In today’s fast-paced generation, people prefer to eat bakery products (cookies, bread, cakes, pastries, etc.). So, if you are planning to start a bakery business, it will be the most profitable in the coming years. But how will you start your bakery business if you know nothing about it? Well, here you need to do your basic preference research on the type of bakery plant you want to start (bread, biscuits, etc.).
Market Analysis of Bakery Products
Indian bakery market is estimated to grow 17.44 billion by 2028. Additionally, the bakery-making industry setup has brought about revolutionary changes with food products that are simple to prepare and eat using upgraded bakery equipment.
Here, is the market segmentation recorded to better understand how to start a bakery business’s most preferred strategies. We must ensure our bakery business requirements as per the product type, distribution channel, and geographical areas. Here, we can start a bakery business for the bakery products as listed below:
By Product Type
- Cakes and Pastries
- Biscuits
- Bread
- pav, rusk
- Other Product Types
What is the perfect Bakery for making a business plan?
Setting up a bakery business is a streamlined process. In addition, it requires proper planning, including choosing your location, manpower, correct equipment, and other parameters. Therefore, to know more about how to start a bakery business, here is a quick go-through. So, here we will be discussing the complete bakery business and starting the process.
1. Selecting a bakery business plan: This is the initial step to moving forward with the bakery business establishment. In addition, you need to do a proper business survey and determine the type of bakery, like bread making, cookie making, etc. Moreover, the process includes good finances and marketing and promotional strategies.
2. Purchase correct bakery equipment: Long-lasting kitchen and bakery equipment with the required capacity is required to purchase. So, here are the list of that equipment:
- Oven
- Deep fridge
- Cooling fridge
- Gas stove
- Planetary mixers
- Crockery and storage utensils
- Cylinders
- Working table
3. Choosing an affordable and convenient location: Choosing an ideal location will give you a potential customer. In addition, it ultimately helps in driving more sales and easy-to-make bakery products. Moreover, a good and ventilated place helps in maintaining good hygiene and manpower will also enjoy their work with improved efficiency. As well as an affordable location will also reduce costs.
4. Licenses and permits are required: For, your business set-up security, you need to get a license permit. In addition, here are some names of licensing from the authority of the state. Moreover, it includes an FSSAI license, GST Registration, Local Municipal Corporation’s Health License, and Fire License.
5. Hiring skilled Manpower: Skilled manpower smoothly and efficiently helps in bakery business growth. So, you need to hire a baker, Head chef, cashier, cleaner, transporter, etc.
6. POS/billing software: For the proper financing solutions, you can install the POS billing software.
7. Branding Strategy: For, the branding and marketing of your final product, a proper branding strategy is required. It includes a logo, pamphlet, display board, etc.
8. Financing solutions: You can take proper finances before setting up your business to avoid any further money scarcity. It includes term loans, asset-based loans, capital loans, etc.
Although, there are many factors that decides the bakery business plan and expansion. However, all the above-mentioned factors are good to go.
How profitable is a bakery business in India?
India is a developing country, so there is huge scope for business expansion. So, if anyone wants to open a bakery factory for small, medium, or large-scale production of bakery products, they will always benefit, but with proper planning and marketing strategy. Moreover, Indians like to eat and preserve bakery products anywhere and anytime, so this also drives them into the bakery.
Not only this, Indians celebrate any function greatly, like weddings, anniversaries, holidays, partying, and many others. So, this is also a main reason for bakery products’ mass production. Further, once a bakery business is established in the correct location and with the right product, you may earn lakhs within a month. While the investment could be from a few thousand to lakhs (TBD).
Cost Analysis on a Bakery Business
A bakery business plant or factory can make varieties of products like rusk, cookies, bread, pav, etc. For starting a bakery business, you need to calculate all categories and their expenses, which are shown below:
- Machinery Required: Deck-oven and rotary rack ovens are the most commonly used pieces of machinery required. For the small plant, deck over (20–200 kg production). For large scale (rotary deck oven 200–1000 kg production). Similarly, spiral mixers, pow ring molds, biscuit molds, baking trays, etc. are required.
