The demand for bakery products is constantly rising. Every day a new item comes in the market. Business owners are looking for creative strategies to expand their bakery business and outshine their competitors. A bakery business deals in several products like cakes, pastries, doughnuts, biscuits, pies, and many more. According to resources, the Indian bakery market has reached a value of around US$ 8 Billion in 2019.
If you are planning to start a bakery business in India, then check out this blog. We have mentioned every aspect associated with starting a bakery business. The blog contains the details of finances, types, scope, business plan, and other matters.
Scope of a Bakery Business
Now people are not limited to normal chapati, lentils, bajra, or simple food items. Modernization has evolved the taste of people. Now they are looking for new food items to change the taste using the same ingredients. Bakery products are one of the most palatable food items. Every day a bakery business owner experiments with new food items to offer something unique and tasty.
Most of the bakery products are nutritive as they are made up of wheat. It is the major food crop in India and has high nutritional value. Bakery products can be divided into three main categories- bread, biscuits, and cakes. Among bakery products, bread and biscuits are the highly sold items in India.
The demand for bakery products is more in urban areas as compared to rural areas. Due to illiteracy, people are not aware of the kinds of bakery products available. They are not familiar with career opportunities in the Baking industry.
The main bakery products include bread, cakes, pastries, biscuits, and other dairy products. Bakery products are convenient to carry and one of the most affordable food items. These items are appealing and offer succulent flavors. Opportunities in a bakery business exist in abundance. You can open cafes, restaurants, stores or you can join the existing ones.
This is how you can earn in the baking industry-
- Chefs and head cook– You can become a chef or head cook in a restaurant or at other places where food is served. The task is to direct kitchen staff and handle food-related matters.
- Start a store– You can start a store and sell cakes, pastries, bread, buns, and other baked items. You should cautiously plan the display and the interior of the store.
- Café-cum-bakery– You can also start a small café where you can sell bakery items. Different types of pastries, doughnuts, brownies, and other baked items. You have to spend on the interior of the café. It should be catchy and comply with the theme of your café.
- Own a Franchise– Owning a franchise is not a bad idea. All you need to do is abide by the guidelines of the franchise while designing an interior and business plan. You can enjoy a lower cost of marketing.
You can even do specialized courses in baking from culinary schools. But it is not a necessity to start your bakery business. Now you must have made your mind for a bakery business. So, go through this stepwise guide on how to start a bakery business.
How can you start a bakery business?
1. Create a bakery business plan–
The business plan is the backbone of a business. It’s like you cannot imagine establishing a business without a plan. Making a plan for your bakery business allows you to jot down strategies, operations, product items, staff details, budget, and everything. An ideal bakery business plan should include the following-
- Summary of the Bakery Business plan- The summary of a business plan gives a brief idea of the business plan. It should contain the goals, ownership structure and legal details, a brief history of the business if it is a pre-existing one.
- Overview- It discusses the concept and the theme of your bakery business. It should include the details of the products you are going to sell.
- Research and USP- Before entering into a bakery business, you must have researched about the industry and extracted out the analysis. Do not forget to include industry analysis in the business plan. Also, talk about your USP. USP refers to Unique Selling Proposition.
This defines the uniqueness of your bakery business. This is something different you are going to offer. This serves as a strong answer to the question- “why your bakery”.
- SWOT Analysis– This is one of the most important things to be included in a business plan. It contains a detailed analysis of the strengths of your bakery business, weaknesses, opportunities you can get, and threats you are likely to face.
- How are you going to run a bakery business- The detailed description of the operations of a business must be mentioned in the business plan.
- Financial Analysis- The cost of your business must be mentioned in the business plan. It should include the cost of raw material, operating costs, the salary of the staff, and miscellaneous expenses.
- Marketing Strategy- You should include your marketing plan in the business plan. It should include the strategies you are going to adopt to promote your bakery business.
2. Choose the location wisely-
The next step is to choose the location for your bakery. The ideal location for a bakery business is a reputed market or shopping streets. Make sure the place should have a high footfall. Prefer ground floors for your bakery and the ideal area is 500 square feet. You can keep your kitchen on the backside of the upper floor. While the ground floor should be used for display cum serving a purpose.
Other important points to be considered while selecting a location for your bakery business are proper water supply, drainage facility, electricity, and a legal agreement of the property you are renting or owning. Also, make sure that the parking space is available near your store.
3. Obtain necessary Licenses-
A bakery business requires five licenses which include, GST Registration, FSSAI License, Local Municipal Corporation Health License, Police Eating House License, and the Fire License. It is advisable to obtain all the licenses in advance but FSSAI, GST Registration, and Local Municipal Corporation Health License are the most important.
