6 Financial Tips for Starting a Successful Bakery

Small Business
6 Financial Tips for Starting a Successful Bakery

Bakeries are a staple in most American neighborhoods. They’re the go-to spots for birthday cakes, holiday pies and other tasty goods to satisfy a sugar craving. But the business side of a bakery isn’t always as sweet.

Starting a bakery can be a costly endeavor, from securing a lease to stocking up on high-quality ingredients — not to mention hiring workers and buying or leasing commercial equipment. Bakery startup costs often range from $10,000 to $50,000, according to Entrepreneur.

That’s not to say you can’t make money if you do it right. The U.S. has around 6,000 retail bakeries with total annual revenue of approximately $3.8 billion, according to First Research.

Four industry experts share their tips on starting a successful baking business:

Utilize equipment financing, and do it right

“It’s super advantageous for the business owner to utilize equipment financing for assets [like a dough proofer, oven, fridge and point-of-sale system],” says Cory Damm. He’s the vice president of client services at LeaseQ, an online marketplace for equipment financing.

“This makes sure they keep their credit card, bank line and personal capital for other things that will continuously cost money over time. Save your liquid capital for all the other things you’ll need to spend money on, seen or unforeseen.

“When you’re considering equipment financing, your first consideration is, do you want to own it? Will it be useful to you longer than you make payments? Let that define what structure option for your finance agreement you choose,” he says.

Source: https://www.nerdwallet.com