bake - April 2018 - 9
A good rule of thumb to follow is projecting your bakery's firstyear sales at three times startup costs. Shoot for 10% profit, and
you may be able to pay off startup costs in three to five years.
Do the math on everything. "I do projected sales on a spread
sheet with average check and average number of customers for
each hour of the day we are open," Chang says. "You should be
able to pay your rent in one day's sales."
Eventually (some bakery owners wait a year or more), you as a
bakery owner will need to pay yourself a salary. Chang remem-
TOP 4 MISTAKES OF STARTING A BAKERY
bers not caring about such money matters in the beginning,
Underfunded
Lack of consistency
Unclear vision
Inability to lead team
but "you will care if you work 10 years and you have nothing to
show for it."
Real estate location is vital, and it's important to think through
your plan, she adds. Scherber lived in Hell's Kitchen prior to
TOP 4 PIECES OF ADVICE BEFORE OPENING
her first bakery opening and recognized the once-dodgy area
Go to work in a bakery first
Learn how to manage people
Everything takes twice the time at twice the cost
Keep personal risk as low as possible
was growing in popularity. "Real estate is a big issue. Today, it's
harder to find these little quirky places that are up and coming."
Chang recommends negotiating long leases - a minimum of
10 years with options. "You don't want the landlord saying after
five years that we're going to double your rent."
Doing your own thorough research on possible locations is
always a good idea, as is contacting a real estate broker to
look at 20 or more open spaces. "Get involved and know the
spaces," Scherber says. "Finally, you can find that perfect spot."
Look closely at potential hidden costs in each building space
you investigate. What's the ventilation like? The water lines?
Some spots can save you upwards of $50,000 in renovation
costs, Scherber says.
PROTECTING YOUR ASSETS
S corporations differ from the standard C corporation
because S corporations are pass-through tax entities,
according to BizFilings.com. They file an informational federal return, but no income tax is paid at the
corporate level. The profits/losses of the business are
"passed-through" the business and reported on the
owners' personal tax returns. Any tax due is paid
at the individual level by the owners. Both S and
C corporations offer limited liability protection, so
shareholders (owners) are typically not personally
responsible for business debts and liabilities.
Chang suggests negotiating with landlords on a tenant
improvement allowance to cover the costs of improvements.
Calculate your gross monthly rent per square foot, including
taxes, insurance and maintenance. Utilities in cities like Boston,
JOHN UNREIN
Chang says, are extra. Make sure an architect looks at your plan
to make sure you can pass the health department inspection.
"Pay a lawyer to look at your lease," Chang urges. Scherber
agrees: "Giving the landlord a lot of your money is never a
S corporations face more extensive internal formalities than LLCs, according to BizFilings.com. LLCs
are recommended, but not required, to follow internal
formalities. Owners of an LLC can choose to have
members (owners) or managers manage the LLC. S
corporations have directors and officers. The board of
directors oversees corporate affairs and handles major
decisions but not daily operations. Instead, directors
elect officers who manage daily business affairs.
good idea."
bakemag.com | APR 2018 > 09
http://www.BizFilings.com
http://www.BizFilings.com
http://www.bakemag.com
bake - April 2018
Table of Contents for the Digital Edition of bake - April 2018
Bake - April 2018
Editor's Note - THE DESIGN ISSUE: a profound influence
Contents
Management - Be Financially Fit
New Product Success Stories - Macarons That Pop
Technical Corner - All about Bagels
Practical Marketing - The Review Effect
Equipment Innovations - Spring Cleaning
Elevate your product line
Dessert to go
Inventive Displays
Chocolate & Decorating - National Donut Day
Cakes - Specialty Desserts
Sweet Goods - Seriously delicious donuts
Breads - The Best of Bread
Pastries - The finalists
Foodservice - Turkish Breads
Beverages - Shake it up
Product Showcase
Classifieds
Ad Index
Formula of the Month - Sorghum Whole Grain Banana Bread
bake - April 2018 - Bake - April 2018
bake - April 2018 - Bake - April 2018
bake - April 2018 - 2
bake - April 2018 - Editor's Note - THE DESIGN ISSUE: a profound influence
bake - April 2018 - 4
bake - April 2018 - 5
bake - April 2018 - Contents
bake - April 2018 - 7
bake - April 2018 - Management - Be Financially Fit
bake - April 2018 - 9
bake - April 2018 - New Product Success Stories - Macarons That Pop
bake - April 2018 - 11
bake - April 2018 - Technical Corner - All about Bagels
bake - April 2018 - 13
bake - April 2018 - Practical Marketing - The Review Effect
bake - April 2018 - 15
bake - April 2018 - Equipment Innovations - Spring Cleaning
bake - April 2018 - 17
bake - April 2018 - Elevate your product line
bake - April 2018 - 19
bake - April 2018 - 20
bake - April 2018 - 21
bake - April 2018 - 22
bake - April 2018 - 23
bake - April 2018 - 24
bake - April 2018 - 25
bake - April 2018 - Dessert to go
bake - April 2018 - 27
bake - April 2018 - 28
bake - April 2018 - 29
bake - April 2018 - Inventive Displays
bake - April 2018 - 31
bake - April 2018 - 32
bake - April 2018 - 33
bake - April 2018 - Chocolate & Decorating - National Donut Day
bake - April 2018 - 35
bake - April 2018 - Cakes - Specialty Desserts
bake - April 2018 - 37
bake - April 2018 - 38
bake - April 2018 - 39
bake - April 2018 - 40
bake - April 2018 - 41
bake - April 2018 - Sweet Goods - Seriously delicious donuts
bake - April 2018 - 43
bake - April 2018 - 44
bake - April 2018 - 45
bake - April 2018 - Breads - The Best of Bread
bake - April 2018 - 47
bake - April 2018 - Pastries - The finalists
bake - April 2018 - 49
bake - April 2018 - Foodservice - Turkish Breads
bake - April 2018 - 51
bake - April 2018 - Beverages - Shake it up
bake - April 2018 - Product Showcase
bake - April 2018 - 54
bake - April 2018 - Classifieds
bake - April 2018 - 56
bake - April 2018 - Ad Index
bake - April 2018 - Formula of the Month - Sorghum Whole Grain Banana Bread
bake - April 2018 - 59
bake - April 2018 - 60
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