Think baking is life? Want to fulfill your childhood dream by setting up your own bakery? Here’s are a few tips on how to go about it.
Do you love baking different desserts and food items? Do you feel at peace whenever you are baking? If the answer is yes then maybe you can turn your talent into something profitable and earn a lot from your entertaining hobby.
Cakes, cookies, desserts, etc. are always loved by people and is often invested in, independent of the fact whether there is a recession or not. This is why it makes one of the most profitable and predictable business and if you love baking then you would actually enjoy it too.
However, setting up your own bakery is a big task and shouldn’t be taken lightly at all. If you are contemplating with the idea of setting up your own home bakery and would like to learn more about it then this is the perfect article for you.
In this article, we will discuss the various steps that you need to take to set up your bakery and how to grow it and diversify it to make a profit out of it. Don’t think it is an easy road ahead if you love baking and want to bake one of the most delicious cakes and cookies ever, there are many legal and practical things to think through before you can start running a successful business.
So, prepare yourself with this guide and set up your own home bakery in no time at all.
Table of Contents
Meet Different Bakery Owners
The first thing that you should do is meet a few local bakery owners and discuss with them their journey and how they started out. Take some tips from them and understand the different struggles that they would have faced initially.
Basically, do your homework and research properly about bakeries before you even move ahead with your plan. This will help you in realizing a few shortcomings with your plan and will help you in eliminating them by an efficient solution.
Talking to different bakery owners will give you a better idea of the business and the strategy that you would need to employ to get the most out of it.
There are several bakery shops in the market now so you need to find something which will set you apart from these bakeries and will make customers to choose you over them and this can be only done by getting to know the bakery business and learn more about your competitors.
How to Plan out your Bakery
Once you have talked to fellow bakers and bakery owners, you will be able to assess your situation and will be able to come up with a suitable plan for your bakery business.
Select the Bakery Style
One of the most important decisions that a user will have to make is to decide the kind of bakery shop that you wish to establish. For this, you need to determine and analyze your budget, goals, and your talent and make sure that you are completely practical and logical about it. Try to do market research and check out your neighborhood and demography to assess which type of bakery shop will be the best for you.
Here is a list of bakery shops that you can possibly consider for yourself:
If you would like to open a bakery where your customers can both order and sit down to enjoy the baked goods then you need to choose a dining style bakery. This would require a decent amount of place to seat the customers and counter space and a kitchen to take and prepare the orders.
Another popular type of bakery shop is a counter service shop where the users place their order and then pick up their completed orders. It doesn’t offer the users a place to sit and relax and is just meant as a takeaway option.
Finally, a lot of bakeries run a specialty service where they serve the users with their specialty desserts and focus on just that. You can start this specialty service from both your home and a store, it is entirely up to you.
If you want to start with a low budget then an online bakery shop is the best way to go. You don’t need a store for this and just require a website to get started. So, the customers can see your products and make online orders as and when needed allowing you to handle everything from the vicinity of your home.
Prepare a Business Plan
Once you have decided the type of bakery shop that you want to open, you need to prepare a business plan for your bakery. This means you need to look at your plan from every angle and determine your business goals, revenue structure, investors, target audience, and so on.
Determine your customer base to whom you will be selling and marketing your products and enhance and modify your products according to their needs and requirements. If you are opening a home bakery, then you would need to assess your immediate area and then cater to their needs.
If you have a lot of children in your surrounding area, then you can focus on desserts favored by children like chocolate, cakes, cookies, etc. If you live in a diverse neighborhood then you can specialize in different cultural desserts and baked goods.
One of the main things would be to find a way to finance your newly opened bakery. For this, first and foremost you will need to calculate the startup cost by determining the baking equipment needed.
You will need to purchase various kitchen and baking equipment like a refrigerator, oven, stand mixer, pans, etc. Although this will cost a lot of money, it is a one-time investment which will come to fruition after a few months of hard work.
Another thing to keep in mind is that you won’t make a profit just after a few weeks of opening a bakery so calculate the money that you will need to keep aside for your daily needs to survive until you start making a profit.
Find a Bakery Space
The next important thing that you need to figure out is the bakery space. If you are opening a home bakery then your location is sorted but if you are thinking of opening a dining bakery shop then you would need a formal, well-managed location to seat your customers.
