Starting your own bakery can be a dream come true! But the logistics can sometimes transform into nightmares. We’ve put together a few pragmatic tips for starting your own bakery.
1. Business plan
A solid business plan is a roadmap to success for any business. If you only have a vague idea of your destination or can only envision the last leg of your journey, then you can’t possibly expect to get there efficiently or in one piece.
When you sit down to create a business plan for your bakery, you need to look at your business from every angle; even angles that aren’t there yet! A business plan needs to include plans for the present and the future.
While it’s tempting to forgo what might seem like a tedious exercise, taking the time to create the plan will not only help you think through the best approach to growing your business, but it will also serve as a guiding document for hiring, expanding, and more in the future.
If you need help getting started, take a look at our Guide to Creating Your Bakery’s Business Plan.
2. Build Relationships With Vendors And Suppliers
It’s always a good idea to build rapport with other businesses and business owners in your industry. This is especially true when it comes to the place you’ll get your ingredients from. Vendors and suppliers are the first step in achieving great product quality.
Creating a relationship with vendors also means that they can offer price information that will be helpful for costing your products. Pricing your baked goods will help you tremendously as you start your bakery. You need to take into account the cost of the ingredients going into your products so that you can price them appropriately.
As you’re reaching out to local vendors and suppliers, tell them that you’re costing goods for your new bakery. They will most likely be happy to send you information since you could potentially become a customer.
3. Capital and Finances
Bakeries aren’t cheap, and unless you built up a nice-sized nest egg, you most likely need to seek outside funding through a loan. Even if you do have a chunk of change, explore all your funding options. Make sure you’re checking out all the small business loans available.
It can be helpful to use loans for your upfront costs so that you have cash to spend on other things that pop up. Any loans you take out will, of course, come with interest, but you can think of the interest payments as insurance against any future losses. If you take on debt now, you’ll still have cash on hand for when you need it.
If you do plan on taking advantage of any lending opportunities, you’ll need a detailed business plan.
When you’re thinking about your finances, you also need to estimate when you’ll break even. Knowing where your sales are coming from and how much they cost in equipment, labor, and ingredients will help you establish financial goals.
You may also think about leasing your bakery equipment. Leasing is considered a monthly business expense and could fit into your budget better. It’s also tax-deductible.
4. Hire the People You Need
Make sure you have the right people by your side as you begin this entrepreneurial adventure or at least a plan to hire them. You might know how to bake a scrumptious batch of cookies, but that doesn’t mean you have a knack for bookkeeping. You need to be honest about your skills and talents, so you can have an understanding of the types of people you might need to bring into the mix.
Depending on the size of your bakery, you may also consider hiring a bakery manager. They can help fill the gaps and keep the behind-the-scenes running smoothly.
We understand that you might not have the capital from the outset to have an entire team by your side. If you have to be a one-baker show for a while, that’s ok, just have a concrete plan to hire the right positions when you can. A well-placed accountant or manager can mean the difference between success and failure.
Once you’ve assembled your team, make sure you are managing effectively. A mismanaged front- and back-of-house staff can create a chaotic and unorganized workplace that will affect your bakery much more than a bad batch of cookies.
5. Proactively Build Your Client Base
Most new bakeries don’t operate under the Field of Dreams model (If you build it, they will come). You’re going to need to put a little elbow grease into attracting customers. One great way to do this is by maintaining a presence in your community.
See if you can work events for organizations you support. Is your favorite animal shelter having an adoption day? Offer to help out and bring some samples. Don’t use community events as a sales pitch; people don’t like to be sold to. Go with the intention of meeting new people and making them happy with your goodies.
And once your bakery gets going, maybe hold an event yourself.
Here are a few other tips for meeting new potential customers:
- Bring treats to your business neighbors down the street and make sure they know you’re available for office events.
- Set up a booth at a local vendor market.
- Keep your bakery’s business cards on you at all times! You never know when you’ll meet someone looking for 12 dozen cupcakes for a party.
Our final tip for starting your own bakery is perhaps not as pragmatic as the rest, but important nonetheless: have patience. It’s going to be a lot of hard work, and not every day is going to go according to plan. But take it one day at a time and keep growing your business as you grow as a business owner. On the days that disappoint you, remember why you’re passionate about baking. And on the days that your heart swells with joy and pride, be grateful.
We wish you the best of luck on the exciting, scary, fulfilling endeavor that is starting your own bakery.
As you begin your journey as a bakery owner, BakeSmart can help you manage your entire operation.