How to Start a Bagel Shop & Make It Profitable

To start a bagel shop, you must decide on the type of business you want to own, create an encompassing business plan, and purchase the necessary equipment. Afterward, pick the best location, secure permits and licenses, create an attractive menu, and get the best bagel shop POS system. Furthermore, hire a responsive team, create a thorough marketing plan and plan your grand opening.

In this article, you will find a detailed guide on how to start a bagel shop, full of useful tips that will help you open a business that is profitable long-term.

Opening a bagel shop can seem like a massive task, but if you are ready to dive into the food industry, we’ve split the process into ten manageable steps to make it easier for you to get organized:

To settle on the right type of bagel shop, examine your target audience, desired business model, and available resources. You can opt for a full-service experience with a sit-down option, a delivery focused operation, or a pop-up bagel shop.

Let’s see the characteristics of the different types of bagel shops you can open:

• Traditional brick-and-mortar-shop: similar to a restaurant, yet your menu will only focus on bagels. Clients can enjoy your menu items both in-location and to-go. The bigger space will require a significant investment, and location will be crucial to secure foot traffic;
• Café and bagel shop hybrid: where you offer clients café items like coffee, tea, or matcha on top of bagels. As drinks typically have a higher profit margin, it will be easier to earn bake your initial investment. Moreover, the café atmosphere can differentiate your business from other classic bagel shops;
• Takeaway bagel shop: if you cannot or don’t want to invest a lot of money in the space, you can focus on only providing takeaway and delivery with no on-premises service. You will need to have a powerful online ordering system to help you accept orders seamlessly. Here’s how you can set one up in less than 10 minutes:

A bagel shop business plan must include a market analysis, an executive summary, an organizational structure, financial projections, product listing and a marketing plan.

The bagel shop business plan will be the blueprint you can base your decisions on. If you take the time to do the research and planning at the beginning, you will be able to focus on more pressing daily matters. Here is what your business plan should include:

• Market analysis: what is the demand for bagels in your area? Who are your potential customers? Who are your competitors and how is their business working? For example, your target audience may be busy office workers in their thirties that want food that is prepared fast and are willing to pay up to $20 for an order.
• Executive summary: what is the vision for your business? Why do you want to open a bagel shop and what are your goals? For example, Unique Selling Proposition for a bagel shop could be “Fresh ingredients in a crusty dough, ready in less than 10 minutes” or “Asian flavors in a hearty bun that is guaranteed to fill your belly”;
• Organizational structure: who is involved in running the business? How many employees will there be? What will the management structure look like?
• Financial projections: what is your revenue forecast and your cost estimates? What are your projections for the first year, including all expenses?
• Products: what will you sell? How and where will you acquire ingredients? What will your pricing look like?
• Marketing plan: how do you plan to promote your business? How much will you invest in marketing? What platforms will you use for advertisement?

Check out this list of bagel making equipment: Ovens, mixers, proofing boxes, refrigeration units, boiling equipment, baking sheets and pans, bagel shapers, knives and cutting boards.

We can’t talk about how to start a bagel shop without mentioning equipment. It is a necessary cost to be able to prepare multiple bagels a day while maintaining the same quality.

On top of this, you will also need equipment for storing, serving, and cleaning, such as:

• Packaging and utensils
• Ingredient containers
• Sanitizing tools and equipment
• Display cases

To pick a location for your bagel shop, you must consider your target market’s preferences, look for an accessible spot that has a lot of foot traffic and also has generous interior space.

No matter the type of bagel shop you plan to open, to attract more clients, take into account these factors:

• Close to your target audience: for example, around corporate buildings, schools, parks or in the city center. The easier customers can reach you, the more likely they are to visit your bagel shop;
• In an accessible space: both near public transport and easy to reach by transport, ideally with parking spaces;
• With lots of foot traffic: avoid hidden alleys that barely get visitors and opt for main streets where potential customers can spot your sign and be tempted to come it;
• Has generous interior space: if you plan to serve customers in the bagel shop, you will need to provide enough space for the kitchen, counter and sitting area.

