Bagel Business Plan, With a Projection

A bagel business plan is a plan for early mornings and many hands. A bagel has about 18 cents of flour, malt and toppings in it and nearly two minutes of shaping, boiling and baking, so it costs under a dollar to make and sells for $2.50 at a counter. The money is in the volume, and the volume comes from three places: people who come for a dozen on Saturday, cafés that want bagels every morning, and the cream cheese that goes with them. In the example below, a bagel bakery in New Jersey sells singles, baker's dozens, café bagels and house cream cheese, and ends its first year about $39,300 ahead on $123,800 of sales, with every hour paid at $20. Below is a description example, each part of the plan, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the bagels, where they sell, the goals.
• Cost a bagel from the flour up: ingredients, shaping and boiling time, the bag, fees.
• The hands are the cost: shaping is three times the ingredients.
• Dozens earn the most an order; cafés sell the most bagels for the least.
• Cream cheese earns well and sells with every dozen.
• Plan the mornings: a full month is about 8,300 bagels, more than one person shapes.
• TaroStack costs every batch from what you paid for the flour and keeps the café orders on one list. More below.

Part 1: the business description

Passaic Street Bagels, a made-up bagel bakery in Clifton, New Jersey, I use in these examples, writes:

Passaic Street Bagels hand-shapes, boils and bakes bagels in a shared commercial kitchen before dawn, and sells them at a weekend counter and two markets, by the baker's dozen, to four cafés in Clifton and Montclair, with house-made cream cheese. In its first year it aims to bake 8,000 bagels a month.

Part 2: what each sale costs

A batch of 48 takes 90 minutes of hands-on work, so the time is more than three times the ingredients in every bagel. How a bagel's price is built from these numbers is in how to price bagels, and labor in a baked good in how to compute labor cost in baking.

Part 3: customers and prices

In a month at full speed the baker's dozens bring $4,647 of the $9,870 of contribution, the singles $3,080, the cafés $1,368 and the cream cheese $775. The cafés take 2,400 bagels, the most of anything, and bring the least for each one; they fill the oven on weekdays, when the counter is closed. Café pricing is in how to price baked goods for wholesale.

Part 4: the first year, month by month

Fixed costs are $2,315 every month: the shared commercial kitchen for early mornings ($1,400), market fees ($300), insurance ($90), the website ($40), ads ($200), delivery van fuel ($250), and software and card fees ($35). Sales start at 15% of full speed:

The year's sales are $123,766 and the profit $39,339, with every hour paid at $20. A full month is about 8,300 bagels, around 260 hours of shaping, boiling and baking, so the plan has the owner and a helper on the morning shift by month six.

Part 5: the startup budget

The $7,500 spent before working cash is earned back in month 8, when the cash reaches $12,080.

Get the template

Download the bagel business plan workbook. Four sheets: your bagels, dozens and spreads with price, variable cost and a month at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Flour by the 50-pound bag, malt, seeds and onion by the pound, cream cheese by the case, four cafés with standing orders that change on Mondays, and weekend dozens preordered online. A notebook can't say how many bagels to shape tomorrow, or what a bagel costs now that flour went up.

How TaroStack does it

TaroStack costs every batch from what you paid for the flour and keeps the café orders on one list.

Batches costed. Each bagel is a recipe, so each batch takes the flour, malt and toppings off stock and is costed from what they cost, and flour bought by the bag is used by the pound.

Standing orders on one list. Each café's order is a sales order, with one picking list for the morning's deliveries, so the bake is sized to what's ordered.

Reordering flour. Flour, seeds and cream cheese come up on a reorder list in days of cover, worked out from how fast they're used, with each supplier's lead time, and price rises show up in the price-creep report.

Recipes, costing, sales orders and reorder lists are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a bagel business profitable?

It can be, with volume. In the example, a bagel bakery ends its first year about $39,300 ahead on $123,800 of sales, with every hour paid at $20.

How much does it cost to start a bagel business?

In the example, $12,500, with a used spiral mixer, the kettle, the boards and pans, and $5,000 of working cash the biggest parts. The kitchen is rented for early mornings.

How many bagels does a bagel business need to sell?

In the example, about 8,300 a month at full speed, across singles, dozens and cafés, to make $7,555 a month after fixed costs.

Should a bagel business sell to cafés?

They buy the most and pay the least: 57 cents a bagel in the example. They fill weekday bakes when the counter is closed, which is when they're worth it.