Opening a bakery is an exciting process. Bakeries are such an inspiring type of business to choose to open. And we’re sure that you’re already envisioning delicious-looking cakes in store windows. You’ll be preparing tasty freshly-made bites to eat and, hopefully, becoming a much-loved community figure.
A business plan for a bakery is more to do with creativity and much less to do with formal service. A good bakery is a community pillar - somewhere to quickly duck into for fresh loaves of bread or sweet treats. This fundamental difference is where bakeries differ from standard restaurants, and it’s really liberating. So with all that said, how do you open a bakery?
In this guide, we’ll look at a bakery business plan and break down the steps of opening bakeries. With the proper steps and simplification, opening bakeries can be really straightforward.
To build a successful bakery, nail these basics and give yourself a brilliant foundation. The rest will come. From mistakes to avoid making to a simple 5-step opening plan, here’s everything you need to know about bakery openings.
Opening a Bakery: 5 Steps To Open a Bakery
First things first, what are the basic steps of opening a bakery? It’s best to keep things as simple as possible, so we’ve broken things down into five steps for success.
- Conduct market research and choose a location
The first step is to conduct market research and choose your location. Both of these things are absolutely vital in shaping the direction you take with your bakery. You can use these findings to decide which property you rent.
- Create a business plan
Next, a bakery business plan is essential. Having a plan will help you clearly envision your way to success. It will cover your inventory ideas, business management aspects, regulation compliances, and pricing strategy. This second stage is where you really put your dreams into action. Spend as long as possible in this section.
- Finalize the menu
While bakeries don’t technically have ‘menus,’ you do need to finalize what you’ll be offering. You need tried-and-tested recipes and a clear idea of what you’ll sell. This is an excellent point to get family and friends to taste test and give opinions.
- Host your opening event
Events are a fantastic way to get customers in. And the most significant event of all should be your opening day - make it a big deal. You can market it beforehand by inviting specific people or offering a tempting deal (like free cakes). If you want, you can even get performances and entertainment.
- Market, market, market
Finally, having a bakery marketing strategy is an absolute must. Marketing customer engagement goes way beyond the opening of your bakery and is something you need to sustain long-term. You could use captive portal WiFi, social media marketing, or traditional leaflets and billboards. Get creative and really prioritize marketing your bakery. The results will follow.
How Much Does It Cost To Open a Bakery
Opening a bakery isn’t all fun and games - things get a bit more serious when it comes to money. So, how much does it cost to open a bakery? It takes approximately $8,000 to open a small bakery, not including any staff or upfront building purchase. $8,000 breaks roughly down into:
- $4,000 bakery equipment
- $2,000 ingredients
- $1,000 website, digital ads, and licensing
- $1,000 rent or mortgage for one month, plus utilities
$8,000 is the absolute lowest you could open a bakery for, with other opening prices rising to the millions. You probably won’t have the capacity to hire staff at this lower end, so you’d run the venture alone initially.
If you want a comfortable budget for a mid-size bakery, aim for a $50,000 opening budget. With a $50,000 opening budget, you’ll have more chances of opening a commercial bakery with multiple staff members. With $50,000, this could be your budget breakdown:
- $15,000 bakery equipment (more capacity to create more products)
- $8,000 ingredients (more ingredients to create more products)
- $8,000 staffings costs (approximately four staff members)
- $3,000 website, digital ads, and licensing
- $10,000 interior and exterior design
- $3,000 rent or mortgage for one month, plus utilities (a larger property or property in a better area)
- $3,000 marketing campaign, including WiFi
You can clearly see the difference in the type of bakery you get out of a higher opening budget. Establish your budget beforehand. And also, make sure to see if you can get any funding to boost your bakery up through the brackets. Opening a restaurant on a < $10,000 budget is possible, but you’ll thrive on a higher budget. It’s worth spending longer to save.
9 Biggest Mistakes When Opening a Bakery
Do as I say, not as I do, is one of the best sayings when opening a bakery. Pay attention to others’ learning curves.These 9 biggest mistakes when opening a bakery don’t need repeating.
- Picking the wrong location
Enough said. Location is critical; forget to attract the right customers if you don’t have the correct location.
- Over-ordering ingredients
Over-ordering ingredients lead to waste. You need to keep tabs on inventory and have a solid idea of output.
- Failing to provide adequate storage for ingredients
Without adequate storage, ingredients turn to waste. Picture out-of-date eggs and cheese-smelling butter left exposed on a worktop.
- Buying unreliable equipment in poor condition
Shutting the fridge door in a specific way to stop it from falling off might be feasible at home. But you need reliable equipment in your bakery, especially at the beginning.
- Failing to buy equipment under warranty or not insuring the equipment
Everything is perfect until - oh no. That oven fan isn’t sounding healthy. Too bad you went for the cheaper no-warranty option.
