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How To Open A Bagel Shop? [And Sell Them Online]

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That slightly sweet and salty taste and chewy texture of plain bagels – who can resist that? We can’t! And the upcoming National Bagel day just makes our cravings more intense. Just in time, we’ll be talking about how to open a bagel shop.

In this article, we’ll be teaching you the two ways on how you can set up a bagel business:

  • Physical store
  • Online store

We will be talking about the cost of establishing either business and we will be weighing the pros and cons of both. And by the end of this article, we’ve given you a list of successful online bakeshops that will surely inspire your business.

So if you have the baking skills and the passion for kneading dough, this business is for you. Let’s get started!

How Much Does It Cost To Open A Bagel Shop?

Stack of money on the palm of man

Image Credits: Burst

Starting a bagel shop can be an exciting venture and it could also be a profitable one if you know how to market your business.

You have two options if you want to start a bagel shop business. But whichever business model you choose, there is a financial aspect involved.

Let’s see how much money is needed to start a bagel shop (on both business model options) and let’s weigh-in their pros and cons.

Physical Bagel Shop

Overhead shot of a man busy working in a small bakeshop

Image Credits: Burst

Most of the time, the startup costs of a business with a physical storefront are more expensive than starting an online store.

Here’s an estimated breakdown of all the things you need to spend money on if you want a brick-and-mortar bagel shop business according to Profitable Venture.

A table that breaks down all the estimated expenses associated to establishing a physical bagel store
Image Credits: Profitable Venture

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The cost estimate for starting a bagel business with a physical store amounted to a whopping $243,650 dollars. Thus, if you want to launch a physical bagel shop, you must be financially prepared and you should be ready to commit for the long haul.

Here’s the thing, you don’t need to shell out all this money by yourself because you can pitch your business idea to a potential investor. That said, if an investor said yes, you wouldn’t have full ownership of the business and you would have to split your profits.

Pros:

  • Visible Location: A good location will yield high foot traffic.
  • Physical Experience: Customers can physically experience your products
  • Community Engagement: Earn a loyal customer base

Cons:

  • High Overheads: High startup cost and recurring expenses
  • Limited Reach: Reach is limited to the traffic in your area.
  • Operational Challenges: Operating a physical store can be challenging at first.

Online Bagel Shop

Screenshot of Harry & David -- a purely online-based bake shop
Image Credits: Harry & David

If you want to start a bagel shop with little capital; or if you simply don’t want to risk too much money on a physical store, an online store could be your best option. The good thing about this is that you can start the business as a side hustle, operate from your own kitchen, and slowly transition to doing it full-time if things go great.

Be that as it may, selling bagels online still requires cash investment.

A table that breaks down all the estimated expenses associated to establishing an online bagel store
Image Credits: Profitable Venture

At $3,950, the cost of establishing an online bagel shop is significantly lower. You might have noticed that the initial inventory in here is only set at $1,000. That’s because you don’t need to purchase inventory in bulk if you plan to start from your kitchen.

You’ll also notice that we don’t have a cost for bagel-making equipment. And that’s because homemade bagels only need a boiling pot and an oven – things that are readily available in your kitchen.

💡 Quick readShopify Fees Calculator - What's The Cost of A Shopify Store?

You can further decrease your initial capital if you already have your own computer. More importantly, you don’t have to pay $1,200 for website design if you can do it yourself.

Creating an online store nowadays is incredibly easy. One platform that we can recommend is Shopify.

Using their e-commerce platform is incredibly cost-effective as it is equipped with the digital tools that you’ll need in your online store, it is user-friendly, and you can find tons of tutorials on YouTube on how to create a Shopify store.

Screenshot of Shopify Pricing Plan
Image Credits: Shopify

Their pricing plan won’t break the bank as well:

  • Basic (for individuals) - $25 per month
  • Shopify (for small business) - $65 per month
  • Advanced (for medium to large business) - $399 per month

If that isn’t cheap enough, Shopify also lets you start your online business for only $1 for the first three months.

Since you want to start at a small scale. We recommend the Basic plan so you can test the waters.

Pros

  • Lower Overheads: No high rental and utilities-related expenses.
  • Wider reach: You can tap on a wider audience
  • Flexibility: Easy to pivot when needed.

