A private business owner should have full discretion in regards of who they do business with, and should never be required to make a sale or perform a service for anyone they don't want to.
If a business owner wants to be bigoted and hateful towards customers of a certain category, it's unfortunate, but that's his/her choice. Their community of customers will probably boycott their business and pressure them into either a) changing course or b) closing their doors.
Obviously essential services such as pharmacies, hospitals, etc. must be required to serve everyone, but most other businesses should not.
thank goodness this isn't the current law. what you're describing is law pre-1964 civil rights act. we agreed as a country in 1964 that we should not allow people to discriminate in businesses open to the public... if you wanna turn back the clock great but i'll work my butt off making sure that that never happens.
Except that's not the law and never has been nationwide. Title II covers a specific class of businesses known as "public accommodations" which does not include all retail establishments and would include a bakery only if allowed on-premise consumption of its goods. Many States do have more expansive laws, but those are State laws, not Federal ones.
Incidentally, whether Title VII (employment discrimination) applies to LGBT discrimination is a matter of unsettled law at present as different circuits have reached different conclusions, so it's probably headed to SCOTUS for resolution, tho with the current court, I think they'll rule Congress could expand the Civil Rights Act to include sexual orientation, but it hasn't chosen to do so, so it doesn't.