How Much Money Do You Have to Invest in your Bakery

How Much Money Do You Have to Invest in your BakeryA bakery business may require anything from $75,000 to $200,000 or more to establish, depending on what you have in mind, and where you’ll be renting your premises.

It’s a lot of money, and it could need even more if things don’t turn out as expected, so think about it carefully and be very thorough when estimating the start up and operational expenses.

On top of all the costs needed to set up the bakery and buy all the furniture, equipment and everything else that’s needed, it is advisable to have enough money in the bank (working capital) to cover overheads for at least 12 months.

Entrepreneurs typically make the mistake of under-budgeting costs and over-estimating the revenues that can be generated in the initial months of starting a bakery. And this leads to a cash crunch that puts the whole business at risk.

In general, you will need more money to start a bakery than you initially project. Unless you’ve done it before, you may not be aware of hidden costs, unforeseen delays, and an endless list of things that can go wrong along the way.

If you’ve got a realistic financial projection of what it takes to start up your bakery, it instantly becomes clear that it requires a substantial investment.

Initially, you may have thought $75,000 could be enough, but once you go through all the details, this can easily balloon to $125,000. And that’s without having a comfortable cash buffer in the bank.

All of a sudden, the small little business that you thought could be set up affordably ends up mushrooming into a venture that needs more money than you initially planned.

Bakeries are normally self-funded by the owners as it is difficult to get a loan for such high-risk food and beverage businesses. You may have to dig deep into your savings, borrow from friends and family or even take out a mortgage to fund the new business. It’s a big decision.

Failed bakeries have bankrupted their owners before, so think very carefully before taking the leap in putting all your savings or assets at risk.

Why Do You Want to Open a Bakery

Why Do You Want To Open A Bakery

Think you want to open a bakery? The first thing you should do is to reflect on why you want to get into the bakery business. If you think it’s going to make you easy money and you’ll be rich quickly, then think again, as you should probably reconsider your decision and choose another business to get into.

Hopefully, the reason why you want to own and run a bakery is because you are interested in, and passionate about baking. You may or may not be a good baker at the moment, but the important thing is for you to absolutely love baking, as you will need a lot of dedication to make the business succeed.

A lot of people may be competent bakers who can bake really high quality cakes or cookies from recipes that they’ve done plenty of times at home. They have the ability to bake certain items very well, and lots of friends and family have told them that they should start their own bakery.

If you’re one of these talented amateur bakers, you shouldn’t jump into opening a bakery just because you can replicate Grandma’s chocolate chip cookies perfectly. Think about whether you would enjoy spending 10 to 12 hours standing in the kitchen every day, where you’ll need to bake lots of different products at speed and in great quantities. Think about how you will need to manage bakers, kitchen helpers and other staff who will all give you problems along the way. Think about what you would do if the cookies that you spend hours to bake end up not selling like you anticipated. If, after assessing the challenges of the business realistically, and you’re still keen on exploring further, read on.

In general, anyone who wants to own and run a bakery, should be passionate about baking, be competent at it, and would like to turn it into life-long career where they are committed to the job and business. Ideally, they should have worked in a bakery before in order to have a real taste of what the job entails and what it’s like to the whole day baking in a kitchen. Above all, they should be opening a bakery for the right reason, as it requires a significant investment in financial resources, time and copious amounts of hard work.

So, sit back and think real hard about why you want to start a bakery and whether you really do want to get into the business before taking the leap. Only you will know the real reasons behind your decision.

Feel free to ask any questions in the comments section below if you’re unsure about anything.

Welcome to OpeningABakery.com

Welcome

OpeningABakery is a free resource and guide for all aspiring bakery owners who are looking for information, tips and advice about how to open a bakery.

The goal of this site is to help everyone who is interested in starting a bakery business. You may be a great home baker who is just toying with the idea of turning your passion into a career, or an existing pastry chef who is ready to start your own business after years of working for someone else.

Regardless of your background or experience, we hope to share valuable insights on the different ways to open and own a successful bakery.

Over the coming months, we will be updating this guide with business and bakery start up articles to provide you with useful resources to assist in making your new venture a success. Do bookmark this website now and remember to return every now and then to see what we’ve got in store for you.