Have you perfected your bread and cakes, so you’re planning to start a bakery business? My hat comes off to you! While it can be a profitable business, starting in the bakery industry isn’t such an easy task. There are a lot of factors to consider before you start selling your products. The bakery industry is a highly competitive one, and you need to sell great quality products at the right price to be successful.
Here are 18 tips that can help you start a bakery!
#1 – Decide on the type of bakery you will be
The very first decision that you have to make is to decide on what kind of bread you will make. There are many types of bakery businesses that you could open, but choose one that is suitable for your experience and capabilities.
It is also worth considering where you will sell your bread. Some options to consider:
If you specialise in a certain type of baked goods, a speciality bakery would be the perfect option for you. Having a speciality bakery means focusing on one type (or group) of baked goods.
It could be slab cakes, artisan bread such as sourdough, gluten-free products or whatever! This option allows you to be regarded as a “specialist” or “artisan” in your field.
It will allow you to be noticed quickly in your area and attract customers.
You will need to be competent in the area you specialise in, though! It will be hard to “learn on the job” as expectations will be high in a speciality bakery.
It can also be challenging to scale as speciality bakers take longer to train or harder to find (plus expect higher pay).
Grab n’ go bakery
Depending on where you are going to sell your bread, you might wish to focus on grab-and-go products. Bakery items such as sandwiches, pies, focaccia slices, pastries and cakes can be designed to be picked up during lunch breaks.
You’ll want to be located in a heavy footfall area to pull this off.
You could also provide a mobile solution in the format of a delivery service or a mobile truck that travels to set locations at peak times.
The challenge with this bakery business is the higher number of ingredients required. There is also the labour needed to make, serve or deliver your products.
Because of these obstacles and high rent expenses, profit margins are often tight. Running this kind of operation can be hard to make a decent profit.
This type of bakery is the most common. Preparing bakery products using pre-packaged “dough improvers” or “mixes” is how many bakeries operate.
The skill level is lower, making it easier to train staff and grow your business. Many customers won’t care how it’s made as long as it tastes good!
The challenge with this format is many bakeries like this already exist. It may be harder to provide something unique to create demand in your area.
#2 – How will you sell your products?
The topics of how to attract customers and where you will sell your products go hand in hand.
All you need is an online platform that customers can easily interact with. This can be a website, an Instagram page, or even a Facebook page (for the oldies!).
Products ordered online are usually for delivery, so you will have to work out how you will do this. You could deliver your items yourself, hire a driver or use a courier.
If you plan on having a small commercial space for customers to walk in and buy your products, this is your option. You can also have a chance to socialize with your customers if you want to manage the counter yourself. It’s also a way to delegate to an employee, so you spend more time baking.
More and more bakery owners are considering sit-down bakery cafes. You can have an indoor seating area with a counter where you display your elegant products and pastries.
An outdoor seating area can be welcomed by potential customers if you have the space outside your commercial property.
Customers can buy your products and enjoy them with a cup of coffee. You can also branch out into chef-prepared breakfasts, lunches and even evening meals.
In this business, you’ll be trying to lock down local businesses to large orders. This can be more high-risk to start with if you have no contacts, but once you get a few customers, it will feel like a sensible option.
While a food truck bakery may not be a fashionable choice, if your primary purpose is to make money, don’t cut it out of your options!
A food truck is a well-versatile business since you can go anywhere to sell your products!
You’ll be more mobile than the other types of businesses mentioned above. You can also have more than one food truck if you expand your business later.
Link up with local offices to provide catering, attend festivals and street markets or camp outside a busy train station. It’s a great way to get wholesale customers too!
#3 – Come up with a great marketing strategy
This step is probably one of the most important factors before opening your bakery to the public. Create a buzz around your bakery business and get people excited! There are several ways to attract customers.
You need to formulate a marketing strategy that works for you because not every bakery business will work the same way.
What you want to concentrate on is attracting the right sort of customers to your business. Building a social media fanbase is great, but if you’re a wholesale business, could you better spend your time picking up the phone?
Conduct market research
Market research should be the first step in your marketing campaign, as this is where you determine your target market.
