The Economics of Owning a Bakery

A croissant costs 58 cents in ingredients and sells for $4.25. So why does the owner keep only 43 cents of every $10 a customer spends? We build a full bakery on paper, from the first lease deposit to the last tray of unsold bread, and follow every dollar to see where it goes. In this video: The $226,166 it takes to open the doors, from the deck oven and the build-out to the working capital that carries the shop through the slow start A day that starts at three in the morning, and the three lines that feed one oven: the counter, custom cakes, and wholesale Why the waste ($21,622) is bigger than the owner’s profit ($19,554) The break-even point, a bad year, and why the owner needs only eight customers a day to stay afloat How a cupcake chain with 65 stores went from the stock market to bankruptcy The numbers come from a representative model built on industry benchmarks, not from the books of one specific bakery. If you enjoyed this breakdown, subscribe for a new business economics video every week, and tell us in the comments which business we should break down next.