The Fresh Loaf

News & Information for Amateur Bakers and Artisan Bread Enthusiasts

Questions about a business opportunity

mountaineer cookie company's picture
mountaineer coo...

Questions about a business opportunity

I have a business opportunity that I have a few questions that I hope people can help with.  This new business wants to hire me as a baker and use my personal formulas.  I have a feeling that they are going to compensate me too little, but I need more information.  


 


They are currently offering $9 an hour plus a 2-3% incentive pay (bonus) from each bakery sale with a "promise" of a partnership in future opportunities.  They are not offering any compensation for my personal formulas.  I have a few questions (our location is Morgantown, WV):


 


1.  What is the starting salary of a head baker?  Does this depend on whether it is a bakery versus a specialty shop that makes bread (that's what this would be)?


2.  What is the standard markup over total cost for a loaf of artisan bread?  (Sourdough, ciabatta, etc)


3.  What would a bakery pay for a quality formula for an artisan bread?


4.  Any advice for a counter-offer?


 


Thanks for the input in advance!!

koloatree's picture
koloatree

1. What is the starting salary of a head baker? Does this depend on whether it is a bakery versus a specialty shop that makes bread (that's what this would be)?


I think it would depend on how much breads are sold each week. I would not be able to afford a head baker unless I was selling a few hundred breads a day.



2. What is the standard markup over total cost for a loaf of artisan bread? (Sourdough, ciabatta, etc)


I am sure it can vary depending on your bakery's location and the amount of ingredients you order. What are the prices the competing bakeries are charging? Prices here in NJ can range 4-6 dollars.


3. What would a bakery pay for a quality formula for an artisan bread?


I wouldn't say much since most formulas can be found online/books.I am sure fancy pastry recipes can get more. I guess first you must prove that there is a large demand.


4. Any advice for a counter-offer?


Can you prove to them your creations are hot sellers and that you can bake the volume they want without sacrificing quality?


 

victoria louise's picture
victoria louise

I would be very cautious about using your personal formulas.  Be sure that your formulas are protected and don't become the property of the bakery.  Protect your formulas!

Daisy_A's picture
Daisy_A

Hmm. Re formulas: Don't give away the family silver if you don't have to. Try alternatives like leasing or licensing their use.


I may be wrong but my understanding is that if the bakery gets exclusive rights to your formulas then they can carry on using them even if you don't bake for them - a bit like music rights being lost by the original recording artists.


Yes many formulae are available in books. But normally the author would retain copyright and grant publishing rites to the publishers. Why not look into a mid way agreement like that where you lease or license rights to the formulas for a set period of time but copyright remains your own? This is what photographers often do with images. It would also give you time to find out if they are serious about partnership.


I don't know how it is in the USA but in the UK there are agencies, like Business Link, local Chamber of Commerce etc. that will advise small businesses for free and which have good internet sites. Might be good to see if you have something similar in VW - get a one to one with a good adviser?


Anyway if they are wooing you your formulas must be good! Hope this gets sorted in a way that is good for you.   Regards,   Daisy_A


 


 

mimifix's picture
mimifix

Recipes (formulas) are only a list of ingredients and do not receive copyright protection. "Copyright" is applied only to written directions. Really. So there's no way to protect a recipe unless you are the only person with access to it. 


For hard physical work, $9 per hour is little compensation. And to receive incentive pay means you must rely on their good word. I suggest you negotiate a higher salary. Check out the Bread Bakers Guild  http://www.bbga.org/classifieds.shtml


Mimi


 

Daisy_A's picture
Daisy_A

Thanks for the clarifications Mimi. I'd have to revise my comment above then to say that it's extended written text that may (although not always) be copyrighted in published baking books. 


Best wishes,  Daisy_A

mountaineer cookie company's picture
mountaineer coo...

So pretty much we have decided not to do it, too much risk.  But this whole thing has got the attention of the other partners, they've gotten a chance to try my breads, and are willing to set me up my very own bakery YEAH!!  It will be very small 1,200 square feet, that will feel like a mansion compared to  the 10x10 kitchen I'm working out of in my basement.  I will still supply the shop with their bread, along with 5 other restaurants that the group of developers own, or are connected too.   I will try and keep you all updated. This shall be an adventure for sure!! 

knud's picture
knud

Make sure they can't produce your bread without paying a Royalty  make sure what ever you do get it in writing, if they want to be partner with you in a new Bakery, what is your remuneration gone to be.


Just to give you an idea the minimum wage in the Province i live in (Canada) is $ 10


knud 

Daisy_A's picture
Daisy_A

I'm pleased for you - that sounds like a good outcome. Those breads must be special - one taste and they set you up in your own bakery! - Enjoy the adventure. Best wishes,  Daisy_A

idiotbaker's picture
idiotbaker

Talk to your lawyer! Make sure you and your recipes are legally protected.  Lawyers really do serve a purpose! Esp in small business.

amauer's picture
amauer

What a great venture and I sincerely hope it is everything you dream of! How exciting... How I wish I could try your bread!


