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How to Open Your Own Bakery

By Edited Nov 13, 2013 0 0

Cooking and baking are favorite hobbies for many people although few realize the opportunities that exist to turn the hobby into a business. In fact the bakery business is a billion dollar industry with bread alone accounting for $23.6 billion dollars. Anyone with an interest in baking food and products for people to consume has the potential to cash in on this industry by learning how to start their own baker business.

Write a business plan. Assess your strengths and weaknesses based on the location for your baking business as well as the competition you face. Consider the financial aspects of starting the business including how much money you need to start as well as how much product you need to sell each month to make a profit. Include plans for marketing and advertising your bakery in your business plan.

Find funding. Apply for a loan for your baker business from a bank or credit union, and provide them with a copy of your business plan to review. Check with the U.S. Small Business Administration to find out if you qualify for a guaranteed or low-interest loan specifically designed for people starting their own business. If you don't have a good enough credit score to qualify for a business loan, consider finding an investor who will provide the money to start-up the baker business in return for a share of the profits.

Find a location. Determine in advance how much space you'll need for baking and storage versus space for retail and sales. Search for a commercial property with a kitchen suitable to the space you need. Consider purchasing the business if you need to make major changes to accommodate the plans for your business. Make sure that you can truly afford to purchase the property if you have limited start-up funds.

Apply for a license. Obtain a food license from your local health department that approves you to make and sell baked goods. To get your license, complete food safety training offered by the health department and have your facility inspected to ensure it meets safety and health code requirements.

Register your business. Complete the form to get an employer identification number for your baker business from the Internal Revenue Service. Arrange to collect and pay sales tax with your state and local department of revenue if applicable in your area. Finally, obtain a business license from your local government by completing a license application and paying a fee.

Determine the specifics of your business. Decide what products you'll bake and sell in your business. Determine what price you'll charge for the products based on the cost of supplies as well as the cost of running and operating your own business. Double check that you charge enough to cover the cost of your space, utilities and additional staff while still making a profit. Consider ways to reduce business operating expenses if you aren't able to profit from the sell of your baked goods.

Purchase equipment. Assess what your kitchen features built-in prior to obtaining baking equipment. Buy any items not built-in such as mixers, pans, cooling racks, ovens or refrigerators. Purchase used initially until your business makes a profit that allows you to upgrade to new equipment and supplies. Arrange for a wholesale supplier or distributor to deliver the food supplies needed for your business each week or as needed such as flour, butter, sugar and spices.

Advertise your business. Use general advertising via radio, television and newspapers to promote your baked products to the public. Network with business professionals by attending Chamber of Commerce meetings and activities. Inform them about the baked products you provide, which may be exactly what they need to entertain clients or offer at conferences. Host baking classes at your location or provide samples at expos and conferences to familiarize people with your baked goods.


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