How to start
Are you planning to start a bakery but don’t know to pull it off? Read our comprehensive guide on how to successfully launch a bakery, right here.
Are you the one that your friends always turn to bake up a storm during birthdays and movie nights? Are your donuts and snacks to literally die for? Somewhere at the back of your mind, there's always this little nagging thought: what if I turn my skills into a business? What if I start a bakery?
Maybe it’s time to listen to that voice and get to work. Bakeries are one of the most popular food service establishments, giving you the freedom to creatively express your culinary skills. While it brings joy to your immediate environment, it also gives you a sense of fulfillment.
Starting a bakery isn’t a piece of cake. It presents new challenges that may appear daunting to a novice. It would be best if you had proper planning and implementation to pull it off. Some of the biggest mistakes when opening a bakery happens when you don’t properly plan.
Here at Vev, we are always excited about new people launching ventures. So, how do you start a bakery? We present you with a complete guide on how to kick off a bakery business.
Choose the bakery type you want to run
First, you need to decide the type of bakery you want to run. There are multiple forms of bakeries available. However, before making a decision, you need to review your talents, capital, and short and long-term goals. Which bakery options are available to you?
- Counter style. This is one of the most recognizable forms of a bakery. It requires less space and is typically set up in front of the bakery. Customers can approach the counter, order freshly baked items, and pay for them. Counter style has no dining space where customers can sit. This makes for a lean but efficient operation.
- Bakery café. This type of bakery is an intersection between a bakery and a café. Here, you can sell your loaves of bread, cookies, and pastries to guests in a chilled and friendly environment. There’s dining space for guests to sit and eat. You also get to offer supplementary items such as coffee, ice cream, and tea.
- Food truck. This cost-effective option is perfect if you’re not planning to pay for a venue for your business. You can bake your offerings and sell them in a mobile truck. You can go on a ride and cater to customers at street fairs, public parks, and special events.
- Home bakery. This bakery is increasingly popular, as you don’t need a lot of capital to set it up. You can bake your products and market them online via your website or social media accounts – from the comfort of your home. (We also wrote an article about starting a home bakery, by the way)
- Specialty bakery. This bakery offers one type of baked goods, such as wedding cakes, cupcakes, and low-carb or gluten-free items. This bakery can easily stand out because you’re offering niche products that people won’t find elsewhere or better than other shops.
- Wholesale bakery. Instead of baking and selling your goods, you can opt to market them to grocery shops, delis, cafes, and restaurants. You can opt to supply to a particular retail shop or several commercial outlets.
Review your current needs and decide what option is suitable for you.
Find the right location for your bakery
Next, you need to look for the perfect commercial space for your bakery. Your retail space choice depends on the type of bakery you want to open. For instance, if you're going to run a home bakery, you’d need to make enough space in your kitchen. If you want to run a food truck service, you’d need to purchase or rent a perfect truck for your business.
If you want to open a physical space for a business, you may need to contact a commercial real estate agent who will look for suitable options for you. Ensure you opt for a professional agent to help secure spaces that may feature equipment such as ovens or refrigerators. Other factors include the following:
- Proximity to your customers.
- Water supply
- Ventilation and air conditioning
- Health regulations
Once you’ve found a suitable location, you can contact your lawyer to determine requirements and negotiate with the landlord.
Write a business plan to ensure a successful business
Now that you’ve secured a space for your business, the next step is to write a business plan. One of the biggest mistakes when opening a bakery is not having a plan. A business plan lays out the framework of your business in its entirety.
Your plan should include the following:
- An executive summary.
- Company description and overview.
- Market analysis and survey and your competition.
- Product offerings with prices and nutritional info.
- Organizational and ownership structure.
- Marketing strategy and campaigns.
- Sales plan and payment options.
- Financial projections.
Your business plan can help facilitate funding for your business.
Understand the startup cost needed to open a bakery
Writing a business plan for your bakery is just a slice of the pie. You need finances to set it up. Which begs the question: How much does it cost to open a bakery?
The answer lies in your type of bakery, requirement equipment, and business location. Depending on these factors, it could be as little as $5,000 and as high as $100,000. It is relatively unlikely that you’d be able to foot the bills alone. So, you’d need to take out loans.
