Pretzel Business Plan: Markets, Breweries and Frozen Packs

A soft pretzel is flour, water, yeast, malt and salt, dipped in a food-grade lye bath and baked, so a 4-ounce pretzel costs about 18 cents in ingredients and sells for $5 at a market. That margin carries a business with several kinds of customer: farmers markets and events for the full price, breweries and bars that buy giant pretzels by the dozen, pretzel bites with cheese dip, and frozen packs for grocers, which keep selling in winter. What the plan has to cover is the kitchen hours, a baker up early, a van, and freezer space for the packs. The plan below works per pretzel. In the example, a Cincinnati pretzel maker starts with $37,000, ends its first year about $20,700 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 pretzels, who buys, where you bake, the goals.
• Cost each pretzel: flour and malt by the gram, the lye bath, butter, the bag and the card fee.
• Plan sales by product: market pretzels, brewery pretzels, bites, frozen packs, events.
• Breweries and frozen packs keep sales going in the winter months.
• Lye is caustic: gloves, goggles and a food-grade supply.
• Butter on top puts milk on the allergen line, beside wheat.
• TaroStack costs each pretzel from its recipe and what each batch used. More below.

Part 1: the business description

Vine Street Pretzel Works, a made-up soft pretzel maker in Cincinnati, Ohio, writes:

Vine Street Pretzel Works bakes Bavarian-style soft pretzels in a shared commercial kitchen and sells them hot at two farmers markets, as giant pretzels to six breweries, as pretzel bites with beer cheese dip, frozen in six-packs to independent grocers, and at events. In its first year it aims to reach $14,550 of sales a month.

Part 2: what a pretzel costs

A 4-ounce pretzel is 75 grams of flour with malt, yeast and salt, a dip in the lye bath, coarse salt and a brush of butter. The cheese dip costs more than the bites it comes with. The frozen packs are baked, cooled, bagged and frozen, for customers to warm at home, and the grocer sells them for about $11. How a packaged food gets onto a grocer's shelf is in selling to grocery stores requirements.

Part 3: customers and the kitchen

Markets run Saturdays from May to October; breweries take giant pretzels twice a week all year, warming them in their own ovens; grocers reorder frozen packs every two weeks. The business holds its own food license at the shared kitchen, which is in shared kitchen license. The lye bath is a food-grade sodium hydroxide solution, and whoever dips wears gloves and goggles. The frozen packs carry a full label: ingredients, allergens (wheat and milk, from the butter), net weight, and the business's name and address.

Part 4: what each product earns

At full speed the business sells $14,550 a month and keeps $12,546, 86.2%; market pretzels bring $4,620 of it.

Part 5: the first year, month by month

Fixed costs are $7,300 every month: shared kitchen hours ($1,400), wages for a baker and a market helper ($4,200), market and event fees ($500), van fuel and upkeep ($300), freezer storage ($200), insurance ($200), software ($50), ads ($200), and other costs ($250). Sales start at 35% of full speed:

The year's sales are $125,626, and the business ends it $20,702 ahead, before the owner's pay. It breaks even at about $8,470 of sales a month, in the fifth month. The lowest cash point, −$6,237 in month 4, is covered by the $12,000 of working cash with about $5,800 to spare. Markets close for the winter, so the breweries and frozen packs carry those months; change the shares in the workbook's second row if your markets are seasonal.

Part 6: the startup budget

The $25,000 before working cash is earned back in about 5 months at full speed. A bakery making bread and pastries is in bakery business plan, and another snack sold at markets and events in popcorn business plan.

Get the template

Download the pretzel 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 pretzel. Butter and flour prices move, the breweries order a different count each week, and which frozen packs are oldest is written in marker on the bag.

How TaroStack does it

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

Recipes by weight. Each pretzel 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 pretzel business?

The example budgets $37,000, including $12,000 of working cash; the used van is the biggest item.

Is a pretzel business 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 soft pretzel cost to make?

In the example, about 18 cents of ingredients for a 4-ounce pretzel; with the bag and card fee, 38 cents at a $5 market price.

Is lye safe for pretzels?

Food-grade lye in a dilute bath is how traditional pretzels are made; the lye reacts in the oven, and whoever dips wears gloves and goggles.