- Labor and staff: It depends on small, medium, and large-scale production.
- Space needed: This is the maximum space requirement to set up the bakery plant.
- Baking Items: It includes the bakery products category like rusk, cookies, bread, etc.
- Total expenses: It is the total expenses for all
Calculating the final cost
- Small-level bakery production- Typically, 100kg/day is the production in small level production. And, here, a total of 400–500 sq. ft. of set-up area is required. Whereas the manpower required is up to 3 workers. And the bakery business’s total expenses would be around 2.25 lacks.
- For mid-level bakery production: In the mid-level of bakery production, usually 300–500 kg/day is the total production. Futher, the total set-up area will be around 800–900 sq. ft. In addition, the manpower strength would be 4-6 workers. Finally, the total cost is 7-8 lacks.
- For large-scale bakery production: In large-scale bakery production, the total production is 1500–2000/day with a set-up area of 1600–2000 sq. ft. The number of workers required is around 7–9. The final set-up and running costs would be 15–20 lacks.
So, by going through in this table, it can be better understood:
| Small-scale Production | Mid-scale Production | Large-scale Production | |
| Production unit | 100kg/day | 300–500 kg/day | 1500–2000/day |
| Total Area | 400–500 sq. ft. | 800–900 sq. ft. | 1600–2000 sq. ft. |
| Manpower | 3 workers(Including chefs) | 4-6 workers(Including chefs) | 7-8workers(Including chefs) |
| Total expenses(production unit+ total area+ manpower) | 2.25 lacks | 7-8 lacks | 15–20 lacks |
In short: After going through all the desired requirements and easy calculations of starting a bakery business. Anyone could invest in the Indian bakery business and get the maximum profit in a short period.
How to avoid frauds in bakery business?
- Advance Payment: Finding a perfect baker is a time-consuming task. You have just started your bakery business, and you urgently need an experienced baker. So, a baker can scam you by asking you for the advance payment. And later, they won’t respond to your calls or messages after taking your money. Therefore, it will be an ultimate loss of your money.
- Spiral mixer scams: Anyone can sell the wrong products to you. For example, with a capacity of 30 kg (75 liters), it can produce 45 kg of dough, and with a capacity of 30 liters, only 12.5 kg of ready dough is produced. So, you might get confused, and ultimately, it will affect your final product-making capacity with the wrong machine.
- Made in Taiwan (bakery machinery): It was originally made in China, and they can lie to you by calling the machine is made in Taiwan.
- Less-consuming oil machinery: A salesman can sell you a machine by telling you that their machine consumes less oil. Consequently, you might fall into the trap of investing in the wrong product.
Why is bakery business failing?
Although, the bakery business is the fastest-growing, sometimes it might fail because of uncertainty and preplanning. So, here we have enlisted a few of the reasons for its failure.
- Proper financial preplanning: If a bakery business started with no backup plan and with zero investment. Now to proceed with how to start a bakery business, if you are not aware of proper financial plannings. You may face financial shortages later when purchasing the efficient bakery equipment and any other similar expenses. Hence, you should preplan your finances to avoid any future losses.
- Wastes: You should avoid lots of bakery waste and raw materials to avoid unnecessary expenses. i.e., scrapes of wedding cakes, etc.
- Correct market analysis: Sometimes you just jump into your business without analyzing your market, competitors, local preferences, and many other parameters. So, this ultimately results in future losses.
- Lack of skilled manpower: A good profit in the business takes minimal time if you have good and skilled staff. Moreover, the skilled staff can work efficiently with preplanning of raw materials, proportional dough preparation, and many other things. So, this reduces the cost of the expenses and avoids waste.
Summary
At last, we concluded that “how to start a bakery business” and opening up a bakery business is quite challenging if you are a new entrepreneur. However, after reviewing all of the previously mentioned information. You can easily make a business plan and marketing strategy accordingly. In addition, you can also hire a skilled manpower and preplan your expenses. Further, this will help you avoid falling for any scams and future money losses. Hopefully, all the information shared here is quite authentic and easily understandable.