4. Hiring Staff-
A bakery business requires an expert workforce. As the taste and the presentation of food both matter. You would require a chef, helpers, and a cashier to run a bakery business properly. You would also need watchmen and cleaning workers. The salary of the staff depends on the experience and can be negotiated.
5. Buy Necessary Equipment-
A bakery business cannot function without the equipment. The necessary equipment includes ovens, fridge, gas stove, storage utensils, etc. Apart from that, if you have seating arrangements for customers, you would also require chairs, tables, or sofa, depending upon the interior design of your bakery.
6. Design the display area-
Your display areas getting you customers. Make sure it fascinates the customers. Also, it should be aromatic and the environment of the bakery should be pleasing. As we all know, the first impression is the last. Your display area is the first impression and it should be the best. It should contain everything you are selling. Make sure nothing could escape from the eyes of the customers. Also, adjust the space accordingly. An attractive layout can add a lot.
Branding is essential for every business. Get a beautifully designed logo for your bakery and a display board from professional designers. This allows people to recognize your brand easily, which in turn, generates brand awareness.
8. Marketing Strategy-
Marketing is an important part of a business. No business can grow without marketing. And by marketing, we mean the choice of strategies to promote your business. The best thing about a bakery business is- the strategies that can be used to promote are available in abundance.
You can even promote your bakery by sticking the logo on the knife that you are giving with the cake. Different traditional and digital marketing strategies can be used to promote a bakery business. All you need to do is choose the right one for your business.
9. Billing Software-
Choosing the right billing software is a must. It can help you in keeping the record of inventory and eases the billing process. It can help you in tracking the shelf life of baked items, which in turn, helps you in acquiring the items carefully.
10. Join hands with online food aggregators-
Joining hands with online food suppliers is a great idea. It is advisable to register your business with online food aggregators to get orders. In the coming sections, we will be talking about the need and ways of digitalizing your bakery business.
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Is it Profitable to start a bakery business?
Yes, the bakery business is a profitable one. We have facts to claim our statement. The Indian bakery market reached a value of US$ 7.22Billion in 2018. And it is expected to exceed US$ 12 Billion by 2024. You can even begin this business from your home. But it is advisable to rent a store.
I won’t mind labelling a bakery business as a profitable idea. All you need is the right marketing strategy and realistic revenue as well as non-revenue goals. You can learn new recipes and even introduce your unique and creative dishes to offer unique items to the customers.
You can learn different strategies to promote your bakery business. Make sure the pricing strategy is capable enough to bag maximum profits. At the initial stage, keep your prices low and develop a strong customer base.
The profit in a bakery business depends heavily on what you bake. Also, prices can be set based on different factors like cost of raw material, competitor’s price, market trends but mainly it depends on what you offer.
If you are planning to start a bakery business, make sure you enter the bakery business with a strong business plan and a sound marketing strategy. Provide quality services, satisfy your customers and this is how you can make money.
Type of Bakery
So now, you are apprised with the basic plan to open a bakery business. Hold on! Do you know, that different types of bakery business can be started? You need to find the most suitable bakery business by considering different factors like budget, management, skills, cost, etc.
The type of bakery business you can start in India are-
Retail bakery vs Wholesale Bakery
Before you choose a bakery business, you need to choose the basic structure. You have to decide whether you will be opening a retail bakery or a wholesale bakery. As both the structures require different equipment and financial investment. Now we will be discussing the pros and cons of both types.
As the name itself suggests, a retail bakery sells the products directly to the customers. If you are planning to start a retail bakery business, make sure you have both front and backspace. The backspace will be used for preparing the food, while the front space is used to display the products and have seating arrangements for the customers. You are expected to spend on the interior of the bakery.
Pros of starting a retail bakery business-
- You can show your creativity and promote your business
- A chance to interact with the customers directly
- You can start a bakery business with a low investment
Cons of starting a retail bakery business-
- Need more employees to run a retail bakery business
- Income is made from small orders
Grow your sales!
We believe anyone can get a successful business with a strategy.
If you are willing to do business with large-scale clients then you should go for a wholesale bakery. Wholesale bakery deals with other businesses. They sell their products to retail bakery businesses, restaurants, cafes, etc.
Wholesale income depends on large orders and not on individual customers. You don’t have to spend much on the interior of the shop. You can choose whether you want to work from home, or in a commissary kitchen, or out of a leased commercial kitchen.
