Read about future bakery owner Emily Day's experiences opening a bakery. This week: to rent, lease or buy equipment.
When it comes to equipment, many new bakery owners have grappled with the question, “To rent, to buy or to lease?” Future bakery owner Emily Day tackled this topic on her blog, Flour + Co, a few months ago. Day and The Baking Blog have teamed up to explore Day’s journey to opening retail bakery Flour + Co in San Francisco.
Here’s what Day had to say in October 2012 about the challenging process of determining what kind of equipment is best for her business and how to go about acquiring it.
“Outfitting a bakery with equipment is nothing but bonkers. Using this word brings the littlest bit of light to this paramount task. Here’s a partial list of the over $100,000 of equipment that I need to open Flour + Co:
- walk in
- espresso machine
- POS system
So, what’s it going to be for Flour + Co? It ends up a relatively easy decision when you understand everything we’ve gone over. It’s based on a pretty simple calculation. I’m saving my money for the really small stuff, like a tabletop mixer, pans, bowls, etc. I also have a little money set aside for the small down payments required for leasing or renting. Other than that, I’m leasing my few key pieces of equipment and renting the rest. It gets the bakery going with relatively little capital and it gives me a piece of mind. There’s one check off my list. Now, on to the endless other empty boxes that are yearning for a check mark.”
Day has since made a few adjustments to her final decision regarding equipment. The Baking Blog caught up with her this week to find out how it will all play out.
Modern Baking: How did you decide what was the absolute essential equipment you’d need for the type of bakery you plan to open?
Emily Day: My essential bakery equipment list changed as I found the space and started space planning. My 1,400-sq.-ft. location is broken up into thirds, with only one third being the production area. So, I quickly realized that some pieces of equipment that I thought were "essential" weren't essential after all. Funny how that happens!
I knew I needed an oven (convection or rack), proofer, mixer, refrigerator, freezer, some thing required by code (3 compartment sink, veg sink, hand sink, mop sink, etc), and a few small pieces of equipment (blender, tabletop mixer, food processor, tabletop sheeter, etc). So, I had to compromise and research in order to find these absolute essentials in sizes and varieties that fit my product lineup.
MB: How much is your location already outfitted to house a bakery?
Day: My location was a plumbing store in its past life, so I have a blank slate to work with. It's nice because I can set it up any way that I want, but it's also more expensive and takes more time.
MB: How did you decide what to lease or rent versus the smaller pieces you’re going to buy?
Day: My lease versus buy versus rent list also has changed over time. As I realized the leasing terms that I'd be given and what that meant for my monthly payments, I made some adjustments. Also, as I was going through the process from finding the space to getting the building permits, there were expenditures that I hadn't budgeted for and so my budget for everything else, including equipment, decreased.
It ends up being a short-term decision (cash flow), but I'm renting almost everything. Renting has smaller monthly payments, includes maintenance, and allows me to change out equipment easily if I grow out of it or made the wrong decision. I will never own the equipment, so that's the down side. I'm leasing a small oven that will be used to heat up baked goods as people order them and also my coffee equipment. These two pieces of equipment weren't available from the rental company. I'm buying pretty much everything under $1,200, such as the blender and tabletop mixer.
MB: What resources are you using to get the equipment?
Day: To save money, I'm acting as the foodservice person on my job. My architect is helping me out with this. Usually, you work with a foodservice person who picks your equipment, lays it out, and does all of the technical plans. They give their completed plans to the architect who combines it with the overall site plans. Instead, I've done a lot of online research, I try to see what people are using when I'm in bakeries or restaurants, I also have talked to some industry contacts about various pieces. I've tried to look at equipment when available at a local supplier. Everyone is very helpful and more than happy to share their experiences or connect me with someone who can.
MB: How do you plan to handle maintenance and/or upgrades?
Day: Luckily, maintenance is covered in my rental fees. So, I'll just have to call for service when necessary. The benefit with renting is that I'll be able to upgrade fairly easily when needed...as long as it fits in the space. From a systems perspective, I will setup weekly, monthly, quarterly, and annual preventative maintenance checks on my end to avoid major issues and keep the equipment in good shape.
Stay tuned for the next entry: Menu planning and packaging