Skill, inventory and space. These are the secret ingredients to a successful in-store bakery—skill for creating recipes that bake into attractive, mouth-watering goods; a diverse inventory of products; and plenty of space for equipment, says Rick Bittner, executive director of the Retail Bakers of America, a McLean, Va.-based trade organization dedicated to helping bakeries succeed. But what if you’re working with limited resources and space? Below are a few tips from industry experts.

Keep it simple

Focus on low-skill goods or items that can be purchased frozen, then thawed, baked and finished, Bittner says. From-scratch cupcakes are a good option, as are many other quick desserts like brownies, cookies, muffins and pies because none require advanced pastry skills or expensive bread-making equipment.

If you’re determined to offer fresh breads and pastries, par-baked (partially baked and then frozen for storage) and frozen breads are convincing substitutes if you can’t bake from scratch in-store, Bittner says. “Frozen breads have dramatically improved in the last decade so that the loss of moisture through freezing is almost nonexistent,” he says. “You can’t tell the difference” between frozen and fresh bread. This shortcut also allows retailers to get around skill, large equipment and space issues while expanding inventory. 

As for potential profit margin, Bittner suggests retailers mark up frozen unbaked breads by 60 percent after cost and par-baked bread by 50 percent.  Still, these potential profits can’t compete with breads made in-house, which, after labor and equipment costs, are quite cheap to produce; usually only 20 percent of the item’s cost comes from ingredients, he says.