If you’re thinking of starting a bakery these top eleven tips for starting a new bakery will come in handy. My hat comes off to you, if you're successful you’ll be deeply proud.
These are the top eleven things I would do if I was starting up a new bakery. These tips will help you to make your new venture a success.
#1 -Know your dough recipes
You should know what breads you’re going to bake from day one. You may start off with a limited range, which is cool. But don’t start developing new recipes as soon as your equipment gets installed because you can. Do it before, either hire a unit or if necessary set up at home. There’s a great post here that shows you how to build an awesome home set up.
When you first open the doors focus on driving great customer service and creating quality products from you and your team. Time spent trying to work out which cheese works best inside a pastry is best once you’ve settled your daily routines.
#2 -Don’t skimp on the bakery equipment
You may see a price of equipment on eBay that claims to do exactly the same thing as the brand your 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 really recommend you don’t buy cheap, unbranded bakery equipment!
Buying equipment like this can be a big risk. I learnt this lesson the hard way. The spiral mixer I bought seemed like a bargain. It could do everything the branded names could, had the same specifications and looked great. But once I used it it could develop dough. My bread collapsed once it went in the oven, it made me late for a delivery as I’d had to remake a mix and I lost the contract. The seller wouldn’t refund it (or appear on Judge Rinder).
Despite declaring strong spec and features, products like this are often not up to standard. I recommend you only purchase products that are actually proven in a professional environments.
Yeah you’ll find a few bargains by searching secondhand sites, but on average once you’ve removed the stinkers that you’ve thrown away and the time it’s taken to try and get the bargains it’s not worth doing.
#3 -Invest in equipment with a long term plan
You should also look at the bakery equipment you’ll need as you expand.
Is it worth looking at a dough divider press or a croissant laminator in the future?
If you are expecting a need for one, plan when the time will be right for you to dive into your wallet.
Knowing what you’re going to buy as you grow will help you plan your market growth. You'll be able to target customers who want the products you will be able to produce in your daily production.
It's a bit silly to buy lots of bread tins before targeting customers who want to buy bread rolls!
#4-Know your profit margin
It took me ages to understand profit when I started my new bakery. Where the dough ingredients cost 10p a loaf, how much should I be selling one for?
It’s not easy to work out, but the best way I found was to create a spreadsheet and do the following:
Charge for oven rent
I worked out how much my oven cost to run a day (£30), how many hours it was turned on a day and divided then to work out a cost per hour. Then I calculated the cost per minute the oven by dividing by 60. For each bread I could now work out how much it cost me to bake by dividing the cost of bake by the amount I would bake at a time.
Add a selling cost
How much one member of staff takes to process the sale. Perhaps two minutes per order. Then work out how much your staff will earn per minute.
35p x 2 minutes = 70p
This is added to the price of every product you sell.
Know your cost of production
Work out how long it takes to make a batch of each bread then divide it by the hourly rate you will pay your bakers and then by how many your going to make in a batch.
If you are to be the main (or only) baker don’t be tempted to think this is your wage so it can be low cost to start with as you will take the profit. When you employ someone to do it, you will need to pay them and yourself.
Then lastly include the cost of the packaging your going to sell it in. It shouldn’t be much but this is the time to include it.
You’ve now got your basic cost of goods sold, but there’s more.
Additional fixed costs
Up till now I’ve discussed the cost of production and selling (cost of sales) the bread. But there are going to be further outgoings to think about.
Things like marketing, website, utilities, rent and management costs all need to be factored into your costing.
To work out how much to charge for your bread products
I add up all of the fixed costs per month.
Work out how many loaves of bread you’re planning to sell in a month- Always downplay your expectations when budgeting.
Divide the fixed costs by the quantity of bread you expect to sell.
This will give you a standard figure to add to each units price.
You can lower and increase it depending on the value of the product sold or add it on using a percentage.
You may introduce a complicated up-sale strategy or multi buy offers that you expect 50% of your customers to purchase….
….It’s up to you how you include this cost, just remember you’ll need to include your fixed costs somewhere.
#5 -Plan to make some decent dough when starting up a new bakery
You're in the game of running a business to make money and secure your future, not just yours either.
Your employees, customers, suppliers and even landlord are relying on you to get this right.
You may as well just get a job if your not ambitious to create a better financial future for you and your family.
Just like the fixed costs, work out how much profit you want to earn in a month and add it on to your unit price of your products.
I thought it was a good idea to entice new customers with low prices when I started up. I then gradually increased them once I'd grown a customer base.
This wasn't a good idea for many reasons:
- It can be seen as greed by your existing customers and can cause upset.
