Complete Guide on starting a Bakery Business.
How to Start a Bakery Business ?
Are you a cake lover and also can make yummy and tasty cakes for your loved ones on their birthday? Do you make various cookies, doughnuts etc. often to satisfy the sweet tooth? If your answer is yes then get ready to transform your baking talents into a beneficial bakery shop.
If you are passionate about the bakery business and want to open a bakery then you are at the right place. In this blog we are going to share some proven steps and necessary things regarding bakery business. Here we will cover business plan, overview, profits, marketing etc. topics and provide information how to start a bakery business. Read the blog completely and apply the tips in your bakery business and make your business successful.
Choose the Bakery Type:
It is the first thing you have to decide which type of bakery you want to open. There are many bakery formats are available you can choose from. As per your budget, talent and goals you should choose the types of bakery. Some bakery types are given below-
Online Bakery- You needn’t bother with a customer facing shop to open a bakery. You can start an online bakery shop. With an effective website, photos of your work, and a method for placing orders. You can run it from any location.
Counter Service- With a little business space, clients go to the counter and get the bakery products from a sales person in the counter. You need not invest a huge amount for this small shop.
Home Bakery- If you are not prepared to take the spaces on rent or purchasing modern big equipments then you can keep things simple and start your bakery business from home. Here you will require less fund and can easily sell your products at local markets or start catering service. You might try and make deals with nearby coffee shops to sell your products.
Cafe Style Bakery Shop- Many investors attempt to put their fund in the cafe type bakery shop. Nowadays, it is a developing trend in the bakery industry. People go out with friends or with family can order the bakery products, sit there and eat in the shop. Peoples enjoy in such types of bakery shops.
Read More: How to Start an Ice Cream Parlor Business ?
Market research of the bakery business
The bakery industry has become one of the most famous food segments in India. Roads and streets are loaded with many bakeries in every city. There is a great demand of bakery items like cakes, pastries bread, cookies and different snacks by peoples. Most of the bakery products are prepared by own or take them from vendors or the wholesalers.
With a consistent development in this field, the bakery business is profitable. If you are planning to open a bakery shop in India you should research about the bakery business and market demand, customer’s need, new arrivals, latest food trend etc. as much as possible.
If you have some previous experience in any business then it is easily for you but if you are new in baking business then you have more questions. Typically, market research covers industry trends and market survey. You can use local resources to get relevant information. Talk with your local Small Business Association, read the latest news on the internet related to bakery, which types of baking items are on demand and the how much investment required for a particular types of bakery business. You also consider the risk and limitations and your risk taking capacity of this business. After complete knowledge then you should enter to this business.
Guide to start a Bakery Business:
After deciding the type of bakery, you need to make a business plan. It helps a business to look from every angle. We are giving some main points which need to include in the business plan, they are given below-
Layout of the business: You need a strong business plan or layout before proceeding. Your business layout depends upon the type of business. It will include the location, design of bakery shop, the menu and other aspects.
Market research: This is very important part of any business. You need to know the choice of the customer in your local market, which type of products they prefer to choose. You also need to know what types of products offered by the local bakers and the response of the customers etc. A deep market research make you understand about your target customers and their needs.
SWOT analysis: If you are planning to set a business then you must go through the SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunity and Threats analysis of any business. It can provide you important information about your bakery business.
Money related analysis: It is the crucial part of a business and also the foundation of the business. Your bakery’s financial examination includes things like budget, operational costs, staff payments and sales, profit, margin and so on.
Task planning: A proper work planning determines the smooth running of your business day by day. This includes managing the staff, dealing with ingredients, handling inquiries, handling the orders, support and delivery of the products.
Location for the Bakery Shop:
If you are planning to open a shop then you need a good place for the shop. Selecting a suitable area for bakery business is another fundamental step that needs to be taken carefully. It is the initial step that requires a lot of analysis and preparation. The ideal area for a bakery shop should be in the main market or any higher footfall area.
If you want to open a bakery you need huge small and large quantity ingredients. Here we are providing some necessary ingredients for making cakes, cookies and loaves. You can get all the raw materials in your local market or you can order online also. The approx. cost of raw materials for a small sized bakery is 18,000 – 25,000 per month. Some essential raw materials for bakery business are-
- Wheat flour
- Milk powder
- Dry fruits
- Icing Sugar
- Baking powder
- Food color
- Refine oil
- Coco powder
Machinery and Equipment required for Bakery Business:
|Equipment||Approx. Price in Rupees|
|Weighing scale||Rs. 800-1000|
|Planetary Mixers||Rs. 35,000|
|Working table||Rs.8000- 10,000|
|Gas Stove with 2 burner||Rs. 3000- 5000|
|Knife Sets||Rs. 2000-3000|
|Mixing Bowls/ Piece||Rs.300|
|Various Utensils||Rs. 15000- 20,000|
|Total||1 lakh to 1.25 lakh|
Read More: How to Start Restaurant Business in India ?
