How Do I Start My Own Bakery – Whether you want to get financing from a private investor or a bank loan (such as an SBA loan) for your bakery, you need to develop a solid business plan.
In this step-by-step article we will go through all the parts you need in your bakery business plan. Use this template to create a complete, clear and robust business plan that will get you funding.
Contents
How Do I Start My Own Bakery
Business Plan Execution Summary Provides information about your business plan to lenders and / or investors.
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If the information you provide here is incorrect, informative and scannable, potential lenders and investors will lose interest.
Although an executive summary is the first and most important part, it should usually be the last part you write, as it will summarize the various sections throughout the plan.
Provide a detailed and advanced summary of all the parts you have included in your bakery business plan. The information and data you enter in this section should be of immediate interest to investors and lenders. Make sure your executive summary does not exceed 2 pages in total.
In this section of your bakery business plan, you will provide an overview (slightly more specific) of your business. If there is anything special about your baked goods, please tell it in this section.
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No previous experience required in a bakery. As long as you love it and know your market, you can go.
However, if you are experienced, be sure to describe it. For example, maybe you have been a creative pastry chef and baker in a popular bakery for 6 years and now you want to start your own bakery.
However, make sure that you present not only your hobbies but also the industry knowledge you must acquire through thorough research.
Each company has a reason behind its existence. What is yours? Are you going to solve some of the problems in the bakery business today?
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For example, your target market may have a high percentage of obese people who like to bake. You may be the first to include low-calorie cakes, noodles and other baked goods.
Also, if the area has a high vegetable density, you may want to recommend vegan products that no other bakery in the area offers.
You also need to make sure the market is right for the business. For example, if you are a real baker who makes a lot of expensive cakes and you try to sell them in a low-income neighborhood, your cake will not sell.
Therefore, it is important to understand the market before starting a business to avoid huge losses and eventually to close.
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There you will talk about the business model and the type of bakery you want to open. Here are some points you should briefly describe:
Regardless of the type of bakery you want to open, make sure there is enough demand for the product you want to sell. For example, if you try to sell vegan baked goods to customers who want non-baked goods, you will not succeed. There should be enough vegans in your target market.
In the sub-section of your bakery business plan, you will list your products and services. For example, if you want to open a specialty bakery, such as a wedding cake, you need to provide a menu that lists everything you have to offer.
Also, if you just want to sell bread, cookies and candy, be sure to list it on your sample menu. If there are too many items you plan to sell, make sure the sample menu you are offering includes the main attractions. You do not have to list all the items.
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This is where you will outline your pricing strategies. Of course, your price can vary greatly from your competitors. However, if there is a significant price change, you must explain these differences.
For example, you might want to sell custom-designed birthday cakes and wedding cakes instead of the general design. That may be the reason for the high cost. Also, the quality of the ingredients you use for baking can also affect the price difference.
In either case, include a price list for your menu item. It is not necessary to enter the price of each product or the range of products you want to sell. Instead of listing the price of each product individually, you can offer multiple price ranges.
Providing a price list is important because your pricing strategy will also allow investors to relate your pricing strategy to your financial projections.
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Finally, the overview section of your business should describe the type of business structure you want. Is it a corporation or a partnership (LLC)? Who are the investors? What percentage do they have? Is there a board? If so, to whom? Do they have experience in this field?
A thorough understanding of the market you want to operate in is critical to the success of your business.
For example, there may be many cafes nearby that have a regular and high demand for baked goods such as cakes and cookies. So opening a wholesale bakery to meet B2B needs can make sense here.
So here in the market overview or market analysis section of your bakery business plan, you need to cover three main areas:
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According to the American Bakers Association, the US bread market represents $ 154 billion and employs more than 800,000 people ..! The retail segment is the largest (91% industry size) and retail bakeries account for only 9% of the total US bread market.
By product, this is an analysis of the most popular bakeries as a percentage of total bakery sales in the United States:
When you take specific data for the US market and incorporate it into your business plan, you can focus your attention on the area in which you want to operate. It may not be possible to find a study in a particular area or region, so you need to estimate the size. For more information, read our article on how to calculate TAM, SAM and SOM for startups.
Now let’s look at how to calculate the market size of the bakery industry for your business plan. We know:
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Therefore, the average annual revenue of each retail bakery is about $ 650,000 (that is, an average of $ 1,800 per sale per day).
So if there are already 20 bakeries in the area where you will operate, then we can assume that the market size of the bakery industry in your area is about $ 13 million.
Now you need to show the expected growth rate of the bakery industry in your area. This information may not be available through online research. However, assessing the growth rate will not be difficult.
You can approach each bakery individually and ask for their year. You will get a clear picture of the total growth rate.
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For example, if there are 18 bakeries in 2018 and 20 bakeries in 2022, the average annual growth rate is 5.1%.
An analysis of your competitors’ business model is essential. You need to understand what makes them successful or why they fail. A clear understanding of the bakery’s product offerings, marketing strategies, etc. will allow you to provide better service.
If your competitors offer almost the same products and services, what is their market share and how do they market their products and services to attract new customers?
It is always a good idea to do some research (if necessary, go to your competitors without revealing your business intentions) and understand their product and service offerings, marketing strategy, target audience, etc. Create a comparison table that summarizes them.
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The competitive analysis chart you add to your bakery business plan will depend on the information you need and want to include based on your business model.
Try to provide SWOT analysis. It should be refreshing and very focused. SWOT is a strength, a weakness, an opportunity and a threat.
A clear understanding of your strengths and weaknesses, along with real marketing opportunities and threats, can help you develop your marketing strategy. It also helps potential investors assess the risks and rewards of your business.
This is a subsection where you will provide a detailed analysis of your target audience. Some important points to include in your customer analysis are:
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You can add as many data points as needed to confirm your business decision. This is where you show your in-depth understanding of your target audience and their needs, preferences and expectations. This knowledge can help you to customize your products and services to attract new customers.
It is not necessary to use all channels. You can start by focusing on a few of them. You can introduce other marketing strategies later.
You also need to have an accurate and close estimate of your marketing budget. Failure to properly plan and present sufficient cash flow for advertising and marketing can cause investors to lose confidence. That’s because the investors are there completely.
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