Bakeries offer you the opportunity to make money while expressing your creativity. The baking industry generates over $300 billion in revenue annually and makes up 2.1% of America's Gross Domestic Product. However, while it is a lucrative venture, you may get it wrong if you don't take the proper steps. That said, here are some tips to get you started.
Select a bakery format
You may choose either to open a retail or wholesale bakery, depending on your preference and capital. Retail bakers deal directly with customers and include specialty bakeries, bakery food trucks, counter service, bakery cafés, and home bakeries. However, wholesale bakeries serve other business ventures like grocery stores, delis, cafes, and restaurants. While wholesales don't demand a desirable location, they produce immense quantities and require considerable capital for large spaces, multiple baking equipment, and labor costs.
Draft a business plan
You'll need a business plan to determine your goals and track your business' progress. Aside from this, it helps you make critical decisions while opening your bakery to potential investors and finance opportunities. To create a viable business plan, you need to include an executive summary, a company overview, and a description. It's also prudent to have a market analysis to ascertain what unique goods to offer. You may then include a product description, management plan, and ownership structure. By all means, have your marketing and sales strategy and financial projections for a fair idea of the capital you require.
Select your business entity and name
It's prudent to decide what business entity to adopt for your bakery, as it determines your taxation. What's more, it offers liability protection while boosting your chances of selling your business. You may opt for a sole proprietorship or general partnership if you wish to run the business with other people. Limited Liability Company (LLC) enables partners to limit their personal liabilities while enjoying the dividends of a partnership. You may also opt for a corporation if you want your bakery business to be a separate legal entity. Before you choose a business name, you should verify that another business is not using it from the secretary of state.
Select a commercial space
You need a space to produce your baked goods, which is why you should be keen on it. Although a retail baker would want to position your bakery in the central part of town to attract customers, a wholesaler could secure space outside of town since they deal with other businesses. Regardless, all bakery types should consider safety and crime rates, proximity to suppliers, competition, and health regulations before selecting their ideal locations.
Secure your capital
You require money to secure a space, buy equipment and insurance, pay utility bills and labor costs to keep the business running. For these reasons, you should prepare startup capital. You can secure a traditional commercial loan or a small business loan if your money isn't enough to get you started. You can also leverage alternative funding sources such as angel investors, venture capitalists, and crowdfunding. Fortunately, credible companies such as the Wefunder marketing agency can set up crowdfunding to generate enough income for your business.
It's also advisable to get the required licenses for operation and host a grand opening. While these tips are not exhaustive, you may apply them to start your bakery business successfully.