Understand Bakery Startup Costs and Make Your Dreams Crumb True
Creating artisan bread or elaborate cakes and selling them to a dedicated following in your local community is a dream for many.
Running a bakery is not the easiest job, though—baking is a full-time job, requiring dedication and perseverance.
You will also need to invest in your business at the beginning—the infrastructure you need to run a successful bakery is considerable. You will most likely need to find financing options—either a small business loan or startup financing—to launch your bakery.
DoNotPay understands the challenges ahead of you, so here is our guide to bakery startup costs and how you can start making serious dough!
The startup costs for a bakery can be grouped into:
- Securing premises
- Investing in equipment
- Hiring and training staff
- Obtaining raw materials
- Getting licenses and permits
You will need suitable premises with good access for:
- Suppliers delivering high volumes of raw materials
If you can find a suitably sized store, you need to make sure it is in an area that is frequented by the kind of customers you want to attract.
A bakery—no matter how exclusive—will seldom be a destination store, so you should try to secure premises with good existing foot traffic.
You may have to pay a security deposit and several months’ rent upfront to secure your lease.
You should also budget for extensive renovation and refitting—your bakery will need to present a clean and welcoming image to attract and keep customers.
Mixers, ovens, all the other equipment required of a good bakery will be needed from the word go.
While you can buy second-hand machines, you should consider the potential cost of maintenance and repairs versus buying new ones.
You will likely need specialized staff to help you run your bakery—whether they are serving customers or helping you with the baking.
Finding suitably qualified staff may be a job for a specialized recruiter, in which case you will need to budget for these costs.
If you decide to hire novices and train them yourself, you have to factor in the time this will take and ensure you can cover your ongoing expenses in the interim.
The relationship with your supplier of raw materials is essential in maintaining the quality and dependability of your business.
Your supplier should be prepared to partner with you to ensure just-in-time delivery of what you need, meaning you can avoid:
- Issues with expiring product
- The need for excessive storage facilities
You should bear in mind that you will need to store your raw materials safely and hygienically, so you may have to investigate cold storage facilities in your bakery.
Depending on your local and state legislation, there are a variety of permits you will need, such as a:
- Business license
- Sales tax permit
- Health department permit
- Fire clearance certificate
You may also need special permission to perform alterations to existing premises.
The estimated startup cost for a bakery depends on its:
- Status as an independent or a franchise
As a rough guide, you can expect the following:
|Bakery Type||Estimated Startup Costs|
|Franchise||From $500,000 upwards|
There are several loan types and lenders for you to choose from, but each will require you to go through a qualification process. As a rule, the greater the risk associated with your business, the higher the interest rate and the more demanding the terms of your loan will be.
- Realistic planning and expense control
- Fact-based sales projections
- A history of financial credibility
The best sources of startup or small business financing are:
|Small Business Lenders||Explanation|
|Banks||Banks represent the safest option but may not offer the most competitive deals|
|Credit unions||As a member of a credit union, you may be able to borrow the capital you need at a favorable interest rate. Entry requirements for credit unions are stringent, though, and only members can access funding|
|The Small Business Administration (SBA)||The SBA can help with startup funding by connecting you to a potential lender and acting as a guarantor for your loan|
Whichever financier you choose, you will have to provide a convincing business case to persuade them you are worth the risk.
DoNotPay can help you with your application by creating the perfect business loan request letter, making sure all your chosen financier’s boxes are ticked.
DoNotPay is in the business of making your bakery startup easier—helping you get finance is our bread and butter!
Our Business Loan Request Letter product is designed to:
- Summarize your loan request
- Present your business plan
- Qualify you as a good loan prospect
We will make sure that your loan application is presented clearly, convincingly, and with the right backup to help you succeed.
To get your letter set up, here’s what you need to do:
- Become a DoNotPay subscriber
- Navigate to our Business Loan Request Letter feature
- Collect your credit score and financial documentation and upload your documents
- Answer a few questions about the loan you need, your business, and your plans
DoNotPay will take it from there—we will summarize your request in a concise and convincing letter for you to submit to the financial institution.
DoNotPay is all your new bakery needs!
Preparation is the key to success. Our app can help you prepare for and safeguard against various issues that may come your way. Use DoNotPay to keep your business safe from copycats—trademark your company and keep its logo, name, and slogan safe.
We can also make sure the following application processes go smoothly:
- Privacy Shield program application
- Business loan requests
- DMCA agent registration
- 83(b) election form submission
- Employer Identification Number (EIN) application
Our faxing and mailing service may also come in handy when you do not want to waste time or money.
With DoNotPay—the world’s first robot lawyer—you will be able to handle difficult clients and customers. If your company gets negative feedback that is either incorrect or fabricated, we can help. Use our Remove Negative Reviews product to keep your reputation intact.
Consumers can also fabricate issues with your product or service and initiate chargebacks. If there is no valid reason for a chargeback, DoNotPay can assist you in disputing it.
If worse comes to worst and a client is refusing to pay, you can rely on our Client Breach of Contract. Our app will generate and forward a professional demand letter and ensure you get what you are owed.