How to start a bakery? Between the upfront cost of setting up a bakery and the running cost of buying ingredients, hiring staff, and general production, it should be no great surprise that starting a bakery is a costly enterprise.
But if you have the passion and the vision, opening a bakery could be a lucrative business opportunity.
Take a look at how much it costs to open a bakery and whether it’s financially viable for you.
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Baker Real Estate Cost
When it comes to opening a bakery, the cost of purchasing or renting baker real estate will be the main cost. Depending on the complexity of the bakery business and its location, real estate costs can range from moderate to expensive.
Renting space for a bakery may cost between $22-$30 per square foot or more. Purchasing property for a bakery can be even higher.
Factors like the popularity of the area, demographics, local market rent prices, the size of the building, and renovations will affect the cost.
Utilities and Baking Equipment
Opening a bakery requires a significant investment in hospitality equipment. Some of the most considerable costs in opening a bakery are utilities, baking equipment, and ingredients.
Utilities can include electricity, water and sanitation, and the annual license fee. Commercial baking equipment is the lifeblood of a bakery and can be expensive.
Ovens, mixers, refrigerators, storage units, display racks, and tables can cost up to five thousand dollars for a medium-sized establishment. Ingredients can also be a major cost for any bakery.
Ingredients can range from a few hundred dollars to thousands of dollars.
Preopening expenses will include rent and utility deposits, building renovations, licenses and permits, and start-up inventory costs.
Rent and utility deposits can range from a few hundred to thousands of dollars and are typically due upfront. Building renovation costs will depend on the condition of the space and what needs to be done to get it ready for business.
Licenses and permits can also be costly. And lastly, start-up inventory costs for ingredients, machinery, and display cases are a must.
Potential new business owners can expect to pay from around $25,000 to several hundred thousand dollars in staffing costs. When staffing a bakery, materials, wages, taxes, and benefits must all be taken into consideration.
In most cases, seasoned professionals may be needed to help manage the business. This could include a head baker, an experienced pastry chef, or an experienced business manager for the front end of the bakery.
Additionally, new business owners will need counter service and table service. For a well-staffed bakery, the total cost will likely come in at the higher end of the range.
When it comes to professional services for opening a bakery, it’s important to secure all the necessary permits and licenses for operating. It is also important to consider securing an attorney to help with any legal questions that may arise.
Depending on the state and its laws, it’s estimated that professional legal help may cost somewhere between $1,000 – $3,000. Additionally, professional accountants and tax advisors’ professional fees range from $1,000 to $10,000.
How Much Does It Cost to Open a Bakery?
How much does it cost to open a bakery can be expensive, but there are ways to make it more affordable. Cutting costs with staff, using affordable ingredients, and utilizing tools can all lower the price tag.
If you’re interested in opening your bakery, it is essential to do your research and get a proper estimate of the costs.
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