Starting Your Own Bakery

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Bakery Business Background Information

What’s involved in running a bakery? Photo of a baker

A bakery gets buzzing before the sun comes up, making breads, cakes and pastries very early every morning. Throughout the day, the bakery will also produce breads, cakes, doughnuts, pastries, pies rolls and anything else that is offered by each particular bakery.

Many bakers not only bake every day, but must also take care of all of the inventory, such as making sure the shelves are stocked and supplies are on order. A baker calculates the amount of flour, yeast, salt, etc. that is needed each day.

Day to Day bakery operations

Each day, the baker must operate blenders, air guns, cutting/slicing machines, stoves, ovens and microwaves.

A baker must also be able to lift boxes and heavy bags of flour, etc. at least 50 to 75 lbs.
The baker must also manage all of the hiring, training and firing of all employees.

They are in charge of marketing and creating new products. The baker must also be knowledgeable of all hygiene and sanitation guidelines as laid out by the department of health.

It is rare to find an angry person in a bakery, it is believed that the smells of a bakery are soothing to people. Therefore, the people who visit bakeries are generally happy people. In addition, people buy baked goods for happy occasions such as birthdays, weddings, etc.

Special Requirements for A Bakery:

Special Requirements for a bakery business include HACCP and excellent Sanitary Practices

If you plan to do any construction to your bakery location, you will need a permit.

You must also be inspected by the health department to conduct a business that involves preparation of food items.

If you plan to set up tables and chairs for your dine-in customer, you must contact the fire marshal. Authorities should be contacted to find out regulations for the specific location of your bakery.

Licenses Necessary for Running a Bakery:

If you plan to operate a commercial bakery, you must obtain a business license from the state in which you run your business. You will also need a food vending license and approval from the health department.

Equipment Necessary to Run a Bakery:

The equipment that you need to start a bakery includes:

Mixers and ovens of various capacities in order to manage jobs of all different sizes and designs
Wrapping material, bags, boxes, etc. for customers who want their baked goods on the go
Cooling racks for the food once it is prepared before it can be packaged or sold
Display cases so you customers can see all of the goods you have available.
A number of baking dishes in all different shapes and sizes; made of glass, metal, etc.
Tables and chairs if you plan to have dine-in customers
Mixing bowls of all shapes and sizes to accommodate any job
Chemical detergents and sanitizers to keep you kitchen utensils and equipment safe
Various cutlery and utensils that you will need to make the baked goods
Manuals, cookbooks, recipe books, etc. everything you need to keep your menu appetizing to customers

The Pros Running a Bakery

Huge market- depending on your location
Great potential for expansion. You can start off with a small bakery, just baking breads. You can then expand into a café offering a wide variety of specialty coffees
You can opt for both, wholesale and retail
You can develop your own specialty product and be the only place to get it
No matter what the economic situation may be (booming or a slow economy), this type of business keeps moving – a big bonus.
You are in control of creating your own products which usually results in high profits.

The Cons of Running a Bakery:

Running a bakery means that you have to get up and begin working very early every morning.
In fact, a number of bakers work 12 – 14 hours every day to make sure they have everything the customers want.
The average baker is up well before the sun.
In addition, a successful baker often misses days off for holidays and weekends because there is so much work to be done.
Bakers work on a tight schedule with a strict quota.

Skills Necessary to Run a Bakery

The top bakery professionals must develop skills in a number of specific areas, which includes:

Almond paste
Artisan breads
Glace work
Chocolate and sugar
Petits fours
Plated desserts
Specialty cakes and pastries
Wedding cakes and pastillage

Associations:

American Bakers Cooperative Inc.
Allied Trades of the Baking Industry
American Bakers Association
American Culinary Federation
American Institute of Baking
Independent Bakers Association

Employees & Job Requirements for A Bakery

Baker:

A baker must master a number of tools ranging from simple kitchen tools, such as mixing spoons and rolling pins, to more complex industrial size tools.

A baker must be creative and able to come up with original recipes, as well as self-motivated and able to work well on their own.

A baker must have solid knowledge of the hygiene and safety regulations of the job, and be able to enforce such standards to the others in the bakery,

Dough Maker:

A dough maker must be able to read and document the ingredients, uses scales accurately, lift heavy objects and work with little or no supervision.

A dough maker must be reliable and have a flexible schedule that allows them to work 20 to 35 hours per week. Experience is typically a plus. Employees in this position are paid about $8/hr.

Waiter or Waitress:

A waiter or waitress at a bakery is needed to take orders serve foods and beverages if you have dine-in customers.

It is the servers job to make sure that the customers are enjoying their baked goods without problem.

A waiter or waitress must seat all customers, explain menu items, let customers know about daily specials, prepare a check with total costs.

Once a customer leaves, the waitress or waiter must clear dishes and clean off tables. It is also the servers job to ensure that the dining area is complete with linens, tableware, etc.

Approximate Minimum Start up cost

A baker working by the hour can make anywhere from $8 to $14 per hour on average with an annual salary ranging from $15,000 to $20,000 each year. A baker can require higher pay depending on education, experience and geographical location.

It is recommended that you have three months worth of operating costs set back before you open your bakery.

