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How to Start a Bakery Business

Are you passionate about baking delicious treats? Do you dream of owning your own bakery? If so, starting a bakery could be the perfect career move.

However, as with any new business venture, there is a lot to consider and plan for before you can start dishing out the goods. To help you start, we’ve assembled a step-by-step guide on opening a bakery.

Ten Steps to Launching a New Bakery

1. Choose Your Type of Bakery

The first step in launching a bakery is to identify the type of business you want to launch. You might choose from the following types among others:

  1. Online bakery: An online bakery sells its baked goods through an e-commerce website.
  2. Home-based bakery: A home-based bakery is run out of the owner’s home kitchen.
  3. Retail bakery: A retail bakery has a brick-and-mortar storefront where customers can come in to purchase.

 

2. Name Your Bakery

Give your bakery an identity so people will think of it as a well-known and respected brand. You can take the name of your bakery from your culinary theme, focus on a geographical location, or use your own name among other options.

The main goal for naming your bakery is to make it sound appealing and trustworthy so customers will want to visit you.

 

3. Determine Your Bakery Business Model

There are several possible types of business models for a bakery including:

1. Franchise: A franchise is an existing business model that you buy into and operate under the same name and branding.

2. Licensing: Licensing allows you to use another company’s copyrighted material, trademark, or patent for your business.

3. Business-to-business (B2B): B2B businesses sell their products or services to other businesses rather than to individual consumers.

4. Business-to-consumer (B2C): B2C businesses sell their products or services directly to individual consumers.

No matter which model you choose, make sure that it aligns with your business goals and the products you offer.
 

4. Choose a Legal Form for Your Business

By incorporating your bakery business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your bakery business will determine the taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common bakery business structures.

 

5. Write a Bakery Business Plan

All bakery business owners should develop a business plan. 

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team.

Read our article about how to write a bakery business plan.

Create a winning business plan quickly & easily with Growthink’s Ultimate Bakery Business Plan Template. Complete your business plan and financial model in hours.

6. Apply for the Necessary Permits and Licenses

You may need to obtain required licenses and permits before launching your bakery.

For example, all food businesses in the United States, including bakeries, are required to have a Food Service Establishment License To get this license, you will need to complete an application and pass a food safety inspection.

Read our article about obtaining the proper bakery business licenses.

 

7. Determine Your Budget & Apply for Funding as Needed

In developing your bakery business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your bakery, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your bakery include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting a bakery to help you determine if funding is needed. 

 

8. Select Technology & Software Needed to Run Your Business Efficiently

When you start your bakery, it’s essential to have the right technology in place to maximize efficiency. You need a computer with Internet access, and accounting software for tracking expenses and revenues. 

You may also want to invest in other software to help you manage your operations. For example, software programs can help you design and price custom cakes, track inventory, and manage orders.

 

9. Market Your Bakery to Potential Customers

Before selling your baked goods, you must let the world know you exist. The first step is to create a website so people can learn more about your products and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the bakery industry through social media and blogs so they can help share your business. 

You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Bakery businesses should consider the following promotional strategies for which you should start getting prepared:

  • Banners, and Billboards
  • Catalogs
  • Coupons
  • Direct Mail
  • Event Marketing
  • Flyers

Read our article about how to market your bakery for more tips.

 

10. Get New Customers & Grow Your Business

When you promote your products, you’ll start to get interest from potential customers

Make sure you’re ready to serve these customers. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your bakery business.

Read our article about how to effectively grow your bakery to learn more.

Create a winning business plan quickly & easily with Growthink’s Ultimate Bakery Business Plan Template. Complete your business plan and financial model in hours.

Starting a Bakery FAQs

Bakeries offer a lot of potential for entrepreneurs. The industry is growing, and there is a constant demand for baked goods. The barriers to entry are relatively low, and with the right marketing and business strategy, you can be successful.

To start a successful bakery, you need a few key things:

  1. A great product
  2. The right location
  3. The right technology and software
  4. An effective marketing strategy
  5. The right people to help you grow your business

If you're interested in starting a bakery business from home, there are a few things you need to do:

  1. Obtain the necessary permits and licenses
  2. Make sure your kitchen meets health and safety standards
  3. Invest in the right technology and software
  4. Market your business effectively

Starting a bakery business online is a great way to reach a wider audience and sell your products to more people. To start an online bakery business, you need to:

  1. Create a website
  2. Promote your website through social media and other channels
  3. Invest in the right technology and software
  4. Train your staff on how to use the technology
  5. Market your business effectively

  1. Select the right location
  2. Invest in the right technology and software
  3. Train your staff on how to use the technology
  4. Market your business effectively
  5. Get the right people to help you grow your bakery

A simple checklist to use when starting a bakery is as follows:

  1. Choose Your Type of Bakery: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
  2. Name Your Bakery: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
  3. Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
  4. Determine Your Bakery Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
  5. Write a Bakery Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
  6. Apply for the Necessary Permits and Licenses: In most locations, you must apply for a business license and/or permits before you can begin operations.
  7. Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
  8. Get the Technology & Software Needed to Run Your Bakery Efficiently: You need the right tools to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
  9. Market Your Bakery Business to Potential Customers: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the products they truly need. 
  10. Get Customers & Grow Your Bakery: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products

 

Open Your Bakery

Starting a bakery business can be a great way to fulfill your passion for baking and make some extra money. However, it’s important to do your research and plan carefully before getting started. Be sure to obtain the necessary permits and licenses, invest in the right technology and software, market your business effectively, and get the right people to help you grow your business. With careful planning and execution, you can be well on your way to success.


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