Bakery business might seem like a very simple business however the bakery business statistics shows that many bakeries are not successful mainly because of poor business planning. Most of the time bakery owners believe in there business vision and fail to do their homework before they start their business. On the other side, compared to other small businesses bakeries do not require large investments and with a good planning they can be very profitable.

Things to consider before you open your bakery

Location

Location is the most important element of your bakery business strategy. You need to research as many potential locations as possible before you make a decision where to open your bakery. Important location issues are whether there are enough potential customers in the area, how convenient is the location, what are the demographics of the area and what the demand for different products is.

Products

You location research will discover potential product offerings for your bakery. Are you going to open an upscale bakery or are you going to offer the same products like any other bakery and you will grow your business through large traffic, superior marketing skills and customer service.

Buy an Existing Bakery or Open your own Bakery

You have three options: 1. Buy an existing bakery, 2. Buy a franchise or 3. Build your own bakery. You can buy an existing established bakery and in this case you can forecast your revenue and profit based on historical data. If the existing bakery is very well established and it has its own customer base this might be a good alternative. This option is less risky than starting your own bakery from scratch. Again you will need to develop a good business strategy and plan how you are going to grow this business beyond its current profitability.

The second option is franchising. If you buy a franchise you are buying a brand which is hopefully successful and recognized by your target customers. This may give you a quick start with your business.

The third alternative is developing your own bakery business with your own vision. If you decide to develop your own bakery you have the freedom to develop your own business model based on your vision and develop your own menu. However this is the riskiest alternative so if you decide to go with this option make sure you develop a good business plan before you jump in.

Financing

Obtaining financing for your bakery can come from different sources such as savings, credit cards, loans, and venture capitalists. You need to develop a financing plan that works best for you and balances the risk and returns for your business.

Operating your bakery

Your operational plan should include kitchen planning and layout, equipment required and capacity of your bakery equipment, legal and safety issues and required skills and number of employees to operate your bakery. You need to plan how to operate your bakery based on your sales forecast and number of customers you plan to serve – this will define the capacity of your equipment, the space required and employee scheduling.

Marketing and Sales