Specific permits and licenses can depend according to the state, county, and city you plan to open the business in. Here are the main requirements for a bagel shop in the US:

• Business License
• Health Department Permit
• Food Handler’s Permit
• Sales Tax License
• Fire Department Permit
• Signage Permit
• Employer Identification Number
• Dumpster Placement Permit
• Business Insurance

To create an attractive bagel shop menu, strive for a visually appealing designed that is optimized for conversion. Moreover, consider adding seasonal items to keep clients interested in your bagel shop menu offerings.

After you’re done with the more taxing part of how to start a bagel shop, it is time to focus on the one thing that probably started your passion: the food. You have to decide (with the help of market research) what the most attractive menu items would be for your future clients.

Here are some well-regarded options:

• Classic bagels: with toppings like sesame, poppy seed, or everything and fillings like cream cheese and smoked salmon or slow roasted pork;
• Specific-cuisine bagels: you could choose a type of cuisine, such as Asian and create unique options like pork belly and gochujang or roasted shimeji mushrooms;
• Sweet bagels: appeal to clients’ sweet tooth with sweet options such as ricotta and honey or chocolate and blueberries;
• Vegetarian bagels: go for a more niche audience by only serving vegetarian options such as hummus and onion or vegan cream cheese and oyster mushrooms.

Once you’ve decided what you want to sell, it is important to make the ordering process as easy as possible for your clients. You can do so by creating an online menu with GloriaFood.

The set-up process is intuitive, and you can also mark items as belonging to a specific cuisine and add allergen and nutritional information.

You can also make the online menu available for in-location clients by enabling on-premise dining. Use GloriaFood to generate a QR code you can stick on the counter and tables. After scanning the code, clients can browse the menu, order, and pay, all using their mobile phones.

You need a bagel shop POS system to increase efficiency at your business, reduce order processing errors, and increase sales due to the streamlined order taking and payment processing. Moreover, the extra features like staff management and bagel shop analytics can help you improve your bagel shop.

Marketing can help you bring in more clients, but if you want them to come back, you must provide them with excellent service. And to do so, you need the best bagel shop POS system. How to start a bagel shop? Begin by getting the efficient GloriaFood POS system!

Here is how the GloriaFood POS can help your bagel shop:

• Ability to accept multiple payment methods: serve customers fast, no matter what they choose to pay with. You will be able to receive payment by credit card, debit card, smartphone, and smartwatch;

• Fast-service for your clients: employees can log-in immediately by scanning their RFID cards and browse the color-coded menu at a glance, helping them process orders and accept payments as fast as possible;

• Manage staff easier: the staff management features of the POS make supervising employees a breeze. For example, you have a training mode where you can show newbies the ropes without impacting your financials. Moreover, you can assign employees different responsibilities, such as only allowing managers to use the cash drawer;

• Make data-based decisions: the POS has an embedded reports module that gives you access to data about sales, clients, employee logs, best-selling dishes and a lot more. You can use the statistics to monitor and better your business;

• Accept online orders: the online ordering system from GloriaFood is seamlessly integrated with the POS, allowing you to explore this additional revenue generator. You can set online orders to be automatically accepted through the POS and sent to the kitchen, or you can manually accept them using the order-taking app;

• Work seamlessly offline: even if your internet is down, with GloriaFood POS you will still be able to accept orders and payments as normal.

To create the best bagel shop marketing plan, you need to start by branding your business and acquiring a data-base of professional photos of your menu items. Afterward, create a social media calendar, optimize your Google Business Profile, encourage online reviews, and start email marketing campaigns.

