Opening a bakery in a brick and mortar location means a large startup cost and large overhead costs. A little over three months ago, my old roommate Ashley decided to take the plunge and start her own at-home bakery business. She has been a stay at home mom for three years now and has been urging to contribute to her household without having to leave her daughters in daycare. I convinced Ashley to join me for an informal phone interview to discuss the process of setting up home her home bakery business. Here’s what went down on our interview.
Me: Ashley, so I hear that you’re opening your opening your at home bakery business soon, what was the first thing you did when deciding to take the plunge?
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Ashley: Aside from consulting with my attorney about all of the legal issues, license and kitchen requirements, the first thing I did was hire someone to prepare a business plan. Once that was out of the way, I immediately jumped into the fun stuff: buying equipment! I’m lucky because I won’t be using my own personal kitchen to create my goods; I’ve got an empty guest house with an up-to-grade kitchen, so I’ll be running my bakery business from there. I purchased cake pans, pie pans, pastry bags, decorating tools, two large mixers, a stainless steel bakers table and a huge chest freezer for all my stuff. I haven’t purchased the ingredients yet because I haven’t “opened the doors” to my business yet, but I am in the process of tracking down a good wholesaler that will work with me on the quantities that I need.
Me: Wow Ash, that sounds really expensive how much did you spend on all of that? And, was it out of pocket?
Ashley: It was very expensive, well at least for us anyways. But, if you are going to start a business, you need all the necessary tools to succeed. Michael (her husband) and I have been discussing this ever since I went on maternity leave, and we’ve been saving money for my bakery business ever since. In total, it cost me just under $4,000. I’ve still got some cash set aside for ingredients, packaging, marketing, etc. So in total, I guess we’ve saved up about $10,000 for this. But, I hope it will be worth it in the end.
Me: Sounds great Ashley. So, are you going to be a general bakery or will you focus on a specialty?
Ashley: You know, I considered specializing in wedding cakes because I’m such a romantic, but because I live in such a small town, weddings aren’t an everyday occurrence over here. I’ve always had a thing for beautifully crafted and indulgent baked goods, so I’ll be focusing on creating cakes, pies, cup cakes, muffins, donuts from your donut pan and donut maker, and fresh bagels. These products align best with the interest of my target customer base.
Me: So, who exactly is your target customer base?
Ashley: I’m thinking of targeting restaurants and diners.
Ashley: Because there are a ton of those businesses in my immediate area. In such a small town, there really isn’t much more than mom and pop diners and family owned restaurants. They do almost everything in house and that costs them money for ingredients and labor. By buying wholesale baked goods from me, I’ll be saving them money and time. Also, I already have an industry connection. My husband’s uncle is the owner of a local diner; he’s going to be my first customer.
Me: What about marketing?
Ashley: Since I won’t be targeting the general public, my marketing costs are minimal. All I really need is to cold contact local businesses and set up appointments so they can sample my products. Though, I will be taking out small ads in the newspaper here and will be attending our county’s chamber of commerce meetings. I’ve lucked out because I have a business model that supports low cost advertising.
Me: Thanks for the interview Ashley. I’ve come out with a lot of valuable first hand information that will surely benefit my readers.
Ashley: No problem. I’m glad I could help. I’ll definitely keep you updated on how things go. Hopefully a few months down the line you can post a success story of my business.
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