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A Guide to Launching a Bakery Business

Posted on Apr 1st, 2022
Articles

bakery business plan

Bakeries are consistently one of the most appealing businesses to start. There’s always a strong demand for baked goods, and if you have a passion for baking, it can be a highly rewarding business. You’ll just need to make sure you have a solid bakery business plan to help you launch more successfully.  

In this guide, we’ll cover everything you need to know about starting a bakery and putting together your bakery business plan.  

Bakery Industry Overview  

Whether you’re focused on bread or sweet treats, starting a bakery is a popular business idea and opportunity. Baked goods are always in demand, and communities all around the country have their own bakeries that locals frequent. 

In fact, the bakery and cereals market in South Africa is one of the fastest-growing markets around the world. Owning a bakery can be a profitable business venture, as long as you are able to establish a good place in the market through developing a unique bakery business plan. 

Bakery Trends 

When putting together your bakery business plan, it’s important to understand what trends are happening in the industry. 

The baked goods market produces some of South Africa’s most staple foods. The industry is expected to achieve steady growth, with the market being led by bread and rolls. There are also plenty of new market opportunities that exist in this industry. These opportunities increase as more independent bakeries appear and offer a wider range of baked goods.  

Bakery Success Stories 

There are numerous success stories of bakeries that started small and carved themselves a big place in the market.  

While the baked goods industry is still dominated by large-scale industrial bakers, there are many neighbourhood bakeries that have stood the test of time. From artisanal bread to sweet treats, you can find small businesses all around South Africa with a strongly devoted following.  

This includes businesses ranging from baked goods food trucks to well-known brick and mortar bakeries. 

Spinach King is a great example of a township bakery success story. The bakery business was started in the founder’s neighbour’s kitchen, with only R40. Today it is a thriving business, with a permanent cafe location and stockists around the country.  

Bakery Industry Challenges and Opportunities 

The baked goods industry offers plenty of opportunities. The market is enormous, and there is space for a bakery in nearly every community. However, this doesn’t come without its challenges.  

Small independent bakeries have to compete with large-scale industrial bakeries that can offer cheaper products. Most people go to supermarkets for their baked goods.  

Because the price of baked goods is low, with a pretty slim margin, you also have to sell a high volume to turn a good profit. Setting up a bakery can also be very expensive, and you need to make sure you have the right location.  

To help bakery entrepreneurs, there are funding programs available, such as TREP 

Bakery Laws and Regulations  

Launching a bakery requires various licenses and permits. You need to make sure you meet all requirements under the Health Act (1977) which focuses on general hygiene requirements around food and beverage handling and transportation.  

Your bakery will need a business license, as well as a certificate of acceptability to operate. You will need to get in touch with your local municipality to apply for the necessary licenses and permits.  

Getting Started  

There’s a lot that goes into starting a bakery. Besides developing great recipes, finding the right location, and building up a customer base, you will need to properly equip your business to operate efficiently. 

Setup Costs 

Bakeries are expensive to set up. You will likely need an industrial oven, an industrial mixer, fridges, and various kitchen and baking equipment. Bakeries also require a lot of space.  

This isn’t to mention things like furniture, plumbing, electronics, signage, branding, company registration, and more.  

Must-Have Tech Tools  

Besides your baking equipment, your bakery will also need a POS system to operate, a card machine to accept payments, and software solutions to help you run the business – such as accounting and payroll software.  

Starting a bakery can be a lucrative and rewarding business. You just need a rock-solid bakery business plan to help you get started properly.  

This is the type of business that requires a great deal of work, long hours, and plenty of commitment. Get it right though, and it could pay off in a big way.