Baking begins in the home and good baking always finds an appetite. Why not bring the two together and start selling your baked goods? This can be on a small scale, which means selling from your own kitchen. It can also be on a larger scale, selling baked goods commercially. In this post, we’ll unpack how to start a baking business.
Making choices
The first step in opening a bakery business is to make some choices.
The two major decisions you need to make are:
- What type of bakery would you like to open?
- What goods will you sell?
The type of bakery may determine what you sell and vice versa. It’s important that what you sell and where and how you produce it go hand-in-hand.
It would make no sense to aim to sell a wide range of baked goods from home. You’re unlikely to have space in your kitchen, and you’ll need special equipment. On the other hand, it’s quite possible that you could sell a range of cakes and cupcakes from home. They don’t need as much space for preparation and mostly use the same equipment.
Type of bakery
If you are just starting a bakery business, there are two types of bakery you should choose from:
A home-based, cottage bakery
Deciding to work from home is the more manageable option for a bakery business. You will have full control over every aspect of the premises, process and management. It also means you’ll have to do all the baking yourself, at least at the beginning.
A commercial bakery
Opening a commercial bakery is a big commitment, on all fronts, mostly financially. You will need to employ at least one or two people right from the beginning, so that every aspect of the business is serviced.
The main difference between the two types of bakeries is scale. You still need to go through all the other steps of beginning the business, before you can open to the public.
Goods
There is a huge range of baked goods that you can consider when starting a bakery business. The best way to choose what to sell is to ask yourself what you are good at baking and what goods will sell.
It’s no use deciding only to sell vegan cupcakes, when you know that there is a very small number of people who will buy vegan goods in your area. On the other hand, it’s no use deciding to sell a huge range of different baked goods when you are already very good at baking cupcakes.
Business plan
Once you’ve decided what you will sell and where you will sell it, you should do yourself a huge favor and not take a single step towards setting up your bakery business before you develop a business plan.
Think about the business plan as being the blueprint for your bakery. It specifies the nature of your business, what your goals are and how you plan to achieve them.
The more detailed the plan, the more successful your business is likely to be. Make sure it’s well written so you can follow the steps to create a business that will succeed.
Paperwork
Any bakery business will need to meet certain requirements in terms of licensing. I suggest that you make sure you’re familiar with the relevant laws and necessary permits you are going to need for your bakery right at the beginning. You could even include these details in your business plan.
There are likely to be local, state/ regional and national laws you will need to abide by.
Market research
A bakery business is nothing without the customers to buy the goods. To know how to find them, you’ll need to do some market research.
I suggest doing research into your possible customers as soon as possible in the process of starting your bakery. The information will help you understand what type of goods will sell, the area you should be selling in – and even the type of bakery you should start.
Strong market research and the profile of your customer base will be a great asset when you look for finance.
Start-up finance
Any business needs financial support to begin. If you are able to bankroll your own business, then you are good to go. Starting a bakery, especially a commercial bakery, needs money. It’s likely you’ll need to find financial support.
You could opt for approaching individuals to invest in your bakery. However, you need to set the conditions and boundaries from the outset, so any investors know what you require, the risks involved and their stake in the bakery.
A more formal path to take is to go to a bank for a loan. To do this, you’ll need to follow the correct channels and fill in the necessary forms. Do some research and find out what the best options for a loan are and how to go about applying for one.
Some areas do offer small business start-up loans, which is an avenue to explore.
Space
The next step in starting a bakery business is to find the perfect premises to fit your bakery. If you’ve decided to start a cottage-style bakery, then you already have the premises you need.
I suggest you stand back from your kitchen and make sure the space is arranged in the most efficient way for baking on a large scale. You can save time running across the kitchen to fetch something, or wash your hands.
There are a few options for space when it comes to opening a commercial bakery. The most obvious is a fixed address, but a bakery truck is also an interesting option.
If you do decide to go with a food truck, you’ll need to look for the perfect vehicle. And the perfect location.
Looking for a fixed property where you’ll start your commercial bakery is an important process. You mustn’t choose a premises that is either too big or too small. Rather begin on a smaller scale, from which you can grow.
The space you choose will need to cater for four spaces: preparation and baking; washing and drying; serving and displaying; front of house.
When you are looking for the premises, you must consider the nature of the area. Is there scope for a bakery? Is the area safe? Will your bakery attract customers from the area?
Equipment
You can’t bake successfully without the necessary equipment. This can be as simple as using the best mixing bowls, to operating the most specialized ovens.
For a home-based baking business, you’ll already have most of the equipment in your kitchen. Make a list of any other equipment you’ll need and go out and get it.
If it’s a commercial bakery you are starting, you’re going to need a whole lot of specialized equipment, and ordinary equipment. You may be lucky enough to find a premises that is already equipped with some of the larger pieces, such as ovens. Make sure you know exactly what equipment you need and that every area in the bakery is properly equipped.
Marketing
If you’re lucky, the customers may come to you. It’s most likely, though, that you’ll need to attract them. This means marketing the business.
You can market your start-up bakery business without spending a huge amount. Begin by using word-of-mouth. Any customer who has enjoyed your baked goods is a great ambassador for the business.
Social media offer many channels for you to do effective marketing, practically for free. You can also have flyers made, which can be handed out in your area. Posters are also an effective tool.
If you have the budget, you can advertise on the radio, via billboards and even on television. Start small, let the business begin to grow, and you can then extend your marketing reach. This will be the final step when you are working on how to start a baking business.
