The earnings of a small bakery owner depend on a range of variables, from scale to experience to business model. Further, self employment earnings can vary widely from month to month in any industry, depending on seasonal fluctuations in demand and big bills such as tax liabilities coming due in particular months and cutting into your net earnings. Bakeries, which experience surges in business during the holiday season and the summer wedding season, can be especially vulnerable to such fluctuations.
The median annual salary for a baker is $30,234 in 2018, which means that half of bakers earn more and half earn less. But the earnings of a bakery owner can vary wildly, depending on the business type, size and business model.
Bakery Owner Income
There is very little data available about average net income for entrepreneurs in particular fields. However, the website PayScale, which provides salary ranges for job positions, has some relevant and interesting information. Annual income for a baker ranges from around $18,000 per year to $57,000 per year, or $1,500 to $4,750 per month. Annual income for a bakery production supervisor ranges from $37,000 to $71,000 per year, or $3,083 to $5,917 per month. But annual income for a bakery general manager ranges from $25,000 per year to $52,000 per year, or $2,083 to $4,333 per month.
The striking thing about these numbers is that a bakery general manager typically earns less than a bakery production supervisor. This diverts from a trend of managers with broader knowledge and influence in other fields earning more than workers or managers whose work is more compartmentalized. For example, a human resources manager typically earns around $60,000 per year while a human resources specialist typically earns about $48,000 annually.
The general manager of a small bakery is likely to be its owner, and a bakery that hires a full-time production supervisor is not likely to be small. Bakery general managers usually earn less than bakery production supervisors because their earnings are self-employment or entrepreneurial income rather than salaries, and entrepreneurial income depends on many variables other than relevant technical skills such as knowledge of baking.
Calculating Small Business Earnings
To determine how much the owner of a small bakery makes per month, subtract the bakery's gross revenue or receipts from its monthly operating expenses, including labor, ingredients, rent and advertising. For a sole proprietorship, partnership or limited liability company, the bakery's net income equals the income of the owner or owners. A bakery structured as a C or S corporation will pay its owner a predetermined salary, but this owner will still be responsible for dealing with cash shortfalls if the business does not earn enough to cover this salary.
Business Model and Scale
The monthly earnings of the owner of a small bakery depend on how effectively that bakery is run. If the bakery owner is committed to using only high quality or specialty ingredients, the price of the baked goods must cover the added cost of these ingredients. Greater volume allows you to purchase ingredients at lower prices, increasing your profit margin and owner earnings. Economies of scale also allow you to produce more cost effectively, spending less and earning more for each unit produced.