How to Start a Bakery

Workers and customer in supermarket bakery Adobe

This article is part of our “Starting Business” series, an in-depth look at how to start a company in a particular niche or industry.

Baking has always been a creative pastime, requiring knowledge and discipline – traits that are equally important in business. Therefore, deciding to start your own baking business – whether it be selling pastries and doughnuts, a pie and cake business, or a mixture of everything – is an ideal endeavour.

It's also an increasingly popular one, given the success of recent television shows such as Cake Boss and The Great British Bake Off. There is almost always a market for delicious, handmade baked goods, and with some planning, a willingness to learn, and an investment of time and money, achieving success is entirely within your remit – whether you operate from home or out of a shop.

To help get you started, here is a clear and easy guide explaining all the steps you will need to take to get your venture off the ground.

This is how to start a bakery.

Step 1: Market Research

As mentioned, bakeries are popular entrepreneurial ventures in 2020. Whether they take the guise of traditional bakeries, artisan bakeries, dietary-specific providers (such as gluten-free or vegan bakeries), or even cakes made to order from home, there is an almost universal market.

However, you still need to research the viability of your business proposal thoroughly. For instance, how many competitors are in your location? Is there a gap in the market for your USP? What kind of potential customer base makes up the area around your proposed site?

These are all questions that can make or break the success of your company, and may require some flexibility on your part. Location is particularly important in this regard as, by its definition, your bakery can only realistically serve a relatively small customer base. Therefore, you will be relying heavily on repeat customers and being able to establish yourself within your local area.

Step 2: Company Research

When launching a baking business, you must consider and research the following facets:

Funding

Depending on where you decide to open your bakery – that is, if it is run from home, or based out of a static location – the funding you require will change accordingly. Obviously, the most significant factor will be rent or mortgage costs, but there are a wealth of other outgoings you will need to cover, including ingredients, staff, and numerous types of insurance.

Luckily, there are numerous funding sources available, most likely of which will be a bank loan. Based on the market research you've already done, ensure that you draw up a convincing and quantifiable business plan to present to any potential investors.

Expertise

Of course, if you are planning on launching a pastry or cake business, then you – or your chief baker – should possess advanced knowledge of how to actually bake. You don't necessarily have to have attended a culinary school, or even have worked previously in a professional bakery or kitchen; after all, many successful bakers are self-taught. However, you should probably get some feedback on the quality of your products first, either through fairs, stalls at public events, or even a local delivery service.

If you are handling food products, you will also need to obtain numerous food safety and hygiene certificates and become familiar with the local laws and regulations in this regard.

Networking

As mentioned, it's a good idea to get the word about your skill and proficiency in the kitchen before you open; this ensures that you start with a positive reputation and already have a client base in place. This can be something as simple as baking for family and friends and encouraging them to spread the word.

Resources

Whether you're baking at home or in a shop, you will need to ensure that you have all the necessary equipment to bake. If you are taking over a site that has an existing kitchen, you may be able to use the ovens, fridges and pantries already in place. Either way, you need to factor all of this equipment (as well as replacements) in your funding costs above.

Licensing and Legal

Food laws can vary drastically between various regions and jurisdictions, so you will need to clarify with your relevant local body what licensing you will need to sell food products to the public. You will also have to comply with numerous health and safety codes, which are often assessed through inspections, while there are a whole host of other insurance-related and administrative hoops that you will have to jump through.

Step 3: Business Documentation

Like any business venture that a person may opt to take on, a business plan is of the utmost importance. This will help you adopt a macro perspective of your company, as opposed to focusing on single (micro) aspects of the day-to-day. It's also a perfect opportunity to come up with both a mission statement and a vision statement – the former outlining your bakery's purpose and identity, the latter proudly declaring your plan for the business's future.

These documents should ideally outline your long-term goals. Do you hope to stay in the same location for years to come, or grow to expand to a larger space? Perhaps your goal is to open up more than one spot and create a chain?

Your business plan should also include a pricing strategy and an analysis of what will set you apart from your competitors, while it's also a good idea to outline a full marketing plan.

Step 4: Branding

Branding is of vital importance to any business, but for creative-based ventures, it is even more crucial. It is an opportunity to demonstrate the style and tone of your product and identify the kind of audience you are targeting. It is also what will separate you from your competitors and allow you to stand out.

The core tenets of your brand strategy should be your name and your visual identity, visible through your business website and your social media channels.

This is where you will need to focus on your chosen approach. Do you want your aesthetics to be elegant and traditional? Or do you want to use fonts and imagery that convey a modern, innovative approach? Both styles will appeal to different audiences, so think carefully about how you want to do this.

Step 5: The Legal Bit

As already mentioned, there are numerous ongoing compliance codes that you will have to adhere to in regard to food safety, and you will have to navigate any tenancy or mortgage terms if you are working out of an external property. At this stage, you will likely already have enough on your plate (figuratively and literally), so it's recommended to enlist the services of a legal professional here who can do the legwork for you.

Other legal factors that you should consider are your branding; ensure that you are not encroaching on any existing trademarks before you submit your documentation. To a lesser extent, think about your intellectual property (IP), too. If you have a particular recipe that you created (or inherited) that your customers love, then you may want to consider applying for a patent to prevent IP theft.

Step 6: Attracting Customers

Of course, setting up your business is the "easy" part; to ensure the survival and success of your bakery, you need to be able to attract paying customers.

Depending on your location and the type of bakery you are running, you should ideally identify a customer persona. You should then build your strategy around that. Identify which marketing platforms will best enable you to reach your target customers, whether it's through social media platforms (as a visual medium, Instagram is particularly suited to this), offline platforms (such as local radio and print advertisements), or by actively promoting your products at public events. You can even consider building partnerships and collaborations with other businesses from which you can both profit, such as local bookstores or sporting events.

Finally, don't ignore local SEO. If someone is Googling "best bakeries in Glasgow" and you do not appear in the results, then you are potentially missing out on a whole raft of customers.

Case Studies

There are numerous examples of successful bakeries not just flourishing, but expanding to new locations and even publishing cookbooks, such as:

Carlo's Bakery (Hoboken, NJ, USA)

When you have a queue so long it takes hours to reach the front door, you know that your bakery is a success. Thanks to the aforementioned Cake Boss, Carlo's Bakery has shot to fame, expanding across various states in the US as well as opening cake vending machines in cities such as Toronto.

Duchess Bake Shop (Edmonton, Canada)

Known across the province of Alberta as a must-visit bakery, Duchess Bake Shop combines elegance with mouth-watering flavours. Inspired by the pastries of Europe, this Canadian bakery is the enviable dessert caterer for large upscale events and small gatherings alike. Duchess has also capitalised on merchandise, with an online selection of chocolate, baking kits, dry goods, and extracts and pastes available through their website.

Ladurée Paris (Paris, France)

Not only does Ladurée offer a visually stunning dine-in location in the City of Lights, but they also provide their well-known baked goods through a courier service when ordering online.

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As discussed, there are already some critical similarities between the disciplines of baking and entrepreneurship. Therefore, if you have an entrepreneurial mind to match your creative touch, then opening and running a baking business could be a viable and successful venture.

Hopefully, the advice in this article has given you a springboard from which to launch your new venture, and while the competition will be fierce, there's no reason why your new bakery should not be a flying success.

Was this article helpful? What other tips and advice would you give for setting up and running a professional bakery? Let us know your thoughts and ideas in the comment section below!

Additional content provided by Sion Phillpott.