Some of the options include:
- Traditional commercial loans. Commercial loans can come in handy when you need funding for your bakery. You can apply for loans from a major financial institution or a local bank in your community. Startup loans come with higher capital and lower interest rates. You’d need to have a high credit score and wait several months for it to be processed.
- Business line of credit. This is quite similar to having a credit card. You apply and get approved to use up a specific amount limit. However, you only get charged for the amount you use. A business line of credit doesn’t give you access to more considerable funds and may require strict eligibility standards.
- Small business loan. This is a loan that aims to provide startup businesses with capital. Established by the Small Business Association, these loans come with lower interest rates but would require you to have a high credit score.
Get the right licenses and permits for your bakery
Remember that your resident county or state has regulations, permits, and licenses for businesses. You should check out the government websites for your city to know all the documentation, requirements, and other information needed to set up a bakery.
Some of the permits and licenses include:
- Food handler’s permit.
- Catering permit.
- Kitchen health and safety license.
- Homeowner association rules (if you’re starting a home bakery)
- Sales privilege license.
You should contact your lawyer to help facilitate these permits for your bakery.
“You need to stand out from the pack. ”
Define your bakery brand
The next step is to brand your bakery. With several bakery businesses available, you need to stand out from the pack. One of the biggest mistakes when opening a bakery is not effectively planning your branding. It would help if you had excellent branding to launch your career successfully.
The following are areas to focus on:
- Name of the bakery. Your bakery needs to have a name. It should be unique yet memorable.
- Logo. You need a logo for your brand. It should be effortlessly authentic and recognizable.
- Color scheme. Your brand should have a color scheme that should be unique for your logo, décor, and packaging.
- Social media. Your business needs social media accounts to connect and build a following with your target audience.
- Product names. Are there unique ideas you have about the names of your offerings? Write them all down and make a decision.
- Packaging. You need to decide how you’d want your baked items packed.
Get the right equipment
Getting the right equipment and tools for your bakery is underrated. Your equipment choice depends on the type of baked goods you’d be preparing.
On a broad scale, you’d need the following:
- Storage. It is essential to keep your supplies organized and free from pollution. You’d need racks, large bags, and carts.
- Dough preparation. You’d need work tables, mixers, dividers, sheeters, scales, holding and proofing cabinets, and refrigerators.
- Baking. You’d need ovens to bake your tasty goodies.
- Cleaning. Equipment includes compartment sinks, disposable gloves, sponges, scrubbers, and cleaning products.
- Display. How your goods are displayed goes a long way toward influencing your bottom line. Display options include full or self-service cases, refrigerated or unrefrigerated cases, boxes, plastic packs, and bags.
Understand how to price baked goods
With all the preceding factors in place, you might wonder how to price baked goods. You should note that the pricing of your goods should be based on overhead costs, production costs, taxes, and market analysis.
Let’s say you run a donut business that costs about $3000 to run the place monthly. If you project to sell 300 donuts per month, your operating costs will be 3,000 divided by 300, which will give you $10.
Let’s say it takes $3 to produce one donut. You’d need to add that cost to the $10, which will be $13. That final amount is the minimum amount your goods will be priced.
Remember, the above example is an exaggeration, but you get the idea.
Use online ordering software
Last but the least, you need seamless online ordering software for your bakery business. If you’re catering to a broader audience, you need software where your customers can place orders – even before you start making your goodies.
Vev is an innovative online ordering system for bakeries where you can create a custom page for your bakery business, display products and attach their prices to them. Your customers can explore your page, select items, order and select a pickup date and time.
You can open your bakery page to see which goods got ordered, the pickup date and time, and your customers' contact information. You get complete control in adjusting your opening hours, editing, and customizing your products, including logos and product descriptions.
With Vev, you can set your orders to be placed 24 to 48 hours in advance or without a deadline. You also have the option of customizing payment options either in advance or during pickup. What’s more? Vev is free, as we aim to provide entrepreneurs the power to stand up on their own and make headway in their ventures.
Get started launching your own bakery, today
Launching a bakery presents several challenges that may throw you off-balance if you’re not prepared. You must put your best foot forward in planning, strategizing, and organizing your business.
Apart from that, you need good a good online ordering system where your customers can easily connect, select, order and pick up your freshly baked goods.
We are confident that with our complete guide, you can go ahead and launch your bakery successfully.