Open a Bakery

Here are the steps you need to go through to get your bakery from wish stage to profitability stage.

1) Write a business plan.

Even a one page business plan, scribbled on notepaper, is better than no business plan at all. Of course, if you can focus yourself enough to write a five or ten page business plan, that will be much, much better. Your business plan needs to include the following: a short statement of why you want to go into business, what niche or baking speciality you want to focus on, what the competition is in your area and what their strengths and weaknesses are. You also need to include an outline of what you will need to launch your business, both in terms of materials and equipment and also in terms of licenses and inspections. Finally, you will need to estimate how long and how much money it will cost to make your baked goods, and where you'll sell them and how much you'll charge. Be sure to leave room to pay taxes and to pay yourself at least minimum wage.

If your business plan only covers each of these items in one line, that's better than nothing. Even one paragraph to each item I brought up is a good start. Ideally, though, a page for each item is what will be required to really have a clear idea of what you are about to undertake. It will also be essential if you want to get funding. For more details on writing a business plan, go to the SCORE website.

2) Make it legal.

Decide on your business structure (LLC, sole proprietorship, incorporation, etc) and then pick a name, get an Employer Identification Number (you can get one online in less than 20 minutes), and then get a business license from your town hall. You will need all this to get a checking account, and getting a checking account is your next errand after you recieve the business certificate from your town hall. You will also need to get a reseller license... it helps to be able to buy retail items in bulk and sell them along next to your baked goods. Every stream of income helps.

3) Get financing.

Hopefully you have good credit. If so, go get yourself a proper business loan from a local bank instead of putting all your startup costs on your credit cards. Many, many new entrepreneurs charge their credit cards, and I've done it, too, but a real business loan is a better deal.

If the banks won't lend to you, the next stop is family and friends. Show them your business plan and give them plenty of room to say no. Even if you can not get funding from others, there's nothing wrong with starting small and using your own kitchen and what you have on hand to get your bakery started. And you won't have any debt, either, which is a beautiful thing.

4) Get your basic equipment and a place to use it.

For the underfunded (and even the well funded) Ebay is a bonanza. Get only what you really need at first, and try to get it used or at a discount. You need to reserve all the money you can to help you get through the first three to six months. Too many businesses overspend at launch and then run out of money a few months later. Don't be one of them.

You will also now have to pass the dreaded health inspection. Take a deep breathe -- you may find out you need a second sink, or some other huge expense as a result of the health inspection. Or your inspector might pass you on the first try (its pretty rare). Ask around to find other bakeries or restaurants and buy people nice lunches to pick their brains on what to expect. Learn everything you can about the inspection and give it your very best shot.

5) Find or confirm places to sell your goods

Now is where you'll thank your lucky stars that you wrote a really good business plan and really figured out who would and would not sell your bakery items. Even one or two good sources is enough to get started. Offer free samples to any good prospect. Even if you splurged and got a retail location, selling your baked goods to local coffee shops, restaurants and hotels is a terrific way to maintain those multiple income streams. That way, if you have a bad retail month, your business accounts will keep you afloat.

Start a Home Bakery

How to Open a Bakery