Making the math work for a small artisan bakery (that pays rent)

How I think about wholesale vs. retail & how much revenue we need to survive

Before you take your cottage bakery out of the garage and into a commercial space - a few financial things to consider.

Say you can make a loaf that people are willing to pay $10 for. You get going and seem to be able to sell 200 loaves a week and bring in ~$2,000 ($8,000/month). You are on a path to making this work, but not there yet. Why? Because your rent is $1,200 and that means $1.50 from each loaf has to go to pay rent (15% of your revenue), which will leave you longing for your garage.

A question I constantly ask myself is - how big should the bakery be?

Okay - let’s start with why you, or I guess I’ll switch to I, started:

• I wanted to do things in small batches to create a product with integrity - one that I’m proud of, but I also want it to be widely available (not super scarce)

• I don’t necessarily want to do it all by myself.

• I want my bakery to last and continue baking for the local community for a long time.

• I want to pay the bills doing it

What does it take to cover your costs?