For this, you will most likely need to rent out a commercial space. This place needs to have a general area for the public and a kitchen where most of the baking will happen.
Make sure that you compare all the shop areas and locations before making any decision and don’t be hasty about it, take your time. Be picky when choosing the perfect location for your bakery and don’t make a rash decision. Talk to other shop owners and assess the market value of a location before you select it for your bakery.
Remember to consider the pros and cons of each location and check the cost before you select the best-suited bakery space for yourself.
Complete the Legal Process
Determine the Legalities for Bakeries in your Area
Once you have found the right place and the perfect business plan for yourself, you need to complete the legal process in order to proceed with your bakery set up. First, you will need to check with your state’s health or food department about the feasibility of a home bakery or a store based bakery.
If you are planning for a home bakery then you might have to consider all the restrictions and prohibitions put in place and make sure that you adhere to all of them in order to pass the legal obligations. Once that is done, only then you can proceed with the bakery setup.
Certify your Kitchen
Once you have determined the legal aspects of your bakery, you need to pass the kitchen inspection in order to open your bakery. For this, you will need to make the required modifications in your kitchen and maintain it the entire year and be prepared for the yearly inspection.
So make sure you perform all the modifications and enhancements to your kitchen before the inspector comes and keep everything ready so the legal process can be expedited and completed soon.
Get your Paperwork completed
You will need to get different types of certifications, permits & licenses etc. ready so as to start your own bakery. So, check with your local government and get all your paperwork completed as soon as possible so that you can start setting up your bakery.
Price your Baked Items
Once all the legalities are out of the way, you can start by deciding your initial retail price. This would require a lot of thought and consideration because too high a price would make it seem expensive and too low a price will put off the users. So, you will need to include the cost of the supplies and time spent on making the baked goods and make sure you charge the right amount for your beautiful creations.
Define the Discount Policy
It is no surprise that when you open a new business, a lot of relatives and friends drop by asking for discounts for your products. While it might not have been a big deal before to give free cookies or cakes to your neighbors or your friends, it won’t be a wise path to follow once you own a bakery.
However, this doesn’t mean that you can’t give your family and friends with a well-thought-out discount which will make them feel special while ensuring that you earn something too but make sure you are consistent with this discount policy.
Gather Help and Support
One of the most important things to remember is that you would need support from your friends and family, not only in cheering you on but otherwise too. Opening a bakery will take up a lot of your time and every now and then you would need some help to get it on track.
This would be required at least till you are comfortable with the management and have hired help to support you but until then, take help from your friends and family.
How to Establish Your Bakery
Once you have prepared a plan and set everything in motion, you need to fine-tune things and actually get started with the setup.
Make an Original Business Plan
You have your draft business plan ready but there is a crucial thing which is missing from it. You need to come up with something, anything to set yourself apart from other competitors. You need to come up with a plan to make people want to visit your bakery and giving out just good cakes, cookies, etc. won’t do that.
So, you can either go for a nice and innovative bakery theme or you can prepare special treats which are not sold in any of the other bakeries in your area so that people are forced to try them out and give you an edge over all the other bakeries.
Get the Required Equipment
Once the idea is fixed, all you have to do is start setting up your kitchen and get all the necessary equipment in place. This means you will need to purchase a professional stand mixer, to begin with.
Next up will follow a convection oven for baking and for the smaller mixing tasks a hand mixer should come in handy. To find a professional hand mixer, check out our hand mixer reviews and we promise you won’t go wrong 😉
You cannot compromise on the quality of the kitchen equipment because you will only be able to bake amazing stuff if you have the right and best-quality items with you
So, make sure you have plenty of items in your kitchen and don’t make the mistake of buying limited baking supplies. Trust me, when you have plenty of cakes, muffins, desserts to make and you don’t have any clean baking bowl or utensil left, you will be wishing you have invested in more baking tools.
Form Partnership with Suppliers
Apart from getting the required baking and kitchen tools in place, you also need to get the baking ingredients which you would be using daily.
For this, you will need to find a reliable supplier who will provide you with the necessary supplies daily as your baking business depends on it. So, talk to a few different suppliers and gather feedback on them from their employers before forming a partnership with the best-suited one.
