Bakery Business Plan - How To Start A Bakery Business

An online report suggests that the bakery market of India is estimated to grow at a Cumulative Annual Growth Rate (CAGR) of 8.5% between the years 2021 and 2026. Additionally, the report implies that it is set to reach a valuation of US$12.39 billion by the end of the year 2026, making bakeries a fairly lucrative restaurant format. This can be evidenced by the demand for baked goods that has witnessed a gradual but noticeable increase in the past couple of years. The same can be true as baked goods tend to offer customers convenient food options at an affordable price, hence the growing demand. This has also led to an increase in the number of bakers operating from their homes and chefs venturing into the bakery business from the comfort of their homes. In this article, we will talk in detail about how to open a bakery business in India and how one can secure a business loan for it.

The first step of starting a bakery business in India is to decide on a location. In the case of a bakery, the ideal location is a market of repute or a high-end centre complete with sports bars and other kinds of eateries that already draw attention to the place. Ideally, the front area shops on the ground floor that are easily visible and accessible are appropriate for bakery businesses. It is advisable to have a shop with a carpet area of 500 square feet at the very least, preferably divided into two floors to build a functional kitchen on one level and house the patrons in another. However, this is subjective to the available space.

For a commercial space spread over 1000 square feet, the rent should not go beyond ₹60-70k, and expenditure should be capped at ₹1,80,000 to acquire the place for the bakery’s operations.

Additionally, while finalising the location, it is essential to ensure that the place comes with proper drainage and water supply facilities. The owner should also procure a No Objection Certificate (NOC) from the property owner, stating that they have no problem using their place as a bakery.

Unlike the QSR and Food Truck methods, bakery shops need a relatively skilled workforce since both the taste and presentation aspects of a baked good are fairly crucial to its ultimate fate. In the case of a high-end bakery, one will need a chef de partie, a head chef, helpers and a commis chef, in addition to a cashier and service boys at the serving area’s display. The salary of the personnel will depend on their experience.

The bakery kitchen equipment is costly as each equipment piece is made up of stainless steel because they are supposed to be sturdy and long-lasting. The essential pieces of equipment required at a bakery are ovens, planetary mixers, cooling fridge, deep fridge, gas stove, working table, storage utensils, and cylinders. Unlike QSR or Food Trucks, a bakery requires new efficiency equipment. But, to lower the cost, one can get a second-hand working table.

The display area or the front end of the bakery business should be well designed and created so that every item is noticeable to attract walk-in customers. You mainly require a display fridge for cakes and pastries. Other than the refrigerator, the display area should have proper storage and a display rack.

The point of sale (POS) software is no longer just billing software. These things are equipped with powerful integrations like inventory management, making the POS software the only software one will need in their bakery. While purchasing one, the owner must ensure that the device's software has features that will help them manage the baked items' shelf life and have robust inventory management capabilities as one would be dealing with perishables all the time.

Marketing and branding are essential for any entrepreneur who wants their business to flourish, and the list of such entrepreneurs includes bakers too. One must acquire a properly designed logo and display board from an experienced designer, and it is also important to get a well-designed menu.

Apart from the items mentioned above, one must also have set aside some money for the restaurant management software. It could also help them run multiple marketing campaigns by utilising data pertaining to customers.

Uniforms are usually ignored while opening a bakery. However, it must be noted that they are essential as they give out a professional feel and look, which usually works well for the branding of the bakery. All staff members must look hygienic, cleaned, and well dressed. One can choose from chef coats, smart shirts and t-shirts, and aprons, among others.

Reference of all T&C necessarily refers to the terms of the Partners as regards to pre-approved offers and loan processing time amongst other conditions.