How to Start a Bakery

Starting a bakery may prove to be highly satisfying but is certainly no cakewalk. You need to have the basic know-how and expertise to run a thriving bakery business. Besides, a lot depends on the scale of operations. You can operate on a large scale, medium scale or just stick to being a small homespun unit. But you need to understand the nuances of starting and running a bakery because the dynamics differ from other businesses.

To run a successful bakery, you'll have to don two hats: that of an outstanding baker and a shrewd businessperson. Besides you need to have basic knowledge of accounting, human resources and management. This is because bakeries are involved in both retailing and manufacturing operations. You may decide to altogether set-up a new bakery, begin one in-house or purchase an existing one. In all three cases you'll have to do a SWOT (strengths, weaknesses, opportunities and threats) analysis. Don't go at it alone. You'll have to take legal opinion. Also consult an accountant to make a study of estimated costs and future earnings. Work out at what point you'll break even and when you can expect profits.

The most vital thing to consider while starting a bakery is the location. Ensure that the location has a wide potential customer base. Around 1000-2000 families should serve your purpose. Also, you need to size up your competition. Find out how many established bakeries are already operating in the vicinity. This should tell you whether it's viable to begin another bakery in the area. While deciding on a location, also figure out if there are schools, colleges or movie theatres in close proximity. Competition is not necessarily a bad thing. Competition may also unintentionally end up sending business your way. It's all about how you use your marketing strategy to turn your competition into an advantage.

Never mind the size of your bakery, your decor should be pleasing to the eye. The lighting and array of your products should be just right to capture interest. Before purchasing any equipment consult a professional to make sure that they're in good working condition. As far as advertising is concerned, begin before you set up shop. Send out pamphlets and feelers to homes in the locality. Once you're all set and raring to go you can also put in an advertisement in the local newspaper.

The next important decision is pricing. Don't price your products too low because you have to leave a sufficient margin for profits. Keep a daily account of expenses. Try to narrow down your suppliers to those who offer the best rates while maintaining an acceptable quality standard. Needless to mention, always buy in bulk for better rates.

The most valuable resource no matter what your scale of operations is manpower. Employees can make or break your business. Take pains while recruiting and train them well. Take inventory at regular intervals and maintain records of supplies and spillage. Maintain a proper system for keeping accounts of cash inflows and outflows, utilization of provisions and getting rid of stale stocks.

Starting a home bakery is relatively less complicated. The equipment you need is less sophisticated and you can cater to a number of retailers. Though you need a license to operate, with the co-operation of purchasers you can wait until you recover a few of your costs to get one.

While operating a bakery you need to keep control over your costs. Watch every penny. Make sure every customer leaves happy. This is the perfect recipe for a booming bakery business.