Why Your Bakery Needs a Business Plan

Whether you’re opening a new bakery or have an established business, a business plan can make all the difference in the world down the line.  

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.

While it’s tempting to forgo what might seem like a tedious exercise, taking the time to go through this exercise 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.

Getting Started

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. Ask yourself questions like:

  • Where do I want to see my business in 5 years? 10 years? 30 years?
  • Do I have an exit strategy?
  • Do I want to grow or expand the business, or do I only want one store?
  • Do I want investors to help me grow at some point?
  • Do I want to bring on any partners to help me run the business?

…and more.

To get started, really think about all of the answers to questions relating to the present and future of your bakery. Go deep. Maybe take a weekend retreat to get it done, or even talk it through with your family or advisers.

(By the way, if you do plan on getting any equipment loans or taking advantage of any lending opportunities, you will need a prepared business plan.)

Most business plans have some similar parts; here are some you should consider when writing your own.

Executive Summary

As a critical piece of any bakery business plan, the executive summary is used to introduce your bakery and give some crucial highlights. The executive summary encompasses the most important points from each of the other sections and should give the reader, often a lender or investor, a sense of what is to come. Succinctly let them know how your bakery will be successful.

While this section appears at the beginning of the business plan, you will probably need to write this last because you may not have all the details you need until you address the rest of the sections.

Company Analysis

Use this section to give information on the types of goods and services you will offer and your rationale behind them. Be specific. Don’t just mention that you will offer cupcakes; give flavors, colors, and any other detail that can help the reader almost taste your vision.

Also include some of the necessary logistics like location, any specializations, your bakery’s description and mission statement. In essence, what makes your bakery special?

Maybe you have items that are of your own invention or perhaps it’s your theme that makes you stand out. Either way, be descriptive about what makes your bakery unique.

Market Analysis

While the section above looked internally at your bakery’s offerings, this section is dedicated to looking outward to the market landscape. You will need to justify the demand for your business in its particular location.

Address any competition in your area and keep in mind that depending on your market area, your competition might not just be other bakeries, but supermarkets as well. Can you learn anything from your competitors’ successes or failures? When conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, what internal and external factors do you need to consider moving forward?

Bakery-Business-Plan-Operations

Clientele

Knowing what your customers look like demographically can be a tremendous help with everything from pricing to products. For example, if you have a significant Hispanic population you might offer specialty goods for holidays like Día de los Muertos. To help you begin to form a picture of your customers, take a look at local census data.

Also, take into account if you can rely on both local traffic and tourists as this could affect your bakery at different times of the year. It might be helpful to define your “ideal customer” here.

Marketing Plan

Just because you know that your bakery will offer the best selection of gluten-free cupcakes in the city, doesn’t mean that your potential customers do.

It has become essential to cut through the noise and get the word out about your business, so use this section to outline your marketing efforts. This includes any plans for:

  • Pricing
  • Distribution to local stores
  • Print or media advertising
  • Promotions and discounts
  • Social media
  • Loyalty programs

Looking at your demographic and industry information will also help you make better-informed decisions regarding your marketing.

Operations Plan

This portion of your business plan should shine a light on everything that’s going on behind-the-scenes that makes your bakery the best that it can be. While you may be an excellent baker, you might not have a knack for keeping the books. Here is where you should discuss plans to hire an accountant, or any other operational staff, along with their compensation.

Other behind-the-scenes considerations:

  • Suppliers
  • Licenses and permits
  • Delivery
  • Business-related goals and milestones
  • Front of house versus back of house staff considerations

You should also include both short- and long-term processes for sales transactions and order management, whether online or in-store.

Bakery Customer Services

Management Team

This is the space to introduce the key members of your bakery. Mention any business partners and how you will distribute and delegate operations. This section also gives you the opportunity to breathe a little more life into your business plan.

While you should have bios that include the usual education and experience, you can use the management team section to demonstrate your team members’ passion for your bakery and the strengths they bring to the table. At the end of the day, your biggest asset is your people; shine a lot of light on why your people make your bakery great.

Financial Plan

You should outline your financial projections here. Answer the questions that an investor or lender will be especially interested in: When will you make a profit? What is your exit strategy? What are your potential funding sources?

To answer these questions, outline all costs including:

  • Rent
  • Payroll
  • Ingredients and supplies
  • Packaging materials
  • Utilities
  • Marketing
  • Software

All your potential revenue streams and their implementation timelines should be added in this section as well. This will take into account specialty services such as wedding cakes or catering.

This isn’t to say that this is the end-all-be-all for your bakery. You should revisit your business plan every three to five years to make sure you are on track and make any adjustments that you might need.

Here’s a free resource to help you get started writing your own bakery business plan:

Get bakery software that will help you manage your entire operation. Schedule a demo of BakeSmart today.

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