Are you someone who everyone in the college used to approach to bake a cake for someone’s birthday party? Are you the one who likes to experiment with their culinary skills? Do you churn out to-die-for cupcakes? Would you be interested to make money out of your passion for baking? Then you have come to the right place to get some effective tips! Choosing to start your own bakery business in India is a wise decision we would say!
Bakeries are a popular foodservice establishment business in India these days. Due to globalization and growing interest of Indians to try new things, the demand for bakery items has witnessed a steady increase in the past couple of years. You must have noticed that every street in Indian cities has at least one bakery shop which is frequented by a lot of buyers.
A recent report released by leading market research company IMARC in March 2019 stated that the Indian Bakery markets reached a value of dollars 7.22 billion in 2018. The market value is projected to exceed $12 billion within the next 5 years. Let us, deep-dive, into the business plan of opening a bakery shop. We’ll discuss the steps involved in opening a bakery shop.
How To Start A Bakery Business in India?
Determine your bakery business structure, kind and format
- Home Online Bakery: With a stellar website having pictures of your work and testimonials from clients, you can start a bakery service online and you can run it from your home. You don’t even need to open a storefront.
- Counter Service Bakery shop: You can open a storefront bakery shop where the customers can walk-in, pick up and take away the baked goods.
- Sit down to dine Bakery Shop: You can open it from a space where your customers can buy, sit down and enjoy the baked items.
- Food truck Bakery Shop: Instead of the brick-and-mortar model of the bakery shop, you can sell your products from a mobile truck after baking them at home.
- Wholesale Bakery: Rather than selling your products directly to the consumers, you can sell your products to various other businesses like cafes, restaurants and grocery stores.
Create a Bakery Shop Business Plan
Before starting out to open a bakery business in India, make a solid business plan after studying various studies and consulting the bakery tycoons. This would help you in streamlining the operations, deciding the budget and mode of operation of your bakery.
- Business Plan Summary: You should have a clear mission statement of your business, a brief history of your bakery shop, its idea, and its future course of plan, vision and ownership structure of your bakery shop.
- Market Analysis: Do an in-depth analysis of the market, location, investors, target audience and competitors.
- Business offerings and menu: It should entail the business overview of your bakery shop and the types of services you provide. It should include the menu and items that you are going to offer to your customers.
- Sort out your Operations: Have a clear cut plan of the day-to-day operations including details about the functioning of the bakery, order-placement services, menu building, procurement of raw materials, recruitment of staff, etc.
- Financial Analysis: It should include the cash flow statement, the operating costs, the fixed and recurring costs, the profit margins, etc.
- SWOT Analysis: The SWOT analysis of your bakery business will help you identify your own strengths, weaknesses, opportunities and threats associated with it.
Choose an ideal location for your bakery shop
- One of the crucial decisions to make is to decide the business location of your bakery shop as it will directly impact your sales. The ideal location is a high-end street or a shopping market where the footfall is very high. Also, the place should have an efficient water supply and drainage facility too.
- Ideally, in the case of the brick and mortar model, the front area visible shop on the ground floor of a building is apt for the bakery business. You can have a fully equipped and functional kitchen on the first floor and the display cum serving area on the ground floor. This way, you can sell the idea of freshly baked products to attract more customers.
- Do not forget to obtain the No Objection Certificate (NOC) from your landlord that he/she has no problem that his/her property is being used for food outlet purposes.
How Much Does It Cost To Open A Bakery?
Following is the approximate cost of the various elements involved in opening a bakery business in India. Use this as an example.
- Rent: Rs. 60,000
- Licensing: Various licenses need to be obtained for running a bakery. You need to get the approval from FSSAI which would cost you Rs. 15,000. TIN number can be obtained for Rs. 10,000. Obtaining Municipal Health License will cost you around Rs. 3000 and fire license would cost somewhere between Rs. 1000 to Rs. 2000. Therefore, the total licensing would cost around Rs. 30,000.
- Manpower cost: You would need around Rs. 1 Lakh for the head chef, helpers, service boys, cashier and sweepers, etc.
- Kitchen Equipment: Setting up an entire kitchen set up and bakery machinery would cost around Rs. 8Lakhs.
- Marketing: Marketing items such as display boards, pamphlets and social media marketing would cost around Rs. 50,000.
- Miscellaneous costs: Various other costs of heads such as uniforms, display, etc. would cost around Rs. 20,000.
The total approximate cost of opening a bakery business in India is around Rs 10-12 lakhs. However, the cost of equipment and location can lead to considerable variance in the estimated cost.
Equipment Needed To Open A Bakery Business in India
Be it a basic or a high-end bakery kitchen, equipment needed of very high quality if you want to produce the best products. This is so because each equipment is made up of high quality sturdy and long-lasting stainless steel or high-end glassware.
- Dough Preparation and cake makers: The major equipment for a fully functional bakery consist of planetary mixers, oven, deep fridge, cooling fridge, working table, gas stove, cylinders, etc.
- Storage: Good storage utensils will help you keep your kitchen organized. Also, invest in trucks and carts to move the large bags of flour and sugar around in the kitchen.
- Display and sales: Choose the display cases carefully because the more attractive they are, the more sales you will get. Select stylish boxes for packaging and sales of your goods.
- Cleaning and sanitation: Install a three-compartment sink for your cleaning area. Ensure that you have handwashing stations for your employees and customers. You must use disposable gloves for better hygiene. You must buy the cleaning chemicals, scrubbers, and other essential cleaning items.
- Install a POS and Billing software: These days, the POS comes integrated with inventory management software too. It does your billing as well as keeps a track of billed items on your shelf and the perishable items in the inventory.
Tips Which Can Lead You To Generate Extra Revenue
- Make the packaging super attractive: These days people are getting allured by small brands that do artisanal packaging to make their products stand out from the crowd. Unique packaging with an authentic human touch that takes care of the aesthetics makes for special memories associated with your product.
- Social Media presence: Click good and attractive pictures using your phone or invest in a DSLR camera. These pictures will serve as your ambassadors on the image-based social media platforms such as Instagram, Snapchat, Facebook and Pinterest. The visuals can make the mouths of the consumers watering which will tempt them to order your products.
- Have a good display and ambience: Make sure the display cabinets of your café or bakery shop is lined with the aesthetically appealing and mouth-watering products such as cakes, pastries, muffins, etc.
- Offer free samples: Who doesn’t enjoy an extra piece of cake or a pie or a muffin and that too absolutely free! You can flaunt your best culinary treats to your potential customers when they order something of above a particular value. Next time, when they order something else, they know what they have to team it up with. This way you can promote the sales of otherwise low selling products.
- Offer baking classes: If you are good at baking and you know there are many people who think that baking is fun, then cash in on that idea! Start your own branded baking offline as well as online classes. You can charge quite a lot for these classes and this way you can have an alternate stream of income as well.
So, what are you waiting for? Take the first step. Find the right space and location, have the required funding, have up to date licenses and permits, start your journey to own your own bakery business shop. We wish you all the very best in your new venture!