From here, you should also do some competitor analysis to see what they’re doing in terms of their marketing and why their customers choose their products.
Take this time to find out what your market is looking for. Once you’ve gathered information, you can create a marketing strategy to meet their needs and expectations.
Use what you found in your market research to design your brand. This means answering the below questions and conveying the responses in your interactions, logo and marketing material:
What do you want to make people feel when they see your brand?
What level of sophistication do you want to convey?
What do you want to be recognised for?
How do you want to talk to people?
Are you an Expert? Fun? Budget orientated? A social hub?
#5 – Have a website for your new bakery before you start!
This is likely to be your first point of contact with potential customers. You don’t want it to let you down!
Maybe you’re willing to make your own on Wix, but you’ll be rolling the dice to discover if your design skills are up to scratch. I’d advise finding a reputable website builder that can build you a website to last. They are generally cheaper to maintain too.
You can start with traditional methods such as print ads, signage, flyers, newspapers, magazines, direct mail, and so much more.
What you need to make sure of is your ads should have a clear call to action that will entice the customer into your bakery business.
Social Media Marketing
A social media presence is pretty vital in today’s business world. Social media is the easiest way to get your brand message out there.
Use platforms such as Facebook, Twitter, and Instagram to create interesting posts that people will click on. A wider audience of potential customers will lead to more sales.
I can suggest you run a couple of channels and see which ones will work best, and then double down your efforts.
An online business is a popular choice. As an online bakery, you can make all of the products in your home bakery. Sadly, no one can smell the nice aroma of freshly baked bread online.
So what you need to do is appetize your customers by having great-looking photos and videos! This will most likely be something you need to study before you launch.
Search Engine Optimization
People need to know how to find you, and many people use Google to do and search for this. They’ll enter the phrases such as “bakery near me” or perhaps tap in the name of your bakery.
Getting your bakery business to appear at the top of the search results will get your website more hits and customers in the door.
Internet searchers either want to discover someone local to purchase bread from or want to find out more about your business. A properly built website that ranks well is very important.
Once it’s set up, drop posts and pictures as often as possible to keep in touch with your fans and grow your traffic.
It’s also possible to outsource search engine optimisation to experts who can dial into your website and perform any tech bits.
A good website with frequent and relevant content will give you authority on search engines. If they like your site, they’ll send more traffic.
It might sound a bit “out there”, but setting up a YouTube channel and posting regular videos can draw customers in from destinations you could only dream of. Becoming an authority on YouTube makes you a better baker in many people’s eyes.
#7 – How much does it cost to start a bakery?
When opening a new business, always assess the capital and start-up expenses that you’re going to need to invest. Bakery businesses cost varying amounts to start. A small home bakery might cost around $5-10K to open. At the same time, a bakery shop in a central location is going to be upwards of $100K, probably.
Costs to consider when starting up a bakery business:
Deposit and rent costs for a commercial space
Renovation and decoration costs of the space
Equipment needed for production and selling the products
Ingredients to get started
Staff costs – including yourself
Funding costs for loans and finance payments
Business rates and taxes
How much are you willing to invest? Are you getting a business loan? Can you finance your equipment?
Funding is usually the biggest hurdle when starting a business for the first time. It’s easy to get excited and all pumped up, but it is important not to bite off more than you can chew.
If the amount you’re investing doesn’t align with your current financial capabilities, it might be better to reconsider a more sustainable solution.
#8 – Choose the right location
You may come up with the best-baked goods in the world, but what if you’re operating in the middle of nowhere? If you’re expecting customers to come to you, no one will!
You should consider the location of your shop carefully before taking the plunge. You need to choose an area where you’ll have a good, steady flow of customers. Make sure the location is accessible to people, like near public transportation or along busy roads.
#9 – Write a business plan
Once you’ve decided on what kind of bakery business you want to operate, you should now make your business plan for it.
A business plan is an integral part of any business. It will be the basis of the business’ structure, marketing strategies, financial plans, and operations.
