Skip to content

How to Start a Bagel Shop – Complete Guide

Bagel is a preferred food item among people of all age groups. It is taken in breakfast as well as in meals. This love for Bagels makes it a very profitable business idea. You can start your Bagel Shop and earn a good income.

Bagel Shops serve not just Bagels but also other savories and beverages so that people get all that they need for breakfast or lunch at the same place. So, your Bagel Shop must have the arrangements for all these.

There are two ways to start a Bagel business. One is starting your own from scratch and the other is buying a franchise of a reputed bagel chain brand.

15 Steps to Start a Bagel Shop

1. Learn How to Make Bagels

Before starting your Bagel Shop Business, you must have a good idea about Bagels. If you know how to bake Bagels, it will be helpful for you. If you don’t know, then take a course on Bagel making and make some at home. Get some idea about the different types of Bagels available in the market and the preferred type of Bagels in different regions.

To stand out in the competitive bagel market, you’ll need to perfect your bagel recipe. Experiment with different flour blends, hydration levels, and flavor variations to create a signature bagel that keeps customers coming back for more. Don’t forget to pay attention to shaping and boiling techniques to achieve that classic chewy texture.

2. Do the Research

Before diving into the bagel business, conduct thorough market research. It is important to understand your target audience, competitors, and potential locations for your shop.  First of all, you must study the people in the area where you want to start your Bagel Shop. Since Bagels are not high-priced items, affordability will not be a problem. You have to study their preferences.

Take note of the Bagel Shops in the neighboring areas. That will give you a clear picture of the competition you are going to face. That will enable you to plan your strategies accordingly.

3. Find a Proper Location

The success of your bagel shop often depends on its location. Look for a high-traffic area with a mix of residential and commercial properties, ideally near office buildings, schools, or colleges. Consider factors such as foot traffic, parking availability, and proximity to competitors when selecting your shop’s location.

4. Make your Bagel Shop Business Plan

Before starting the Bagel Shop Business, make a detailed plan for the business. Write down the details like the location of the shop, rent, and cost of setting up the Shop which includes furniture, equipment, crockery, cutlery, utensils, ovens, salaries of staff, cost of raw materials, and other items.

Estimate the investment you need for the business and how will you manage the finances. If you have enough savings, you can start with that. Otherwise, you can apply for a bank loan or other kinds of funding.

5. Choose the Right Business Model

You have two options in starting your Bagel Store. You can start the shop under your leadership preparing fresh Bagels and selling them. Otherwise, you can go for a franchise and start your Bagel Shop Business under a reputed name.

Both have their advantages and disadvantages. You have to do your local research to know whether the people of the area prefer fresh Bagels or those from reputed brands.

6. Equip Your Kitchen

Invest in quality baking equipment and appliances essential for bagel production, including mixers, dough dividers, proofers, ovens, and bagel boards. Ensure your kitchen layout is efficient and meets health and safety standards, with designated areas for food prep, baking, and storage.

Here’s a list of essential equipment required for a bagel shop:

⇒ Bagel Mixer

A heavy-duty mixer with a dough hook attachment is essential for mixing and kneading bagel dough to achieve the proper texture and consistency.

⇒ Dough Divider

A dough divider allows you to portion the dough into uniform pieces, ensuring consistent size and shape for each bagel.

⇒ Bagel Former/Shaper

This equipment is used to shape the divided dough portions into round, hole-in-the-center bagels, providing the characteristic appearance of traditional bagels.

⇒ Bagel Proofer

A proofer creates the ideal environment for the dough to rise before baking, maintaining optimal temperature and humidity levels to ensure proper fermentation and development of flavor.

⇒ Bagel Boiler

Boiling is a crucial step in the bagel-making process that gives bagels their distinctive chewy texture and shiny crust. A dedicated bagel boiler or kettle is used to boil the shaped dough briefly before baking.

⇒ Bagel Oven

A commercial-grade deck oven or steam-injected oven is necessary for baking bagels at high temperatures, resulting in a crispy crust and soft interior.

⇒ Bagel Boards/Pee

Bagel boards or peels are used to transfer the shaped bagels onto the oven’s baking surface, allowing for easy handling and placement.

⇒ Proofing Baskets

These baskets, also known as bannetons, are used for the final proofing stage, providing support to the shaped bagels as they rise before boiling and baking.

⇒ Baking Sheets/Pans

Baking sheets or pans are used to hold and transport the bagels throughout the baking process, ensuring even heat distribution and preventing sticking.

⇒ Cooling Racks

After baking, bagels need to cool properly to set their texture and crust. Cooling racks allow air to circulate the bagels, preventing them from becoming soggy.

⇒ Slicers

Bagel slicers or knives are used to slice the cooled bagels into halves, making them ready for serving or packaging.

⇒ Dough Sheeter

While not essential, a dough sheeter can be useful for rolling out and shaping bagel dough to a consistent thickness before cutting and forming.

