A sourdough business plan is a plan for oven space and hands-on hours. The flour and salt in a loaf cost about $1.50, and the dough spends most of its life sitting, but the mixing, folding, shaping, baking and bagging add up, and a home oven bakes two loaves at a time. So the plan has to pay those hours, size the oven to the bakes, and sell loaves before they're baked wherever it can. In the example below, a micro bakery in North Dakota bakes sourdough loaves, focaccia and bagels at home with a countertop deck oven, sells at a market, by preorder and by monthly subscription, and ends its first year about $18,400 ahead on $44,600 of sales, with its hours 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 bakery in a paragraph: the breads, the oven, where you sell, the goals.
- Cost a loaf from the flour up: ingredients, bag, oven power, your hands-on minutes, fees.
- A bigger oven cuts the hands-on minutes a loaf more than any flour discount.
- Subscriptions and preorders are sold before they're baked; nothing goes stale on the table.
- Check your state's cottage food law: what it allows, and whether it caps sales.
- TaroStack keeps flour by the bag, every bake costed, and preorders on one list. More below.
Part 1: the business description
Prairie Hearth Bread, a made-up micro bakery in Fargo, North Dakota, I use in these examples, writes:
Prairie Hearth Bread bakes naturally leavened sourdough, focaccia and bagels at home under the state's cottage food law, sold at a Saturday farmers market, by weekly preorder for pickup, and by monthly subscription.
Part 2: what a loaf costs
A countertop deck oven bakes six loaves at a time, and a batch of 18 loaves takes about three hands-on hours, so a loaf carries 10 minutes of work.
| Per unit | Loaf, market or preorder | Subscription, 4 loaves | Focaccia, quarter sheet | Bagels, half dozen |
|---|---|---|---|---|
| Flour, starter, salt, or oil and toppings | $1.50 | $6.00 | $3.00 | $1.20 |
| Bag, label and parchment, or box | $0.40 | $1.60 | $0.60 | $0.30 |
| Oven power | $0.20 | $0.80 | $0.20 | $0.20 |
| Hands-on time at $20 an hour | $3.33 (10 min) | $13.32 | $3.33 (10 min) | $5.00 (15 min) |
| Card fees, 3% | $0.36 | $1.32 | $0.48 | $0.36 |
| Variable cost | $5.79 | $23.04 | $7.61 | $7.06 |
On a home oven that bakes two at a time, the same loaf carries more than 13 minutes; the deck oven pays for itself in hours. How the loaf was priced, and what each price pays for an hour, is in how to price sourdough bread, and how to put hours into a cost is in how to compute labor cost in baking.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | A month at full speed |
|---|---|---|---|---|---|
| Sourdough loaf, market and preorders | $12.00 | $5.79 | $6.21 | 51.7% | 240 |
| Bread subscription, 4 loaves a month | $44.00 | $23.04 | $20.96 | 47.6% | 40 |
| Focaccia, quarter sheet | $16.00 | $7.61 | $8.39 | 52.4% | 60 |
| Sourdough bagels, half dozen | $12.00 | $7.06 | $4.94 | 41.2% | 80 |
At full speed the market and preorder loaves bring about $1,490 of the month's $3,230 of contribution, the subscriptions about $840, the focaccia about $500 and the bagels about $400. A subscription loaf leaves a little less than a market loaf, $5.24 against $6.21, but it's paid for at the start of the month and never comes home unsold from a rainy market. Bagels leave the least for each hour of work; they bring people to the table. How much to bake for a market day is the same question as in how much inventory for a craft fair.
Part 4: the first year, month by month
Fixed costs are $295 a month: cottage food registration averaged ($10), insurance ($40), market fees ($120), the website and preorders ($40), marketing ($50), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:
| Month | Loaves | Subscriptions | Focaccia | Bagel half dozens | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|---|
| 1 | 36 | 6 | 9 | 12 | $984 | $189 | $189 |
| 2 | 48 | 8 | 12 | 16 | $1,312 | $350 | $540 |
| 3 | 60 | 10 | 15 | 20 | $1,640 | $512 | $1,051 |
| 4 | 72 | 12 | 18 | 24 | $1,968 | $673 | $1,725 |
| 5 | 96 | 16 | 24 | 32 | $2,624 | $996 | $2,721 |
| 6 | 120 | 20 | 30 | 40 | $3,280 | $1,319 | $4,039 |
| 7 | 144 | 24 | 36 | 48 | $3,936 | $1,641 | $5,681 |
| 8 | 168 | 28 | 42 | 56 | $4,592 | $1,964 | $7,645 |
| 9 | 192 | 32 | 48 | 64 | $5,248 | $2,287 | $9,932 |
| 10 | 216 | 36 | 54 | 72 | $5,904 | $2,610 | $12,542 |
| 11 | 240 | 40 | 60 | 80 | $6,560 | $2,932 | $15,474 |
| 12 | 240 | 40 | 60 | 80 | $6,560 | $2,932 | $18,406 |
The year's sales are $44,608 and the profit $18,406, with the hands-on time paid at $20 an hour in the variable costs. At full speed that's 400 loaves a month, the market's and the subscribers', plus the focaccia and bagels, and about 97 hours of hands-on work. Profit from the first month, because a home micro bakery's fixed costs are small; the hours are what limit it.
Part 5: the startup budget
| Item | Example |
|---|---|
| Countertop deck oven | $2,500 |
| Spiral mixer, 20 quart | $1,500 |
| Bannetons, peels and baking tools | $300 |
| Proofing racks | $200 |
| Scale and small tools | $150 |
| Market tent, table and display | $500 |
| Bags, labels and a label printer | $300 |
| Website | $300 |
| Working cash | $1,000 |
| Total to start | $6,750 |
Sourdough bread is a food most state cottage food laws allow from a home kitchen, but the rules differ: what may be sold, where, how it's labeled, and in some states a yearly cap on sales that a bakery this size could reach. What to check is in how to start a cottage food business. At $18,400 a year, the $5,750 spent before working cash is earned back by month 8.
Get the template
Download the sourdough business plan workbook. Four sheets: your loaves, subscriptions, focaccia and bagels with price, variable cost and a month's volume 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, two kinds, a starter fed twice a day, 40 subscribers to bake for every week, preorders that close Thursday night, and a market loaf count that depends on the weather. A notebook can't say how many loaves are promised for Saturday, when the next bag of flour has to be ordered, or what a loaf costs now that flour went up.
How TaroStack does it
TaroStack keeps flour by the bag, every bake costed, and preorders on one list.
Flour as stock. Flour is bought by the 50-pound bag and used by the gram; TaroStack does the unit math, and flour comes up on a reorder list in days of cover, so the next bag is ordered before Thursday's mix.
Bakes as batches. A loaf is a recipe of its flour, starter, salt and bag; each bake is a batch that takes them off stock at what they cost, with the good loaves, the ones that didn't make it, and the minutes it took.
Preorders by day. Each preorder and subscription is a sales order for its pickup day, so Saturday's loaves are one number before the first mix, and the price creep report shows when the flour went up.
| The job | Notebook | In TaroStack |
|---|---|---|
| Loaves promised for Saturday | Count the messages | Sales orders by pickup day |
| When to order flour | When the bag looks low | Reorder list in days of cover |
| What a loaf costs now | Last year's price | Each bake, at what it used |
| Loaves that didn't make it | Forgotten | Rejects on every batch |
Recipes, batches, 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.