- Changing your price range changes your target customer.
- When building a new brand you should be consistent.
Marketing to bring in sales
It is possible to use introductory offers as part of a launch marketing campaign.
So long as make it clear it's only cheap on the first visit, week or month.
Any promotion of your business is going to help push your new brand to the masses.
It doesn't matter if it's a price promotion or brand awareness campaign, it'll help you get noticed.
Build your marketing plan alongside your new bakeries business plan.
#6 -Have a website for your new bakery before you start!!
People need to know how to find you. Many people use google to do 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 come up at the top of the results is going to get more website hits and more customers in your door.
Internet searchers either want to discover someone local to purchase bread from or want to find more about your business and importantly, your story.
Having a properly built website is very important. It’s best to use WordPress as the platform to build it.
You can have a go at building the website yourself or get a designer to build you one. Once it’s set up you can drop posts and pictures as and when you need.
It’s possible to outsource fairly cheaply to experts across the world. They will be able to dial into your website and perform any tech bits. Often with a same day service.
Having a good website with frequent and relevant content will allow you authority on search engines. If they like your site, they’ll send more traffic.
Prioritise building a website at the start of your journey, don’t leave it till later on.
#7 -Sell the bakeries story
If you’re going to be an owner operator of your bakery you’re going to be asked your story by your new customers daily.
Get this practised with a short, medium and long version prepped.
This will help you to be confident and fluent with passion when you are asked.
What story you tell will be passed on to others. Emphasise key points of your bread or pastry expertise so it’s easy for them to remember.
If your not going to mingling with your patrons then engage your team on what to say.
Your story can also be display inside your bakery with artwork or infographics. It should also be included in the bakeries branding and website.
Also a side note, I went to Gino D'Acampo's restaurant last month. He has hundreds of pictures of himself (sometimes with celebrities) across the walls of his restaurant.
It's a little vain, slightly hilarious, but again it tells a compelling story of how well regarded he is in the industry.
#8 -Sell your ingredients
If you’re using good ingredients, shout about it.
Tell your customers what makes them special, how you select them, how you craft the recipes with them to make the best quality products.
Give history and again story into your products, it'll add value every time. That said, actually allowing your customers to purchase a small bag of flour, yeast or sourdough will give an air of pride in your own ingredients.
It'll also generate a small amount of easy profit for you too.
Listening to a good story about a product can be more rewarding than consuming it!
#9 -Have a marketing plan when setting up your bakery
On your opening day you could open the doors to hoards of people and find them coming back to you because of your charm, good looks and your baguette.
Ideal this may be, but if it doesn’t happen it doesn’t mean your business can’t become a success.
You need to tell people about your business, then get them excited enough to visit.
To do this some sort of marketing campaign could work.
You can routes to gain customers with flyers, newspaper adverts, social media, organic or Pay Per Click google advertising, Facebook messenger or YouTube. If that doesn't work or budgets don't allow, get on the streets and give away samples of your quality products.
#10 -Get everything ready
When you approach opening day, you should be ready and some before you start.
Your bakery is likely to be open for long hours. You're going to want to oversee the operation when you open.
This where your focus should be, it shouldn't be on painting the toilet or sourcing the right sausage.
There will things are go wrong and need your attention and drive to resolve them.
That’s normal, you’ll probably already expect this, but if your trying to do lots of things yourself.
You’ll either burn yourself out or not do them properly.
Get everything you possibly can do ready before you open the doors.
#11 -Outsource non baking tasks
Going back to the last topic, it’s easy to burn out by taking on too much.
When running a business you should try to spend your time maximising your strengths. In other words,
“Get other people to use their skills and concentrate on your strengths.”
For this was a weakness of mine. I like to keep busy.
I knew how to do a bit of electrical work so I saved a bit on the cost of an electrician by doing some work myself. I could use a saw, so I saved on a chippy I could paint, so I saved on a painter… you get it.
I tried to do everything because I could and I thought it would save me money.
But it took time away from doing what I should be doing, managing and driving my business.
Therefore doing everything myself cost me too much money.
Further reading to help your new bakery start up
And here we have it. The top eleven tips for starting up a bakery. If you’ve found this helpful, check out the book I wrote about my first bakery business.
In the end, it bombed and if you read the book, I’ll tell you the things I did wrong and how to put in place these tips and loads more to make your bakery start up business a success.
Reading this book is the best way to help make your start up bakery (or any small business) a success (in my opinion).
It's not all easy swimming out at sea, sometimes there are some sharks to avoid.
I've learnt to just get on with it.