Cons:

  • Intense Competition: Competition may be intense because of other online shops.
  • Shipping Challenges: Transporting perishables require extra precautions.
  • Building Trust: Earning customer’s trust online can be hard at first.

What Do You Need To Open A Bagel Shop?

Opening your own bagel shop (or any business) involves a series of steps that require careful planning and proper execution.

If you want to start a bagel shop in the fastest way possible – especially if you want to launch before the National Bagel’s Day – an online store is the best way to go.

For that, here are the steps needed to launch your bagel shop using Shopify:

01. Market Research

Hands typing on a keyboard
Image Credits: Unsplash
Before starting a bagel shop, thoroughly research your target market. Understand their preferences and purchasing power. Identify already-established bagel shop owners and see how they interact with their customers.

Also, you need to take a look at their menu and identify their best-sellers. This will give you an idea on what bagel flavors you should sell.

In researching your competitors, here are the things that you should do:

  • Check out their social media accounts and figure out their content strategy (frequency of posts, audience engagement, types of posts)
  • Visit their website if they have one. Read their web copy and learn from it. Figure out their tone, their website structure, their branding, etc. You should not copy these aspects, however, by studying their website, you’ll have an idea for when you launch your own.
  • Visit their physical store if they have one and taste their products. Check out their menu and figure out their best sellers.

02. Business Plan

Woman writing on a notebook

Image Credits: Burst

When creating a business plan, the first thing that you need to identify is your business model. Will you launch an online bagel shop or a physical bagel shop?

In either choice, your business plan should be written according to your model.

💡 Quick read8 Best Business Ideas to Start (Tips & Guides)

Create a detailed business plan outlining your goals, startup costs, marketing strategies, and financial projections. A well-structured plan will serve as your roadmap to success.

03. Legalities and Permits

Man and woman shaking hands over the table

Image Credits: Pexels

It is crucial that before selling bagels, all necessary licenses and permits are secured to avoid penalties from your local government. Here are the things that you should do:

  • Choose a business structure
  • Pick a name for your business
  • Apply for an EIN
  • Apply for business licenses
  • Register with state agencies
  • Open a business bank account
  • Understand your compliance requirements
  • Understand your tax obligations

Read this article to know more about business registrations in the United States: How to register a business in the US | Stripe 

Additionally, make sure that your business is compliant with health and safety regulations.

04. Create Your Shopify Store

illustrate an online store with a laptop

Image Credits: Burst

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Launching a Shopify store instead of a physical store is the fastest route that you can take if you want to launch a bagel store the soonest time possible – and we suggest creating one now if you want to be up and running before the National Bagel’s Day.

Here’s a comprehensive guide to creating a Shopify store:

 

05. Equipment and Supplies

Kneading dough using a handheld electrical dough mixer

Image Credits: Pexels

Your bagels’ quality depends on your skills and the tools that you use. Therefore, you should not cheap out on your bagel-making equipment. Choose the ones that offer the best balance between practicality and durability. These are long-term investments and are expected to be used for many years to come in your business.

If you’re starting small as an online store, you can make do with regular kitchen equipment. But as your orders grow, you need to invest in high-quality equipment.

06. Staffing

three female staffs happily talking business in front of a computer

Image Credits: Pexels

Hiring skilled staff in your bagel shop is a crucial ingredient to your success. Experienced bakers can be more expensive to hire, however, they will require lesser training and management, and their expertise will be very crucial in your operations. If a full-blown restaurant is in your mind, training your customer-facing staff is necessary.

If it's an online bagel shop, you can limit staffing as you can do the baking (if you know how to) and marketing yourself.

07. Marketing and Branding

A document clipped on a folder with words that say " What is a brand strategy?"

Image Credits: Pexels

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Developing a strong brand identity is very important nowadays. Customers are becoming more and more discerning, and competition is getting stiffer. Thus, your marketing and branding strategy should be able to compete with other bagel shops.

Create a website that reflects your brand and learn how to take advantage of social media to attract potential customers.

Instagram is a great platform to establish a brand identity as it has a great focus on visual content such as photos and videos.

Additionally, Instagram allows you to create a “shoppable feed” – meaning that your Instagram followers can click on your post and purchase that product without looking for it on your website.

If you have a Shopify store, the process becomes easier because all you need to do is to install Vibe Shoppable Instagram Feed.

