Micro Bakery Business Plan: Preorders, a Market and Cafés

A micro bakery bakes a few hundred loaves a week, mostly to order: customers preorder online by midweek, the baker mixes and shapes, and loaves are picked up fresh on Saturday. Baking what's already sold is what keeps a small bakery's waste near zero. A sourdough loaf costs about $1.40 in flour, salt, the bag and the card fee and sells for $10. Around the preorders sit a market stand, a monthly bread subscription, and a few cafés buying at a wholesale price. The plan turns on oven hours, since every loaf has to fit in the oven on bake night, how many loaves one baker can shape, and the cottage food question: baking at home is cheaper, but it can close the door on the cafés. The plan below works per loaf. In the example, a Grand Rapids micro bakery starts with $10,500, ends its first year about $32,100 ahead before the owner's pay, and makes about $5,200 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 business in a paragraph: the breads, how customers order, where you bake, the goals.
• Cost each loaf: flour and salt by the gram, the bag and label, the card fee.
• Plan sales by channel: preorders, the market, subscriptions, cafés.
• Preorders mean you bake what's sold; the market is the guess.
• Michigan's cottage food law allows bread from home, but not sales to cafés.
• Oven hours and shaping hands set how many loaves a week.
• TaroStack costs each loaf from its recipe and what each batch used. More below.

Part 1: the business description

Fulton Street Micro Bakery, a made-up micro bakery in Grand Rapids, Michigan, writes:

Fulton Street Micro Bakery bakes naturally leavened bread two nights a week in a rented shared kitchen in Grand Rapids and sells it by preorder with Saturday pickup, at a weekend farmers market, by monthly subscription, and to three cafés. In its first year it aims to reach $10,610 of sales a month.

Part 2: what a loaf costs

A 900-gram loaf takes about 550 grams of flour, much of it organic, at about $1.40 a kilo, plus salt and the flour that feeds the starter. The baker's own hours and the bake-night helper aren't in the loaf's cost; the helper is a fixed cost below. A market loaf still on the table at close is the cost of guessing, which is why preorders come first. Setting the price is in how to price sourdough bread.

Part 3: preorders, cafés and the cottage food question

Preorders close Wednesday at noon. The baker mixes Friday, shapes in the afternoon, holds the loaves overnight in the walk-in to slow the rise, and bakes from 2 a.m. Saturday; pickup is at the bakery's market stand, so preorder customers and walk-up buyers come to the same place. The second bake, Tuesday night, is for the cafés and the subscribers' midweek loaves. Many micro bakeries start at home. Michigan's cottage food law allows bread made at home and sold directly to customers, but not to cafés, and caps gross sales at $50,000 a year, as michigan cottage food law explains. This plan sells to cafés and passes that cap in its first year, so the bakery rents oven time in a shared kitchen from the start, as in how to rent a commercial kitchen.

Part 4: what each product earns

At full speed the business sells $10,610 a month and keeps $9,041.20, 85.2%; preorder loaves bring $3,440 of it.

Part 5: the first year, month by month

Fixed costs are $3,810 every month: shared kitchen and oven hours ($1,400), wages for a bake-night helper ($1,600), market fees ($200), insurance ($150), delivery fuel ($150), website and preorder system ($60), software ($50), and other costs ($200). Sales start at 35% of full speed:

The year's sales are $91,356, and the business ends it $32,128 ahead, before the owner's pay. It breaks even at about $4,470 of sales a month, in the third month. The lowest cash point, −$660 in month 2, is covered by the $6,000 of working cash with about $5,300 to spare. Preorders keep waste low all year; the market slows in a Michigan winter, when the plan leans on subscriptions and the cafés.

Part 6: the startup budget

The $4,500 before working cash is earned back in about 1 months at full speed. A bakery with its own storefront is in bakery business plan, and a home sourdough business under a cottage food law in sourdough business plan.

Get the template

Download the micro bakery 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 cost per loaf. Flour prices move, the market's leftover loaves change with the weather, and once the subscription list grows, who gets which loaf on which week outgrows a notebook.

How TaroStack does it

TaroStack costs each loaf from its recipe and from what each batch used.

Recipes by weight. Each loaf is a recipe, with unit conversion from the case or sack to the gram.

True cost from the batch. Each batch takes ingredients at their real cost, from the deliveries they came from, so a price rise shows up in the next batch.

Price creep. A price-creep report per supplier shows which ingredient is quietly costing more.

Recipes, batches and true cost 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

How much does it cost to start a micro bakery?

The example budgets $10,500, including $6,000 of working cash; the proofing racks and dough bins is the biggest item.

Is a micro bakery profitable?

It can be: the example makes about $5,200 a month at full speed before the owner's pay, and ends its first year ahead.

How much does a sourdough loaf cost to make?

In the example, about 85 cents of flour and salt, and $1.40 with the bag, label and card fee, for a loaf that sells for $10.

Can I run a micro bakery from home?

Bread is a cottage food in many states, for sales directly to customers; Michigan's law, for one, doesn't allow selling to cafés and caps gross sales at $50,000 a year.