How to Start a Bakery
Interested in starting a bakery?
Your dream of owning a successful bakery can definitely come true, but there is a lot of planning that must come first.
Let’s get started:
-> First Step: A Business Plan
Your business plan will define the terms under which your business will exist, all the expenses you will incur and the revenue you expect to generate. It should cover the first three to five years of operation.
1. What kind of business will your bakery be?
- Legal structure. Will you set up your business as a sole proprietorship or a corporation? You may want to talk to a business attorney to learn the pros and cons of each.
- Physical structure. You can run your bakery out of your home, out of rented space in a commercial kitchen, from a storefront or from a food truck. One caveat: Some cities do not allow home-based food businesses, so be sure to check that out before you take that path.
- Product line. What type of goods will your bakery offer? Finding a unique niche can be the key to success. Being the first, the best or the only baker that provides a particular product will make you stand out.
2. What will your costs be?
- One-time costs are things like remodeling your space, buying equipment and setting up a system of business-management software.
- Ongoing costs include rent, ingredients, utilities, marketing materials, personnel and any other costs that you will have to cover for the duration of the business. Many experts recommend having all one-time costs and three months of ongoing costs in the bank before you launch your business.
3. How will you generate revenue?
You will need to plan out the price of your products and how much you need to sell to cover your costs. Remember that bakeries often see wide seasonal fluctuations in business with summers and holidays being the busiest times. Can you diversify with related products to fill in the gaps?
4. What are your goals over the next five years?
Setting realistic goals helps keep your business on track. Pegging the performance of the bakery to the goals you set will tell you if things are working out as planned or if your business is slipping and you need to make changes.
-> Second Step: Finding a Location
When you have written your business plan, determined that your plans are viable and lined up the necessary financing, you are ready to start looking for a space to set up your bakery.
1. Working from home
This may be an option if you will be catering, selling online or otherwise not depending on foot traffic, but it is not as cheap or as easy as you may think.
First, your kitchen will have to pass the same health department inspections that any other food-based business must pass. Appliances, storage, plumbing and waste disposal must all be up to par.
Second, the family, including pets, will not have the same freedom in the kitchen that they have had in the past. Are they on board?
2. Working from a commercial kitchen
If you do not want the disruption of baking from home, or if your business is simply too big for that, renting space in a commercial kitchen is a popular option.
The biggest downside is that you will probably be sharing the schedule with other businesses, so there will be restrictions on when you can use the space.
3. Working from a storefront
This is the traditional idea of a bakery, and it is still a very viable business model. You may offer counter service only or add a few cafe tables where customers can sit and relax.
Aside from legal considerations like zoning laws, it is important to consider the associated costs and the population demographics of any location.
The cost of a location includes the rent plus any modifications you will need to make to the interior.
If your city has an area that is undergoing revitalization, this can be a wonderful place to find cheaper rent, lots of foot traffic and a fun vibe.
Population demographics can give you information about where your customers are. For example, if you plan to sell high-end specialty goods, you may want to locate in an area that is more affluent or that attracts tourists.
If you want to focus on cookies and cupcakes, a bakery that stays open late and is an easy walk from a college campus may be a great idea.
4. Food trucks
Food trucks sprang onto the scene and became an instant phenomenon. Selling baked goods from a food truck may be just the business model that works for you.
Vehicle upkeep will likely be less than rent, and you can go to your customers rather than waiting for them to come to you.
A food truck does still have to meet all the sanitary regulations of a home or storefront kitchen.
-> Third Step: Marketing
You can set up the most amazing bakery ever, but if no one knows about it, or they know about it and don’t like it, the business will fail.
1. Get the word out
A multi-pronged approach that includes social media, word of mouth and public events will give the best results.
Blogs and social media posts will be most effective if they are kept current, so remember to budget time for posting or delegate that task to someone who has social media savvy.
Public events like farmer’s markets or “Taste of the City” weekends are great places to get your products into the hands of potential customers.
An open house or ribbon cutting ceremony with free samples gives you great exposure in your immediate neighborhood and may score a picture in the local paper.
2. Positive word-of-mouth
Have no doubt that your bakery will get word-of-mouth advertising. Your goal is to make sure the things people are saying are good!
You always want to aim for excellent customer service and competitive prices.
Always be open to suggestions from your customers; an odd request from a customer could end up being the next hot product that everyone is buzzing about.
3. Keep it up
Marketing is not just a one-time blitz when you open the bakery. It is an ongoing process.
Passing out business cards, asking happy customers to recommend you to their friends and keeping your website up to date are just as important five years after you open as they were five days after.
-> The Importance of a Support System
A detailed business plan executed in a great location with a stellar marketing campaign can go a long way toward getting your bakery off to a successful start. The trick is to get to this point with your health and sanity intact.
A support system is so important during the entire process of planning and opening a new business.
A mentor who knows the bakery game can give you solid advice that will keep you from making costly mistakes.
Friends and family can serve as sounding boards and can pitch in and help when you need a few extra hands.
People you meet in professional organizations can offer support and encouragement.
Taking the time to keep in touch with the people who support you may seem difficult when you are in the throes of starting your bakery, but it may be the very thing that gives you the energy to move forward.
Starting any business can be complex and stressful, but few businesses offer the rewards of being a baker. The opportunity to express your creativity in a way that brings happiness to others is worth pursuing.