Bread is one of the foods most present on everyone’s table, appreciable both for its taste and for the fact that it is a really cheap product.
These are sufficient reasons that should lead you to reflect on the idea of opening a bakery: also because, even when all other items of consumption are decreasing, the demand for bread, pizza, and other bakery products continue to be high.
However, today, those who decide to open a bakery, to differentiate themselves and have a good customer base, must have their strategy: it is important, first of all, to differentiate their offer, producing different types of bread and also offering niche products, such as gluten-free bread or other allergens.
Here is a practical guide on how to open a bakery where you will find the essential information to help you decide whether or not this activity is suitable for you.
How to Set up a Profitable Bakery
Before making this decision, however, it is important to know that the typical day of a bakery starts at dawn, with the baking of the loaves: once baked, the bread is sold in person or delivered to other outlets.
At the end of the day, the oven and other equipment must be cleaned and the kitchen restocked.
It is therefore essential, to start a bread resale, to possess certain requirements: the first among these is certainly that of being able to prepare various types of bread, skills that you can learn by attending the best bakery courses in Delhi but which must also be perfected with experience; the second, on the other hand, concerns management skills, for which you can find support by joining a bakery franchise.
Why you need a business plan?
Like any other type of company, even to open a bakery, you will need to draw up a business plan. This is, in fact, one of the fundamental steps to be successful in your business, a sort of compass that will help you understand what you need to open a bakery.
- Realizing your business plan can be quite a complex operation, but with a little effort (and the advice of Entrepreneurship), you will be able to do it without problems. Here is a checklist to find out what information to include in your business plan:
- Expenses to be incurred to open and maintain your bakery in the first and subsequent years, from the rent of the premises to the costs for equipment, furniture, marketing, personnel and taxation under the current tax regime;
- Financing arrangements, whether you draw on your resources or those of your partners or bank loans;
- Number of clients and expected income for the first and subsequent years of operation;
- Marketing strategies you plan to implement to attract new clients and expand your business.
Opening a bakery requires an extremely thorough knowledge of the buying habits and preferences of the population living in the area where you want to start your business.
THIS IS NECESSARY NOT ONLY TO UNDERSTAND WHICH PRODUCTS TO SELL BUT ALSO TO UNDERSTAND WHAT SIZE YOUR BAKERY SHOULD HAVE.
If the number of potential customers is not high and there are many competitors, it will be preferable to opt for a small bakery (at least 100 / 150 square meters for the laboratory plus the space for sale), with highly specialized products.
If instead the concentration of customers is high and there are few competitors, you can also think about starting a larger business with more than one laboratory and even open more than one store.
In addition to the size, you will also have to choose the location of your store, which will have to be in a very busy and passing area to always have a good influx.
Consider that a bakery will have a physiological drop in orders and customers during the summer period when people and other retailers go on vacation, so make sure you are in an area of the city with a good transit of tourists to fill at least part of this gap.
Once you have identified the area, you will need to select some funds, which will have to have some characteristics or will have to be adapted in order to obtain the necessary health authorities to carry out the activity.
Hygiene, cleanliness, and safety are in this case the keywords to be able to pass all the controls.
The bureaucratic process to open a bakery
One very important thing to know is that to start a bakery you need to follow a precise bureaucratic procedure that involves:
Cost of Opening a Bakery
The average cost to start a business of this type is between 10 lacs to 15 lacs depending on the size of the place and the area where you intend to open. A commercial shop in the suburbs will have a lower rental cost than a room of the same size in a central area.
In addition to the initial costs which include rent, equipment, etc. a bakery will also have to meet current expenses or operating expenses from the outset. Among these, the main expenses are those aimed at covering:
- The supply of baking ingredients;
- The payment of employees’ wages;
- The payment of consultancy fees (such as the accountant, tax consultant or labor consultant, for example);
- Possible expenses for promotion and marketing.
Methods of financing
Once you have decided to open your bakery, you will also need to determine how to find the necessary resources to cover at least your initial expenses.
The possible financing arrangements for an activity of this type are, in fact, those provided for all other activities that are:
- Use your resources, perhaps asking for help from family members;
- Asking for a bank loan (this requires a business plan?);
- Find private lenders to support your business;
- Intercept funding for your specific sector.
As for the last point, keep in mind that these are usually reserved for particular categories of financing that have the advantage of having very favorable repayment conditions and interest rates.
How to Market a Bakery
The best way to promote a bakery activity remains word of mouth: bakeries should make the best possible bread so that people talk about them with their friends and neighbors. Encouraging online reviews and building social media profiles are other strategies that can help build your local reputation.
Then you’ll need to think about more sophisticated forms of promotion, such as creating a site or sending emails or instant messages with personalized offers to all your customers to get them back.
In some cases, it may also be useful to offer other retailers free samples of your products to expand your distribution circle.
How much you can earn with a bakery
Curious about how much you can earn from a bakery?
A bakery can certainly be a million-dollar business. Just ask L’Opera or Choko La both of which have plans to further expand in India in 2020.
But whether you hit those heights or not will depend on your management skills, investment, location, and more importantly, on your ability to carve yourself a niche in an otherwise competitive field.
Do you know why these bakeries and shops made it so big?
That is because they learned to stand out. Yup, L’Opera introduced the Indian market to French Pastries and bread whereas Choko La changed gifting forever with its supreme chocolates and now it is your time to tickle the taste buds with something new.
Running a bakery does involve huge investment initially and a lot of hard work but get it right for the first 4-5 years and you will sleep better for the rest of your life