How to Start Your Own Bakery in 2022
Are you eager to open up your own baking business? Well, it’s definitely not an easy task to accomplish in 2022. After all, with the current financial climate, one wrong investment may cost you all of your life savings or even worse.
So, how can you start your own bakery in 2022? In this article, we will go over everything you need to get your baked goods to the hungry masses.
Deciding on the Bakery Type You Want to Start
Nowadays, bakeries, besides their traditional definition, can fall into many categories. For up-and-coming entrepreneurs, we recommend trying one of the following:
- Bakery cafes
- Wholesale bakeries
- Counter service bakeries
- Food truck bakeries
- Home bakeries.
Let’s go over each option briefly. As their name suggests, bakery cafes combine the food service and the sit-down-have-a-drink aspect of a cafe or a bar. On the other hand, wholesale bakeries don’t even have a storefront. Instead, they ship products to different venues and act as baked goods suppliers.
Counter service bakeries are usually small, have no seating areas, and people merely buy what they need and go. If you prefer mobile services, a food truck bakery is a perfect option due to how versatile it is and how much ground it covers. Finally, there are home bakeries, i.e., baking businesses you perform out of the comfort of your own home.
Market research is the absolute bedrock of any business. Simply put, unless you know your market, you will not succeed. So, when starting a new bakery, you will want to research your local economic environment, paying special attention to:
- Local market trends
- Target audience
- Budget constraints
- Local competition
- Demographics in general.
By doing your due diligence, you will have the raw numbers that indicate what sells and what doesn’t. That way, your bakery can focus on popular products and still leave some room for experimentation.
When you have your market research in front of you, it’s time to focus on the items you intend to offer. Make an outline of what you’ll want to sell, and then focus on reaching that goal. Keep in mind that you’ll probably redraft your menus up until the moment you’re ready to open up shop.
Covering All Legal Info
In order to run a food-related business, you will need all sorts of permits and licenses, especially those related to health, safety, and administration. In order to acquire everything, you will need to look into all of the official departments and organizations in your local area. It’s also a good idea to discuss the matters with a current business owner and learn from their experience.
Location, Location, Location
Sometimes, location doesn’t matter if the food is good. But as a new business, you will definitely want as much traffic as possible. So, these are the factors you ought to consider when choosing the location for your future bakery:
- Foot traffic
- Growth potential
- Parking space
- Cost of maintenance.
Making a Business Plan
This step is usually the most intimidating to new entrepreneurs, but it’s essential. Without having a proper business plan, your bakery will have no real direction, and you can expect to lose money.
Here are the elements of a typical business plan:
- Executive summary (i.e., the major points from each of the following elements)
- Company overview (a brief description of your baking business)
- Market analysis (filled with data from the market research you performed)
- Business offering (i.e., the products you aim to offer to potential customers)
- Management (i.e., a list of employees, partners, financiers, etc.)
- Marketing plan (wholesale or consumer marketing)
- Financial projections (i.e., your prediction for the earnings and losses by the end of the financial year).
Understanding the Finances
How much will a baked good cost? What goes into that cost (ingredients, baking time, cost of electricity and gas for the appliances, packaging, etc.)? How can you sell your products without losing money? More importantly, how can you do it and actually profit?
Starting a bakery is far from cheap, but that’s not where your expenses end. In fact, you will have to do a lot of calculating and thinking when you decide on the products. And, as we stated earlier, it will definitely affect the menu you had in mind, so you’ll have to update accordingly. In addition, make sure to keep track of your finances and save all of your records.
Registering a Company
Should your bakery be an LLC, a sole proprietorship, a corporation, or a partnership? If you don’t know what those terms mean, we suggest researching them thoroughly. The alternative is to talk to your financial advisor, a business attorney, or an accountant. That way, you can figure out how best to register your bakery without any added expenses or risks.
Securing the Necessary Funds
Businesses require an initial investment. Lots of people take out business loans from the bank or seek out partners via venture capital funding. However, it’s the 21st century, and you can always use the power of crowdfunding.
Websites like IndieGoGo, Kickstarter, GoFundMe, Patreon, and SubscribeStar are perfect for upcoming entrepreneurs. And since bakeries are food-producing businesses, there will always be a customer ready to back you financially. All you have to do is offer some decent perks and milestone awards for your financial backers.
Drafting a Marketing Campaign
Businesses like bakeries tend to do marketing using one of these methods:
- Traditional advertising via local and regional media platforms
- Social media pages and influencers
- Press releases
- Word of mouth
- Offering coupons.
We all understand traditional advertising, i.e., TV and radio ads, billboards, newspaper ads, flyers, posters, and more. However, social media advertising is also fairly well-known at this point. Hiring an influencer with a lot of reach can definitely boost sales. The most difficult, but also most effective method for a bakery is word of mouth, though. After all, if people in your neighborhood are talking about your products, you’ll get plenty of local clients, some of whom will be returning or even become regulars.
Buying the Equipment
With all of the legal, financial, and bureaucratic matters out of the way, it’s time to focus on the meat and potatoes, so to speak. As a baker, you will need the best tools for the job. Those tools will include refrigeration systems, mixers, ovens, a workspace table, storage carts and containers, dining area furniture, and a good point-of-sale system.
Someone has to work in your business, so it’s instructive to get the best people for the job. Of course, you will have to know how to do it. Lots of new bakers have no experience hiring professional workers, and one small error can have serious consequences for the business. Therefore, approach this step carefully and with lots of preparation beforehand.
Building the Business Brand
Congratulations, your business can now officially open!
However, the ride is only just beginning. In order to really expand, you’ll have to evaluate your bakery’s performance yearly, monthly, weekly, and even daily. Furthermore, set some goals for yourself, ones that you can realistically achieve. Always try to outdo the last season’s performance and focus on growth rather than dwelling on mistakes. It’s a process that will last for years, if not decades. Plus, future plans for the brand based on its evaluation are a must, and you need to have them ready in advance.
Starting a Bakery: Final Thoughts
There are many other small elements that go into starting a baking business. Some of those you’ll learn on the go, and for some, you’ll have to ask the veteran bakers for advice. At the end of the day, it takes a bit of patience and careful planning. The actual baking part is comparatively easy — and, without a doubt, much more enjoyable.