01 · The baker
Ines Carvalho has opened the door at 3 a.m. for 11 years, and two bakers can now do it without her
Ines trained in Lisbon and came to Port Ellery to bake for a hotel. In 2014 she leased a former chandlery on the harbor road, put in one deck oven and sold out of sourdough by nine on the first morning.
The wholesale side started when a café owner asked to buy forty loaves a day. She said yes before she knew how she would deliver them. That one account became 38.
Her mother is 84 and lives in Portugal. Ines is going home. She has spent the last two years teaching two bakers every formula so the bread does not leave with her.
“The starter is older than the business. It stays.”
- Reason for sale
- Relocating abroad
- Training
- 8 weeks on shift with the buyer
02 · The morning
Two-thirds of a day's bread is sold before the shop opens at 7
The bakery runs on one shift and one van. This is the whole operation.
A weekday, by the clock
01
3:00
Two bakers shape the dough that was mixed the afternoon before. The first loaves load at 3:40.
02
5:30
The van leaves with the wholesale orders. One driver, one route, 38 stops, back by 8:15.
03
7:00
The counter opens. Pastry comes out through the morning.
04
1:00
The afternoon baker mixes tomorrow's dough and feeds the starter.
05
3:00
The counter closes. Unsold bread goes to the food bank and is counted as waste, at 3% of production.
Revenue, by where it is sold
- Retail counter56%
- Wholesale44%
38 accounts. The largest is 9% of revenue.
Team of 11
- 1Owner and head baker
- 3BakersTwo can run the 3 a.m. shift alone
- 1Pastry cook
- 1Driver
- 5Counter staffThree of them part time
03 · The numbers
$985K buys $352K of owner earnings, at 2.80× with $177,750 in cash to close
The price includes the ovens, the mixers, the van and the recipes. The building is leased.
Financial snapshot, 2025
- Revenue
- $1,468,000
- Gross profit
- $969,000
- SDE
- $352,000
- SDE margin
- 24%
Earnings grew 42% in two years, on revenue up 24%
2023
$248K
2024
$309K
2025
$352K
See the adjusted statementsHide the table
| 2023 | 2024 | 2025 | |
|---|---|---|---|
| Revenue | $1,184,000 | $1,342,000 | $1,468,000 |
| Cost of goods sold | $420,000 | $463,000 | $499,000 |
| Gross profit | $764,000 | $879,000 | $969,000 |
| Operating expenses | $631,000 | $689,000 | $741,000 |
| Net income | $133,000 | $190,000 | $228,000 |
| Add-backs | $115,000 | $119,000 | $124,000 |
| SDE | $248,000 | $309,000 | $352,000 |
| SDE margin | 20.9% | 23% | 24% |
From reported net income to SDE, 2025
See each add-back and why it is thereHide the table
| Net income, as reported | $228,000 |
|---|---|
| Owner salaryInes's pay as head baker. A new owner sets their own or hires the role. | +$78,000 |
| Owner taxes and health planPayroll taxes and the health plan on the owner's pay. | +$14,500 |
| DepreciationA non-cash charge on the deck oven and the delivery van. | +$22,300 |
| InterestOn the oven loan, which is paid off at closing. | +$9,200 |
| SDE | $352,000 |
Why earnings grew faster than revenue
Wholesale orders are baked in the same ovens on the same shift as the counter bread. Each added account brings flour and delivery cost but no new rent and little new labor.
04 · Your deal
On a 15% down payment the bakery covers its loan 2.1 times after paying a head baker $70K
These are your assumptions, not ours. Move them and the deal re-prices.
Price to SDE
2.80×
Cash to close
$177,750
Down payment plus $30,000 closing and working capital
Loan payments per year
$134,167
$837,250 borrowed
Debt coverage
2.10×
SDE less your salary, over loan payments. Lenders commonly look for 1.25× or better.
Left over each year
$129,833
After loan payments, your salary and the reserve
Return on cash
73%
Left over, divided by cash to close
Where each dollar of the $352,000 in 2025 SDE goes
- Loan payments
- $134,16738¢
- Your salary
- $70,00020¢
- Equipment reserve
- $18,0005¢
- Left over
- $129,83337¢
Financing: Illustrative SBA 7(a) loan
- Down payment
- $147,750 (15%)
- Borrowed
- $837,250
- Rate and term
- 10.25% over 10 years
- Loan payments per year
- $134,167
- Closing costs and working capital
- $30,000
- Cash to close
- $177,750
Terms are an illustration, not an offer of credit. A lender sets the real ones.
05 · Hard questions
Four things that could go wrong, and what the record says about each
- 01
Ines is the baker. What is left when she goes?
Two of the three bakers have run the 3 a.m. shift without her for the past 14 months, including every week she was abroad. The formulas are written down and are part of the sale. What leaves is her relationship with the wholesale buyers, which is why she will introduce the new owner to each of the ten largest in person.
- 02
Is there one oven?
There is one deck oven, installed in 2021, and one older convection oven that carries pastry. If the deck oven fails, bread stops. It has had no unplanned downtime since it was installed and is under a service contract through 2027. A second deck oven would cost about $62,000 and the room has space and power for it.
- 03
Flour went up. Did margin hold?
Cost of goods was 35.5% of revenue in 2023 and 34.0% in 2025. Wholesale prices were raised once, by 6%, in early 2024. No account left over it.
- 04
How long is the lease?
Through March 2031, with rent at $5,200 a month rising 3% a year. There is no renewal option in the lease. The landlord has said in writing that she is open to discussing one with a buyer.
06 · Upside
Ines turned away 9 wholesale accounts last year because the oven was full
One lever, named by the owner and priced from her order book. It is not in the asking price.
Today against the model
The model is an illustration of the levers below at the stated assumptions. It is not a forecast.
01Add a second deck oven
+$58K
Today
1 oven, full by 5:30
Model
2 ovens
Nine waitlisted accounts at the current average of $17,000 a year, at a 38% contribution, after $62,000 for the oven.
07 · Next
Two steps, and the second one starts at 3 a.m.
01
Write to the broker
A few lines on who you are and how you would fund the purchase. Tax returns and the equipment list follow a short call.
02
Work a shift
Ines asks every serious buyer to come in at three and stay through the delivery run. It is the fastest way to know.
Example Business Advisors
08 · Legal
What you agreed to when you opened this
- 01This memorandum is confidential. You will not share it or discuss it with anyone other than your own advisors.
- 02You will not contact the business, its owner, its employees, its customers or its landlord. All contact goes through the broker.
- 03The information comes from the seller. The broker has not audited it and makes no warranty that it is accurate or complete.
- This memorandum is not an offer to sell securities or a solicitation of an offer to buy them.
- Figures for future periods are illustrations built on the stated assumptions. They are not forecasts or promises.
- A buyer must rely on their own investigation and their own advisors before making an offer.
- Financing terms shown are examples. Only a lender can offer credit.