a man starting bakery business

Every now and then you pass by a bakery, if they are good enough the aroma is bound to tingle your senses. Other than the mouthwatering treats, bakeries are huge industry that serves people who are in love with breads, sweet rolls, cakes, pies. According to the American Bakers Association, bakery products are 2.1 percent of the American GDP(Gross Domestic Product).

The sheer market size makes close to $30 billion of revenue annually, industrially it comprises of $423 billion in U.S. in term of economic impact of baked products produced and sold. The profits are hampered only by the increase in wheat and sugar prices

Venturing into the industry may be easy with unique products like multi-grain breads but growing takes a big pinch of capital to equate yourself with much larger competitors along with equipment purchasing.

With the rise of health conscious consumers, there is demand for low carb, paleo diet, gluten free products, with alternatives of yogurt, nut and fruit bars. Parallel there are new and heavy regulations on bakeries by the Food and Drug Administration and the Environmental Protection Agency which monitor operation/production costs.

Business Plan for a Bakery Shop

Absolutely, every venture which involves finance and taxation requires a precise business plan to identify financial leaks making a viable business venture. It not only will bring in good investors but also loans when required. Here’s an overview of how to go about with a business plan.

An Executive Summary – A clear summary of your venture is the first thing that potential investors and bankers look for. The summary length varies depending on the business ranging from 01-04 pages, how is your venture special, how will it be successful and at last projected growth and profits. Mention the real estate location you are interested in for regular operation, equipment.

Description and Overview – An overview explains why you intend to open a bakery, your baking passion parallel with the finances defined finely. Specify your market niche, theme, promotional lost and new recipes, legal structures, long term and short term goals.

Market Analysis – This portion displays the current scenario of the market, hence it will require the most research. In depth details will show your aptitude about the market & industry as a whole. The findings forge a great foundation from your conclusions.

In terms of research there has to be clear idea of demographics, current trends, competitor research, checklist of codes & regulations, detailed financial breakdown.

Management Plan – A well-defined idea of management structure, in case of several owners it can specify personal info and ownership shares. If you are qualified enough to run a bakery, future investors will look for a great management plan.

In a management plan there always has to be potential business partners, your company share, number of employees, will you be a guiding force or get your hands dirty baking, requirement of financial advisers.

Financial Projections – A transparent financial breakdown along with projections clarifies the investments required. While projections can be speculative, required costs with a clear window required to break even gives you a way ahead. A checklist of supply costs, bills, salaries that give a consistent financial picture. Be realistic in projections, investors look for a clear cut numbers to invest.

What Should I Name my Bakery?

The heart and soul of your bakery before all the sumptuous treats you make is its name. People will travel from far away and close by when they remember its name. It has to be in tune with current times yet catchy. Being a baker that embraces the local culture in their bakery’s name too gives your brand the love it deserves and booming sales too.

Where do I Open my Bakery Shop

Almost everybody has a sweet tooth, if you could afford a prime location you will be soaring in no time. Be it near a super market, shopping center/mall, near a school, along a busy street, just make sure it is near a parking lot for your employees and enough customers to even walk to your establishment by foot.

What Kind of Company is my Bakery?

There are several types of classification for businesses in the United States, for a bakery shop the preferred being a sole proprietorship initially or rather a partnership if more than one owner is involved.

Read more:- Legal entities in the USA

So what kind of investment am I looking at?

Entrepreneur magazine observed that on an average to start up a bakery it costs close to $10,000 to $50,000, a jump start may need $2000 still earn a monthly revenue of $2000 – $5000.

Going small is much easier in comparison to joining a franchise. Starting on your own, the breakdown involves 25% funds for packaging, ingredients & raw materials, 35% goes for labor, 30% of total finance for overhead and at last 10% for profit.

Depending on the goodies you plan to make every day or occasionally, you may have to rent in or buy equipment, be it dough mixers, cookie machines, bread and pastry machines may cost up to $10,000.

Impressions last much longer, when you bakery looks good, the cakes & breads look unresistant. The key is great interior design of your bakery, apt breathing space, work stations, storage etc depends on your choice and initial investment.

Nobody Knows you are a Master Baker? The World has to Know!

Marketing and growing your business go hand in hand. The more people know your enterprise, the further your business grows.

  • Join Local Business groups: Entrepreneurs at the chambers of commerce even small ones encourage and build networks to mutually grow, events of local business are great window to display your skill and art of baking. Create partnerships with their business with every opportunity.
  • Blog and Social Media: Your guts, challenges, trials and tribulations as a baker teach you a lot. The hard work you do to bring your products to all the customers when written in a blog and shared on Facebook, Twitter, Instagram bring you the love you deserve.
  • Customer Focus: Every customer can visit you once or many times if they like and love your products, each customer experience counts including feedback.
  • Free samples: Ever left untouched a free cake, nobody does. Messed up some cake decor, burnt a side of bread, improvise and sample them. Many may not buy it, but sure will try it for free.
  • Bake and Sale classes: For many baking is fun, so are cake decorations. Taking classes and spot sales at local events. Some cakes, pies, sweet rolls and a clown, spontaneously children appear and your event is a hit.
  • Discount sales: You may not be a sellout every day, day old items on discount up for grab always clear the shelves, updates on social media will bring in your loyal customers right away.
  • Diversity is key: There will be off seasons, low sales. Summers are full of weddings, graduations parties etc., be sure to venture into catering for corporate clients for some extra capital. Of course you will have to increase your range of products in turn increase expenses, improve workflow, and weigh all your options periodically.

So What Kind of Labor Should I be Hiring?

You may be great baker but more help means more work done. Baking and handling the cash counter might chase away customers that come by. Delegate your venture, a high bar of quality makes sure new hires on probation cook and bake well, always be cautious to learn if they are trustworthy and want to learn. 

New hires should be open to learning and multi- tasking still have a sunny, engaging and upbeat personality.

Counter Staff: Someone good with conversational skills, common sense and good basic mathematics can work the front counter because it is an important task, it brings in all the money. Meanwhile they can also work the display, handle food and other ingredients.

Production Bakers: The core of the bakery is where the goods come from, created by the bakers, initially maybe only you but as business flourishes you will need more bakers ideally two experienced or trained. Some bakers are required to be certified in food safety in many jurisdictions. If your goods are high in demand, you may want to work in early day of night shifts, remember people for fresh bread in the morning.

Kitchen Help: There are many tasks in a bakery other than baking and handling cash, which needs a keen eye on detail such as clean/hygienic dishes, floors and hauling sacks of raw materials and refilling bins. It is an unskilled job but a vital one that affects productivity in a much larger picture, great hires can be trained as bakers and counter staff.

Specialized skills: Customers are always looking for better, tastier goods. Availability of such treats differentiates your bakery from all your competitors. A gifted or hard working pastry chef, cake decorator, bread baker makes a lot of difference at customer retention.

Be on the lookout for great graduates from the baking schools nearby every few months so you never run out of skilled labor. Business may suffer if there is demand for great food but no supply if a specialist baker moves on. 

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