For running a wholesale bakery business, you need to have contacts with middlemen or retailers. All you need to do is find the customers for your business. The biggest drawback of a wholesale bakery business is a heavy investment. Also, you will require more helpers.
If you cannot spend much, then do not go for this type of bakery business. But the good thing is you can run it from home. A home bakery that supplies products to other businesses is also considered a wholesale business.
Pros of Wholesale Bakery Business-
- Large orders give more income
- You don’t have to spend on interior
- Flexibility in choosing a location
Cons of Wholesale Bakery Business-
- Large investment
- More manpower is required
- More upfront cost
After analyzing the pros and cons of the retail and wholesale bakery business, choose your type accordingly. The next step is to choose the type of bakery service you are going to provide-
We have mentioned the bakery service styles. You can choose the best out of the rest.
A bakery café is a bakery that has seating arrangements and deals in unique and innovative pastries, cakes, doughnuts, and other baked items. For this kind of service, you would require both back-of-house and front-of-house space.
You need to design the interior carefully. It is advisable to set a theme and design the interior, menu cards accordingly. You can also serve other items like coffee, tea, hamburgers, etc.
Counter Service Bakery
Counter service bakery does not have seating arrangements for the customers. The display of the counter service bakery is very similar to bakery café. The counter service bakery can be smaller in size. You can easily deal with the walk-in customers who want only a few products and also with customers who want to order in bulk.
Food Truck Bakery
The food truck bakery business has become a new trend. The investment is less and the freedom of movement is enjoyed. But if you choose this model, you have to find someplace to prepare your food items.
In many cities, the facility of commissary kitchen is available, where you can pay for a few hours and prepare your food. You can also prepare the food items at your home. Make sure the truck is covered with eye-catching banners of the products you are selling.
A specialty bakery deals in two or more products. A shop that only makes different types of biscuits or a shop that only deals in different flavors of cakes. Specialty bakery is one of the most flexible bakery services. As you can make a choice, whether you want to deal as a retailer or wholesaler.
If you don’t have much capital to invest, you can go for this type of business. You can bake products at home. You would require proper equipment, space, permits, and raw material to start. Also, you need to plan your marketing strategies carefully.
As of now, you are not sitting in the market and there are a few chances of getting the attention without any effort. You need to use both traditional and digital marketing methods to promote your home bakery business.
Choosing the type of bakery allows you to decide the plan, budget, and other important matters. Make your choice cautiously as this is a big decision.
The first question that strikes a mind before starting a business is- How much capital is required to start this business?
So, here we go with the detailed description of the investment required to start a bakery business in India.
- Location- You would require some space to run your bakery business. If you are planning to rent a store it could cost you around INR 25000- 40000 per month. The same would be for a cloud kitchen. But if you are planning for a rental café, it would cost you around INR 75000-150000 per month.
- Equipment- The equipment varies based on the type of bakery business you start. The equipment can cost you in between INR 500000-1000000.
- License and permits- You cannot obtain licenses without fees. So, to obtain all the necessary licenses and permits you have to spend around INR 30000.
- Staff- A bakery business cannot run without staff. And if you are running it on a bigger level, you would require manpower. The cost of their uniform, salary, etc will be around INR 120000. It can vary from business to business.
- Installation of Billing& POS- Installation of Billing and POS can cost you around INR 24000-50000 in India. It has become an important part of running a bakery business.
- Marketing cost- A bakery business requires both digital and traditional methods of marketing for promotions. These marketing methods may cost you around INR 40000-60000 per month.
This is an estimated amount you would require to run a bakery business in India. It may vary depending on the type of business you are running and the services you are offering.
Marketing- Necessity of a bakery business
The bakery business is spreading like a forest fire. With the growth of the opportunities in the industry, people are swiftly entering the market. So, to outshine the competitors, you should use unique and innovative ideas to promote your bakery business.
As we already said, a strong and effective marketing strategy can lift your bakery business to great heights. You cannot just rely on traditional or digital methods of marketing to promote a bakery business. This is a kind of business that demands a balance between both of these methods. So, here is the list of digital and traditional marketing ideas that can be used to promote your bakery business.
- Control the Aroma- One of the coolest tricks of attracting the customers is tempting through the aroma. You just have to keep the doors of your kitchen open to allow the sweet baking smell to spread all around. This can appeal to the tongue of the customer and he may get prompted to buy the products from your bakery.
- Attract your customers- Whenever you introduce something new, make sure it grabs enough attention. Make a separate line for a particular pastry or doughnut or whatever you introduced to catch the eye of the customer. Present it attractively, so that the customer cannot resist tasting the new dish.