08. Menu Development

Two menu boards of a street-side pickup coffee stall

Image Credits: Pexels

If you want to attract as many customers as possible, you should have a menu that serves various preferences – those who want plain bagels, bagel sandwiches, and those who want exciting options. You should also consider dietary preferences and trends in your offerings.

This upcoming National Bagel’s Day, do you have a plan to surprise your customers? Like introducing limited-time bagel flavors, or launching an addition to your menu?

09. Launch

A small hanging sign on a glass door saying "We're open"

Image Credits: Pexels

Now that you have everything put into place, it’s about time to launch your business. Keep in mind that you must have a social media presence prior to your launch to build customer anticipation. If you have the budget, consider running ads to announce your upcoming business so that potential customers are informed.

10. Customer Feedback

Scrabble tiles arranged to spell "Feedback"

Image Credits: Pexels

Successfully launching your own bagel shop is only the beginning of your long journey in business. As such, keep an open mind because mistakes can happen. Keep your ears open to customer feedback – especially on negative reviews as these will help align your business to the right path.

Welcome your customers’ suggestions and encourage them to give their honest opinions about your recipe.

Inspirations For Opening A Bagel Shop

The thought of launching your own shop is a very exciting one especially if bagel-making is your passion. It’s totally OK if you still don’t know what to do at this point.

Perhaps you only need a little inspiration. Lucky for you, we’ve compiled some. Check out these successful bake shops, you’ll surely learn a thing or two from them:

01. Milk Bar

Homepage screenshot of Milk Bar online store

Image Credits: Milk Bar

Milk Bar is a bakeshop that specializes in cakes, pies, cookies, cake truffles, and gluten-free products. In their website, they claim that they make “award-winning” treats and Bon Appetit magazine called them “one of the most exciting bakeries in the country” for their unique spins on traditional treats and desserts.

💡 Quick read14 Best Small Food Business Ideas

They have bake shops located in New York, LA, Washington DC, Boston, Las Vegas, and Bellevue.

02. Levain Bakery

Homepage screenshot of Levain Bakery online store

Image Credits: Levain Bakery

Levain Bakery is famous for its chocolate chip walnut cookie that’s “crispy on the outside and gooey on the inside”. Their story started way back in 1995 when two friends tried baking their first batch of walnut chocolate chip cookies and little did they know that an icon in NYC would be born on that day.

Thirty years later, their cookies remain loved by many and they now have 14 store locations in key cities such as New York, LA, Boston, and more.

03. Katz

Homepage screenshot of Katz online store

Image Credits: Katz

Katz started as a humble, one-woman bakery back in the year 2006. Nowadays, it is known as a manufacturer of gluten-free and allergy-friendly baked products that can be purchased off the shelves in over 40 retail stores in the United States such as Whole Foods Market, Reasor’s, and Harps.

04. Noe Valley Bakery

Homepage screenshot of Noe Valley online store

Image Credits: Noe Valley Bakery

Noe Valley Bakery is a husband-and-wife business since 1995. They offer an array of artisanal bread and pastries, with a commitment to utmost quality. Their flagship products include crusty bread and delectable pastries that reflect their dedication to craftsmanship.

“We sell happiness. It just happens to look like a cupcake.” is their tagline. Needless to say, we love it! And it speaks volumes about their deep passion for their craft. Currently, they have two stores in San Francisco, California.

05. Bonjour Bakehouse

Homepage screenshot of Bonjour Bakehouse online store

Image Credits: Bonjour Bakehouse

Bonjour Bakehouse is deeply inspired by French baking traditions. Their flagship products include croissants, baguettes, and other French delights that transport customers to a European bakery experience. They have an immense online following with hundreds of five-star customer reviews.

Final Words

The success stories of these bake shops are truly motivational. And for an aspiring entrepreneur like you, they teach a lesson about starting small, perseverance, and keeping up with the times.

That’s why if you follow the step-by-step guide above, and emulate the characteristics that made these bake shops victorious, your chances of establishing a successful bagel shop become higher.

With the two options mentioned above, the choice lies on you – will you start an online bagel shop, or will you be establishing a physical store?

If you have limited capital and seek full ownership of your business, we recommend starting with an online store. This approach involves fewer risks and requires less preparation. If successful, you can then consider establishing a bagel shop franchise.

Best of luck with your new business!

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