How to start a bagel shop

Here’s a breakdown of key considerations when opening a bagel shop. Read to the end for some inspiring real-world examples.

1. Choose the right location

Opening a bagel business in a high-traffic area is one of the most effective ways to capture and grow demand. It’s specifically foot traffic you want–especially during morning commutes. Starting a bagel shop off a busy highway can also be worthwhile if you are easily accessible and have good parking around your storefront. This is especially true if you’re planning to include curbside pickup.

READ: How to find a good location for your business

2. Source equipment and supplies

Decide how you want to make your bagels–will you prepare everything from scratch in-house, or buy the dough from a supplier?

• The former involves purchasing mixers, bagel kettles, rounders, dividers, racks, and ovens–not to mention the yeast, flour, and other ingredients that go into bagel production.
• The latter is much cheaper, requiring only racks, on-site refrigeration, and an oven. Buying dough from suppliers also allows you to rent a much smaller space when opening a bagel shop. This, in turn, helps to lower costs.

3. Become legal and compliant

Make sure all your paperwork is in order. This multi-step process includes:

• Consulting with an attorney who is well-versed in the local regulations specific to your service area since business and tax requirements vary based on jurisdiction.
• Applying for an employee identification number (EIN) with the Internal Revenue Service (IRS),
• Establishing a legal business entity and applying for a license with your municipality’s permitting office,
• Passing all relevant food inspections (which can be much easier when buying from a dough supplier),
• Taking out business insurance to help shield you from liability and protect you from lawsuits,

4. Set up your payment environment

To make your first sale, you need a way to accept card and cash payments from customers. Although a traditional cash register might work, using a point-of-sale (POS) system offers several important benefits:

• Modern POS terminals can handle a much wider range of payment types (including cash).
• They enable you to run your business easier with functions such as inventory management, online ordering, and employee tracking.
• They can help with payment integration, automatically importing new transactions into your accounting software without the need for manual record keeping.

These benefits are amplified if you choose payment technology that is specifically designed for the food service industry. At Clover, for example, our POS systems all come with contactless payment technology and portable payment processing allowing customers to pay at the table or from their car.

5. Promote your new bagel shop

Before you can start making sales, you need to promote your new venture with marketing campaigns and social media engagement. Our restaurant POS systems can help with this stage, as well, by allowing you to launch discounts and create loyalty programs from one convenient dashboard.

How much does it cost to open a bagel shop?

Now that you have an idea about how to start a bagel shop, you’re probably wondering how much  the startup process costs?

Depending on the size, location, and “readiness” of the spot you choose, expect to spend anywhere from tens of thousands of dollars to hundreds of thousands of dollars. Buying pre-made bagels can help reduce your expenses. You can also keep costs low by leasing equipment instead of purchasing everything you need outright. Another good strategy involves only bringing on employees when you’re no longer able to keep up personally with the current demand and workload.

Real-world examples

In April of 2020, JP Figaro took over Hole in One Bagels with a vision of bringing a nostalgic New York City deli experience to Bonita Springs, Florida. Now, Figaro has made that vision a reality. His team bakes fresh kettle-boiled bagels every day, and he imports all their Italian rolls and bread from New York. In addition, Figaro stocks Italian products like jars of tomato sauce, canned tomatoes, De Cecco pasta, and various olive oils. 

His vision proved successful–quite a feat considering that he opened Hole in One Bagels at the beginning of the pandemic. In fact, it was so successful that he opened a second store later that same year. 

As a previous Clover sales representative, Figaro had a leg up on equipment. He chose to go with two Station Pros and two Minis. The Minis were particularly useful during social distancing since the employees didn’t have to touch the customer’s card. 

“We found our customers ecstatic with not having to hand their card over anymore and to just follow through on the instructions themselves,” Figaro says. 

He also kept wipes next to the Clover Mini to disinfect the screen between customers. 

Bagels and Brew in Fairbanks, Alaska, and The Bagel Meister in Douglasville, Georgia, as featured in our Meet the Merchant series, offer two more real-world success stories.

Want more small business tips?

If you’re starting a bagel business, we can’t necessarily help with ingredient selection or choosing the right location. However, we can help when it comes to PCI-compliant payment solutions designed to help boost sales, save time, and reduce fraud. To start, browse our complete line of POS systems so you can find the right solution for your payment needs.

Or, speak with a Clover Business Consultant today to learn more.

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The content provided in this blog post is for informational purposes only. Nothing contained herein should be construed as legal, financial, or tax advice.