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Bagel Shop

How to Run a Bagel Shop

Early to bed and early to rise makes your bagel shop a profitable franchise.

In any foodservice business, you need to have a passion for two things: food and service (go figure). These are two sides of the same coin, and mastering both will be essential for accomplishing your long term entrepreneurial goals.  

Bagels are universal, but of course, this is a double-edged sword. On the one hand, everyone likes bagels, so it shouldn’t be too hard to attract customers. Bagels are a tasty, easy, and non-confrontational breakfast food. On the other hand, this also means that it can be hard to stand out among the competition. For most customers, a bagel is just a bagel, so you need to find your market advantage in order to rise above the local competition.

Bagel Shop

Use the following tips to help you find your niche in the breakfast food market, and use these tried-and-true strategies to start on the path toward running a successful bagel shop.

Day in the life

It’s no surprise that bagels are meant for morning time, but what might come as a surprise is how running a bagel shop affects your day-to-day. This business will require very early mornings and early nights — say goodbye to happy hours, late-night Netflix, and the nightlife altogether. You will be expected to be open in time for customer’s morning commute, so that could mean starting your workday as early as 4 am to prep food and then running through lunch.

Bagel

In a given day you will perform a variety of administrative, customer service, and food prep tasks. For example, you might spend the morning making bagels, spend lunch ordering supplies, and spend your afternoon putting out customer fires. At the end of the day, you will need to clean, prep, and get ready to do it all over again. As the owner of a bagel shop, you have to be a jack of all trades.

Your target demographic will be breakfast and lunch patrons who are on a time crunch. Half of the appeal of bagels is that they are quick, easy, and transportable. Don’t overthink it — bagels are universally loved for their taste and convenience. If you can consistently deliver those two qualities to customers you’re headed for success.

Supplementing income

Your main source of income will be from bagel sales. You don’t have to be Warren Buffett to figure that out — you are, after all, running a bagel shop. But, bagel sales alone can only go so far.

It’s best to identify and implement alternative sources of income as early as possible. This means closely following customer buying patterns and accommodating accordingly. Have you noticed customers asking for new coffee flavors? What about cream cheese variety? Keep your ear to the ground, and think about what customers want in addition to their bagels, whether that be coffee, juice, fruit, etc. Expanding your offerings strategically is a great way to better accommodate customer needs and make your bagel shop an essential morning pit stop.

Bagels

Diversifying income streams is also a great way to avoid becoming overly-reliant on one product. It’s unlikely that bagels will ever go out of style, but who would have guessed 30 years ago that low-carb would have gotten as big as it is now? It’s best to cover your bases by introducing auxiliary revenue streams. Even offering catering services can help stretch your bagel revenue a little bit further and better integrate your company into the community.

Start up and operation costsSell Your Business

The key to running a successful bagel shop is to bring in more money than you spend. Easy right? Okay, in reality, it might be a little more complicated than that.

Some common expenses to consider as you’re getting your business off the ground include:

  • Real estate : Hands down, your most expensive asset will be the shop itself. Whether you lease or buy property, the monthly cost of your location makes up a large chunk of your operating expenses.
  • Labor : The rule of thumb is that labor usually costs 20 - 30 percent of the budget for small businesses. But some experts estimate that labor can cost more than half of the budget for businesses in the service industry. This is not an area to cut corners — hire the best employees you can because they will be the face of your brand and will add value to a deal when it comes time to sell your bagel shop.
  • Food/Supplies : The third most expensive element of running a bagel shop will be food and the supplies you need to prepare that food. This is the bread and butter of your business (literally), and it is not an expense that can be avoided. But don’t worry, developing a relationship with local vendors can help reduce the ongoing cost of food and supplies as you potentially strike deals for bulk delivery.

All of the above will need to be — at the very least — covered by the revenue of your business. In your first couple of years of operation, all you can really hope for is to break even. But, once you have been operating for a couple of years, and have become integral to a select customer base, you can start looking to turn a profit.



Bruce Hakutizwi

About the author

USA and International BusinessesForSale.com Manager for BusinessesForSale.com, a global online marketplace for buying and selling small medium size businesses. The website has over 60,000 business listings and attracts over 1.5 million buyers to the site every month.

@BizForSaleUS

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