How to Start a Baking Business in 10 Simple Steps

How to Start a Baking Business in 10 Simple Steps

Now that you’re familiar with the startup costs and requirements for opening a bakery, it’s time to make your dream applicable.

Here are the steps you need to follow to start your business.

1. Settle on the Bakery Type

Before going into the deep details of planning, you need to establish the type of bakery you’re opening.

Do you want to start an online business where you cook at home and sell on a platform?

Or do you want to go classic and build a counter-style bakery?

2. Write a Bakery Business Plan

Writing a business plan isn’t only crucial for potential investors in your business, but it’ll also be your guide when you open the bakery.

A solid business plan should include your business’s purpose, an accurate analysis of the industry and what it lacks, the products you’ll sell, financial projections, and more.

3. Choose a Business Structure

The most common business structures for small establishments like bakeries are Limited Liability Companies (LLCs) and Sole Proprietorships.

The former allows for more than one business owner and protects your personal assets in case of debts or accidents.

Meanwhile, being a sole proprietor allows for only one owner and makes you and your personal assets responsible for any issues regarding the business.

If you don’t have enough experience to choose between the two, it’s better to consult a lawyer or a fellow business owner.

4. Obtain the Necessary Licenses and Permits

After settling on a business entity and making it legal, you’ll need to start obtaining the licenses and permits required for your business.

Aside from the ones we mentioned, you should check with your state’s regulations and health department to ensure you don’t miss anything.

5. Research Your Target Audience

Whether you target Class A, B, or C, you must thoroughly research your target audience.

Find them on social media platforms and communicate with small local businesses.

Determine the average money they’re willing to pay for bakeries, the quality standards they accept, and whether they prioritize aesthetics or affordability.

6. Build Your Brand

Building your brand involves the following:

• Designing a logo and name
• Deciding on an aesthetic for your online platforms
• Choosing packaging styles
• Establishing your bakery’s design if you have a physical shop

Most of the tasks involved in this step depend on your target customers. For instance, if you target the younger generations on their way to school and college, you’ll need to come up with a creative name and catchy logo.

On the other hand, if you target older people like homemakers and working fathers, you’ll need to go calmer with the colors.

Choosing a heartwarming and nostalgic name would also help.

7. Find a Place

Now, you need to find a place suitable for your vision and brand. You can skip this test if you plan to bake and sell from home.

If you go with a cool brand that appeals to the younger audience, then choose a rental near a school, university, stadium, and similar locations.

Meanwhile, if you target families, you’ll need to find a visible place in a crowded neighborhood.

Also, don’t forget to look for competition.

8. Write Your Menu and Price the Bakery Products

To write your menu, you should choose the products you’re most talented at making—better if your competition doesn’t offer them.

Then, you can price the products by calculating all the startup and fixed costs and adding a profit margin.

9. Buy the Equipment

Here’s a quick list of the essential equipment every bakery business owner needs:

• Oven
• Refrigerator and freezer
• Gas and flat ranges
• Mixing bowl
• Blender
• Food processor
• First aid kit
• Serviceware and utensils
• Pans
• Pots
• Ventilation

10. Market Your Business

The final step is to market your business to reach your target market. Your two choices are online marketing and offline marketing.

Online marketing includes creating accounts on popular platforms like Instagram and Facebook and paying for promotional ads.

Meanwhile, offline marketing includes handing out flyers and business cards, face-to-face conversations with potential customers, and printing ads in the neighborhood.

Things to Consider When Building a Baking Business

Other than finances and planning, there are things you should consider before building a baking business.

Here’s a brief roundup of them.

Can You Run a Baking Business By Yourself?

Running a business alone is challenging and requires a great deal of commitment.

So before getting dazzled by the potential success and flexibility of starting a bakery business, you should assess yourself.

Determine whether you’ll be ready to handle all of the financial and managerial challenges on your own.

Are You Financially Ready for Unexpected Expenses?

Businesses require more than startup and operating costs.

You might have to manage unexpected expenses like accidents, expired products, transportation, and more.

So other than the fixed costs, you need to set aside a budget for such factors.

Frequently Asked Questions

Can I Start a Baking Business at Home?

Yes, you can. Building a home-based bakery is one of the most famous side jobs from home, as it’s easier and more affordable than renting a place.

In addition, you’ll have to operate on a lower scale and serve fewer customers, so it’ll also be less stressful.

What Mistakes Do Startup Bakeries Make?

The most famous mistakes in the bakery industry are miscalculating food costs, not marketing products enough, not hiring any extra help as the business grows, and forgetting to account for the shelf life of each baked item.

The last one is impactful because it can drive away loyal customers.

Similar Businesses to Consider Starting

If you’re on the fence due to the challenges of building a bakery business, here’s a list of similar alternatives you can try:

• Food Truck Business: Food trucks are more affordable to start than bakeries. Plus, they give you more flexibility regarding product choices.
• Catering Business From Home: Catering businesses have a higher profit margin than bakery businesses, and they’re easy to run from the comfort of your home.
• Coffee Business: Coffee businesses have low startup costs and high-profit margins. Although the competition is high, you have a good chance of succeeding.