How Do I Start My Own Bakery Business?

Want to roll in the dough? Find out how to start a bakery business, as well as the biggest baking mistakes in our latest entrepreneur article.

We’ve tied this article to the sweet observance of National Pie Day. January 23rd marks the celebration of a popular dessert and the perfect segue into our topic: How do I start my own bakery business?

As with any endeavor, there are dos and don’ts to get started. Creating a bakery business from scratch takes more than just the right dough. It takes specific steps to ensure a profit, construct a brand, and adhere to food safety. If you’re interested to see how a local bakery makes its beginning, stay tuned. We have lots of delicious details below.

How much does it cost to open a bakery?

On average, opening a bakery can cost between $10,000 to $50,000. The sum is lower than opening a restaurant; however, the earnings are usually less also. The United States has over 6,000 bakeries, with yearly revenues of approximately $450,000 each. Each tracks their business expenses closely to ensure a profit.

What makes a bakery business successful?

The success of a bakery depends on the quality of its products. Customers care where the ingredients come from and how they are stored. They want to make sure their items are fresh and packaged correctly, adding longevity for the journey home.

Additionally, creating a specific bakery niche can lead to success. For instance, places that offer only gluten-free foods have less competition and more return customers. It’s a balance of incorporating a specific customer base versus potential loyalty. Those wishing to open a bakery must weigh the options beforehand. 

So what does it take to go from concept to reality? We’ll cover that next, step by step.

1. Create a business plan

Business plans have five primary pieces. They include a description of the business, an analysis of the competitive environment, a marketing plan, a section regarding human resources, and essential financial information. The document should state objectives for the business and what the direct business functions will be. 

2. Choose a location

Selecting a location for your bakery can be a difficult task. You’ll want a shop that has room to support the equipment needed to make your product, as well as a place within the public foot trail. 

3. Get the proper licenses

Bakeries require a variety of licenses and permits. While there are some federal requirements, most of the certificates you will need will fall under the state or local government. For example, the Florida Department of Agriculture and Consumer Services (FDACS) issues retail food permits to food establishments selling directly to customers. 

4. Hire your staff

Finding a dedicated worker may come down to asking the right questions during an interview. In general, there are four simple tips small business owners can use to hire employees. They include defining the job correctly and openly sharing company values.

5. Buy equipment

The last step to opening a bakery business is buying the equipment. Each bakery should assess the products they want to produce. Most cannot go wrong with a commercial mixer or heavy-duty food processor. Other equipment items include crimpers and turnover machines for dough. 

Biggest mistakes when opening a bakery

Every industry has its weaknesses. By identifying them early on, you can prevent them from causing hardship to your business. Poorly managed bakeries lower profit margins by wasting ingredients. They also produce too much inventory, causing them to throw away leftovers or donate to employees.

More commonly, they mismanage funds by not having a dedicated account. Small business owners may tap into their personal savings while running their businesses; however, it’s a practice that can lead to improper accounting. Instead, as part of opening your bakery, you should also set up a business line of credit and/or savings account.  

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