How to start a bakery business and make money

How to start a bakery business and make money

Whether you’re passionate about creating decorated cakes or bread loaves, you must create an action plan for turning your passion for baking into a business. This business is very lucrative and has a high rate of success as almost every household eats bread every morning, and every weekend we either go to a party or a wedding all these events want bakers to bake their beautiful cakes or scones. Discover the steps of opening a successful bakery below.

  1. Choose a bakery-style
    While there are many bakery business models, they all fall under one of two umbrella categories: retail and wholesale. Retail and wholesale bakeries make similar products, but they have different needs and customer bases.

Opening and Operating a Retail Bakery
Retail bakeries are the most common type of bakery; they sell baked goods and loaves of bread directly to customers. Retail bakeries come in many different forms, and they often specialize in a particular type of baked good. They require both front- and back-of-house space.

Types of Retail Bakeries
• Bakery Cafe – This type of bakery is a combination of a bakery and cafe, and they typically sell baked goods like bread, pastries, and cookies.
• Counter Service – While counter service bakeries have a front-of-house, most do not have a dining space. Instead, they have a counter where guests can order freshly baked goods to take home.
• Bakery Food Trucks – Rather than using a brick-and-mortar store, food truck bakeries sell their products from a mobile truck. Due to the small space, many bakery food trucks do not bake in their truck, instead opting to bake their products ahead of time in a home bakery.
• Specialty Bakeries – A specialty bakery typically focuses on one type of baked goods, such as wedding cakes, cupcakes, or gluten-free items. This type of bakery can excel because they offer niche products that customers either cannot find elsewhere or that are better than the products offered at less-specialized bakeries.
• Home Bakeries – This type of bakery is becoming more common, especially because you don’t need a lot of startup capital or culinary experience to open a home bakery.

• Opening and Operating a Wholesale Bakery
• The other main type of bakery is a wholesale bakery. Rather than selling their products directly to customers, wholesale bakeries market their baked goods to businesses like grocery stores, restaurants, delis, and cafes.
• Because wholesale bakeries have to meet the demands of commercial customers, they are typically larger than retail bakeries. Wholesale bakeries don’t need to have a front-of-house or a desirable, high-traffic location. However, wholesale bakeries must produce high volumes of baked goods. This requires a large space and lots of baking equipment, resulting in higher startup costs.

  1. Write a bakery business plan

The first step in opening your new establishment should be to write a bakery business plan. The business plan is an integral part of starting a bakery business because it lays out what type of bakery you want to open, how it’s going to be structured, what sort of products you’re going to sell, marketing strategies, and financial projections.

  1. Startup capital

When starting a bakery, there are many costs that you will need to consider, such as leasing a commercial space, getting insurance, outfitting your space with equipment, hiring and training staff, stocking your kitchen, and paying for utilities. As a result, you will need to have a significant amount of money available to cover these costs. It may take a few months after opening for your bakery to become profitable, so you will need cash on hand to cover costs for several months after opening.

  1. How much money you will need to start
    Bakery startup costs range between R100000.00 and R200000.00 the startup cost price range reflects the type of bakeries. How much money you need to start a bakery depends on its location, equipment, staffing requirements, and menu items.
  2. Lease a bakery space
    Once you have secured funding, you can start looking for a commercial space for your bakery. The type of commercial space you need depends on the type of bakery you are opening. For example, if you are opening a food truck bakery, you will need to purchase the truck and you may want to look into renting space in a commissary kitchen.

When renting a bakery space, there are a few aspects you should consider such as an area that is close to your target market, close to your suppliers, accessibility, and competition and health regulations.

  1. Order bakery equipment
    The equipment that your bakery will need depends on what type of baked goods you will be preparing.
  2. Layout your kitchen
    After securing a location and deciding what equipment is needed to start your new bakery, you can plan your bakery kitchen organization. If your bakery has a front-of-house area, you will need to design a floor plan.
  3. Hire and train staff
    Operating a bakery can be handed full; hence you will need people to assist you. The size of your staff will depend on the scale and style of your bakery. A locally owned and operated bakery with just one location is likely to have a short chain of command. Retail bakeries must hire and train front-of-house staff to take orders and work the cash register. However, most of your bakery staff will work in the back-of-house, preparing your baked goods.
    Your bakery should have at least one or two employees that have formal training or bakery experience to oversee the actual baking process. You may also want to hire unskilled workers for washing dishes, mixing ingredients, package products, and do other tasks that don’t require previous experience or expertise.
  4. Marketing and advertising
    Before you open your bakery to the public, you must conduct some marketing campaigns to get the word out and create buzz.
  5. Host a grand opening
    The final step in opening a bakery is to host your grand opening and welcome customers to your business. A successful grand opening can get your new bakery off to a good start and help generate loyal customers. You should advertise your grand opening to create interest and alert your target audience that your bakery is open for business.

One great way to get customers in your bakery for your grand opening is to offer discounts and specials. For example, you can offer discounts for the first 100 people to visit. Another option is to give customers who order a dozen cupcakes one cupcake for free. You can also offer free samples to encourage customers to make purchases and expose them to more of your products.

You don’t have to have a culinary degree or a bachelor’s degree in business to own a bakery. However, having hands-on experience or academic knowledge of both the baking and business management aspects of owning a bakery will help you succeed.

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