What Is the Average Revenue for a Bakery?

There are about 6700 retail bakeries in the United States, that have a combined revenue of about $3,000,000,000. That puts the average revenue per bakery at about $450,000. The 50 largest players, however, earn about 20 percent of this income, so if you open a small retail bakery, you'll probably take in less than the industry average – especially, while you're getting your enterprise off the ground.


There's no such thing as an average revenue for a bakery, because not all bakeries are the same. Some items your bakery sells will yield much higher profit margins than others, so it really comes down to your size, location and product mix.

How to Increase Revenue

You can increase revenue at your bakery by selling more baked goods or by charging more for the baked goods you sell. It's tough to start charging dramatically more once customers have grown accustomed to your prices, so develop a clear understanding of your expenses right away. You can increase sales by offering a broader selection of breads and pastries, or by surveying your customers to develop a more focused understanding of what they want.

Understanding Revenue vs. Profit

Even if your bakery does take in $450,000 per year, you'll take home considerably less than that. Your profit, or owner's income, is the amount left over after subtracting operating costs such as materials, labor, rent, utilities, office supplies, equipment repairs and all the other expenses necessary to keep your bakery running. It's better to have lower revenue and a higher profit than higher revenue and lower profit.

In the former case, you're running a tight, efficient operation, earning more money relative to your sales volume. In the former case, you're probably doing extra work without achieving economies of scale, producing more product without earning netting extra at the end of the day.

Understanding Profitability

Some items your bakery sells will yield much higher profit margins than others. It is good to keep your food costs under 35 percent and your total cost of goods sold under 50 percent. The cost of goods sold includes materials such as ingredients and packaging, and the direct costs that go into producing the physical product you sell, such as hands-on baking time.

The cost of counter service help should be calculated separately, and should also be contained as much as possible by scheduling fewer employees during slow times and by teaching workers to multi task. However, don't cut back your service payroll to the point where customers wait so long that they decide to go elsewhere for their pastries.

Track the costs of producing different offerings so you understand the labor and food expenses that go into making a wedding cake versus a batch of cookies. This information will help you target your personnel and marketing resources toward the items that cost the least to make and yield the highest profit. Adding higher margin items such as coffee to your menu can also help make your bakery more profitable.