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A Dozen Hot Tips for Starting a Bakery

Be realistic. One expense you can't dodge is rent. Select wisely. That means understanding your customer. It wasn't until Grove moved from wholesale to retail that he confronted the shortcomings of being in a strip mall located on a major artery with few stoplights. "A lot of our customers were scared to go in," he explains. "People were driving too fast."

Another issue he faced with his location: air conditioning. In his lease, the landlord determined that. But since a bakery needs more air conditioning than most offices, he found himself constantly battling with the landlord.

Leasee beware. Most leasing agreements run three to five years. But if you're successful, moving in five years is a huge headache. Be sure that you have the option to renew at a specified increase. Otherwise a landlord may take advantage of your success.

Also read the fine print. Connolly didn't realize she had to notify her landlord five years into her seven-year lease of her intention to renew. "They told me after six and half years that I had to vacate the premises because their son needed my space," she recalls. Luckily, she found a space that was twice as large but that move, and the need to build that out, cost her $50,000.

Hire right. Your payroll will likely be your biggest expense. Although finding good help in the kitchen and in the back office can be challenging, take your time. Alan Furman says that whenever Edibles Incredible Desserts rushed to hire someone because the position needed to be filled, it would inevitably not work out. As a result, they wasted everyone's time and their money on a bad hire.

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