I have been doing research at different bakery business related websites trying to get specifics to use in a business plan to open up shop with another person who has prior experience in the commercial aspect of the industry (which I don't). I find that the information I get is very general. For instance, the most "current" government report I have found is from 1997, where they quote the "average" bakery as having annual gross sales of $325,000, but it does not elaborate in terms of # of employees, the % of cost of goods sold, etc for that figure. While I don't expect anyone to reveal private information about their operation, I am interested in hearing from anyone near that range as far as how many employees you have and the overall cost of ingredients as a percentage of sales. If the sales figures sound way off one way or the other, please elaborate. Email me if you prefer not to post a response publicly. Thanks!

By Panini (Panini) on Wednesday, May 30, 2001 - 12:20 am: Edit

twoodard,
I don't understand where they got numbers like this, was this sole propriators or corps.? The number sounds a little low to me. Maybe these are just ma and pa type. If an outlet is doing 325 yearly the labor should run you 80-90,000.A kitchen manager/baker, sanitation, and inexperienced front end people. Your cogs should be about 70,000. Then add in supplies, overhead, insurances, officers salary and so on.
How ever this all changes if you say your partner has "commercial experience". Does this mean wholesale? By the way, I use the word partner for lack of a better work. Most people will tell you to STAY AWAY FROM A PARTNERSHIP including me. Feel free to e-mail me anytime www.paninicakes.com
Jeff

By Panini (Panini) on Wednesday, May 30, 2001 - 06:59 am: Edit

twoodard,
I just wanted to drop a line and tell you I'm no expert. People who compile numbers, do just that. You can make your numbers what you want. When proposing your business plan make room for change, tell the lender you plan on reviewing your plan each quarter and they to will get a report. A business plan is a wonderful thing, you may have the greatest plan for a scone bakery, If all your customers ask for key lime pie, you are now in the Key Lime Bakery. Make sure you are using a good business program. Plug the numbers and I suggest not being conservitive. Anyway Good Luck.
Jeff

By twoodard2 on Wednesday, May 30, 2001 - 11:14 am: Edit

Jeff,
Thanks for your input. The report wasn't specific enough to be helpful. My guess is that these numbers might apply to a relatively small operation. My partner owned/operated a bakery (sole proprietorship) for a few years and tells me the highest gross sales were 70K without any employees. My future partner's specialty is cheesecakes and mine is cakes. We may offer a couple of other products, but our core sales will come from decorated cakes and cheesecakes. With these two extremes in numbers, I was trying to find a happy medium and something that would sound realistic to a lender.

By Panini (Panini) on Friday, June 01, 2001 - 10:20 pm: Edit

twoodard,
Are you planning to retail? Ya know the two items you talk of are at the low end of the bakery margins, usually higher COGS and labor. Will you sell yeast products to offset the margins? 70k retail is about right without help, wholesale, it's low. Although 70k with no help, your buying a job, not owning a business.
Are you using a computer program to do your busine3ss plan?
If you like e-mail me, I love to take a look at your business plan. We've just wrapped up our first year in our new retail location. Let me know if your thinking SBA,etc. You probably already know it's best not to approach the lender as start up. Equipment and assets don't mean anything to them. Most all food loans will need to be colateralized, and they usually want personal guarentee's. The line is the best way to go using your partners business. Please get all the advice you can about partnerships. I'm sure you know you can't partnership under a Corp. You'll have no shield under sole proprietorship and assume each others liabilities. Anyway, I love to talk business.
paninicakes.com
214-363-1225 retail shop AM best place to catch me
214-328-5505 wholesale kitchen PM
972 488 cake office
Jeff