Starting a Bakery

Running a bakery is a creative and challenging business, whether be it a stand-alone bakery, a retail bakery chain, or industrial bakery operations for that matter. However, in this feature we are concentrating on the points to be considered for the running of a start-up stand-alone bakery business.

An entrepreneur venturing into bakery business should remember that simply love for baking wouldn’t do, the passion for baking should be complemented with knowledge and expertise if the entrepreneur wants to survive the competition, especially with limited funds. It should do well for her/him and many such entrepreneurs to remember that bakery business has great potential for growth in India, but the competition too is huge.

Location and Costs

First of all, as an entrepreneur starting a bakery she/he should be sure of her/his location. That is she/he should be sure that the location where she/he is thinking of starting the bakery business has a need for a new bakery or not, or whether the consumer profile there is suited for the kind of baked products which she/he has in mind or has expertise in producing. If the answer to any of these questions is no, the entrepreneur should proceed to another suitable location that is within her/his budget, without thinking twice.

Secondly, it is important to calculate in detail the fixed and variable costs involved in running the bakery operations, especially for the first six months, when the profits are not expected to trickle in. Two examples of fixed cost are the rent of the outlet (assuming the entrepreneur doesn’t own the property where she/he decides to create a bakery) and the depreciation on the bakery equipment or the lease costs on them; two examples of variable cost are the cost of ingredients and human resources or labour.