Freshly baked bread, croissants, cakes, sandwiches… What’s not to love about bakeries? If you are thinking about starting your own bakery, some essential things can help you break even or earn a larger profit.
- Find the right business model
The bakery industry in the UK is quite large and worth about £3.9 billion. Many stores are owned by bakery chains like Greggs, which has more than 1,950 shops throughout the United Kingdom.
Competing as a small business can be difficult. Some business owners choose to open a franchise store belonging to an existing chain to increase their chances of success. Others target a niche and distinguish themselves by offering specialities such as pastries or food from a certain region, such as France.
- Write a professional business plan
Your business plan could include the following sections:
- A brief history of your business and description
Include information on how you plan to start or how you have already started, and what kind of business it is e.g., a family-owned bakery.
- Show there is demand for your products
How many people pass through the area where you plan to open your shop? Do they tend to buy food products at small shops in the neighbourhood? How much do they earn on average and how much can they afford to spend? By learning to understand the habits and interests of your customer base, you can determine where to position your shop, what to sell and at what price.
- Plan your marketing strategy
A marketing plan includes details about the products you plan to sell, the prices,
and where you would like to set up your business (find the ideal spot and analyse your competition closely). Also, add information on distribution in this section.
Carefully analyse how you plan to promote your business. A successful marketing plan includes details on the perfect shop signs, flyers, posters, online ads, design choices, etc.
- Make a financial plan
When do you expect to be able to make a profit with your business and how much time can you afford to pass until you break even? Write down the costs as accurately as possible, including salaries for your staff, furniture, renovations and rent.
- Training and qualifications
If you plan to employ people from the very beginning, how can you offer training and what kind of preparation could help them? How can you educate yourself about the business? Even if you don’t plan to bake the products from scratch or aren’t considering spending any time preparing the food, it can still be very useful to learn how to do this. This will also allow you to understand the needs of your employees much better.
- Licencing and permits
As a business in the food industry, you need the right kind of licence before you can start and will also need to register your shop with the local council. There is a deadline for handing in information about your premises and any vehicles you may be using. You also need to ensure you can meet any health and safety regulations.
- Finding the right location
We already mentioned finding the right location in the section covering marketing plans, but this is such an important aspect that it deserves to be mentioned again. As a bakery, you will need to attract enough customers to break even, and many small stores fail to do so despite being in an area many people pass through.
Answering these questions while searching for a location could help:
- How easy is it to access your store?
Is parking available for both delivery trucks and customers? Is it easy to reach by car, train or bus?
- How many people pass by the shop on foot?
You could research this by simply spending time in the location on several different days in a week and analysing the foot traffic. If you are a self-service bakery that offers many quick snacks, you may want to choose a location on a high street or town centre, while a more personal smaller store could profit from being in a convenient spot in a residential area.
- What is the crime rate in the area?
- How far is it to other competing bakeries? How can you compete for customers in the area? Could you benefit from a location next to a high-traffic store such as a supermarket?
- Get the right equipment
Commercial baking equipment includes ovens, mixers, scales and thermometers. The right kind of equipment can save you time while baking and allow you to concentrate on other aspects of the business.
With the right kind of plan, your bakery could become highly successful, so spending enough time on preparations is worthwhile.
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