Do you want to start a bakery business from home with low investment? Here in this article, we list down stepwise guide on starting a successful home-based bakery business.
The bakery is a traditional industry. Also, it is one of the most promising businesses in the food processing industry. Bakery products are an item of mass consumption in view of its low price. Additionally, the rapid growth and changing eating habits of people, bakery products have gained popularity among masses.
This industry holds a large share in the global food packaging market. In addition, the industry is growing very fast. Product innovation and increased penetration in fast-growing regions such as Asia-Pacific and Latin America are the main drivers of this increase. However, pastries are the fastest growing category among baked goods, accounting for almost 80% of absolute volume growth.
Currently, in-store bakeries are gaining importance both due to their lower prices and the convenience of one-stop shopping trips. Over the past five years, Western-style bread and bakery products have become more popular in emerging markets. Because the rising levels of affluence and changing consumer tastes have positively stimulated demand.
10 Steps in Starting a Bakery Business from Home
1. Find your Niche
There are the variety of ways you can start a bakery. Furthermore, some of the most popular bakery items are bread, biscuits, cake, pastries, cupcakes, donuts, candies, fruitcakes, wafers etc. You need to decide first what kind of bakery items you want to make.
2. Learn the Art of Baking
To be successful in developing a successful business, one needs to have passion and know-how for baking. If you feel you need to learn more about the process of baking, take training from competent people or from online courses on the internet which are in plenty.
3. Write a Business Plan
Crafting a business plan is the most important aspect of commencing and running a successful business. By creating a business plan, you’ll force yourself to look at the business from every angle. This plan defines your business, sets goals, creates a plan to generate revenue, lists expenses, describes your customer base, and examines your competition.
4. Choose a Business Model
This is another crucial aspect of starting a profitable business. There are many ways you can start and run a successful bakery business from home. Some of the legitimate options are
Online Selling: In this option, you don’t need to open a storefront for your business. You can start out online. With a killer website, pictures of your work, and a way to place an order, you can run a bakery from your home. Counter service bakery. With a small commercial space, customers can walk in and pick up baked goods from an employee-managed counter.
Home Service: You can start with a small commercial space. In this option, customers can walk in and pick up baked goods from an employee-managed counter.
Specialty Service: If you plan to specialize in a certain kind of baked good, a specialty service is your best option.
Dine In Option: It’s a growing trend in the bakery industry right now. If you can afford some space at your home or at your backyard, you can make it a place where people can taste your baked items.
5. Learn the Bakery Industry Trends
The market trend of this industry is changing very fast. And you must have a solid marketing plan in hand for a successful launching and run the business. Additionally, you must have sales promotion strategies. Some of the options you can try
- Launch the business with a grand celebration party.
- Tap the local market first
- Do some outdoor events for the product promotion
- Create the same products in innovative sizes and flavors at different prices.
- In addition, go for the electronic media advertisement to catch the mass consumers.
- You can sponsor relevant events, such as bakery competitions and wedding shows on TV etc.
- Go for some outdoor or billboard advertising.
- Online promotion is the must. You can promote the products on social media and blog.
- Finally, establish a solid distribution channel for your product.
6. Identify Target Demographic
This is an important consideration in starting a successful business. determine whether you will attract a niche or mass consumer. Depending on this, you will need to select the right products, business model, and marketing strategies. However, catering the mass consumers is the most profitable option. You can cater
- Families (Homes)
- Schools (boarding house and campus)
- Groceries Stores
- Shopping Malls
- Wedding Ceremonies
- Event Planners
- Sport Centers
- Corporate Organizations
- Clubs & recreation centers
7. Define Competetive Advantages
The bakery is a highly crowded industry. Definitely, you will find a small bakery even in every small town of the world. However, all those are making profits out of their business. So identifying and defining your competitive advantages will keep you ahead of the other competitors.
8. Arrange Startup Funds
You will need to arrange the startup fund for initiation and operation both. However, we can define the fund requirement in two ways. One is your one-time investment. It goes mostly for the tools and equipment purchase. And the second is your working capital. Generally, it includes the rents, staffing, ingredient purchase, marketing, and delivery expenses with other operating costs.
9. Secure Space
According to your business model, you will need to secure an ideal space for it. However, we would recommend you going to rent space in starting. As your business grows, you can switch to a purchased property at any moment of time. Before finalizing the deal, check the property document. Additionally, do some local market survey to know the price trend of that particular location.
10. Pricing Strategy
This is an important factor regardless of you are starting a product based or service based business. Initially, offering an average price or a little bit below the market price will definitely help to attract consumers. However, we would recommend, try to offer at least some innovative products with good profit margins.
All-Inclusive payment policy is always a better proposition. Try to offer as much as various payment options to your customers. However, some of the basics are
- Cash payment
- Payment via Point of Sale (POS) Machine
- Online bank transfer (preferably for those that will order the products and would want doorstep delivery)
- Check payment from the institutional clients as well as from the B2B clients.
- Payment via Mobile money.
Find below a bakery business plan checklist which you need to follow before starting a bakery business:
Bakery Business Plan Checklist
- First of all, check the business name availability
- Then go for business registration
- The opening of corporate bank accounts
- Securing Point of Sales (POS) machines
- Opening mobile money accounts
- Opening online payment platforms
- Application and obtaining registration and licenses
- Securing the Space
- Conducting feasibility studies
- Arranging startup capital
- Crafting a business plan
- Drafting of employee’s manual
- Drafting of contract documents and other relevant legal documents
- Design of the company’s logo
- Designing and printing of packaging and marketing / Promotional Materials
- Recruitment of employees
- Procurement of furniture, electronic appliances, and bakery equipment
- Creating an official website for the company
- Health, safety and fire protection arrangement
- Compilation of the product list
- Arrangement for trainers and training facility
- Establishing a business relationship with vendors
- Arranging delivery vehicle
Finally, to make your business more profitable, you must have a marketing plan. Promote your bakery products at nearby retail stores, wholesale if possible. Creating a food blog of your will surely add value to customers about your business. You can also create a small retail online store to tap a wider audience.