How to Start a Bakery Business – Free Business Plan Guide

Do you want to start a bakery business? And you are looking for a free bakery business plan sample template? Here you can find a complete sample bakery business plan template & feasibility report for your ready reference.

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.

However, starting and running a successful bakery business demands skill, knowledge and proper planning. Additionally, 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.

Bakery Market Potential

bakeryThis 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.

Why You Must Have A Business Plan With Right Business Model?

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.

Business Model

This is an another crucial aspect of starting a profitable business. There are many ways you can start and run successful bakery business. 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.

Counter 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. Whether you run the business from your home, or rent a space, it’s up to you.

Specialty Service: If you plan to specialize in a certain kind of baked good, a specialty service is your best option. Whether you run the business from your home or rent a space, it’s up to you.

Dine In Option: It’s a growing trend in the bakery industry right now. These bakeries have an area to order baked goods and enjoy them in a small eatery.

Bakery Business Model Plan – Startup Guide

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 same products in innovative sizes and flavors with 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.

Identify Target Demographic

This is an another 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
  • Housewives

Define Competetive Advantages

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.

Arrange Startup Funds

You will need to arrange the startup fund for initiation and operation both. However, we can define the fund requirement by 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.

Related: How to Raise Small Business Capital from Investors

Secure Space

According to your business model, you will need to secure an ideal space for it. However, we would recommend you going for a rental 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.

Pricing Strategy 

This is an important factor regardless you are starting a product based or service based business. Initially, offering 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.

Payment Options 

An all-inclusive payment policy is always a better proposition. Try to offer as much as variable 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 door step delivery)
  • Check payment from the institutional clients as well as from the B2B clients.
  • Payment via Mobile money.

Bakery Business Plan Checklist

  • First of all, check the business name availability
  • Then go for business registration
  • 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 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 official website for the company
  • Health, safety and fire protection arrangement
  • Compilation of the product list
  • Arrangement for trainers and training facility
  • Establishing business relationship with vendors
  • Arranging delivery vehicle

If you are interested in knowing more about how to create a business plan of your own, you can check online business plan developers available on the internet.

Bakery Expansion Strategy

The expansion is an ongoing process of any successful business. After you cater the local and neighboring markets, you must go for an expansion. However, it demands right strategy and implementation. We would recommend hire right expert for strategy-making and implementation of the expansion plan. However, you can grow your business through the expansion of the market. Additionally, you can offer franchise of your brand.