If you’ve always wanted to open a bakery, you might be thinking about how much does it cost to start a bakery. Opening a bakery can be a fun and successful adventure, but only if you know how much it will cost.
Whether you want to open a small business like a local bakery shop or a bigger bakery chain, there are a few things you need to think about to figure out how much it will cost to open the bakery. We’ll break down how much it costs to start a bakery, from the cost of equipment and utilities to the cost of marketing and staff.
So, let’s start our blog by discussing the factors that affect the bakery cost before learning how much does it cost to start a bakery.
Factors That Affect The Bakery Startup Cost
There are different factors that affect the cost of starting a bakery, such as;
- Location: The location of your bakery is a big factor in how much it will cost to start a bakery business. Prices for rent or lease can differ based on whether you want a storefront in a busy area, a smaller space in a less busy area, or to run your business from home.
- Size and Layout of your Bakery: The costs of starting your bakery business will also depend on how big your shop is and how it is set up. Most of the time, the rent, utilities, and remodeling costs for bigger areas are higher. Also, the layout needs to work well for making items in your bakery.
- Equipment and Machines Used in the Bakery: The type and number of baking machines and equipment you need can have a big effect on the costs of getting started in a bakery business. Some of the most essential equipment are ovens, mixers, refrigerators, proofing cabinets, and showcases.
- Licenses and Permits: To work legally, you’ll need to get some licenses and permits. The cost of these things will depend on where you are planning to start your bakery business and what kind of bakery shop you want to open.
- Staff: Labor costs contribute to a large amount of a bakery’s costs. You must set aside money for bakers, salespeople, and maybe even delivery people.
- Marketing your brand: It’s important to advertise your bakery if you want to get consumers. It can vary with how much you are promoting your brand and where you are promoting it. Marketing and branding costs include costs for designing a logo, building a website, marketing on social media, and ads.
- Insurance: Most bakeries need liability insurance, property insurance, and maybe even health insurance for their employees. Costs for insurance vary based on where your bakery is situated and how big your business is.
How Much Does It Cost To Start A Bakery?
Even though it seems like a simple question, the answer is a lot more complicated. To put it simply, the cost of starting a bakery depends on many different things, and some of them I have mentioned above.
Costs of Bakery Real Estate
This is the first factor that contributes to the cost of starting a new bakery. Cost per square foot is usually a good way to figure out how much does it cost to start a bakery. Location is the most important factor in this cost, as it is in all real estate investments. A site in a big city will cost more than an adorable little bakery shop in a small town.
The price will also depend on the neighborhood you choose and how much supply and demand there is for that area. The best way to find out how much it costs to start a bakery in your area is to do some study on local real estate prices.
The price per square foot will also depend on whether you rent, buy, or build your bakery. Leasing an existing site is thought to be the most cost-effective choice, and it costs about $160 per square foot on average. Buying the site costs $180 per square foot, which can add up depending on how much space your business takes up.
Your bakery will cost a lot more to start up if you build it from scratch. For a new building, the average cost per square foot is between $300 and $400. You will be able to make your bakery exactly how you want it, but building permits, builders, subcontractors, and the inevitable delays that come with building can all add to your initial costs of starting a new bakery.
Bakery Utilities Costs
To understand properly how much does it cost to start a bakery business, you must need to know bakery utilities costs.
Even though utility costs are usually only connected with open businesses, it’s important to remember that your new bakery will need to use some utilities while it gets ready for its big opening day. While you’re putting together your stock, you’ll need electricity for lights, refrigerators, and freezers.
Any renovations done before the store opens will also need power, water, and, most likely, gas. The bakery’s point-of-sale system will need to be set up so that staff can learn how to use it. Internet connection is also a cost of starting up a business, so add that to the costs of utilities for opening a new bakery business.
According to a survey, it was found that a bakery with less than 4,000 square feet is going to spend between $1000 and $2000 per month on utilities. It’s rare that your business will have those exact costs in the months before it opens, but it’s a good idea to set aside some money to cover them during the start-up phase.
Designing Interiors and Exteriors
Designing your bakery also contributes a huge amount to the overall bakery cost. You must know the interior and exterior design cost to learn how much does it cost to start a bakery.
You’ll want your new bakery to look as attractive as possible to bring in lots of customers and start making money as soon as possible. To do this, you’ll need to ensure your bakery’s interior and exterior design look great.
What you have to start with is the biggest factor in how much it will cost to set up your bakery. Costs will go up quickly if you make a lot of changes, but small changes are always pocket-friendly.
If you decide to build your own bakery, you will be starting from scratch. Putting together the decor for your bakery from scratch can be fun, but it can cost you a lot of money. You may also need help from an interior designer, which will add to the cost of the design but may help you avoid spending money you don’t need to if you set a budget for designing your bakery.
