Do you just love and enjoy making those delicious cakes for all the special events in your family? Is baking your hobby? Do those multi-shaped, crispy and yummy biscuits is your specialty? If that is the case then starting a baking business must be your long cherished dream.
If you really have decided to convert your hobby and passion into a full time money making business then you have come to the right place. Here we have prepared a very handy guide for you to start a Bakery Business in your area. This article will help you plan, start and successfully grow your bakery business.
How to Start a Baking Business – Detailed Guide
Step 1: Planning the Bakery Business
Just like any other business, planning is the first step before we actually make a start. You have to consider important factors like –
- Skills set and Level of Expertise: You have to be confident about your skills and talent to be able to serve to the exact needs of your customers. Remember, making a cake as a hobby is different but making a cake for somebodies special event on a professional level is totally different game. When somebody is paying for your skills then their expectations are obviously high. If you fail to match the expectations then it may result in some upsets or negative reviews.Also you have to assess your capacity to produce the number of products (cakes, pastries, biscuits, etc.) for a number of customers in a given period of time. If you get this number right then it will be easier to handle the rush and there will be no hiccups at the eleventh hour of delivery. Ask yourself questions like if you suddenly receive 25 cakes orders in a day then will you be able to manage that?
- Budget: Budgeting of your business is very crucial. You have to calculate your finances and initial investments before jumping into the waters. Ideally you have to plan the funds for at least 6 months to one year considering ups and downs in the market and volatilities in the business.
- Goal or Objectives: You have to be clear about the objectives of your baking business. Make it clear in the beginning what do you want to achieve in terms of revenue, customer base and customer satisfaction. You can set some milestones for the quarter, six months or a year in advance so that you can gauge your performance against those numbers.
Step 2 : Decide What Kind of Bakery You Want to Start?
Once you have figured these things out then it’s time to go ahead with further questions. Begin with asking these questions to yourself –
You can start four types of bakery stores.
You do not need to open a physical shop in this case. All you need to have is a website that has ecommerce features so that you can display your products and receive orders and payments online. You can feature the best images and video of your products in your website to attract the customers. This is the most cost effective option you can have.
- Counter Service
You still don’t need a big shop for this type of bakery. All you need is a small counter shop where your customers can visit and collect their orders they placed via online more or via phone. This may require some investment for rent or purchase of a suitable place but it will be still less than buying or renting a big shop in crowded market area.
- Specialty Service
You can choose a certain type of product as your specialty and promote yourself for that. You may choose to go online with it or open a shop on rent or purchase, it’s all up to you. You may not have a wide range of products in this case but you will be known for a section of products as your specialty.
- Sit and Eat
This option requires some serious investment. Many bakery owners are opting for this option too. In this case you will have a well-spaced shop or store in a good market place where there are good number of footfalls. People will come in, sit and enjoy their time with your baked goods. You can also offer take away orders.
Step 3 : Be Ready with Your Bakery Business Plan
Once you have decided about the type of Bakery you want to start you need to look into the finances. This will make you look at your business from 360 degree angle. It involves, defining your business, setting goals and targets, listing the expenses, identifying your customer base and judge the competition.
You will have to plan the startup fund. Identify the costs required to buy the machinery like ovens and refrigerators, utensils and raw materials, etc. Make sure you do not leave out even a smallest tool from this initial list. This will be a one-time investment so you have to take very conscious decisions while selecting the items.
It is obvious that you will not start making profits from the very first month. So you will have to identify that how long you can survive without generating any extra money. Plan the month when you think you will break even.
Step 4 : Search for a Shop Space
If you have decided to go for a specialty service or sit and eat way of bakery then you will have to start searching for a suitable space for your establishment. You can either rent a shop or if your budget allows, go for purchasing a property.
The benefits of purchasing the property is that you can stay there forever if you wish to once your business starts picking up. In case of rented place, there is always a risk looming if the owner of property decides to ask you to vacate, then you will have to leave that space. This might impact your business badly if you have just started growing.
By all means you have to be very careful while selecting the place for your shop. Find out a good locality around busy streets. More the footfalls better will it be for your business.
Step 5 : Educate Yourself about License and Legality of the Baking Business
Here come the most tedious and sort of boring yet utmost important part of any business. You have to obtain the right license to start your business. You should also learn the basic legalities and taxations of the process of running this business in your local area. You may seek help of a counselor or CA who does all the legwork for you by charging some fees.
It is also advisable to search for any small business incubator programs in your area. Such programs may help you find some investors who can support your business in the initial days and help it grow by offering mentorship.
Step 6: Price Your Baked Products Appropriately
You have to be very careful while pricing your products. Never underestimate the efforts you have invested in making those and hence price them accordingly. Of course you have to keep an eye on the local competition as well.
Generally a baker considers the cost of the basic ingredients and his skills required to make the product. But ideally you should consider the time required for other chores like preparing the ingredients, cleanup work and cost of promotion. If you do not consider these small but important factors you will end up earning peanuts for all the hard work you have put into it.
Step 7: Have a Clear Plan to Distinguish Between Customers and Friends
Here is a bit grey area. Oftentimes we get carried away for our friends and family and offer undue discounts that cost us dear in long run. It is very important to have a clear offers and discounts policy for friends, family and customers. It is a fact that you have to offer discounts to make a loyal customers but make sure that you offer it logically and not get carried away. Have a consistent discount policy for your business.
Step 8: Promote Your Baking Business
Its time to advertise your Bakery. Get the boards and hoardings ready and display them at the appropriate location so that they are visible to maximum people. Consider giving a small advert in a local newspaper.
You can also distribute some freebies as promotional activity in the nearby area so that people will get to taste your products before they actually buy it. Of course you should have planned the expense of these freebies in during the initial financial planning of your business.
You can also take help of social media to promote your business. Start a website, create social media pages on Facebook and Instagram and create You tube channel to share your original content with your audience.
Be it a baking business or any other venture we, as an entrepreneurs, always need support. We need close friends and family to know our struggles, hardships and challenges. We always need some motivators to guide us and support us emotionally. Have this support system around you to help you out during tough times.
So this is our advice to you if you are serious about your bakery shop business. I hope you found this article useful and informative. If you liked it then please share it on social media and help spread the love. Also please leave your valuable feedback in the comments section below.
All the best for your Baking Shop venture!