 

Get in front of your customers

Getting in front of people is huge for a bakery. Ask your neighboring businesses if you can set up a table and hand out samples. Bring business cards, but don’t use the event as a personal sales event. Be generous, grateful and happy to meet new potential customers. Bring treats to your neighbors in your shopping area. Make sure they know who and where you are. When I worked in a bakery, we did that every afternoon to everyone waiting in line at Starbucks. The staff loved it, the customers loved it, and we got great business. It’s a win – win. 

Make sure you accept credit cards

Shocking, but hardly anyone carries cash anymore. Most of your patrons will want to pay with a debit or credit card. Make sure you’re set up to take all kinds of payments. Especially credit cards.