- Attractive interior and exterior- A bakery is all about colors, aroma, and taste. Make sure the interior of your bakery is colorful and promising. The display area should be beautifully designed. The layout of the bakery should be engaging.
The cakes, pastries, brownies you are selling must be visible. Not just the interior, your bakery should look good from the outside as well. As you know, the market is flooded with bakeries, do not give a chance to your competitors to steal your customers by designing the attractive outlook of the bakery.
- Prompt customers through the door- This is an innovative technique of offline marketing. You can put some questions on the door on a blackboard, and offer a discount to the one who got it right. People get involved in such games and you can generate revenue even from those who didn’t have a plan of buying any bakery items. You can also post about your special offers through a witty and convincing message on the board. These are unique methods of getting customers.
- Distribute free samples- Although, this is not a new technique of promoting a bakery business, trust me, this is evergreen. This is an effective and promising technique of creating customers. Who doesn’t love free stuff? All you need to do is place some free stuff on the billing counter. Just request them to taste and if they found it succulent, they would purchase the newly introduced item for sure.
- Social media– While reading this section, you must be waiting for this word. Social media can be really helpful in luring people to your store. All you need to do is to post the pictures of food items you are selling along with the price and other details. You can also mention the current offers.
Also, you can conduct online contests and serve winners with your palatable food items. Winners would direct their friends to your social media account and you will develop a strong network. Also, you can interact with your customers using social media.
You can listen to their complaints and work on them timely. While using social media, adapt this concept- “talk, sell and share” and then witness miracles.
- Get the feedback- If you are not sure, whether your customers are getting satisfied or not, start collecting feedback. You can collect feedback from your visitors or hold an online or offline survey to know where you lack. This is going to work in two ways. The customer would also feel connected to your bakery. This fills customers with confidence, that their views matter.
- Start a website- Digitalization is inevitable. If you want your business to grow, you should go for digitalization. Develop a website for your bakery business and start collecting orders online. Your website should comply with the theme of your business.
Keep uploading the pictures of the newly introduced food items. Also, integrate a payment gateway with your website, so that you can work digitally. You can add a short survey on the website and offer special discounts to people who offer after completing a short survey on the site.
You may find it difficult to start a website and run it effectively. Don’t worry! We, at Traffic Tail, provide digital marketing services for the bakery business and help you in lifting your business to great heights.
9. Offer Baker’s dozen discounts- This is an American technique of promoting a bakery business. Some bakeries in America offer a discount when customers buy items in a dozen. Now read the two statements carefully and you will get it.
“Pay INR 220 for 13 brownies” or “Pay INR 120 for a dozen of brownies and get one free”. The quantity you offered is the same but the way you presented the offer is convincing. You can research and use different techniques to promote your bakery business.
- Offer customized services- Nowadays, bakeries are resorting to customized services. They offer customized services to their customers and build a strong customer base. You can accept customized orders and deliver on time. And if the customer got impressed, he won’t mind repeating orders.
- Get your logo and put it everywhere- When you set up a bakery, get your logo designed by professional designers. This would help you in creating brand awareness. Put your logo on the packets and handbags of your bakery. You can even get it printed on the knife you are giving with the cake. You can even sell the pastry or cake representing the logo of your business.
By using these online and offline tricks of marketing, you can add generate a good amount of revenue from your bakery business.
What Equipment is Required?
The requirement of equipment depends on the type of bakery business you are pursuing. If you are running a wholesale bakery business you would require heavy equipment. While if you are running a retail business you would require kitchen equipment like ovens, fridge, display fridge, storage utensils, serving utensils, plates, gas stoves, baking tools, appliances, piping bags, scoops, etc. Equipment for a bakery business may cost you in between INR 5,00,000-10,00,000.
Is an online bakery a good idea?
Yes, definitely. It is a good idea. If you want to start a bakery business but can’t spend much, you can go for an online bakery business. This will cut the cost of space, staff, and interior design. In this business, the owner is expected to deliver the items to the customer’s address.
The orders are accepted online. All you need to do is create a website and integrate a payment gateway. This is how you can run your online bakery business.
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Importance of Customer Satisfaction
The primary motive of every business should be customer satisfaction. Can you imagine the success of your business without satisfying your customer? One customer can either make or break a chain of customers. There is a concept of “word of mouth”.
This is a great way of building a customer base. One loyal customer can bring 10 more customers. So, the main aim behind a business should be the satisfaction of the customers. Make sure you are getting the feedback of your customers.