You may sell the best bagels, but without efficient marketing, nobody will know about them. Opening a bagel shop requires a comprehensive marketing plan that includes:

• Branding: Unique Selling Proposition, tone of voice, logo, colors, and other branding items;
• Mouth-watering photography: hire a photographer to take photos of all your menu items and your location so you will have content to promote your business;
• Social media content calendar: it will be easier to stay organized if you plan your social media posts two weeks in advance. Make it a goal to include a link to your menu so interested people can order in just a few clicks. You can get a free smart link from GloriaFood;

• Google Business Profile: optimize your profile with a lot of photos, your address, working hours and link to website and menu. Our Google Business Profile scanner will tell you if your profile contains all the necessary information. Plus, if you don’t have time to optimize your Google Business Profile, we can do it for you.

• Online reviews: create a profile on relevant review platforms in your area and encourage happy customers to leave a positive review;
• Email marketing campaigns: get more return customers with the Autopilot module from GloriaFood. The feature automatically segments customers according to purchasing history and delivers emails with irresistible promotions to re-engage clients, prevent cart abandonment, and encourage second orders.

To hire and train the best bagel shop employees, create a comprehensive hiring announcement and take your time analyzing their experience, values, and work ethic. Afterward, organize training sessions targeting food safety, POS usage, and upselling.

How to start a bagel shop? Hire a committed team that will work together to make your business successful. Start by posting a clear hiring announcement on your website where you list all responsibilities and expectations.

If you get a sales-optimized website from GloriaFood, your hiring posts will be very visible on the homepage where interested candidates cannot miss them.

Once you hire your desired employees, you will need to offer them the proper skills through training. Here are a couple of areas you must cover:

• Food safety: how to handle food properly and sanitize the kitchen and serving area;
• Upselling: how to make recommendations that will convince clients to buy more. With our menu builder, you can do upselling directly in the menu by adding choices and add-ons to dishes (for example suggesting fries when you order a burger);
• POS usage: how to efficiently use the POS system.

The good news is that the GloriaFood POS system has a training module that helps you show new employees the ropes without affecting financial statements.

To organize a bagel shop grand opening, start by posting small snippets teasing the launch on social media and organizing contests with prizes that can be redeemed at the opening. Moreover, during the first day, you can offer freebies and a variety of attractive discounts.

If you want to ensure you are prepared for the grand opening, you can organize a soft launch with friends and family. You can get their opinions and persuade them to leave your first good reviews.

A bagel shop grand opening is guaranteed to be a success if you:

• Tease it on social media: posts like “Coming soon” with photos of the food or “Don’t miss our grand opening” before the date;
• Organize contests: classic giveaways with like and share for a chance to win free menu items that can be redeemed at the grand opening;
• Offer freebies: the first 50 people that visit your bagel shop get a free bagel;
• Add promotions to your menu: for example, 10% off the whole menu only available for the grand opening.

You can use the Promotions module from GloriaFood to set up a variety of tried and tested promotions in seconds. Once activated, the promos will appear at the top of the menu for maximum visibility.

The cost for opening a bagel shop in the US can be over $100.000, including both fixed and variable expenses. Here is a more detailed breakdown of what you will have to spend money on:

• Kitchen Equipment: $10,000–$75,000
• Kitchen/Restaurant Design: $3,000–$8,000
• Mortgage/Rent: $1,000–$8,000, monthly
• Permits & Licenses: $1,000–$3,000
• Insurance: $100–$300, monthly
• Ingredients: $1,000–$4,000, monthly
• Labor: $3,000–$7,000, monthly
• Marketing & Branding: $2,000–$5,000, monthly
• Packaging & Serving: $200–$500, monthly

The profit margin for independent bagel shops is typically between 5% and 10%. Are bagel shops profitable? Check out these other statistics to determine if this business choice is right for you:

• New York-style bagel shop owners usually earn between $50K and $150K per year, depending on location, shop size and foot traffic;
• The cost of goods sold represent 25-30% of revenue;
• Gross profit margins often are around 25-30%, depending on the pricing strategies.