How to start a bakery business

Bakeries are a trendy business, which grows like yeast.

In this article, we will briefly consider the pros and cons of several formats: mobile and stationary mini-bakeries.

Many businessmen think about how to open a bakery. Such interest is caused by several factors at once: high and stable demand for the produced goods, high profitability, relatively low expenses for opening.

There are several bakery formats, each of which has its own advantages and disadvantages. In this article, we will look at how to open a mini-bakery from scratch and which format to prefer depending on the size of capital.

Trends in the bakery products market

Bread has always been one of the most popular products in the human diet. Today, bakery products are a product of daily demand and are among the three most popular products. According to a social survey, 74% of respondents consume bread daily. On average, per capita accounts for 46-50 kg of bread per year. For some people, bakery products are a great snack, for others – a mandatory addition to the dining table, and some prefer confectionery products.

Even though now every city has bakeries, bread production has a lot to grow. Possessed consumers place high demands on bakery products. It is not enough to be tasty and fresh with modern bread; it must also be useful. Today, manufacturers of bakery products are adjusting to the trend of consumption and increase the production of bread, which is positioned as a healthy product – in its manufacture use functional additives, cereals, and vitamins.

In this regard, the number of open mini-bakeries is increasing. In most European countries, this format of baking provides more than 70% of the population with its products. In our country, this share is 10-15%.

All produced bread can be divided into two types: traditional and non-traditional. The production share of traditional bread is 90% of the total market volume. Traditional bread is referred to as cheaper products. Traditional bread is the products according to original recipes, national varieties of bread. The category of non-traditional bread is developing dynamically – in 2016, its growth was 7%, while traditional bread grew only by 1.3%.

Thus, we can highlight the main trend in the bakery products market: unconventional bread is in demand, which is positioned as a “healthy product”. The modern bakery market places high demands on the producer. Today it is not enough to produce mass sorts of bread. To operate successfully in the market, it is necessary to form a wide range of products and take into account the tastes of consumers. And these tastes are so diverse that the entrepreneur can find his niche in the bakery business. Therefore, the business of hot baking is a profitable and promising direction, which can bring a stable profit.

Which bakery format to choose

Currently, there is a large number of different bakeries on the market. Previously, everything was limited to an ordinary kiosk where the so-called “bricks” were sold, but now bakeries offer bread for every taste and purse.

All bakeries can be divided into two large categories – full and partial cycle production. In a full cycle bakery, the whole process of baking is carried out: from starter to baking. This is a more profitable, but also a more expensive option. For the incomplete cycle, half-finished products are bought, from which the bread is baked. For a beginner entrepreneur, this method is much easier, but the profitability will be lower, and the original proposal to create will not work.

Ready ideas for your business

Now let’s consider different bakery formats: their features, advantages, and disadvantages. It should be noted that the most common types of mini-bakeries are chosen here. In comparison with bakeries, small bakeries have their advantages:

  • the possibility to choose the bakery format and develop your own recipes;
  • small production, simple working process;
  • complete control of production, sales;
  • economic flexibility and mobility of production, which allows you to adjust to consumer tastes and market trends;
  • the mass production is not able to compete with the products of mini-bakeries, which are focused on certain tastes and demands of customers;
  • mini-bakeries can quickly establish an efficient production process in the shortest possible time and offer consumers a variety of products.

Mini-bakery

Mini-bakery can also be a home business option. It is attractive for its accessibility and absence of high costs. The main thing is to find customers and buyers, ready to buy your products. It is recommended to form the assortment of production for mini-bakery from 5-8 commodity items. Usually, it has both useful and traditional bread, as well as soft products.

Example of the range of mini-bakery:

  • branded bread with grains and seeds, designed for consumers who adhere to a healthy diet;
  • traditional wheat bread and rye bread;
  • Italian Ciabatta bread;
  • French buns and croissants.

Bakery on wheels

The idea of opening a mobile bakery is quite new but managed to gain a foothold in the market. Consumers liked hot baked goods right out of the oven, and entrepreneurs are attracted by small start-up capital and high profitability. According to statements of some companies offering bakery franchise, the mobile bakery can pay off in 14 days! Not a business, but a dream. Let’s find out what is behind it.

 Mobile mini-bakeries can be different: from trailers to large wagons, which houses a full production line. Usually, the mobile bakery is a modular room with baking equipment located inside it.

Nowadays, the trailer with baking equipment is especially popular, which is used to prepare bread. The baking oven on wheels is attached to the car, and it can already carry hot bread to different points or trade locally. The cost of this trailer is from 80 to 140 thousand rubles. It all depends on the manufacturer and is included in this set of services.

Such mini-bakeries are quite versatile, their application can be different: you can travel to sell bread in crowded places of the city or in remote areas where there is less competition. Entry trade is especially profitable in large cities. You choose points with good cross-country ability and sell your products there. And if it does not work, you can always change your location. You can also alternate stationary sales with occasional trips.

The main advantage of this format is that you are not tied to a particular location. This means that you don’t have to pay for the rent of production facilities, you don’t have to pay for laying communications, and you don’t have to spend money on advertising so that customers will find you because you will come to the buyer yourself.

How to choose the location of the bakery

Opening a mini-bakery from scratch is quite difficult because from scratch you will have to do absolutely everything – look for a suitable room, repair it, conduct the necessary communications, and connect the equipment.

Properly selected room for the mini-bakery is important not only in terms of marketing but also in the context of regulatory requirements.

Requirements for the bakery space:

  • Separate workshops: a warehouse for storing flour, eggs, sugar, and other ingredients; a production and storage area; if the sale of products is envisaged, a sales area as well;
  • the room must have hot and cold water, ventilation, sewerage, tiled walls, waterproof floor, air conditioning systems;
  • there should be additional rooms for bathrooms, a place for storage of industrial waste, a room for staff.
  • you can not have a bakery in the basement rooms

The bakery will require a lot of money for the arrangement of the bakery. Therefore, you should pay attention to the fact that it is better to have a room in the ownership than to rent it. In the case of a lease, there is a risk of termination of the contract and changing the place of production, which will entail additional costs. If your own funds do not allow you to buy the premises, it is worth considering a long-term lease for at least 3 years, or a lease with the right of subsequent redemption.

When choosing a place of production, you should also take into account the presence of competitors nearby. There should be no direct competitors around. The bakery should be located in a crowded place: markets, near shopping malls and office centers, on the main streets.

How to advertise a bakery

A serious threat to the bakery market is competition. Small bakeries are not so easy to survive in a market where the whole bakeries operate. The situation on the market looks like this: about 60% of the segment is accounted for by large players; about 25% – by private bakeries; 15% of baked goods are produced in large stores and supermarkets, but they are focused only on their customers.

In the conditions of fierce competition, only those who competently develop the concept and the advertising campaign will be able to survive and succeed in the market. To promote the bakery you can use various marketing tools: installation of billboards and signs; distribution of business cards, flyers, or booklets with product descriptions; media advertising; radio advertising; participation in food exhibitions and fairs; actions, and so on. Application of this or that tool depends on the target audience of the institution and the project budget.

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