On August 22, 2022 Allison and Carl Vick opened the Little Blue Bakehouse at 2116-H New Bern Avenue. The Bakehouse is a first of its kind incubator for treat making entrepreneurs here in Raleigh.
The store is five shops in one with shared retail space in front and shared production space in the back.
The incubator model allows for a drastically lower barrier to entry to a baker trying to grow their business compared to a traditional retail lease.
The Vicks took on the up front cost and risk of opening the retail store – and Allison Vick also runs Little Blue Macaron, one of the five micro-shops – allowing four other business owners to have access to the tools and space to make and sell their treats with reduced risk.
Layout
As you approach the shopping center from the parking lot there is a single row of covered outdoor cafe seating on either side of the door to the Bakehouse. Little Blue Bakehouse is “two doors down” from Alamo Drafthouse.
Inside the 3,200 square foot store you are greeted by the delicious smells of baked goods and in my case, the smiling face of co-owner Carl Vick.
About one third of the interior space is devoted to retail sales and seating and the other two thirds is for the shared kitchen. Carl is quick to say hello and ready to share the story of the Bakehouse.
Micro Shops
The Little Blue Bakehouse is five “micro-shops” in one. A great example of “co- real estate”. Unlike other examples of co-retail here in Raleigh, this retail space is also an example of co-manufacturing as all micro-shop tenants have a kitchen on site as well.
There are five micro-shops at Little Blue Bakehouse:
In true incubator fashion, the Bakehouse provides access to the space required to make treats, sell treats, and is built on a flexible sublease arrangement that allows treat makers to start a business with a very low barrier to entry compared to a traditional retail lease.
Production
Each treat maker has access to their own kitchen space in the back of the shop. Tenant upfit costs are reduced by using shared space, shared infrastructure, and in some cases shared access to equipment.
A feature that I really love about the bakehouse is the oversized kitchen window. There is something very special about getting to see “where the magic happens” and if they are there, getting to wave to the treat makers. The window allows you to feel connected to the process.
In addition to the efficiency provided by shared operations and production space where treat makers can come and go as they please – and on a part-time basis if needed – the incubator provides access to shared sales area and staff.
Sales
On the day I visited the shop, Carl was handling sales of the treats from the micro shops as well as coffee sales. In addition to the shared retail space that provides a direct benefit to the shop owners, having a shared sales staff greatly reduces the barrier to entry to the market.
Staffing can be a hurdle for retail because the smallest increment is one person. With the ability to share a staff person, each shop owner is lowering their direct labor costs, which reduces the risk to them of opening a shop.
Instead of each shop owner selling their own products, making it necessary to produce during “non-selling hours”, they each partially pay for the services of one salesperson, in this case Carl Vick. The flexibility to disconnect themselves from sales allows the treat makers to focus on their most important tasks, make the treats and grow their business!
In addition, the incubator space allows for cross-selling. I entered the store to buy ice cream and left with ice cream and macarons!
Agreement
With the goal of helping to launch bakeries in Raleigh, a key feature of the Little Blue Bakehouse is flexibility. Micro-retailiers at the Bakehouse can sign an agreement for a term as short as six months.
This flexibility benefits both the bakers and the Bakehouse. The Bakehouse gets to ensure that each business owner is a good fit for the business model and the shared kitchen space, and the bakers get to significantly limit their financial downside risk to opening a shop!
Conclusion
As rents and construction costs continue to rise in Raleigh I am optimistic that we will continue to see creative entrepreneurs bringing forth new examples of the “Co- Real Estate Model” to better serve the community as well as the rest of the business community.
These models reduce barriers to entry for businesses and allow our creative community to thrive.
For more information about the Little Blue Bakehouse, visit their website and follow them on Instagram.
Additional Coverage can be found on Eater Carolina and the Little Blue Bakehouse Kickstarter Page.