This could help you in framing upcoming strategies. Also, you can keep a suggestion box where customers can put their views on matters like interior, dishes, and everything. You will get an idea of where your business is lacking and you can work on that area.
Miscellaneous factors to start a bakery business
- Uniform- Uniforms impart a professional look to your bakery. Also, it helps in creating brand recognition and goodwill for the bakery shop. You can consider giving it a try.
- Online ordering- Integrating with online food aggregators is a great idea. All you need to do is register with these platforms to generate orders online. Also, you can make collaboration with other businesses to grow your business.
Checklist to start a bakery business in India
A quick checklist on how you can start a bakery business-
- Choose the type of Bakery you want to start
- An effective business plan is a must
- Choose the location wisely
- Get required licenses and permits
- Hire the staff according to the need of your bakery
- Gather necessary equipment
- Design the interior of your bakery properly
- Choose the best marketing strategy
- Understand the requirements of your customers
- Customer satisfaction must be the primary objective
- Sell innovative and creative bakery items
- Maintain your social media account
- Keep updating the bakery products you are selling
- Integrate with online food aggregators for sure
- Build a strong network with local bakery business in the city
- Keep introducing new items and discounts on items
- Keep updating your offer and try to give some free items to promote your bakery business
Do you know?
- India’s retail bakery industry is constantly growing
- India Cake Market is forecasted to reach USD 882.24 million by 2024
- Students have started investing in the bakery business
Starting a bakery business is a great idea for sure. You would require a strong plan to start a bakery business in India. Also, you are going to experience a great deal of competition, but with the right plan, you can tackle it for sure. It is one of the most profitable businesses in India.
You can begin with a small bakery and expand accordingly. You can even merge the concept of café with your bakery to earn higher revenues.
Also, you would require a sound marketing plan to promote your bakery business. A sound marketing plan does not only include traditional methods of marketing, it also includes digital methods of marketing.
Although traditional methods are essential for a bakery business you cannot avoid digital ones in this era of digitalization. You should integrate your bakery business with online food aggregators as this could help you in generating orders online.
Also, make sure your customers are liking your services. As we all know, the customer is the king. And one customer can either break or make the chain of customers. One satisfied customer can build a strong customer base by recommending your bakery business to his friends and family.
Also, it is advisable to keep your prices low at the initial stage of business. This can help you in fetching the customers of your competitors. Keep an eye on the strategies of your customers and try to offer something unique and innovative and better than your competitors.
Start your bakery business and earn heavy revenues. Get associated with Traffic Tail to grow your bakery business. We can guide you with unique digital marketing strategies to promote the bakery business.
Frequently Asked Questions
Ques.1 How can I start a bakery business?
Ans. By following these steps you can start a bakery business in India-
- Research the market
- Create a business plan
- Choose your location
- Obtain mandatory license
- Get required equipment
- Design your display area
- Get manpower
- Promote your business
- Kickstart your business
Ques.2 Is it profitable to start a bakery business?
Ans. Yes, it is profitable to start a bakery business as the demand for bakery products is constantly increasing. All you need to do is add the touch of uniqueness and promote properly.
Ques. 3 Can I digitalize my bakery business?
Ans. Yes, you can digitalize your bakery business. You can start your website or you can connect with online food aggregators to generate orders online.
Ques. 4 What are the career opportunities in the baking industry?
Ans. Career opportunities are-
- Chefs and head cooks
- Open a restaurant
- Open a bakery business
- Food preparation workers
- Food processing workers
Ques. 5 What equipment is required for a bakery business?
Ans. The equipment that you would require for a bakery business includes storage utensils, oven, fridge, gas stove, other utensils, display fridge, etc.
Ques. 6 Which licenses are necessary for a bakery business?
Ans. The licenses that are mandatory for a bakery business include, GST registration, FSSAI License, Local Municipal Corporation Health License. You should also obtain a fire license and a police eating house license.
Ques. 7 How much investment is required to start a bakery business?
Ans. You can start a bakery business with an estimated amount of INR 15 Lakhs. The cost may vary depending on the type of products or the size of your store. But you can start a bakery business with an investment of 15 lacs and can expand later.
Ques. 8 What are the items sold by a bakery business?
Ans. A bakery business deals in items like bread, biscuits, cakes, pastries, doughnuts, brownies, and many more.
Ques. 9 Which are leading companies in the cake market?
Ans. Key players include-
- Britannia Industries
- Modern Food Enterprises Private Limited
- Bisk Farm
- Elite Group of Companies
- Anmol Industries Ltd.