⇒ Refrigeration Units

Commercial refrigerators and freezers are necessary for storing ingredients, dough, and finished bagels at proper temperatures to maintain freshness and food safety.

⇒ Kitchen Utensils and Smallwares

Additionally, you’ll need a variety of kitchen utensils and smallwares such as mixing bowls, measuring cups, dough scrapers, and brushes for glazing and topping bagels.

7. Develop Your Menu

Create a diverse menu featuring a variety of bagel flavors, spreads, and toppings to appeal to different tastes and preferences. Consider offering breakfast sandwiches, bagel platters, and specialty coffee or tea beverages to enhance your offerings and increase customer satisfaction.

8. Name your Bagel Shop

After deciding on the area, and nature of the business, you have to name your Bagel Shop. Think of a suitable name that applies to Bagels as well as an eatery, where other foods and beverages will also be sold. The name should be relatable and attractive so that customers feel encouraged and interested to buy from your shop.

Book a domain in the name of your Bagel Shop. This is very important for the publicity and profit of your business. If you don’t get the domain, you have to change the name to get the domain.

9. Register your Business

After the name, you have to give legal status to your business. If you are from the United States, you can opt for LLC for your Bagel Shop Business as it protects your personal assets in case your company comes under financial disputes legally.

10. Obtain Taxes, License, Permits

You have to register your Bagel Shop Business for the necessary taxes and obtain EIN. For the shop selling food items, you need a license from the health department. There are provisions for other licenses which you need to check with the local authorities of the area where your shop will be located.

As the owner of the Bagel Shop Business, you need a Seller’s permit so that you can collect sales tax from the customers. You also need certain other local permits.

In the case of a food shop, there will be regular inspections by health officials to check the standard of your products. So, never compromise on quality or cleanliness.

11. Open a Business Bank Account

After the legal formalities, open a bank account in the name of your Bagel Shop Business. Keep the accounting of your business very methodical. Hire an experienced accountant to maintain the accounts.

12. Get the Right Business Insurance

You have to get your business insured. Get General Liability Insurance and Workers’ Compensation Insurance for your Bagel Shop to protect your business from any incidents of accident or mishaps.

13. Calculate the Cost

You need an investment of approximately $ 70,000-80,000 to start your Bagel Shop. It will cover the equipment needed, rent, furniture, raw materials, utensils, crockery, cutlery, electricity, taxes, license fees, insurance premiums, salaries of staff and sales, marketing, and publicity.

If you want to cut on the start-up cost, you can go to a smaller shop with fewer staff.

14. Set Pricing and Profit Margin for Your Bagels

The price of a plain Bagel is between $2.00-$3.00. For cheese and cream Bagels the price is approximately $4.00-$5.00. The other food items and beverages like coffee or smoothies or yogurt also cost roughly the same.

The calculation of profit is based on the number of Bagels you can sell. The more you can sell daily, the more profit you earn. As Bagels have a very good demand, your chances of selling in large numbers are very bright. However, you need a certain period to cover your cost.

15. Create a Brand

Develop a memorable brand identity that reflects the unique personality of your bagel shop. Design a captivating logo, choose a catchy name, and create a cohesive visual identity for your signage, packaging, and marketing materials. Establish an online presence through a website and social media platforms to engage with your audience and promote your business.

Frequently Asked Questions

What are the wages of workers of a Bagel Shop?

The wages and salaries of staff will depend on the availability of labor in the locality of the bagel shop. However, approximately on average, the wage per hour is between $8 to $12.5.

What is the basic equipment required for a Bagel Shop?

Some of the basic equipment you need to run a bagel shop are an oven, mixer, Bagel Kettles, and Divider.

How much does it cost to open A Bagel Shop?

The cost of opening a bagel shop will largely depend on the size and the location of the shop. The costs include the rent of the space, the cost of making bagels, salaries, and license costs.

The initial start-up cost of starting a bagel shop from scratch in the United States is estimated to be in the range of $1,00,000 to $3,00,000 depending on the location and the number of customers you plan to serve.

How much you can earn from a Bagel Shop?

On average, the cost of making a bagel is in the range of $2.00 to $3.00. If you can sell it for $5.00 the earnings per bagel stand at $2.00. So, for the sale of 100 bagels a day, one can make $200 per day. Therefore, the monthly income for a bagel shop owner with sales of 100 bagels per day stands at $6,000 per month.

What is the cost of a Bagel Shop Franchise?

Again, it will depend on the brand’s reputation. However, the minimum cost of opening a bagel shop franchise is approximately $35000 in the United States.

The general love for Bagels will help to grow your business. With growth, you can also start branches of your Bagel Shop in different locations. According to Statista, the consumption of Bagels in the period between 2020 and 2024 will increase.

Therefore, your Bagel Shop Business has great growth potential. You have to maintain a very good standard of the food items served and a clean and healthy atmosphere. That will be enough to expand your business and increase profits.