We get visitors from time to time who are interested in
doing a small bread business, and come see our shop for inspiration and advice. Each time, after they
leave, I think to myself what else I might have told them, and what are the real essentials
about owning and operating a small business like this one.
I'll list a few items that seem to me the most important, but I guess the nut of
the whole thing is having a true passion for bread, and the will and stamina to perform
the basic day to day tasks that are necessary to get your product to market.
Our operation is essentially a one-man show. Annie helps me out with deliveries once in a while, and
we have a Sunday routine where she delivers half the bread, and meets me at my last stop and we
play for the rest of the day. But for the most part, it's just me. And that's a key factor. Once
you hire help, it starts to cut into your net profit.
Here are a few facts to give you an idea.
- I bake about 160 loaves a day, three days a week. At an average of $3.35 per loaf (wholesale) my gross
income is around $450 to $500 a day. See the spreadsheet to get an idea of the margins
involved.
- It's actually a six-day work week. See the schedule here. You could do it in four,
if you were to kill yourself on 12-hour days and bake at least
240 loaves twice a week. Certainly someone younger and more energetic than I could do this.
- Because we own our home, and the business is located here, what would be allocated for business rent
is already taken care of in our mortgage payment. It would be tough, maybe even a mistake, to pay both
a mortgage and rent for the business also.
- Our startup costs were in the neigborhood of $50,000. We had saved up a lot of money from our previous jobs,
so all the startup costs were capital expenditures, and there is no debt owing on any of it. I'm sure that
someone with building skills could set up shop for a lot less. We had to retrofit an outbuilding on our property,
and we hired a mason to build the oven If you can do more of the work yourself, the startup cost
comes way down.
A big reason businesses fail is undercapitalization. You get half way into the project and your funds run out,
and then you start borrowing, or cutting corners, or making compromises, and your original vision becomes more
of a nightmare. When I sold coffee equipment in California, there were dozens of new places springing up
in the wake of the dot-com boom. And one by one they fell short of doing it 100 percent right. And one by one, they closed.
Not that you are starting a million-dollar restaurant, but the priciple applies - you have to get all your ducks in a row
and do it right, or six months or a year into your venture, the money and your energy runs out.
- The other asset I had when I started Bohemian Bread is experience. For much of the last 25 years I have been a baker.
At one point I was head of production for Beckmann's Bakery in Santa Cruz, CA and we made 1500 loaves a day,
six days a week. So that's a lot of chunks of dough to practice on. I strongly recommend getting some hands-on
experience in a high volume production shop. There are little tricks of the
trade you can't learn any other way. Just being a good home bread baker doesn't give you any idea of how much
work a hundred-plus loaves in a day can be.
If I think of other points, I'll add them. If I scare someone away from doing this who would actually end up
hating the work after six months, that's good. But if you believe you have
a calling to do this sometimes thankless but highly rewarding work, and I have given you a little help on your
way to becoming another member of the small bakery revolution, then more power to you!
