How to Open a Bakery: Step-by-Step Instructions
by Regina Anaejionu
1. Determine what business structure your bakery will use. Whether you choose to operate as a partnership, limited liability company or sole proprietorship, invest in business insurance to fully protect your bakery and your personal assets.
2. Write out a thorough business plan that includes details on who will manage the business, how you plan to market your bakery, what your competitive edge will be and how you will finance your business, whether through loans, savings or outside investors. Also include projections of how much of each item you think you will sell on a monthly basis for the next three to five years.
3. Research the areas of your city to find an ideal location for your bakery. Visit your city's official website for demographic data, which can help you select a location that has many potential customers. You can also take a market survey and determine what potential clients desire in a bakery. Keep in mind your city may have specific zoning guidelines that prevent you from operating a food business at certain locations. View your city's small business department website for more details.
4. Check with your state's health services department to determine what requirements you must follow to operate a food business. Your city may have additional rules on bakery-specific food preparation and storage. Obtain a sales and use tax permit, plus all other necessary licenses, prior to selling your first item.
5. Develop your standard bakery menu and determine how much of each food item, such as eggs, flour and vanilla, it will take to prepare a batch of everything
on your menu.
6. Determine what commercial kitchen equipment and utensils you will need based on the baked goods you sell and the quantity you plan to prepare each day. Also determine what special items, such as display cases, you will use to sell your goods.
7. Research suppliers of the common food items you need. You may be able to obtain some stock cheaply from the grocery store, but most materials will be more cost-effective if purchased from wholesalers even if you have them delivered.
8. Set per-item prices that will cover your material costs plus the labor you put into it. Take into account indirect expenses, such as fuel for trips to the store, business insurance, equipment rental, taxes, marketing and rent for your bakery. Visit competitor bakeries, or their websites, and figure out how much they charge. Unless you have a good reason, do not set prices that vary greatly from what clients expect.
9. Order at least enough materials for one to two months of operation. Return to your business plan in which you predicted how many items you would sell per month when making your initial order. The money you begin to make from sales can then be used to purchase more supplies.
10. Decorate your location in a way that reflects your bakery's personality. Invest in professional banners or signs for your storefront.
11. Get a computer system and software to help you track sales, process credit card payments, monitor your inventory and calculate payroll for any employees you hire.
12. Launch your business with a grand opening celebration. Consider giving away free baked goods.
Category: Business plan