Startup costs are the expenses a business must front before opening. In the case of a bakery, those costs depend on a number of variables, such as where the bakery is located, how large it is, whether it is a franchise and how elaborate the concept is.
New bakery owners can look to comparable operations to estimate how much they'll spend. For a startup bakery in Orlando focusing on cupcakes, that figure is about $15,000 as of this publication. However, for a bread bakery franchise, the total is close to $330,000. Acording to Entrepreneur Magazine, bakery franchises can cost as low as $46,000 to open, but can run into the millions depending on the size and scope of the business.
Construction and Permits
Assuming that the prospective place of operation already has flooring, lighting and walls, a 900-square-foot bakery business in Orlando could expect to pay about $3,000 to add exhaust hoods, plumbing and electrical wiring for equipment installations, and paint. For the same territory, a bakery might have paid up to $1,000 for permits.
A national bread bakery franchise estimates that initial real estate and improvements costs would range from $26,000 to $224,000, as of 2015. It estimates city, state and county fees to run from $400 to $13,500.
One Fat Frog baking consultants estimate an Orlando bakery would pay $1,500 in rent and utilities per month for a commercial lease of a 900 to 1,200 square-foot facility. An estimated $2,400 security deposit also would be required.
For the national bread bakery franchise, one month's rent might be $1,500 to over $5,700 per month. The security deposit would be double that. Utilities would range from $350 to close to $33,000, depending on the facility size and location.
Inventory and Equipment
To open a comprehensive bakery franchise serving bread, treats and sandwiches, opening inventory costs for ingredients and supplies can be as high as $27,000, as of 2015. The Great Harvest Bread Bakery franchise estimates that an average franchisee would pay $17,800. As far as equipment is concerned, costs can go as high as $200,000, although $108,000 is about average.
One Fat Frog's relatively smaller cupcake operation required $1,000 for dry goods and refrigerated products, as well as $6,000 to $8,000 for double-stack convection ovens, countertop mixer, display cases and furniture. Your own costs will vary depending on which products you specialize in,
Staffing and Miscellaneous Costs
Along with rent and utilities, staff salaries and advertising will be recurring expenses over time, in addition to being startup costs. One Fat Frog accounted for two full-time employees at $10 per hour in its monthly staffing expense of $3,200. In the case of a franchisee, Great Harvest Bakery charges an initial franchise fee of $38,000, as well as an ongoing monthly royalty of 7 percent of gross sales during the first five years. It also estimates grand opening advertising costs to be $4,200 on average, and cash reserves to be $20,000.
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