Starting Your Own Bakery Business - Things to Remember

You Can Bake; But Can You Run A Bakery Business?

The thought of being surrounded by sweets smells, warm bread, and customers who are happily munching your products is appealing to anyone who likes to bake.  Owning a bakery business allows you to enjoy these benefits, but it is also a very expensive undertaking.  Before you make your decision to open a bakery, take a look at the pros and cons, as well as the costs, to see if it is for you.

There are different options you can pursue when it comes to owning a bakery business.

• You could buy a franchise like Panera Bread, Krispy Kreme, and Cinnabon are examples)
• You could buy an existing bakery and its equipment
• You could run a bakery from your home
• You could run a retail shop or supply other shops with products

Each of these options has different benefits and drawbacks, as well as levels of cost.  First, decide which type of business you would like to run and how much capital you will be able to put into it. 

As the owner of any business, you need to have a good level of business acumen.  You also need these skills to be a good bakery business owner:

• Obviously, the ability to bake is important!
• The ability to convert recipes to larger quantities
• Ability to estimate how much product you will need on certain days

Baking is a passion for a lot of people, and for these people the benefits of owning their own bakery business will be many.  These include:

• Being able to do what they love
• Having a big market, especially is cities and college towns
• There is a wide variety of products  you can make
• There is great potential for expansion
• You can sell both retail and wholesale
• You can develop a specialty product and be the only place to get it

Any job has downsides, and that is true of the bakery business as well.  Consider these negative aspects when you are thinking of opening your business.

• It is very expensive to get started
• The overhead is high
• You may need investors, loans, grants, etc.
• You have to work long hours (you have to be up early to bake for the morning commuters)

A major part of the expense of opening your own bakery business is the equipment you need.  Even if you're starting out small, or in your own home, you will need the following basics to get started:

• Ovens, cooling racks
• Baking dishes
• Mixing bowls
• Utensils
• Packaging for your products
• Food supplies
• Recipes/cookbooks
• Cleaners and sanitizers
• Rubber gloves
• If you are running the business outside your home, you need a good location and display cases for the products, and tables and chairs for customers who want to eat-in

In order to run a successful, legal bakery business, you need to have proper licensing from your state or city. Even if you are working from home, you need to check on the proper licensing and on zoning issues.  In addition, a bakery business needs to be in full  compliance with health, safety, and fire codes.  You will need to have your business inspected before you can open.

There are several professional associations dedicated to supporting bakery business owners.  Here are a few to check out:

• American Bakers Association http://www.americanbakers.org/ContactList.htm
• American Institute of Baking https://www.aibonline.org/
• Retailer's Bakery Association http://www.rbanet.com/

Courses in baking are offered in a variety of places.  You can take advantage of culinary classes offered by local colleges and culinary institutes.  A lot of high schools also offer culinary classes, so if you're in high school and interested in becoming a baker, take those classes.  You can also apprentice with an established baker in your community.

The cost to start a bakery business is quite high.  Starting out, you can expect to spend at least $100,000.  Ovens can cost from $5000 to $20,000 new, and while you can buy them used, they will still be thousands of dollars.  Mixers can cost thousands of dollars as well.  Franchises come with inventory, equipment, and reputation, but these can cost you about $250,000 or more. 

Starting a bakery business in your home may be the least expensive way to go, but you are limited to small scale baking.  Yet another option is to buy an existing bakery, but you have to be careful about why the owners are selling.  Is there enough business in the area to support a bakery?

Owning a bakery business is an expensive undertaking.  You will need to use savings, get loans, and maybe recruit investors to help you.  If you are determined to start a bakery, despite the cost, go with used equipment and start small.  You can always grow later as your business takes off.  It is definitely rewarding to own a bakery business; be sure you can afford the time and money. 

Baking Business Resources:
How to start a home-based baking business

See Also: How to Start A Business : Business Idea of The Day

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