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The restaurant industry offers a ton of profitable business ideas. Bakeries are unique, as there are so many types. Some bakeries specialize in dietary restrictions or food trends, such as bubble cakes.
Opening a bakery within a niche market is a successful way for bakeries to increase customer satisfaction. However, standard sweet treats work just fine.
How to open a cafe is slightly different from how you would open a bakery, so let’s dive into how to launch one.
Choosing A Bakery Name
Though it’s part of branding efforts, choosing a name for your bakery is crucial. You must include your bakery’s name as you fill out legal documents, which will occur long before launching your marketing campaigns.
If you’re stuck on choosing a name, consider the following ideas:
- Do you specialize in any type of food or restriction?
- Did someone inspire you to open the bakery?
- Is the bakery inspired by a geographic location?
- Will your bakery have any cultural influences?
The name of your bakery should be simple yet catchy enough to remember.
Once you gather name ideas, open your social media platform of choice (we recommend promoting a bakery on Instagram) and a domain site. Check each name idea to see if the social media username and web domain are available.
Cohesive names across every channel are super beneficial for memorability and branding efforts. Plus, it’ll add an extra touch of professionalism to your bakery’s digital presence.
Write A Bakery Business Plan
A business plan functions as a solid foundation and source of guidance. Your business operations don’t need to adhere to your business plan to a tee, but it will help to simplify the entire process.
In summary, your bakery business plan should contain the following:
Executive Statement: A brief overview of what you hope your business will accomplish and offer to its industry.
Competitive Analysis: Write a SWOT analysis and determine the strengths and weaknesses of your competitors. Then, figure out how you can leverage your current place in the market.
Marketing Plan:
Financial Plan: Do you have funding? Are you planning to receive funding from investors or loans? This section of your business plan will outline your financial measures. Also include sales estimates or “projections.”
View our restaurant business plan template for more details.
Rent or Purchase the Right Space
Work with a commercial real estate agent to find the perfect location for your bakery. Ensure that the place is easily accessible to customers and offers an appropriate space to suit your needs.
If you land a rental that isn’t as spacious as what you had in mind, invest in storage and shelving units for all of your gadgets and other inventory.
Choose A Bakery Layout
The layout of your bakery typically depends on the size. A bakery’s design will also dictate whether it's a type of restaurant.
For instance, a counter-style bakery is one where glass cases showcase all the baked goods. Customers order and pay at the counter, then go on their merry way. The fast turnover rate of counter-style bakeries allows for more profits, as customers are quickly in and out.
Counter-style bakeries eliminate crowds, too. All the food items are already available, so it’s simply a matter of choosing the right choice. There is no need for wait staff or cluttering your bakery with tables and chairs.
A cafe will work well to establish a relaxing casual dining experience within your bakery. Sit-down eateries are popular for breakfast and brunch, though cafes can remain open well into the evening (learn more about what is brunch food).
Both counter-style bakeries and cafes can include glass cases. So, many bakeries can be a hybrid of the two layouts.
Though bakeries are a type of brick and mortar shop, baked goods can be sold online, too. Learn all about how to ship cookies and how to ship food to accelerate sales with minimal overhead expenses.
Obtain the Proper Licenses and Permits
To legally operate a bakery, obtain the following permits and licenses:
Sales Privilege License
Since bakeries are a type of retail business, you’ll need to obtain this license to sell goods.
Food Handler’s License
Ensure that the owner and any team members who prepare food obtain this license (or a food health certificate) before employment. Employees need to understand the significance of health, food storage, and cross-contamination before selling food to the public.
Catering License
Bakeries become even more profitable when they offer catering services. If you choose to go this route, make sure you obtain the proper license to produce and deliver food. Food vendor licenses may also apply to these situations, too.
Kitchen Health and Safety Inspections
The health and safety of your customers should be your biggest priority. To begin operating a bakery, you’ll need to pass a health and safety inspection. If you’re planning on running a baking business from your home kitchen, the rules and regulations are much stricter. So, learn all the protocols ahead of time and ensure that your kitchen is business-ready.
Check with local officials for exact requirements, as every state and town can differ. Depending on your location, licenses and permits can be one of your higher restaurant expenses. For instance, it will be more expensive to open a bakery in states like California or New York as opposed to others. So, work this into your budget before allocating funds for other necessities.
Manage Business Finances
Before spending any business funds, open up a business bank account with an EIN. Keeping all of your business expenses separate from personal ones will simplify bookkeeping operations–especially once tax season rolls around.
Speaking of tax season, keeping track of money will become more complex as your business grows. Consider working with an accountant to manage all documents to ensure accuracy.
Use a food cost calculator to determine inventory expenses to accurately price your baked goods. In the end, you’ll want to make sure that you’re making a sufficient return on investment (ROI) and generating profits. The ROI meaning indicates financial returns and the performance of past investments.