Documents & License Required:
If you want to start bakery business then you need some necessary docs. and license which are given below:
- Bakery Permit
- FBA License
- FSSAI License
- Health License
- GST Registration
- Current Bank Account
- Business Pan Card
- Trade License
Basic criteria to open a bakery:
Are you planning to open a bakery then must fulfill these basic criteria-
- You are capable to invest at least 1-3 lakhs for a small sized bakery and 5-15 lakhs for medium and large sized bakery.
- You must have all licenses and permits those are mentioned above.
- You should have at least 2-4 staffs to manage the shop.
- You should have good knowledge about the business.
- You must be passionate in food segment and can invest your enough time in your business.
- You must have a good location with high footfall for your shop.
Staff required for a Bakery:
The numbers of staffs are depending upon your business sale. It can be small, medium or large. If you are planning to open a small sized bakery then you need at least 2-4 staffs and a bakery chef. If you are the baking expert then you only need to hire store managing staffs and 1-2 workers.
Focus Customers of Bakery Business:
Your customers are the key to success. Happy customers always become repeat customers. You should hire a sales person or advertiser who is the expert and take your products to your target audiences. An expert advertiser knows how to present your brand effectively to your desired location with many digital marketing techniques. So work accordingly to generate new clients and give customers the best product experience.
Ask your clients for reviews, talk with them at the counter, and request for product suggestion. Count the client experience and find the most effective way to get repeated customers.
Investment Require to Start a Bakery Business:
To open a storefront bakery you need to invest in following parts-
- Rent- If the area of the shop is rented then it is one of main the cost of bakery business. The rent of a shop depends upon the size and location. It varies between 25,000 – 40,000 rupees per month in any prime location of a medium-sized shop.
- License and permits – All the permits and licenses making cost up to 30,000 rupees.
- Equipment and machines – As we all know that starting up a bakery will require some essential equipment that can cost around 5 -10 lakhs.
- Chef and staff – For a common sized bakery you need a head chef, staffs, and manager. This can cost around 1lakh -1 lakh 20,000 rupees per month.
- Billing System: A billing system is the essential thing if you want to open a bakery anywhere you need to install billing software. It takes cost of 25,000 to 50,000 rupees.
- Marketing Expenses: Any new business requires a strong online and offline marketing. The cost of marketing and promotional activities ranges between 40,000 – 60,000 monthly, depending upon the marketing techniques.
Profit Margin of the Bakery Business:
After consider the investment of bakery business, the next part of any business is the profit. It needs to know how much profit can be made through the bakery business every month. Benefits are important to maintain a business consistently and furthermore for marketing and development purposes. The approximate profit that can be earned from a small scale bakery could be around 60,000 to 1.2 Lakhs per month.
The profit depending upon the numbers of bakery products you are selling, location etc. If you are dealing with multiple products then you can earn more than 2 lakhs per month.
10 Easy steps to start a Bakery Business:
Here we are going to provide 10 steps to open a bakery, they are as follows-
- Create a strong business plan. It should cover all aspects of a bakery business.
- Choose an ideal location for the shop in the market.
- Get all the required permits and licenses to open a bakery in India.
- If you are open small scale bakery then you need 2-4 staffs at least.
- Start buying ingredients and equipment for your bakery. All the ingredients and equipment are mentioned in this blog.
- Design the interior and display area of the bakery.
- You have to install required billing and stock management software in your computer.
- Apply right marketing and promotional activities for your bakery.
- Talk to the local seller and other target customers to sell your products.
- Launch the business with great enthusiasm on a proper date in your location.
Promotional and Marketing Activities for Bakery Business:
If you are set up a nice shop, the products and price are well but still there are lacks of customers then you can understand it is due to absence of promotion and marketing? Without a proper marketing activities create a customer base is impossible because there is huge competition. Your promotional techniques will bring a constant customer flow and also repeat them. You must go through digital marketing along with traditional marketing strategies.
You must attempt new advertising strategies; you can go with Search Engine Optimization, Social Media Marketing, and different types of Google Ads. You can also distribute leaflets in your local market; give small a menu card with each parcel to the customers. You ought to continuously be searching for better approaches to spread your brand name.
Risk of Bakery Business:
If you are planning for a bakery then you must understand its risk factors. After knowing these factors then you can get an idea how to proceed in this business. Some risks are given below-
- Price fluctuation
Price fluctuations of ingredients or raw materials are one of the main factors of bakery business. The natures of many of the raw materials that are used in a bakery fluctuate and the rates become higher after few months and it is a common phenomena. It directly creates an impact on price of the bakery products. You cannot increase the price of your products frequently and it creates an adverse effect in the business.
- Competitions in this business
There is a high competition in this business. You can find a pastry shop in every corner of the market. In many bakeries the owner offers glutton-free, vegan items and it is presently on demand. The prices of special categories are usually higher than the common items. If the customers can get in lower price then obviously rush to that direction. It is really a risk factor for this business.
