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How to Start a Bakery Business – Step By Step Guide

Business Startup Checklist

Free Business Startup Checklist

October 12, 2023

7 Min Read

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A Bakery Business can have versatile ways of operating. Contrary to other food-based businesses, bakeries can be run on a variety of scales or even by individuals as a home-run business. In fact, a majority of flourishing bakery businesses are known to start with temporary home-run baking businesses that expand with time.

If you love to bake and think you’d like to give your skills a go, a home-run bakery business can be a great place to start. Even if you have no skill to bake but have the vision to start a bakery business of your own from scratch, you can streamline your ideas to get started. In any case, if starting a bakery business is on your agenda, here’s an ideation checklist that you can run through to get the ball rolling.

Steps to get started with your own Bakery Business

Not sure how to start a bakery business in the long term? Here are some things that can get you started:

1. Online, Counter Service, or Home Bakery

The first thing to decide on is how your bakery service will operate. This depends on your idea for the business, your budget, and even the target audience that you’re looking to cater to. A home-bakery business can be the best starter for novice bakers who don’t have much of a budget for setup.

If you would like to invest a little in hiring helping staff or have a team already, you can start an online business that would require no investment for the physical space.

If you are ready to go full-fledged, a counter-service or dine-in space can be the setup for your bakery business. Decide on what you want, and make sure your team and budget can deliver at that scale. Just take the plunge based on your current scale. Remember you can always scale up to a physical location at a later stage with profits from a smaller business!

2. Decide on Baked Deliverables and Pricing

Whether you’re interested in a home-run baking venture or a more elaborate one, you would have to decide quite early on what you’re going to deliver and how will your menu be priced. The reason why you should deal with this at the earliest stage is simply that it will take time! You might need to survey the competition in the localities you want to target or conduct thorough research on what sells the best, and at what standard price.

Pricing a new business with a massive markup usually doesn’t work for drawing a customer base in the initial stages. You would also need to know if you have adequate staff or team to bake these items, especially if you’re working with a smaller team. Get menu planning sorted out as early as possible. If you’re still confused about a final menu, at least make an anchor draft.

3. Acquire Commercial Space/Operating Location

A commercial space won’t be a prerequisite for home-bakery owners, but you’d still have to figure out where you are going to operate. For a bakery of a decent scale, a singular home kitchen might not be sufficient. You might need to set up an additional room for cake packaging, bakery goods decoration, and other business operations.

For a cafe-style bakery, a good physical location, accessibility to the public, suitable target audiences in the location, and many other details need to be considered before acquiring a commercial space for your setup.

4. Draft a Business Plan

With the basics in order, next will be drafting a detailed business plan. Your bakery business plan should include everything from loans you are going to apply for, budget estimates, menu, location, and team member roles, right up to marketing and executing your business at the final stages of launch.

This will be the go-to document for all upcoming interactions and strategies for the business at different stages. You might even need to present this to business partners or investors as an official form of documentation.

Can’t figure out how to start drafting your plan? Take a look at our sample business plans to get going.

5. Buy and set up Bakery Equipment

You might think a home setup wouldn’t be equipment heavy, but there is a variety of equipment needed to start a bakery. While you will not need a commercial scale setup if you’re operating from home, equipment like a professional mixer, heavy-duty oven, and adequate refrigeration space might be needed.

For a fully commercial setup, you will need display counters, multiple mixing and baking equipment sets, safe cool-storage inventories, and much more. Look into your equipment requirements and plan them out depending on your scale of operation.

6. License Your Business and Hire Staff

Once everything is in order, and all aspects are ready to implement, work on the license for your business and for your commercial space. In the US, you will typically need registration with your local authorities for primary operation. Additional food premises licenses will be needed for using eggs and other dairy products on site.

A food safety inspection will be carried out by the authorities before you are granted a license. Even a home bakery business falls under the basic business license category, so be sure to register. Having registered and obtained all relevant licenses, you can then officially hire baking staff and serving staff for your business.

7. Market Your Brand to the Right Audience

With a licensed business all set up and staff, all you need to do now is draw in the right people on your launch day. Marketing and advertising would begin months before the official launch. It is best recommended to get marketing professionals on board to streamline a target marketing process and ensure your brand launch is a success.

From your end, you can advertise catchy offers and perks on your business launch to incentivize people to try out the new brand in the block. Online marketing with dedicated social media handles for your brand can be a great way of warming up relevant audiences even before vigorous advertising and marketing begin.

Several new customers are likely to stumble upon your brand while looking for a bakery online. Be sure to develop a strong online presence in the months before your official bakery launch to garner an audience and build customer relationships online.

Summing Up

So, a Bakery Business can be a great business idea for an individual baker or a complete team looking to start out fresh. With stiff competition and many bakeries spawning in every commercial and non-commercial area, you sure need to set your brand apart to be able to survive in the competition.

A lot of bakeries look like spin-offs of each other and still do well. However, with a little bit of planning and foresight, you can adopt the best service features while still retaining the originality of your brand. This could be in the form of an innovative menu, or perhaps a bakery cafe that has a great ambiance.

Upmetrics’ business plan examples can help you plan everything down to the last detail. Get planning and start your bakery venture with full zeal!

About the Author

Sudeshna                                                        Ray

Sudeshna Ray

Avid writer and content marketer, Sudeshna Ray, has created content for diverse premises including technical niches, business and marketing, finances, creative character sketches, and much more. Engineer-turned-Writer-turned-Marketer, she has explored several aspects of performance, lead generation and establishing a brand presence in the digital domain.

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