Create A Bakery Marketing Plan
Now that your bakery is ready to open, promote it to the masses. Marketing efforts can bring in significant traffic before you know it. So, allocate a portion of funding to budget all of your promotional endeavors.
Include the following marketing practices for boosting exposure and sales:
- A restaurant SEO strategy
- Email newsletter campaigns
- Engaging social media accounts (learn more about social media ROI)
- Print advertisements in local newspapers and supermarkets
- Paid digital campaigns to target a local audience
As you market your bakery, track various metrics weekly and monthly to figure out what’s working. You’ll know which efforts to invest in once you notice which strategies generate the most impressions, reach, and clicks.
We also recommend researching restaurant marketing ideas for creative ways to brand your bakery.
Create A Bakery Menu
Writing the menu for a bakery can feel like crafting a dessert menu rather than typical restaurant menus. First, consider all the items you would like to serve. Then, research unique ideas that other bakeries in the area may not carry. A combination of familiar favorites and unheard-of delicacies is a recipe (no pun intended) for a successful bakery.
Menu types that cater to dietary concerns, such as allergies, gluten intolerance, vegans, and others will draw customers. It’ll also establish a sense of loyalty for meeting specific needs.
Once you have a master list of menu items, narrow it down to about two dozen or so. Start by selling a handful of each and gauge which will be best-sellers. Once you have a clear idea of what your customers love, you’ll know what to prioritize in the kitchen.
Don’t forget to display a book on your counter of all the made-to-order items. From party platters to wedding cakes, special orders can be a substantial revenue source.
If you’re operating a counter-style bakery, create easy-to-read name cards for each item so that customers can read what exactly you offer. Sometimes, customers will ask the employee behind the counter for goods based on color or design. When you display which item is which, customers become much more knowledgeable about different pastries, cakes, etc. This is also the same when dealing with a liquor bottle display case.
Learn how to price a menu and check out our free recipe costing to determine what to charge for each menu item.
Decorate Your Bakery
The decor throughout your bakery will be every customer’s first impression. Choose color schemes, wall hangings, and table settings that reflect your theme and vibe.
Some examples of practical and charming decor include:
- Lit-up outdoor signs
- Wall art
- Light fixtures
- Food item name cards
- Decorative menus
If you’re feeling unsure about how to decorate your bakery, start by designing vision boards for inspiration. Don’t forget to display QR codes for your social media accounts, so customers can stay in touch.
Acquire Bakery Equipment
While planning the launch of your bakery, be mindful of all the necessary equipment.
In the beginning, bakery equipment will be one of your most significant expenses; however, it’s necessary for smooth operations. If you’re stuck on which pieces of equipment to buy, consider your menu items.
If you realize that certain items aren't must-haves for what you’ll be serving your customers, hold off until you have more funding to work with. As time goes on, you’ll slowly but surely find your storage cabinets fully stocked with every tool a baker could dream of.
As you shop for equipment, prioritize purchasing the following items first:
- Cookware
- Dishware
- Bakeware
- Glassware
- Decorating tools
- Stoves
- Ovens
- Dishwashers
- Fridges
- Freezers
- Worktables
Take advantage of major sales at retailers that sell bakery equipment. You can save a small fortune with the right coupons, and you never want to miss out on significant savings.
Obtain Bakery Ingredients
Once you have a menu and receive the necessary permits to sell food, it’s time to order ingredients. Opt for a user-friendly platform such as BlueCart.
With an inventory management software, you can order and pay for all your ingredients, such as flour, eggs, other dairy products, and more, all in one app.
When you use BlueCart as your restaurant inventory management system, business owners can take inventory easily and stress-free. With secure payments and timely deliveries, your bakery will always have everything necessary to serve each menu item all the time.
Hire A Bakery Team
Last but certainly not least, hire a dream team to streamline restaurant operations. When you first open your bakery, employees may wear numerous hats. In time, the team should consist of the following roles:
- Managers
- Kitchen Help
- Pastry Chef
- Specialty Bakers
- Social Media Manager
Once you have various types of chefs and a management crew, it’s time to work.
Frequently Asked Questions About Opening A Bakery
Is Owning A Bakery Profitable?
Yes, owning a bakery can be a very lucrative business venture. Plus, bakeries grow at a rapid pace. Some of the most profitable bakeries can experience an annual increase of roughly 20%.
How Much Money Do You Need to Start Up A Bakery?
To be safe, you should set aside anywhere from $20,000 to $60,000. Bakeries are much less expensive to launch than a restaurant as there are fewer expenses. In a bakery, you eliminate the costs of servers, furniture, and inventory.
What Makes A Bakery Successful?
High-quality ingredients, talented chefs, and convenient hours will make a bakery successful. Consumers frequently share delicious foods on social media, bring baked goods to family gatherings, and talk about the best eateries in the area. If you establish a pleasant experience for your customers right from the start, word-of-mouth marketing will quickly drive most of your traffic.