If you’re thinking about starting a successful baking company at your own house, here’s some advice for you.
The bakery is a classic business. In addition to being a profitable enterprise, it is also one of the most popular types of restaurants. Because of its wide range of baked goods, it is often referred to as a “bread shop.” With the growing number of consumers who are choosing healthier foods, bakery items have become increasingly popular.
This sector is one of the largest in the world, holding a huge share of the global packaged foods market. Moreover, the sector is expected to grow rapidly due to increasing demand for convenience products.
Pastries are the fastest-rising category among baked goods, contributing to almost 80 percent of absolute volume expansion.
Bread and baked goods have been growing in popularity for several years now. As consumers get wealthier, they’re buying more expensive items. And, as people move away from traditional foods, they’re looking for healthier options.
Here are the 14 Steps to Start a Small Bakery Business
1. Find your Niche
First, choose which type of bakery item you’d like to sell. Then, consider the different types of bakeries available for sale.
The bakery is a very busy industry. You can definitely find a small bakery even within every small town around the globe. But all these bakeries are making money out of their businesses. Doing detailed market research and identifying and describing your competitive advantages will help you stay ahead of the competition.
2. Learn the Art of Baking
You must have passion and knowledge to start a bakery. If you want to learn more about the processes involved, you could enroll in classes at a local community college or even online through an online course provider.
3. Write a Bakery Business Plan
Creating a good marketing strategy is one of the most important aspects of starting and operating a successful company. If you want to raise funds, potential investors will take a closer examination of your marketing strategy.
A bakery plan helps you define your bakery, set sales targets, create a marketing strategy, list costs, describe your customer market, and examine your competitors.
Include these items in your bakery business plan:
- Executive Summary
- Company Overview and Description
- Market Analysis
- Business Offerings
- Management Structure
- Marketing and public relations strategies are used to promote products or services
- Financial Projections
4. Choose a Business Model
Another important aspect of starting a profitable baking company is choosing an appropriate location for your store. You may choose to open a storefront, set up shop online, or even operate out of a mobile kitchen.
Online selling: In this version, you do not need to set up a storefront for your company. You can begin online. With a great site, images of your work, and the ability to place orders, you can operate a bakery from your house. A family-owned bakery. With a small retail area, clients can come into and get baked items from a staff member-run register.
Home service: Start with a small commercial kitchen where employees serve customers who come into the store.
Specialization: If you plan to specialize in one particular type of baking, then specialization is your best choice.
Dining In option: It’s becoming a popular trend in the bakery industry. If you can afford a small space at your house or at your backyard, you can turn it into a place where guests can enjoy your baked goods.
5. Register your Bakery Business
To run a legally compliant bakery, you need to register your bakery. Each state and each county has its own rules for doing so.
For example, if you’re planning to open a bakery in the U.S., forming an LLC is a common option. You can form an independent LLC or hire a professional LLC representative to help you out.
6. Name your Business
Choosing an effective and catchy name for a bakery is one of the most important steps toward building a successful bakery brand. Read our guide on naming a bakery to learn more.
7. Get Licenses & Permits
Food service businesses require extensive sets of licensing and permitting requirements to open and operate. Before starting your own food service establishment, contact your local government agencies and find out what licensing and permit requirements apply to your area.
Your local city hall may provide information about what types of food services are permitted in your community.
8. Identify Target Audience for Your Bakery Products
This is one of the most important considerations when launching a new product or service. This decision determines whether your business will target a specific market or appeal to a broad audience.
Depending on this, your business may require different types of goods, services, and marketing strategies. But catering to the masses is the most lucrative choice. You can cater to the masses by offering cheap prices and high-quality goods.
- Families (Homes)
- Schools (Boardings houses and campuses)
- Groceries Stores
- Shopping Malls
- Wedding Ceremonies
- Event Planners
- Sport Centers
- Corporate Organizations
- Clubs & recreation centers
- Housewives
9. Procure Equipment Needed to Run a Bakery
To start a commercial bakery, you need a wide range of equipment. We’ve listed them out here.
