Do you have these questions in your mind?
- How to start a bakery shop?
- How much does it cost to start a bakery?
- How to find the best location to open a bakery?
- What are top-selling bakery items?
In this article, you will find answers to all your questions. So please grab a cup of coffee, and let’s get started.
Table of Contents
What is a Bakery Business?
A bakery mainly sells cakes, bread, pastries, cookies, and many more items. In a bakery business, you must maintain good taste in your products. Keeping quality and hygienic products is necessary for the customers to buy things from you.
The best part is people of all ages consume bakery items.
Hence, you need to understand & cater according to their taste & requirements. You also need to understand the demand of your locality and area; those are your most potential customers.
To get inspiration, you can look into these bakeries:
- Warburtons UK
- Ole and Steen UK
- Almondy UK
- Panera bread US
- Einstein Bros US
- Corner Bakery US
Market Insight: The bakery business in the UK is estimated to grow to £8.5 billion, and in the US, it is worth $3 billion a year.
Types of Bakery Business models?
The best way to choose the business plan is by checking the demand for your product in the area & how much you can invest.
Let’s go through bakery business models so that you may decide accordingly-
- Counter Service bakery Shop
It’s a small occupancy shop where customers walk in and pick up bakery items they want. It is one of the most popular ways to sell bakery items. - Online Cake Shop
You don’t need a shop in case you opt for online business. You can make an eCommerce website with colorful & attractive photos of your product, varieties with their costs, and, most importantly tab to place an order.
You can run this business from home in your comfort & it will save your shop rent also.
- Mobile Cake Shop
You need to buy a mobile vehicle for this service; apart from cakes, you can also sell cupcakes, biscuits, cookies, and more. - Shop with a Sitting area
Customers like to sit down, chit-chat, and eat; this is getting more popular daily. However, a larger area and an expanded baking area are required to make sitting arrangements. Sitting shops are expensive due to rent but are highly profitable also. - Specialty Cake Shop
As the name suggests, this shop deals in particular types of cakes. Generally, this type of shop sells specialty cakes.
Specialization in one area of baking is required, like wedding cakes, cupcakes, eggless cakes, and more. You can also operate this business model from home.
Remember, as a startup, your goal should be to keep your costs low and depend on your skills. If you push the process and try to go full-service from the very beginning, there is a good possibility that you’ll be overburdened and may get lost in the process.
Is this Bakery Business Right for you?
Here are some questions to help you decide:
The Pros:
- Be your own boss
- Creative and Passion
- Low cost home bakery model
- Evergreen market
- Repeat customers
The Cons:
- Bakeries start early in the morning
- Long working hours
- High Competition
- Expensive Ingredients
- Short Shelf life
How much investment is required to start a bakery Business?
The average startup cost to open a bakery is between $20K and $60K. The investment varies depending on your bakery model.
Expenses in running a Bakery Business
Starting a bakery depends upon its business model from a low-cost home bakery to a prime street location bakery.
Here is the list of common operating expenses-
- Raw materials / ingredients
- Rent
- Gas / Refrigerator
- Utilities
- Salaries
- Equipment (One time)
- Electricity
- Packaging
- Repairs
- Advertisement costs
- Office & Administration
- Telephone
- Office Supplies
- Water bill
- Storage
- Other supplies
- Insurance
- Taxes
- Licenses
- Property taxes
- Loans if any
- Pest Control
A typical day in a bakery business:
- Starting early in the morning
- Sanitizing the kitchen area
- Preparing dough, mixing ingredients, baking, and more
- Weighing and measuring ingredients
- Cleaning baking bins
- Inventory control and check
- Freezing the selected items
- Maintaining quality standards and hygiene
- Taking orders
- Trying new recipes
- Inspecting
- Checking and removing expired items
- Social Media Marketing
How much will you earn in the bakery business?
Bakeries can expect a profit of 15% to 30%. However, profit margins might vary for different products.
You should charge the customers a justified amount that covers all your expenses. If you are using high-quality ingredients, then you need to keep premium pricing and categorization.
The most selling bakery items are:
- Bread
- Rolls
- Tarts
- Patties
- Pastries
- Cakes
- Muffins
- Pies
- Bun
- Cookies
- Doughnuts
- Biscuits
- Croissants
Seasonal Business-
The business cycle of a bakery business is always moving. Bakery items are consumed by people almost daily. Therefore, delicious products of good quality are always in demand.
During Festivals, Holidays, Weddings, Thanksgiving, Easter, Halloween, New year, and Valentine's Day, there is a high demand for bakery items. Therefore, the bakery business is not seasonal; however, it may sometimes vary due to a few factors.
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Checklist of essential bakery equipment’s
- Ovens / Microwaves
- Freezers / Refrigerators
- Knives
- Mixing bowls
- Stand mixer
- Hand mixer
- Measuring cups
- Baking Pans / Trays
- Digital scale / Weighing machine
- Spatula
- Wooden spoons
- Big tables
- Sieve
- Apron
- Oven gloves
- Pastry brush
- Whisk
- Kitchen scissors
- Electric appliances
- Baking paper
- Molders
- Cutting boards
Shall I go for the bakery franchise?
Bakery brands offer franchises with an aim to roll out their bakery brand nationally. Most of them provide 3 store models – Café, Express, and Kiosk.
- Sitout Café (1500-2500 sq. ft.)
- Grab & Go (500-800 sq. ft.)
