Are You Ready to Move Your Bakery Out of Your Home Kitchen?Orders rising like dough? Your business may need more space.
It’s entirely possible to start a bakery out of your home, without a commercial kitchen. But sooner or later, if your business is successful, you’re going to be tempted to scale up, which means deciding whether to move into a storefront.
How do you know if and when the time is right?
Amanda Wilbanks, owner of Southern Baked Pie Company in Gainesville, Georgia, faced this question a few years ago. A few months after starting the bakery out of her home in late 2012, her business had grown to the point where she needed her first retail storefront. (The company now has three locations.)
Wilbanks shared her experience of making the transition and suggested four questions bakers should ask themselves before deciding to take the plunge.
Is demand increasing for my goods?
First, look at your current demand level. If you are having to turn down orders because you don’t have the time and space to fill them — and you wish you did — it’s likely you need to expand to a commercial kitchen.
Wilbanks started selling pies out of her home kitchen. Three months later she installed two more ovens and was still struggling to keep up with demand.
“I couldn’t scale up,” she said. “Once I got an order for a certain amount, I couldn’t sell it because there wasn’t enough time to bake it or enough room to bake it.”
“By December we had sold close to 500 pies out of my small, tiny kitchen. It was crazy. I had a super tiny house, and just not enough room to keep producing at that level.”
Do I have enough revenue to support a storefront?
While demand may be high enough during peak times to support a storefront, Wilbanks said you’ll want to make sure you have enough recurring revenue to cover your costs during slower seasons. “Not every month is going to be like Christmas.”
It’s critical, she noted, to build a clientele that will buy from you year-round.
“That’s really what gave me the push to open the retail front,” she said. “I felt like I had enough corporate customers to sustain me and keep me afloat — like in January when everyone is on a diet.” Building that solid customer base, she said, “gave me the confidence to know I could make it until the holidays rolled around again.”
Am I prepared to invest in marketing?
A storefront gives you a level of credibility that operating out of your home kitchen may not, said Wilbanks. But it also likely means you’ll need to do more marketing.
“Once you move to a retail location, you’ve really got to have a strong brand and a strong retail presence.” Consider if you’re ready to invest in a marketing firm to help with branding, she advised.
Am I really ready for the next level?
More than anything else, moving your bakery out of your home means you’re taking your small business to the next level. And there’s a lot to consider before taking that step.
“If you don’t have access to a ton of capital, then it’s challenging to find even a landlord that would lease to you. Gaining access to capital and finding a good location that you can afford can be difficult,” she said. “That was one of the greatest challenges. And then, once I was able to lease the space, I had to be able to afford building it out. There’s a lot of cost in building out a retail front.”
All in all, Wilbanks said, opening up a storefront has been worth the investment. Her sales “increased tremendously” as a result. “A lot more customers found out about me than would have ever found out about me in my home.”