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If you don’t plan and track your bakery budget properly, you're setting yourself up for failure.
When we developed our strategy pack for bakery owners, we saw a lot of bakery owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your bakery's finances around and set you on the path to success!
Get the budget tracker tailored for bakeries
Most bakery owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for bakeries
Here is an example of a (very) detailed budget for a bakery, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for bakery space | $3,000 | $36,000 |
| Electricity | Power consumption for ovens and lighting | $600 | $7,200 |
| Water | Water usage for baking and cleaning | $150 | $1,800 |
| Gas | Gas for ovens and heating | $250 | $3,000 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $80 | $960 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Head Baker | 1 | $3,500 | $3,500 | $42,000 |
| Assistant Bakers | 2 | $2,500 | $5,000 | $60,000 |
| Cashiers | 2 | $2,000 | $4,000 | $48,000 |
| Dishwasher | 1 | $1,800 | $1,800 | $21,600 |
| Manager | 1 | $3,000 | $3,000 | $36,000 |
3. Ingredients & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Flour & Grains | Various types of flour and grains | $2,000 | $24,000 |
| Sugar & Sweeteners | Sugar, honey, and other sweeteners | $1,000 | $12,000 |
| Dairy Products | Milk, butter, cream, etc. | $1,500 | $18,000 |
| Yeast & Leavening Agents | Yeast, baking powder, etc. | $300 | $3,600 |
| Fruits & Nuts | Fresh and dried fruits, nuts | $800 | $9,600 |
| Packaging Supplies | Boxes, bags, and other packaging | $400 | $4,800 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $150 | $1,800 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $200 | $2,400 |
| Social Media Management | Managing social media accounts | $400 | $4,800 |
| Print Advertising | Flyers, posters, newspaper ads | $150 | $1,800 |
| Website Maintenance | Hosting, domain, updates | $80 | $960 |
| Email Marketing | Email campaigns and newsletters | $100 | $1,200 |
| Promotional Events | Special events and promotions | $150 | $1,800 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of baking equipment | $300 | $3,600 |
| Uniforms | Staff uniforms and aprons | $150 | $1,800 |
| Licenses & Permits | Health permits, business licenses, etc. | $100 | $1,200 |
| POS System | Point of Sale software and hardware | $120 | $1,440 |
| Contingency Fund | Emergency repairs and unexpected costs | $400 | $4,800 |
| Office Supplies | Stationery, pens, printer ink, etc. | $80 | $960 |
| Staff Training | Training programs and materials | $150 | $1,800 |
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We have studied the strategies of the best bakeries in the world. Replicate them now!
What are the biggest expenses for a bakery?
Be mindful of these significant expenses. Here are five major costs every bakery owner needs to consider, along with some tips on how to manage them effectively.
- Ingredient costsThese can consume a large portion of your budget. You're dealing with perishables like flour, sugar, and dairy, and prices can vary based on seasonality, supply chain issues, and quality. To keep these costs under control, focus on portion control, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by buying too much or opting for premium ingredients that don’t add enough value.
- The staff at your bakeryYour staff is essential, but paying for their wages, benefits, and training can be costly. This expense is always significant because you need a certain number of employees to provide excellent service and keep operations running smoothly. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor service.
- Rent and utilities of your bakeryPrime locations come with high rent, but they can attract more customers. Utilities like electricity, gas, and water are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too large or too upscale for your needs.
- MarketingYou need to spread the word about your bakery, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we provide in our pack. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Baking equipment and maintenance costsThis includes everything from ovens and mixers to display cases. These are expensive because quality equipment and regular maintenance are crucial for smooth operations and customer satisfaction. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your bakery?
Here are practical tips to help you, as a bakery owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Ingredient Costs | Partner with local suppliers for fresh, seasonal ingredients at lower prices. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient baking equipment. |
| Marketing | Run social media contests for your bakery and collaborate with local influencers for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers bringing their own containers. |
| Bakeware | Purchase high-quality, durable bakeware that can withstand frequent use. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a food waste tracking system to minimize waste and donate excess baked goods. |
| Technology | Invest in multi-functional kitchen appliances and utilize bakery management software for orders and inventory. |
| Linen and Laundry | Partner with a cost-effective linen service and consider reusable aprons and cloths. |
| Menu Printing | Use digital menu boards or QR codes for menu access to reduce printing costs. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Music and Entertainment | Use a streaming service for background music and host local musicians during off-peak times. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for a bakery
Yes, some expenses for your bakery are just unnecessary. They don't contribute to increasing revenue or improving customer experience.
| Bakery Expense | Reason It's Useless |
|---|---|
| Extravagant Storefront Decorations | Overly lavish decorations don't necessarily attract more customers and can be a drain on the budget. |
| Premium Coffee Brands | Unless you are a high-end café, most customers are satisfied with mid-range options. |
| Excessive Pastry Varieties | A large variety increases inventory costs and leads to more food waste. |
| High-End Baking Equipment | Top-of-the-line baking equipment is not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your bakery. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for music or magazines often go unnoticed by customers. |
| Exclusive Ingredients | Using rare ingredients can inflate costs and complicate supply chains. |
| Costly Furniture | High-end furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Packaging | Personalized packaging is a minor detail that most customers overlook, and it can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most customers are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Display Pieces | Elaborate display pieces are often ignored by customers and add to the cost. |
| High-End Tableware | Luxury tableware is prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Menu Designs | Frequently redesigning menus is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense.Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Catering Equipment | Specialized catering equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your bakery!
Managing a budget for a bakery when funds are tight can feel like an uphill battle. It's like being trapped in a cycle where any unexpected expense can throw you off balance.
This constant pressure makes it nearly impossible to invest in new recipes or equipment, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, pinching pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more money to invest in your bakery.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of bakeries just like yours. Get them now!
Make your bakery more profitable
We have studied the strategies of the best bakeries in the world. All their tactics are explained in our pack!