- Commercial mixers, working surfaces for kneading, dividing equipment, sheeter/scaler, refrigerator, and proofing cabinet.
- Baking Equipment: Convection ovens
- Shelves and storage racks.
- Cleaners and ware washers: Compartment sinks, disposable latex/nitrile/rubber/latex/silicone (depending on the type) gloves, cleaners, spong
10. Arrange Startup Funds
You will require an initial startup fund to initiate and operate the business. However, we can determine the fund requirement in two different manners.
First, it is your one-time expenditure. It covers mainly the tools and equipment acquisition. Secondly, it is your working capital. Usually, it comprises of rent, staffing, ingredients, marketing, and delivery charges along with other running costs.
If you don’t have enough money to start a bakery business, it’s best to apply for government grants first. For example, if your country is the US, go to the official website of the Small Business Administration (SBA) and see whether you qualify for any grants.
For residents of the U.K., the Government of the UK has an official web page called GOV. The UK where you can learn about different types of grants available for small businesses.
11. Secure Space
Your company needs a place where you can work without interruption. You should consider whether you have enough room for a small office. If not, then rent a separate area for your company.
After you have secured a suitable working environment, make sure to keep it organized. Make sure that you have a proper desk and chair for yourself. Also, ensure that you have adequate lighting so that you can concentrate properly. Finally, set aside a portion of your workspace for storing files and supplies.
12. Pricing Strategy
Regardless of whether you’re selling a product or providing services, fixing the right prices is essential. Initially, offering an affordable average or slightly lower than the market rate will certainly help to draw in potential buyers. However, we would suggest, trying to provide some unique products with high profits.
You may want to consider offering different payment methods for your customers. Some of the basic ones include the all-inclusive payment plan, which is usually a good option.
- Cash payment
- A point-of-sale machine
- Online banking transfers (especially if they’re willing to pay for doorstep delivery).
- You should check payments from both institutional clients and business-to-business (B2B) clients.
- Payment via Mobile money.
Below is a list of things you must consider when planning for opening a baking business.
13. Bakery Business Plan Checklist
Finally, it is vital to check out the progress of the actions taken earlier. Below are some things to look into:
- If you want to register a domain for your business, first check whether the business names you’re considering
- And then register for business.
- The first step for setting up a business account at a financial institution
- Securing POS Machines
- Opening mobile money accounts
- Opening online payment platforms
- Applications and obtaining registrations and licenses
- Securing the Space
- Conducting feasibility studies
- Arranging startup capital
- Crafting a business plan
- Drafting of employee manual
- Drafting of contracts and other relevant legal documents.
- Designing the company’s brand identity
- Creating and designing packaging and promotional materials
- Recruitment of employees
- Purchasing of furniture, electronic items, and bakery equipment
- Create an official website for the business
- Safety, health, and fire prevention arrangements
- Listing of products
- Arrange for trainers and training facilities
- Establishing a business relationship with vendors
- Arranging delivery vehicle
14. Have a Marketing Plan
To make your business more profitable you need to have a marketing strategy. You also need to have sales promotions. Some of the things you can try to promote or sell your baked goods include the following.
- Start your business by throwing a big launch event.
- Make a website and create an online presence.
- Start by tapping into the local market first.
- Do some outdoor activities for the product promotion
- Create a Logo
- Create new products in innovative ways by offering them in different sizes and flavors at different price points.
- You can also advertise through electronic media, which would be cheaper than TV advertising.
- You can sponsor relevant activities, such as baking contests and wedding expositions on television, etc.
- You could go for some outdoor or billboard ads.
- Promoting online is important. You can promote the product on social networks and blogs.
- Establishing a good distribution network for your product is crucial.
If you want to promote your baked goods, you could set up an online shop where people can buy them directly from you. Or you could start a food blog so that people can learn more about your products.
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