So, what do you need to make your shop comfortable and welcoming for your customers? One of the most important parts of your design is the seats. You’ll need at least a few places for people to sit down and enjoy their cooked goods.
Your design budget needs to cover lighting, showcases, changes to the storefront, and both indoor and outdoor signs. Depending on the needs of your place, pre-opening building, and interior design will cost between $5,000 and $25,000 on average.
Tools for baking
You can’t make tasty baked goods if you don’t have the right tools. To keep your bakery stocked, you’ll need a lot of high-quality things. The average cost of getting the tools you need for your bakery’s kitchen starts at $20,000. This cost can easily double if your bakery is a commercial business that sells to other companies in the area.
This includes the basic tools needed, like:
- Blenders or Mixers
- Baking tools
- Sheet Pans and Sheet pan racks
- Dough Proofer
- Deep fryers for donuts
- Brand HOOC HOOCOO
- Material Stainless Steel
- Product Dimensions 16.3″D x 17.5″W x 11.5″H
- Item Weight 11 Kilograms
- Wattage 3600 watts
- Oil Capacity 10 Liters
These are the most needed tools for industrial kitchen wholesalers. You will also need to ensure that your ovens, proofers, fridges, and freezers are good quality and reliable. You must continue reading to learn how much does it cost to start a bakery.
You should also look at our other blog, Innovative Bakery Products to Try This Season, to get ideas for items you can sell in your bakery.
Merchandise, Marketing, and Brand Building
Marketing also plays a big role in understanding how much does it cost to start a bakery. Once you’ve designed the interior and exterior of your bakery, you’ll need to make marketing tools like menus, business cards, and flyers to do marketing of your business.
Marketing and advertising budgets for restaurants can run from almost nothing (if you have technical and marketing knowledge or have a family member or friend who has) to hundreds of thousands of dollars for a full brand, marketing campaign, PR agency, and advertising.
Bakery franchises often get free promotions from their parent companies, but local marketing can also bring in loyal customers. For a new brand, you must work from ground level by yourself.
Some of the possible costs of marketing for new bakeries are:
- Services for public relations (PR)
- Items with a name on them
- Marketing on social media
- Digital Marketing (Digital ads.)
- A website and a name for the brand
- Marketing by email
The money you spend on marketing your bakery should be between 3% and 6% of what it makes. The best way to get people interested in your treats is to make them happy, so use packages with your brand on them and hand out stickers or business cards.
Then, use bakery social media marketing to share posts from happy customers to spread the word about your brand. There is more information on how much does it cost to start a bakery, so keep scrolling.
Services From Experts (Professional Services)
Successful business owners know how important it is to hire professionals to help with important tasks like setting up a business. Even though it may cost more initially, hiring experts can help you avoid mistakes that will cost you more in the long run and ensure your business gets off to a good start.
These services from experts include
- Lawyers (When starting a new bakery, lawyers are needed to get business licenses and permits.)
- Marketing & PR firms
- Technology Specialist
Even though these costs can add up to $50,000, a smart bakery owner can cut costs by doing some of the work themselves or putting off some services until the business grows.
Staff in your bakery also contribute a huge amount to how much does it cost to start a bakery. Around 30 percent of the money you make from your bakery goes toward paying your employees.
This cost is based on how many people you will need to work at your bakery. During the start-up phase, most of your staff costs will depend on how much training they need before you open.
This cost will go down if you hire people with more experience. No matter how experienced your team is, you should expect to pay them before you open your doors.
Training your front-of-house staff on the point-of-sale system and setting up the kitchen for your baking staff means you’ll have salary costs before you sell your first cupcake.
This blog has provided you with information about how much does it cost to start a bakery. Now that we’ve gone over all the things that affect how much it costs to open a bakery, let’s look at the final numbers.
A normal neighborhood bakery will cost between $62,000 and $77,500 to open, while a commercial bakery will cost between $71,700 and $102,000 on average.
Although the franchises are a different story, a bakery owner who buys a franchise gets their name known right away and may already have some customers. However, this comes at a price. For less well-known businesses, franchise fees can be as low as $30,000 and as high as $100,000. For the most popular bakery chains, the fees can go as high as $200,000 and up to $100,000,000.
This was all about this blog, and we hope we have cleared all your queries about how much does it cost to start a bakery. But if you still have any queries, please let us know in the comments.
Is it profitable to own a bakery?
Most bakeries don’t make much money. A bakery’s profit is usually between 4 and 9 percent. Competition is the reason why bakers have such small profit margins. To sell your goods, you need to set prices that are competitive in the market and still give you a profit.
Can I start a bakery if I don’t have a degree?
To own a bakery, you don’t need a degree in cooking or a bachelor’s degree in business. But if you own a bakery, you will be more likely to achieve if you have both baking experience and knowledge of how to run a business.