This is a much cheaper solution to your bakery than a supermarket and you have the benefit of using fresh ingredients in your baking recipes.
Keep a storage area
Once your ingredients and your baking equipment are all figured out, you will need to find a place to store your baked goods and your ingredients. Let’s face it, you won’t be getting daily supplies for your baking because it becomes hectic to transport and will end up costing a lot.
So, you are probably going to stock up on a few ingredients for at least a month and will need a proper storage area to actually keep it all safe and fresh. If you don’t get a storage area, then your supplies might either go bad or you would end up paying a lot for your regular supplies.
So, figure out a place which will be spacious enough to hold a large refrigerator for all your dairy products like cream, milk, eggs, etc. Also, you will need to keep your finished baked goods in a place where they won’t go stale so look for a well-ventilated, humid-free place for your bakery stuff.
Market your Bakery
Finally, once you have your bakery in place, you will need to market it to let people know about it. This means you will need to distribute pamphlets about your bakery, write blogs, and do other gimmicks to let people know that your bakery exists. Since you are just starting out, there is no need to do paid advertisements, here are a few free ways to get the word out there:
Blog about it
One of the easiest and simplest ways to get the word out there about your bakery is by writing a blog about it and then sharing it with everyone that you know. You can also ask your friends and family to share with their known people so that the circle of people who know about your bakery increases rapidly.
Try to network with other business owners to get more customers to your bakery. You can join small business groups or form relationship with other businesses on your street to benefit from each other.
Social Media Marketing
Social Media has become one of the most prominent places to market your business and see positive results. So, tweet, post, Instagram, etc. about your bakery and you will see a lot of customers turning up at your place in no time at all.
19 Tips to Get You Started with Social Media Marketing
Offer Consistent Good-Quality Products
While marketing, setting up, etc. is important, what is even more important is that you always offer your customers with good-quality baked goods.
You cannot screw this up if you want to maintain a loyal customer base so you have to ensure that your baked desserts and other goods taste as amazing as the first time. So if need be, sign up for a professional baking course and get your skills honed.
This will require constant effort and hard work from your side and you can experiment every now and then to spice up things for your customer but the key to a good business is consistency.
Get Feedback from Customers
No business can be successful without proper guidance and honest feedback. So, get feedback from your customers and improve on the points mentioned by them. Don’t be disheartened if you receive more suggestions in the initial days, this will only help you in improving your products.
Focus on making your customers happy and take any criticism as a positive one to do better in the future. Adopt a positive attitude about the feedback and you will become one of the favorite bakeries in the area.
How to Further Grow Your Bakery
Now that your bakery business is all set up, you need to think about how you will keep it growing.
Diversify your Business
Once your bakery business has started to take up, it is time to think about expanding your base and getting more out of your bakery. Summer is the popular time for bakeries and is the only time when you will find your shop packed with shoppers, tourists, etc. But, what about the rest of the months?
Well, the flow of customers reduces in the other seasons but if you introduce other products or expand your bakery services for catering as well then you can ensure a steady flow of cash throughout the year.
Keep Advertising your Bakery
Marketing your bakery is important for it to reach out to more people, so don’t skip on that. Try to use different advertising medium to get the most out of it and try different marketing tactics for yourself. You can do a collaboration with other bakeries or you can reach out to some famous food blogger to post about your bakery.
Find new and innovative ways to keep marketing your bakery for the best results. Try to come up with different promotional schemes and discounts so that more customers visit your base. You can create coupons and distribute it around to lure more people in. Just try to be creative.
Hire More Hands to Help
Once your business starts booming, you will get more orders and would need to hire help to bake your products on time. Don’t hesitate to hire people as it will only help you in the long run and will help you in saving a lot of time too.
Yes, you have to be a little cautious about who you hire for your bakery but don’t be too stringent about it too. Give a chance to fresh talent and teach them your baking skills so that you will be able to complete your orders on time.
As you must have figured by now, setting up your own bakery business isn’t a piece of cake and requires a lot of planning and execution. So, make sure you have researched properly about it before you start buying anything.
However, don’t be intimidated by business thought. If you have the correct mindset and hardworking bone in your body then you can easily set up a bakery shop and make it successful with some work and strategies.