- Health and safety standards
It is a fact that some small bakeries do not follow all the food safety measures and hygiene standards, only large scale bakery business follow the guidelines. In any case, there is a serious risk part to all of this. It the proper health and hygiene of shop is not maintained and quality of the ingredients is not up to the mark then it can cause a danger. Only in a certain temperature the microbes are eliminate but if it is it not properly stored the microbes, fungi etc. can attack fast.
In the closing part, we can propose that starting a bakery in India is undoubtedly good idea that can give you good ROI and there is a good market for bakery items in India, and it is growing day by day. All your questions about the bakery business and how to open a bakery are provided in this blog. Actually everything depends on how you are managing your bakery and how you are doing the promotional and marketing techniques. The development of your bakery shop will definitely depend upon the quality and price you give.
FAQ(Frequently Asked Question):
Q. What is a specialty bakery ?
Ans- A specialty bakery is managing and running by those peoples who are expert in some specific areas and deal in some special bakery items only. They do not offer various bakery items and take orders for special bakery items only.
Q. What are the target areas of the bakery business ?
Ans- Everyone loves bakery products so there are huge opportunity to sale your products. Some target areas are- Local shops, supermarkets, retailers, bakery shops, cage and tea stalls etc.
Q. Do I need any special qualifications or experience to start a bakery business ?
Ans: While having prior experience or qualifications in baking or culinary arts can be beneficial, it is not mandatory. With passion, dedication, and willingness to learn, you can start a bakery business. However, we always to acquire some knowledge and skills related to baking through courses, workshops, or self-study.
Q. How do I choose a suitable location for my bakery ?
Ans: Selecting the right location is crucial for a bakery business. Look for areas with high footfall, preferably in or near commercial or residential areas. Consider factors such as accessibility, parking facilities, competition, and target customer demographics. Additionally, ensure that zoning regulations and permits allow for bakery operations in the chosen location.
Q. What equipment do I need for a bakery business ?
Ans: The equipment needed for a bakery can include ovens/microwaves, weighing scales, mixers, refrigerators, worktables, baking trays, utensils, and more. The specific equipment requirements may vary based on the type and size of your bakery. It is important to invest in good quality equipment to ensure efficient and effective bakery operations.
Q. How much capital do I need to start a bakery business ?
Ans: The capital required to start a bakery business can vary depending on factors such as the size of the bakery, location, equipment, and initial inventory. Typically, a small bakery may require an investment of 1-3 lakhs, while medium to large-sized bakeries may need 5-15 lakhs or more.
Q. Is it necessary to have a wide variety of bakery products ?
Ans: While offering a wide variety of bakery products can attract a larger customer base, it is not mandatory to start with an extensive menu. Begin with a focused selection of popular and signature items that showcase your skills and uniqueness. As your bakery grows, you can gradually introduce new products based on customer demand and market trends.
Q. How can I ensure food safety and quality in my bakery ?
Ans: Food safety and quality are essential for a bakery business. Adhere to proper hygiene practices, maintain cleanliness in the preparation area, and ensure that all ingredients are fresh and of high quality. Implement strict inventory management, labeling, and storage procedures. Regularly train and educate your staff on food safety practices to maintain consistent quality standards.
Q. How many staffs are required for a small sized bakery shop ?
Ans- You need 2-4 staffs to manage the customers and bakery.
Q. What documents and licenses are required to open a bakery ?
Ans: The documents and licenses required may vary depending on your location. However, common licenses and registrations for a bakery business include a bakery permit, FSSAI license, GST registration, health license, and trade license. It is important to consult with local authorities or business consultants to understand the specific requirements in your area.
Q. What is the profit margin of a bakery business ?
Ans- You can earn approx. 20%-40% profit margin from a well settled bakery business.
Q. How long does it take to establish a profitable bakery business ?
Ans: The time it takes to establish a profitable bakery business can vary depending on various factors such as location, competition, marketing efforts, and customer demand. It requires patience, consistency, and continuous improvement. Generally, it may take several months to a few years to establish a strong customer base and achieve consistent profitability.
Q. How can I market my bakery and attract customers ?
Ans: Effective marketing strategies can help promote your bakery and attract customers. Utilize both online and offline marketing channels such as social media, a professional website, local advertisements, collaborations with local businesses, offering samples, participating in community events, and providing excellent customer service. Word-of-mouth recommendations from satisfied customers can also be a powerful marketing tool.
Q. Should I consider offering online ordering and delivery services for my bakery ?
Ans: Offering online ordering and delivery services can be beneficial, especially in today’s digital age. It allows you to reach a wider customer base and provide convenience to your customers. Explore options such as partnering with delivery platforms or setting up your own online ordering system to cater to customers who prefer home delivery or pickup options.
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