- Not investing in pre-opening marketing
Today is the day. Except, nobody else got the memo. Investing in pre-opening marketing is essential to build profit from day one.
- Not researching regulations and licenses
Regulations and licenses are legal requirements. If you don’t have them in order, expect hassle and a delayed opening.
- Not conducting market research on customer needs
Market research is essential for success. There’s no point in ignoring customer needs - you rely on customers wanting to buy your goods.
- Not considering staffing properly - resulting in under or overstaffing
Overstaffing wastes money, and understaffing takes a massive physical and mental toll. Consider staffing properly beforehand.
How To Open a Bakery With No Money
How to open a bakery with no money is a predicament. Opening a bakery does require capital to get it off the ground initially. You’ll need ingredients and equipment, if not a business venue and staffing budget. The most sensible way to open a commercial bakery with no money is to find funding elsewhere. Could you get an investor on board? You could speak to family and friends. Or find a business partner who is willing to lend you the money initially. Whatever you do, make sure to get a contract drawn up. These situations are more complex, requiring some legal backing in case things go wrong later.
You could also take out a business loan besides finding an investor. Again, this is something that you should approach with caution and get a business or financial advisor. You need to use business loans tactically and fully aware of the risks and potential implications. But in the right hands, a business loan can be a brilliant ‘positive debt’ to accrue higher income and profits. Even without money in the first place.
Many banks offer business loans. We recommend contacting a financial advisor first for impartial advice specific to your situation. With this information under your belt, go to enquire at banks - online or in-person - after.
If you can’t apply for a business loan or get an investor, another option is to open a home bakery. Define ‘no money’; can you afford a few ingredients each week? Then perhaps you can add $5 or so to your weekly food bill and start a home bakery. After building your profits, you can reinvest and accrue enough to invest in bakery premises. This is an excellent way to save money to open your bakery while enjoying baking in the short term.
Opening a Bakery: How To Attract Customers
Opening a bakery is about creating a place to attract and serve customers. So once you’ve got your bakery open, how do you go about that vital second step? How do you attract valuable customers?
The first way to do this is to use your opening event to attract customers from day dot. Your opening event could be a huge community party. It could offer people free samples. It could also offer free items in exchange for loyalty programs or email marketing. Your opening event is one of the best times to get immediate brand awareness within the community. You are at utmost topicality and have the utmost pique of customer interest - don’t waste the opportunity.
Apart from opening the bakery, you can also host ‘special days’ as mini-events on a regular basis. For instance, a two-for-one Tuesday could create a routine for a mum on the school run with two kids. It could become the highlight of her week, picking out two chocolate buns. Or, if you have green space or a garden area with your bakery business, you could run events. For example, barbeques where you can market your bread buns simultaneously.
Social media marketing is a classic but absolutely not one to ignore. The power of Instagram and Tik Tok reels these days are astounding. Most definitely have a presence on social media, review sites, and Google Maps.
Another way to market your bakery is through captive portal WiFi. Captive portal WiFi can collect essential details from customers and funnel these details into other marketing efforts. If you harness the meaning of captive portals, you open floodgates of other opportunities.
Finally, make sure to track progress. Measure retail foot traffic, collect reviews, keep tabs on sales, and most of all, celebrate your bakery’s successes.
Just How Difficult Is Opening a Bakery?
All things considered, just how difficult is opening a bakery? We’d say that a bakery is easier than opening a restaurant simply because of the less focus on customer service. With a restaurant or cafe, you have the customer to prioritize.
A bakery is much more retail-like—simply preparing and selling pre-made products. Sure, you’ll need a solid business plan and a firm grasp of our five steps for setting up a bakery. But once you grasp that, you are more than capable of success.
In short, opening a bakery is challenging but also very exciting. It has a significant focus on products which is incredible for anyone with a passion for baking and food. And it is perfect for those who want to focus on creatively paving their way in the food industry. The hardest part is juggling all the different jobs, like menu pricing, ordering equipment and ingredients, and marketing. But with a brilliant bakery business plan, all that stress goes away.
Do you want extra assistance setting up your bakery or help to invest in bakery marketing strategies? You and we know there’s more than meets the eye when opening a bakery. You have much to consider, from price strategy to property rentals and those pesky Tik Tok videos. But that’s where we come in.
At Beambox, we are always interested in your potential and happy to assist you with jump-starting your bakery business. As experts in WiFi marketing, bakeries, and social media marketing, we can boost your journey to success.
Beambox offers the best all-in-one WiFi marketing platform. We utilize a multi-strategy approach to connect, attract, and keep customers. Start your Beambox free trial today, and let us help you maximize your social media and bakery potential.
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