- Mini Kiosk (300-500 sq. ft.)
Here are some Bakery brand franchises you can look into:
- Dunkin’ USA
- Cinnabon USA
- Auntie Anne’s USA
- Shipley Do-nuts USA
- Great American Cookies USA
- Wafflemeister UK
- Pieminister UK
- Baguette Express UK
As a Baker, always remember to update yourself, yet not lose the traditional roots:-
Trends in a bakery business
- Organic nourishing and lighter products
- Gluten-free products are in demand
- Sugar-free items are promoted well
- Good quality products at acceptable prices are more in demand
Challenges in Bakery Business
- Sometimes it is difficult to abide by government policies
- Finding a good supplier can be challenging
- Rising prices of raw materials
- Competitive market
Bakery Business Growth Tips
As per the services you decide to offer, you need to set prices for your projects.
- Give timely discounts
- Try to be creative, try to launch new items to attract
- Take specialization in at least one item & make it your USP
- Mornings & Evenings are always busy, so keep things ready beforehand
- Create a customer database
- Focus on building a brand that people trust & recommend
- If a product is not selling, then take feedback from customers
- Maintain a social media presence; it adds a rich feel to the brand
- Match your prices to the market
- Try to launch new items to attract customers
- Offer the things in trend like gluten-free, sugar-free, and Vegan
- Apart from bakery items, you can expand by selling candy and beverages
TIP: People like coming to clean & hygienic places, keep premises neat & clean. If you are operating from home or counter-selling, make the area clean & safe. Unhygienic products can make your customers fall ill. It will again make you lose your customers.
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Qualification, Skills Requirements, Training & Certifications
In most countries, bakers don’t require long time-consuming training; you can take part in short-term accredited / diploma courses.
However, enrolling in a professional course will present you as a professional & earn customers’ trust.
You will at least need a high school diploma to be a baker. That is the minimum educational requirement in the US, as per BLS (Bureau of Labor Statistics).
However, In the UK, there is no such restriction for minimum academic requirements. To be adequately trained, you can do an accredited / diploma course (always check updated requirements before proceeding)
These courses will train you mainly in the following:
- Baking
- Heating
- Refrigeration
- Freezing
- Roasting
- Weighing and measuring
- Frosting
- Confectionary
- Patisserie
Here are some celebrity bakers to inspire you:
• Duff Goldman
• Buddy Valastro
• Candice Brown
• Paul Hollywood
• Nadiya Hussain
Find a good location for your bakery
To open a bakery shop, you need to find an economic space. Select a locality which has more population & gives you more footfall. If the business location is within your budget, it will be easy for you to establish.
Also, check all the legal requirements, zoning permissions & go through (COSHH) Control of Substances Hazardous to Health and (HACCP) Hazard analysis and critical control points as essential areas of concern.
Conclusion
Bakeries and baked goods are consistently in high demand throughout Europe and America. The bakery industry is one of the most lucrative and is growing yearly. So, it is considered a recession-proof industry.
Bakeries have excellent profit potential if they can operate on cost-effective labor and raw material procurement.
It can be a game changer if you can also make and market high protein or vegan cookies for retail shops.
Want to Save Time in your Business Launch?
- How to Create a Business Plan
- What is Market Research, USP, Niche & Positioning
- How to find a suitable name for your business
- How to create your brand image (Logo + Branding)
- How to Register Your Business
- How to Register for Taxes
- How to get Licenses / Permits
- How to Open a Business Bank Account
- How to Get Business Insurance
- Which Payment Processing Terminal (POS) to buy
- How to get Funds for your Business
- How to do Sales & Marketing – Offline & Online
- Why have a Website / Blog / Social Media
- How to build & train your Dream Team
- How to provide Excellent Customer Service
- Buying an Old Business Vs Franchisee Vs Own Brand from Scratch
Handpicked inspirational Youtube videos for you
Artisan Sourdough Bread Process from Start to Finish | YT Channel ‘Proof Bread’
Heat of the Master Bakers Bakery – Baking 100’s of Breads at 6:00 am in the morning at Camden Bakery -YT Channel ‘Travels in India, London & the UK’
A Day In The Life of a Baker | LONDON – YT Channel ‘Kris Kazlauskaite’
A. Starting a bakery is a good idea. However, the cost totally depends on, which business model you choose. Running a shop is the most expensive, yet most profitable way. You may have to spend on rent, staff salaries, equipment, interiors, etc.
A. Yes, it is a profitable business. On an average, a well established bakery earns a six figure yearly.
A. According to data from the United States Census Bureau, the bakery industry in the US generated revenue of $37 billion in 2019. This includes both retail and wholesale bakeries, as well as in-store bakeries in supermarkets and other retail outlets.
A. According to data from the UK Office for National Statistics, the bakery industry in the UK generated revenue of £8.2 billion (approximately $11.2 billion) in 2019. This includes both retail and wholesale bakeries, as well as in-store bakeries in supermarkets and other retail outlets.
A. Here are a few well-known bakery chains in the UK:
1. Greggs
2. Paul
3. Pret A Manger
4. Subway
5. Costa Coffee
A. Here are a few well-known bakery chains in the US:
1. Panera Bread
2. Starbucks
3. Dunkin’ Donuts
4. Au Bon Pain
5. Krispy Kreme
A. Some of the most profitable locations in the US to start a bakery business are:
1. New Jersey
2. New Hampshire
3. New York
4. Massachusetts
5. Delaware