Hey, but I am having fun experimenting with crackers and had a very good batch tonight. I am making a different kind tomorrow, but this one is a keeper! So much better than yesterday's rye crackers=dog biscuits! The dogs weren't even that crazy about them.


Andrea

mountaineer cookie company's picture
mountaineer coo...

Crackers, now that's something I know nothing about.  I just might have to try and make some, that is if I can find the time, right now I'm doing 4 farmers markets selling anywhere from 40-80 loaves of bread at each one, I can't wait for a real oven! If your ever in West Virginia look me up.  

AtlantaTerry's picture
AtlantaTerry

Don't be shy about getting it in writing. Leave nothing to memory or "he said / she said" arguments. If worse comes to worse, what is in writing has power.


I am a photographer so what the other person said about licensing is true. Be sure your recipe is not commonly found in a cookbook or online. Otherwise, why do they need you?


$9 per hour is cheap and not respectful of your talents. Something to think about while getting the business up and running is a decent base pay + a percentage of the sales. As the business grows your incentive will be larger than your base.


Be sure to SAVE money! Some folks say 1/3 to 1/2 of your pay should be saved or invested.


You say you are running your current bakery business out of your basement. How is this possible? It is not a commercial bakery so how can you get a certificate from the local health department. (Or maybe you are not...)


Best of luck and if you need photographs of your bread please get in touch with me as I am a food and product photographer.


Terry Thomas...
the photographer
Atlanta, Georgia USA
www.TerryThomasPhotos.com
Skype: AtlantaTerry

BellesAZ's picture
BellesAZ

Depending on the state, you can get a food handling permit and certificate/license to sell foods out of your home, but your home has to be inspected and dedicated to your business.  Some states are far less strict than others. 


Good luck in your new endeavor.. CYA is the key to your success :)  Protect yourself and your assets and best wishes!

mountaineer cookie company's picture
mountaineer coo...

I built a commercial kitchen in our basement about 2 years ago, we have so out grown that space.  Last night I baked 68 loaves of bread 8 doz cinnamon rolls, 9 doz cookies, and 4 dozen jumbo muffins and still sold out too early this morning.  Fun Fun!

BellesAZ's picture
BellesAZ

Need a helping hand?  I work for cinnamon rolls! :)  Good luck!

turosdolci's picture
turosdolci

Don't do anything without a contract! A partnership deal sometime in the future doesn't often happen.  Unless you have it in writting it is worth absolutely nothing. 


Busines is business, get legal advice and don't let excitment or emotions enter into your decision. When you have done this and it looks like it works out, then do it and I wish you well.


The salary is low work out better numbers.  I know someone who is working for a caterer (with the baker) who is making $12. per hour and she is not a professional baker.


If you are selling out of your home as suggested above, you must have health permits and a state licenses.  Usually bakeries etc. won't hire you without this and also liability insurance.  Good Luck

mountaineer cookie company's picture
mountaineer coo...

and are going at it alone.  My kitchen is state and localy approved for low risk foods, we do pretty well for ourselves, I just can't keep up with the demand by myself any more.  The tiny kitchen in the basement ain't cutting it anymore.  The town we live in doesn't really have a good bakery, the demand for good bread is here, just need to find a way to fill it.

Daisy_A's picture
Daisy_A

Hi mountaineer coo,


Congratulations on building up such a good volume of sales - your bread must be good!


Sounds like now you've got the permits and customers that you need a propery little bakery, but I know equipment is really costly.


You talk before about there being group of developers who manage a chain of restaurants but that ultimately you felt it best not to go with them. Are there any good restaurants or other buildings with a good kitchen outside of this group? It's just that I've read of other posters coming to an agreement to bake in restaurant or other commercial or institutional kitchens during their (possibly limited) 'downtime' as a stepping stone to getting their own place together. Would this be possible locally, particularly as you already have the insurance etc?


Best of luck with the project,  Daisy_A

Urchina's picture
Urchina

Around here, several churches have permitted kitchens (and boy, these kitchens are large) that are used infrequently. If you are looking for a rental space, you might check your local churches and see if they'd be interested in leasing the space to you. 


You might also consider sweetening the deal for them by offering to bake X number of simple breads or rolls to contribute to the church  meetings (or soup kitchens, etc.) while you're doing your regular work. 


 


Worth a call, perhaps. 


 


Good luck!

BellesAZ's picture
BellesAZ

You should visit your local SBA or find them online.  You can apply for low interest business loans and other types of low cost funding to launch your business.  That would be very exciting and a great option for your town, it sounds like!  Maybe even find a partner who will be the financial partner with you?  When we started our business, we went through the SBA and easily acquired a loan even though we had been turned down by the likes of Bank Of America, etc.. SBA really does help you.

wild mountain bakery's picture
wild mountain bakery

We actualy turned those people down, changed our name to Wild Mountain Bakery, and expanded within the basement .  We are going to wait to open a bakery until my Husband gets tenure.  For now i  bake for a few local coffee shops, then in the summer I bake for ALL the local farmers markets, we are lucky to have 4 in our town alone, and one out of town that i go to.  This keeps me plenty busy!


 


Karen