A bao is a folded steamed bun around a filling: dough that costs a few cents, and pork belly, fried chicken or tofu that costs the most. Buns made in house are mixed, shaped and steamed in batches; fillings are braised or fried ahead. A frozen six-pack to take home sells the same buns without the counter. The plan turns on rent, wages and keeping steamer baskets full at the rush. In the example, a Portland bao shop starts with $112,500, ends its first year about $23,600 ahead before the owner's pay, and makes about $6,400 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the shop in a paragraph: the street, the bao, the goals.
- Cost each bao: the bun, the filling, toppings, the paper and the card fee.
- Plan sales by product: pork belly, chicken, veggie, frozen six-packs.
- Make buns in batches; fillings ahead.
- Frozen six-packs sell the buns without the counter.
- Rent and wages are the fixed costs that decide the month.
- TaroStack makes each bao a recipe, so its true cost follows the price of what's in it. More below.
Part 1: the business description
Lantern Bao, a made-up bao shop in Portland, Oregon, writes:
Lantern Bao is a 700-square-foot counter-service bao shop on Southeast Division Street, making buns in house daily, with pork belly, fried chicken and tofu bao, and frozen six-packs to take home. In its first year it aims to reach $30,000 of sales a month.
Part 2: what a bao costs
| Bao | Bun | Filling | Toppings and paper | Card fee | Cost | Price | Cost share |
|---|---|---|---|---|---|---|---|
| Pork belly bao | $0.18 | $1.15 | $0.32 | $0.20 | $1.85 | $6.50 | 28.5% |
| Fried chicken bao | $0.18 | $0.87 | $0.32 | $0.18 | $1.55 | $6.00 | 25.8% |
| Tofu and mushroom bao | $0.18 | $0.55 | $0.30 | $0.17 | $1.20 | $5.50 | 21.8% |
| Frozen six-pack, pork belly | $1.08 | $4.10 | $0.48 | $0.54 | $6.20 | $18.00 | 34.4% |
The six-pack's toppings and paper column is the tray, bag and label. Folded buns and their cousins are in dumpling business plan.
Part 3: the buns, the fillings and staffing
Dough is mixed at 7 and shaped into folded buns, proofed and steamed in batches through the day; pork belly is braised the day before and cooled fast, in cooling log template. Two cooks and a cashier run lunch and dinner. The frozen six-packs are steamed, cooled, packed and frozen on slow afternoons.
Part 4: what each product earns
| Product | Price | Variable cost | Contribution | Margin | Units a month at full speed |
|---|---|---|---|---|---|
| Pork belly bao | $6.50 | $1.85 | $4.65 | 71.5% | 2,000 |
| Fried chicken bao | $6.00 | $1.55 | $4.45 | 74.2% | 1,200 |
| Tofu and mushroom bao | $5.50 | $1.20 | $4.30 | 78.2% | 800 |
| Frozen six-pack | $18.00 | $6.20 | $11.80 | 65.6% | 300 |
At full speed the business sells $30,000 a month and keeps $21,620, 72.1%; pork belly bao bring $9,300 of it.
Part 5: the first year, month by month
Fixed costs are $15,200 every month: wages ($9,000), rent ($4,000), utilities ($900), ads ($400), insurance ($300), register and software ($200), and other costs ($400). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $15,000 | −$4,390 | −$4,390 |
| 2 | $16,800 | −$3,093 | −$7,483 |
| 3 | $18,600 | −$1,796 | −$9,278 |
| 4 | $20,400 | −$498 | −$9,777 |
| 5 | $22,200 | $799 | −$8,978 |
| 6 | $24,000 | $2,096 | −$6,882 |
| 7 | $25,500 | $3,177 | −$3,705 |
| 8 | $26,700 | $4,042 | $337 |
| 9 | $27,900 | $4,907 | $5,243 |
| 10 | $28,800 | $5,555 | $10,799 |
| 11 | $30,000 | $6,420 | $17,219 |
| 12 | $30,000 | $6,420 | $23,639 |
The year's sales are $285,900, and the business ends it $23,639 ahead, before the owner's pay. It breaks even at about $21,090 of sales a month, in the fifth month. The lowest cash point, −$9,777 in month 4, is covered by the $25,000 of working cash with about $15,200 to spare. Wages are well over half of the fixed costs; the frozen six-packs use slow afternoons and the same buns to add sales without adding staff.
Part 6: the startup budget
| Item | Example |
|---|---|
| Build-out | $45,000 |
| Steamers and kitchen equipment | $20,000 |
| Lease deposit and first month | $8,000 |
| Furniture | $6,000 |
| Signs | $3,000 |
| Opening inventory | $2,500 |
| Licenses and permits | $1,500 |
| Register | $1,500 |
| Working cash | $25,000 |
| Total to start | $112,500 |
The $87,500 before working cash is earned back in about 14 months at full speed. A truck version is in food truck business plan.
Get the template
Download the bao business plan workbook. Four sheets: your products, each with its price, variable cost and units a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one filling cost. Pork belly that jumps in price, a batch of buns that over-proofs, and a rainy week that leaves braised pork in the cooler change the month.
How TaroStack does it
TaroStack makes each bao a recipe, so its true cost follows the price of pork belly, flour and chicken.
Baos as recipes. Each bao is a recipe by weight, so its cost moves when the supplier's price does.
Counts with no signal. The cooler and dry storage can be counted on a phone with no signal, and the reorder list shows what runs out first in days of cover.
Waste with a reason. Buns and fillings thrown out at close is recorded as waste with a reason, reported by item.
| The job | Notebook | In TaroStack |
|---|---|---|
| What a bao costs this month | Worked out once | True cost from the recipe |
| What to order before the weekend | A guess | The reorder list |
| What was thrown out | Not recorded | Waste by reason and item |
Recipes, counts and the reorder list 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.