Delicious food has always been your passion. You love flaky dough, rising loaves, and fruity fillings. And now you want to bring your passion to other people by opening a bakery.
But now you may be asking yourself, is it really necessary to write a business plan for your bakery? Well, yes. Your business plan will be instrumental in securing funding. But even if you’re not looking for funding, writing a business plan will help you successfully open your bakery. It will clarify what need in the market your bakery will satisfy and any startup elements you may have missed.
Due to the many factors, you will need to consider, including where you will get supplies and ingredients and how you will stay on top of production, writing a business plan for your bakery is absolutely necessary.
A bakery business plan will resemble a standard business plan in many ways. But you will want to tailor certain aspects of the plan. For instance, you must include a menu and a plan for staying on top of your production schedule. This article will walk you through how to make your business plan specific to a bakery as well as how to incorporate aspects of a traditional business plan.
If you want an example of a business plan for a bakery, it might be helpful to view our sample bakery business plan. It can help give you a starting point when developing your own plan as you go through the rest of this article.
Why you need a business plan for your bakery
As mentioned above, a business plan can help you secure financing. But it can also help you examine the finer details of your operation. It will help you determine what baked goods you will produce, how many you will produce per day, and what equipment you will need to do so.
You will have to consider the costs of purchasing ingredients and the time required to make the necessary number of batches per day. Trying to gauge these factors ahead of time will help you succeed when it comes time to open your bakery’s doors.
What to include in your bakery business plan
Your bakery business plan will adhere to the format of a traditional business plan. At the same time, you will need to include elements that a typical business plan lacks. This article walks you through each step of the business plan.
Every business plan needs an executive summary. Consider writing this section last so that you have a clear idea of your bakery first. The executive summary will summarize the key points of your plan. But remember to be concise and limit this section to 1-2 pages.
If you are hoping to secure financing from investors or the bank, this is the part of the business plan they will review.
Your executive summary will provide an overview of your bakery, a short description of your target market, and the main points of your management team and financials. You can also nod toward your market analysis.
Opportunity: Vision and Concept
In this section of the business plan, you will discuss your “problem and solution.” You can also think of this part as the vision and concept. What does your bakery offer that other eateries in the area don’t?
Briefly describe the type of bakery you will open, and the atmosphere you hope to create. Then discuss what niche it will fill in the market. Will you open the bakery to fill a need in an area with few food options? Or will you round out the offerings in a crowded mall or boulevard?
Obviously, you are in the business of baked goods. But will you specialize in certain types, such as doughnuts? Or will you appeal to a specific target market by including an array of vegan or gluten-free products? Or will you focus on ethnic baked goods, such as challah bread or egg tarts?
Describe why the items on your menu belong there. Will you take custom orders, such as making birthday cakes? Include that information as well. Draw a connection between your menu and your target market, which we go over later in this article.
The target market section is an especially vital component of your business plan. Your target market is the kind of customers who will be drawn to your bakery. Your bakery will not be for everyone. You should focus on a specific set of people who will find value in what your bakery has to offer.
A bakery that uses ingredients from a local farmers’ market or is exclusively organic will draw one kind of target market. A bakery that keeps products on the cheaper side and focuses on grab-and-go might appeal to a target market of students.
Both your menu and pricing, as well as the overall atmosphere, will help you determine your target market. If you can, talk with your potential customers directly. Know the neighborhood where your bakery is opening.
The target market section of your business plan is at the heart of your success. Check out our article on all the details that can enhance this section for how you can enrich this section.
Design and Branding
When opening a bakery, take the time to consider the aesthetic of your space and marketing materials, as well as your brand in general. Signage and interior decorating can make your bakery eye-catching to potential customers.
These features also communicate what kind of bakery you are. Maybe you run an upscale bakery that offers specialty items such as tiramisu or baklava. Maybe it is more of a casual dining option with typical cookies and pastries.
Once again, location matters when it comes to bringing your target market into your bakery. A bakery should be accessible to people seeking food on the go. It’s unlikely that people will go out of the way to find your bakery, so make sure it is visible and has convenient parking.
A bakery could have a strategic location alongside other eateries. It could be a dessert spot for customers to visit after eating at a nearby pizzeria. Or it could complement a coffee shop that sells beverages but has a limited supply of pastries. Make sure surrounding shops and/or eateries are not direct competitors with your bakery. You might even want to consider how your location and the setup of the inside of your bakery can use smells to attract customers. Will passerby be hit by the scent of freshly baked bread from your windows or doorway in the mornings?
Also, consider the costs of your location. Will you rent or buy the space? Will you need to renovate it to add a counter, seating room, or kitchen space?
Marketing and PR
You will want to alert the world when your new bakery opens. Your PR and marketing will lay out how you plan to spread the word to your target market. You might want to create a website or online PDF of your menu. You’ll also want to create social media accounts to communicate directly with customers.
Marketing is tied to Public Relations (PR). This is what will be written about your bakery in local media such as newspapers or in online reviews. But don’t get too excited about generating press before you’re ready. You will want to make sure your business is up and running smoothly first. Work out any rough spots, such as having enough products available to meet demand throughout the day.
This section of the business plan should map out how you intend to handle marketing, the kind of advertising you will spend money on, and how you will approach PR. You can hire a PR consultant, but make sure you are aware of what kind of experience that person or company has with bakeries or similar businesses.
The final and very important part of your business plan will be the financial plan. Once again, the financial plan is a part of your business plan that will carry weight for potential investors. They will want to see projections and cash flow statements. The financial plan reassures them you have a plan in place to make money.
The financial plan consists of four elements: a sales forecast, income statement, cash flow statement, and a balance sheet. Don’t worry if you don’t have much experience working with these numbers. LivePlan is an example of a tool that can help you build accurate financial projections that you can adjust as needed as your business grows.
For further guidance on the financial statements, we’ve created this guide of what must go into your financial plan.
Bakery business plan templates and examples
It might be helpful to explore how other bakeries, restaurants, and various eateries have set up their business plans. Check out our free library of example plans and templates for bakeries and related businesses. You can download any of these documents in Word form and get some scaffolding for your bakery business plan.
In addition to these bakery-specific resources, you may want to brush up on how to write specific pieces of a traditional business plan. If so, take a look at our holistic writeup on how to write a business plan.
You might want to seek more tools for making sure the writing of your business plan goes smoothly. We recommend checking out LivePlan for writing your business plan. It will guide you through each step in the process of writing your business plan. Furthermore, it will generate financial forecasts for you, making it a premium tool for entrepreneurs of all kinds.
Starting a business can feel overwhelming, so take advantage of the tools and articles available to you. Read more about how LivePlan can assist you in writing the business plan for your bakery.