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How to start a bagel shop

Editorial Team

4 min read
Coffee and bagles

Are you a morning person who enjoys baking and entrepreneurship? If so, few ventures can provide as much satisfaction as starting a bagel shop. However, the setup process involves a lot more than simply announcing you’re open for business. As with all startups, research and planning are essential. This is especially true at a time when lockdown restrictions continue to pose growth challenges across the hospitality industry.

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Below is a breakdown of key considerations when opening a bagel shop.

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 hoping to capitalize on curbside pickup during your first few months of 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 keep costs down even more.

3. Become legal and compliant

Making sure all your paperwork is in order is a multistep process that includes:

  • 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

Because the business and tax requirements governing how to open a bagel shop vary from jurisdiction to jurisdiction, consult with an attorney who is well-versed in the local regulations specific to your service area.

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 – allowing you to promote social distancing in your shop, at the curb, or on delivery runs.

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 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?

You now know how to start a bagel shop, but how much does the setup process cost?

Depending on the size, location, and “readiness” of the spot you choose, expect to spend anywhere from tens of thousands of dollars1 to hundreds of thousands of dollars.2 Buying premade 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.

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, schedule a free consultation with our merchant services team today.

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

1 “How to Start a Bagel Shop,” Truic How to Start an LLC
2 “How Much It Costs to Open a Bagel Shop,” Profitable Venture

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