The bakery sector has become one of India's most popular food services since everyone loves fresh and sweet cakes, pastries, and cookies. Each city's streets and roadways are lined with several bakery establishments. People are in high demand for products such as pastries, cakes, bread, cookies, and other snacks. The majority of bakeries prepare all of these products in-house and then outsource them to vendors and wholesalers. Learn more about how to start a bakery business in India in this article.
Did you know?
The bakery industry is experiencing robust growth of over 9%. This is a large industry employing lots of people. With more than 10 lakh unorganised small scale bakeries and over 2000 organised or semi-organized bakeries, it is the biggest segment of the Indian food processing industry.
How to Start a Bakery Business in India?
Bakery Business Plan
Before starting any business, making a business plan is really important. The bakery business plan involves the following-
Nature of the Business
Firstly study the nature of the business and make an overview of what kind of business it is. It may also involve issues such as the type of administration, the style of your bakery business, the menu, and others.
Also Read: How To Open A Bakery Business In India? - Tips To Generate Extra Revenue!
Market Research
This is a very important stage since it educates you about the possible customers of the place you want to open up shop in as well as who your customers will be. It will also help in identifying competition in the market so that you can choose the best location to start with.
SWOT Analysis
This type of analysis of your bakery business would enable you to determine the strengths, weaknesses, opportunities, and threats related to your bakery firm.
Operation plan
The operations plan of your bakery business should include the specifics of how your bakery would run, such as menu, service, order-taking, raw material procurement, employee management, etc.
Financial Analysis
This part involves considering the fixed expenses that occur continuously, the operating costs that would be incurred, maintaining cash flow statements, etc. All these will help us to know whether the project is financially viable or not.
Marketing Plan
Your bakery business plan should include a complete marketing strategy. How you will attract clients and advertise your bakery should be discussed in the marketing plan.
Tasks Planning
Organise your bakery's activities and how it will operate on a day-to-day basis. This includes dealing with the personnel, maintaining the ingredients, accepting inquiries, processing orders, providing support, and delivering the goods.
Selecting a Location for the Bakery
Choosing the right location for your bakery business is one of the most important decisions you will make. It is the first phase, which needs extensive planning and study. A well-known market or high-end shopping areas with a lot of footfall are good locations for a bakery. The front-area shops on the ground floor that are easily accessible and visible are best for the bakery businesses. Also, check to see if the neighbourhood has enough water and drainage before choosing a bakery location. Get a good legal agreement for the property because you'll need it for paperwork and other licenses. You should also obtain a NOC, i.e. No Objection Certificate, from the property owner stating that he has no objections to his property being used as a food outlet.
Licenses Required for Bakery Business
Starting a bakery shop or business requires different licenses. These licenses have been discussed below in detail-
- FSSAI license: You can apply for a food license by visiting the official website of the FSSAI, i.e. www.fssai.gov.in. Fill out an online form for the same. You can also get this done through a variety of agencies, which includes all paperwork and the license fee. To avoid annual renewal expenses, it is recommended that you purchase a five-year food license. FSSAI licenses cost approximately around ₹15000 for a five years period.
- GST Registration: You can obtain GST registration with the help of a chartered accountant.
- Health license: A local Municipal Health inspector can assist you in obtaining the Municipal Corporation's health licensing fee. The fee for obtaining this license is approximately ₹3000.
- Police Eating House License: You can obtain this license from the commissioner of police.
- Fire license: After installing fire extinguisher cylinders, you can obtain a fire license for a charge of ₹1,000-2,000.
POS and Billing Software
It is important for a bakery shop or business to have a point of sale and billing software. It will help the business in keeping a track record of billing, the life of baked goods as well as in proper management of the inventory. This is essentially important as this business involves dealing with perishable items. The cost of this software can vary as per the features included in the software.
Equipment Required to Start a Bakery
The different types of equipment required to start a bakery include-
- Deep freeze
- Ovens/Microwave
- Mixers and Grinders
- Gas Cylinders
- Weighing scales
- Working tables
- Baking trays
- Utensils
- Mixing bowls
- Gas stoves
- Butter mixing machine
- Sugar grinders
- Sealing machine
Marketing for Bakery Business
Market and branding are critical to the success of any business, and a bakery is no exception. Hire a professional designer to create a well-designed logo and display board. This will not only assist you in developing your own distinct identity, but it will also assist you in branding and packaging. Also, select a well-designed menu as well. For the first several months, approximately 25,000 pamphlets will be sufficient to sell your bakery products which will cost around ₹25,000. It is important to have a beautiful display board that helps in attracting customers.
Raw Material Required in the Production Process
Wheat flour, sugar, eggs, and ghee are the most important ingredients. Other minor quantities of milk powder, yeast, salt, different fruits, baking powder, caramel colour, vanilla, butter, cream, etc., will be required. If you are just getting started, you can get all of your raw materials from the local wholesale market. You can get the main raw materials from direct manufacturers for a medium-scale plant.
You can even build up your own flour mill if you want to create a large-scale bakery business. In a mixer, combine the determined amounts of maida, starch, vanaspati, water, and other ingredients to produce a mixture for biscuits. Then, to bake the wafer sheet, pour the paste into the pre-heated mould. In a planetary mixer, combine the remaining ingredients (sugar, vanaspati, colours, and essence) to make the cream. Then, to make a sandwich, put the cream on the sheets. Cut the sandwich into biscuits and place them in pouches after that.
Pastries in various shapes, such as squares and rectangles, can be made from thick cake sheets with buttercream, jam, and other fillings sandwiched between cake layers. Then cool the layered cake before cutting it into the desired shape and size with a sharp knife.
Manpower Required to Open a Bakery
Bakery shops require skilled personnel because baked items must have both a nice taste and a decent presentation. At the display and service area, you'll need a head chef, chef de parties, commi level chef, and helpers, as well as service boys and a cashier. In the bakery, a total of 15 people are estimated to be needed. Chefs, commis, and helpers are paid based on their experience.
Also Read: Top Work from Home Business Ideas for Homemakers
Bakery Startup Costs
For a typical storefront bakery, we require the following investment
- Rent: The cost of running a bakery shop is determined by its size and location. Monthly income ranges from ₹25000 to ₹40000.
- Permits and licensing - Permits and licences can cost up to ₹30000
- Equipment - Beginning a bakery requires plenty of important equipment, which can cost anywhere between ₹5 to ₹10 lakhs.
- Chef and team - A typical bakery will require at least a head chef, a housekeeper, and a manager. This can cost anything from ₹1 lakh to ₹1.5 lakh.
- Billing System: If you want to operate a bakery somewhere, you'll need a point-of-sale system. It might cost anywhere between ₹25000 to ₹50000.
- Marketing Expenses: Any new firm will need to market itself both online and offline. Marketing costs range from ₹40000 to ₹60000 per month, depending on marketing techniques.
Conclusion
Opening a bakery business can be profitable. But to do the same efficiently requires a good knowledge of the steps involved in opening a bakery business, including preparing a proper bakery business plan, deciding the location where it is to be opened, and estimating the bakery business startup cost to be involved. Apart from this, it is also important to be aware of the different licenses that need to be obtained and the equipment that would be needed in running the business efficiently.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.