There are seven main sections for a business plan:
Company overview and description
Products and services
Strategy and Implementation
Organization and management team
Financial plan and projections
A business plan will serve as the backbone of your business and the road map to success. So make it great and well-detailed. I explain more in my book about my bakery business.
#10 – Secure permits and licenses
Wherever you are, there are special permits and licenses that you should secure first before operating your business. You need to be familiar with the local laws and ordinances before you start your business.
The types of permits and licenses vary depending on your location. It could be a business license, zoning compliance, fire department certificates, and such like.
Also, consider that these things will require some time before they can be approved and processed, so make sure to give yourself some lead time.
#11 – Select your bakery equipment – don’t skimp here!
You may see a price of equipment on eBay that claims to do the same thing as the brand you’re familiar with for four times less money.
Like many, you may be tempted to purchase one of these and make a saving on your start-up costs. I highly recommend that you don’t buy cheap, unbranded bakery equipment. Buying equipment like this can be a considerable risk.
I learned this lesson the hard way!
#12 – Design your range or menu
As a new business, many customers will rely on your menu or price list. People tend to recognize products that are familiar to them, so it makes sense to keep your menu simple. As you can see in many successful bakeries, their menu is usually composed of classic items that are straightforward. Having a good design will also help customers quickly order what they want.
#13 – Know your profit margin
It took me ages to understand profit when I started my bakery. Where the dough ingredients cost 10p a loaf, how much should I sell one for? It’s not easy to work out, but the best way I found was to create a spreadsheet and use this bread costing guide.
The price of your products is important to your branding and marketing plan to get a good idea of what things will cost you before you start. Otherwise, you may be alarmed after a couple of months!
#14 – Build a great team
You might have the best plan and equipment, but it will be hard to succeed if you don’t have a good team at your bakery.
When I say “team” here, I don’t just mean employees. Consider your suppliers, investors, and other influential people in your business decisions. You should always try to hire the right people for the job. Investing in training and development for your future employees is essential.
If someone is the right fit for your business, they should be willing to work with you on building a plan for their development. It demonstrates how much people believe in the company and will encourage them to work harder for it.
Do what you can do in-house, but in skills where you are lacking, don’t be afraid to look for external trainers.
As a start-up, it will be hard to run a business alone.
What can help you is a great team that can support you throughout. Always remember that passionate people will care about your bakery business as much as you do!
So take good care of them, and you’ll be well on your way to success.
#15 – Have a good relationship with your suppliers
I can’t stress this enough, but you must build a good relationship with your suppliers.
The last thing you want is for them to give other businesses preferential treatment over you.
Always offer your suppliers prompt payment and good communication because many will offer you deals in return.
#16 – Sell your ingredients
If you’re using good ingredients, shout about it. Tell your customers what makes them unique, how you select them, and how you craft the recipes with them to make the best quality products.
Give history and story to your products. It adds value every time.
That said, allowing your customers to purchase a small bag of flour, yeast, or sourdough will give an air of pride in your ingredients. It’ll also generate a small amount of easy profit for you too.
#17 – Outsource non-baking-related tasks
When running a business, you should spend your time maximising your strengths. In other words, “Get other people to use their skills and concentrate on your strengths.”
If your strength is baking, try outsourcing other tasks to grow your business faster.
#18 – Know your recipes!
You should know what breads you’re going to bake from day one. You may start with a limited range, but try not to start developing new recipes when you open.
Do it before. Either hire a unit or, if necessary, setup at home.
When you first open, you’ll then be able to doors focus on driving a great customer experience and training your team.
Time spent trying to work out which cheese works best inside a pastry is best once you’ve settled when you haven’t got these stresses.
Further reading to help your new bakery startup
And there we have it, the top tips for starting a bakery. If you’ve found this helpful, check out my book about my first bakery business. In the end, it bombed. If you read the book, I’ll tell you what I did wrong and how you can avoid these mistakes. I’ll also give you the secrets to success and show you how to start a bakery business that meets all your expectations. Drop a comment below if you have any questions.
If I were to start a bakery business, I would make sure to hire a tax preparation service that may help process the taxes and payroll for me. I also agree with you that my business must offer different varieties. Thank you for sharing here as well the importance of serving pies too.