Island Economics

San Juan Islands-specific considerations for this business:

• •Limited local bakeries — fresh baked goods are in demand, especially quality bread
• •Tourists want 'local' food experiences — farmers market bakery booth draws crowds
• •Shipping ingredients adds cost — plan for bulk ordering and ferry schedules
• •Strong community support — word-of-mouth travels fast on the islands
• •Seasonal population swing — summer is high volume, winter serves locals

The $500 Experiment

Test this idea before investing heavily:

Getting Started

1. 1
   Research Washington's cottage food laws before investing in anything

   • •Laws define exactly what you can sell and where — baked goods yes, cream-filled pastries no
   • •Understanding limits prevents wasted effort on products you can't legally sell
   • •Cottage food keeps you out of commercial kitchen costs until you're ready to scale
2. 2
   Start with 2-3 signature items rather than a full bakery menu

   • •Focused menu means bulk ingredient buying — lower costs per item
   • •Perfecting a few items builds reputation faster than being average at many
   • •Simpler inventory management and more efficient batch baking
3. 3
   Build a pre-order system from day one

   • •Pre-orders mean you bake only what's sold — no waste, no leftover inventory
   • •Predictable demand lets you plan shopping and production efficiently
   • •Cash comes in before you spend on ingredients

Where the Money Goes

Expected startup and operating expenses:

Don't Cheap Out On

Areas where quality investment pays off:

Smart Places to Save

Areas where cost-cutting makes sense:

• •Buy ingredients in bulk from restaurant supply stores — 40-60% cheaper than grocery
• •Use your existing home kitchen — cottage food means no commercial kitchen required
• •Pre-orders eliminate waste — bake only what's sold
• •List on a local marketplace for free — take pre-orders without website costs
• •Start with items that use common ingredients — less specialty inventory to stock
• •Share booth with another baker — split market fees, offer variety

Cash Flow Considerations

Financial timing and planning notes:

• •Low startup costs — ingredients and packaging only, using your existing kitchen
• •Pre-orders mean payment before production — positive cash flow from day one
• •Cottage food has sales limits in Washington ($25,000/year) — plan accordingly
• •Holiday seasons (Thanksgiving, Christmas) are peak — build capacity in advance

Risk Reducers

Strategies to reduce risk and increase odds of success:

• •Start while keeping your day job — weekend baking and market sales fit around work
• •Cottage food requires almost no upfront investment — test the market cheaply
• •Pre-order model means no unsold inventory
• •Equipment you buy (scales, pans) has household use if you stop
• •Build customer list through markets — direct connection for repeat orders
• •Start small and scale only when demand justifies it

Island Economics

San Juan Islands-specific considerations for this business:

• •Limited local bakeries — fresh baked goods are in demand, especially quality bread
• •Tourists want 'local' food experiences — farmers market bakery booth draws crowds
• •Shipping ingredients adds cost — plan for bulk ordering and ferry schedules
• •Strong community support — word-of-mouth travels fast on the islands
• •Seasonal population swing — summer is high volume, winter serves locals

The $500 Experiment

Test this idea before investing heavily:

Getting Started

1. 1
   Research Washington's cottage food laws before investing in anything

   • •Laws define exactly what you can sell and where — baked goods yes, cream-filled pastries no
   • •Understanding limits prevents wasted effort on products you can't legally sell
   • •Cottage food keeps you out of commercial kitchen costs until you're ready to scale
2. 2
   Start with 2-3 signature items rather than a full bakery menu

   • •Focused menu means bulk ingredient buying — lower costs per item
   • •Perfecting a few items builds reputation faster than being average at many
   • •Simpler inventory management and more efficient batch baking
3. 3
   Build a pre-order system from day one

   • •Pre-orders mean you bake only what's sold — no waste, no leftover inventory
   • •Predictable demand lets you plan shopping and production efficiently
   • •Cash comes in before you spend on ingredients

Where the Money Goes

Expected startup and operating expenses:

Don't Cheap Out On

Areas where quality investment pays off:

Smart Places to Save

Areas where cost-cutting makes sense:

• •Buy ingredients in bulk from restaurant supply stores — 40-60% cheaper than grocery
• •Use your existing home kitchen — cottage food means no commercial kitchen required
• •Pre-orders eliminate waste — bake only what's sold
• •List on a local marketplace for free — take pre-orders without website costs
• •Start with items that use common ingredients — less specialty inventory to stock
• •Share booth with another baker — split market fees, offer variety

Cash Flow Considerations

Financial timing and planning notes:

• •Low startup costs — ingredients and packaging only, using your existing kitchen
• •Pre-orders mean payment before production — positive cash flow from day one
• •Cottage food has sales limits in Washington ($25,000/year) — plan accordingly
• •Holiday seasons (Thanksgiving, Christmas) are peak — build capacity in advance

Risk Reducers

Strategies to reduce risk and increase odds of success:

• •Start while keeping your day job — weekend baking and market sales fit around work
• •Cottage food requires almost no upfront investment — test the market cheaply
• •Pre-order model means no unsold inventory
• •Equipment you buy (scales, pans) has household use if you stop
• •Build customer list through markets — direct connection for repeat orders
• •Start small and scale only when demand justifies it