Here is an estimated breakdown of the costs involved:

Security Deposit & Construction - $30,000 - $32,000
Startup Inventory - $3,000 - $5,500
License & Permits - $300
Total Startup - $33,300 - $37,800
The average cost to operate a bakery is $10,000 to $12,000 per month.

Naturally all this depends on the size of your bakery.

Notes:

There are different types of bakeries: mom-and-pop shops that do their own baking, franchise bakeries and industrial bakeries.

10 Steps To Starting A Bakery

1. Ensure A Bakery is for You!

You have a choice as to what business you're going to start, so start one that's right for you. Getting into the right business can dramatically increase your success. Get into the wrong business and your success rate drops. Read Five Secrets to Getting into the Right Business for more information. And have a look at 16 Questions to Consider Before Starting a Business

2. Understand How A Bakery Operates

How can you run a bakery if you don't know much about the business? What if you run into an issue that you can't or won't deal with? Then what? You're in a business that you hate working in and that's a problem. See Understand How a Business Operates for more information.

3. Make Sure there is a Profitable Market for Your Business

What's the use of starting a bakery that is not profitable? You'll be putting all your effort in something that can't support itself or you. There are a variety of issues when it comes to setting the stage for profitability. See Tips for Identifying a Profitable Market.

4. Create a Business Plan For Your Bakery

A business plan is a must for any size business because it helps you stay focused, see the big picture, and get funding. It's something that you create when you start your business and then update as your bakery evolves. Read our free online guide on How to Write a Business Plan

5. Set up your Business Team

Setting up your team includes finding the right employees and professionals that will help you run your bakery. You don't need to employ everyone you work with, but you will need a team of people you can depend on, which could consist of a lawyer, accountant, banker, and consultant, as well as professionals in your industry.

See Creating a Business Team for more on this subject.

6. Get a Small Business Loan if You Don't Have the Money to Start

If you don't have the money to get started, then you'll need the necessary financing or you won't have the opportunity to start your bakery. This can be done as a small business loan, a personal loan, or other small business financing options.
For more on financing your bakery see our guide on Financing Your Small Business

7. Legalize Your Bakery

In order to run your bakery legally you'll need to abide by government rules and regulations on the state and local level.

You'll need to do your research, determine what type of business (sole proprietorship, corporation LLC, etc.) to register, create and register your business name, and register your bakery with state and local authorities.

To go through the business registration process, see Chapter 6: Making Your Business Legitimate, starting with 6 Easy Steps to a Good Business Name.

8. Get Equipment for Your Bakery

In order to run your bakery successfully and efficiently you'll need to acquire the right type of equipment. How can you run an online business without a computer? You can't! This is an important issue. See Acquiring Equipment for more on this topic.

9. Insure Your Bakery

Make sure you have the proper insurance for your bakery. Without the right coverage you could lose everything you've worked for. For tips on insuring your bakery, see our free online guide: Insuring Your Small Business.

10. Prepare To Accept Money

You'll need a way to accept money, you can't depend just on cash or checks. You'll need to accept plastic: Visa, MasterCard, and American Express. To do that you'll need to apply for a merchant account. See Setting Up a Merchant Account for more on this topic.

11. Set up Your Accounting System

Running a bakery requires you to collect taxes, and report your earnings. So it's best to set up an accounting system in before you start your bakery. See Setting Up Your Accounting System for more on this topic.

12. Acquire Customers for your Bakery

In order to exist, every business needs customers. Getting customers is one thing you'll need to be good at. If you can master the tasks of getting customers, it's just like turning on a cash machine almost any time you want. See Acquiring Customers for more on this topic

See Also: Our Free Online Guide to Starting A Business

12 Bakery Business Success Tips

1. Prepare to Put In Long Hours

2. Make Delicious Backed Goods

3. Wear Professional Attire

4. Ensure a Sanitary Environment

5. Make Your Pricing Competitive

6. Keep Profits High Without Sacrificing Service

7. Develop Excellent Business Management Skills

8. Keep Business Expenses Low

9. Ensure You Use The Best Ingredients

10. Ensure Your Baked Goods Are Fresh

11. Sell Ageing Baked Goods Quick, Day Old Sales

12. Put Quality, and Customer Service Above Profits

Bakery Books:

There are also many books and videos that you might consider keeping with you and becoming familiar with to help you get started with the bakery business.

The books include:

How to Open a Financially Successful Bakery

The Baker’s Trade

Cake Decorating Business

Bakery Business Software

Business Plan For Your Bakery Business

Bakery Issues's:

Estimating Startup Costs - Find out if you're forgetting something

Business Location - Choosing A suitable one For Your Bakery

Build or Buy A Business? - Buying an existing Bakery

Bakery Research:

Here are some popular terms people are looking for online. These may help you during your research.

how to start a bakery
how to start a home bakery
bakery equipment
bakery supplies
start pastry business
start baking business
start home bakery business

Business Builders For Your Bakery:

Business cards for Your Bakery

Business Plan for Your Bakery

Business Insurance for Your Bakery

Small Business Loans: Finance Your Bakery

More Business Ideas:

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