How to Start a Bakery Business in India

 

Bakery is one of the favorite shops of foodies or food lovers. Bakeries are one of the popular shops in our country. Some of the bakery brands have multiple outlets, almost every city's main roads, and markets. While many bakeries prepare their creative products such as cakes, bread, pastries, savouries, and other snacks, and many outsource it to vendors, who may be wholesalers.

Nowadays, the demand for bakery products is increased as much as other food items. After,  home delivery services offer by Swiggy and Zomato the whole business model has been changed. Now, people order food items online and the same is delivered under committed time. Some of the bakeries also provide the service for parties and events and earned a good amount of profit.

Despite difficulties during the last two, three years of the CORONA pandemic, the forecast for the Indian bakery industry is positive with a projected market value likely to exceed USD 12 billion by 2024 expanding at a CARG of 9.3% from 2019 to 2024, thus the starting of bakery business will be highly profitable. If you are one of those people who is a well-trained baker and also passionate. Then, you should start your own bakery business and earn much more profit.

There is much scope for innovation and creative bakers, you can impress your customers with your creative presentation and design of the cake. You can take the help of social media for your local demand and earned good money.

In this article, we will discuss in detail, how to start a bakery business in India and things which are much needed for running it successfully.

Follow are the basic steps to open a bakery business in India

First of all, you have to decide what kind of a Bakery Business would you want to start? Retail or wholesale.

Retail Bakeries vs. Wholesale Bakeries

Before anything begins, you have to decide whether you want to open a retail bakery or a wholesale bakery. This is a very initial and important decision because it will determine how you’ll interact with your customers. Also, will help to the basic requirement of the building, equipment and minimum investment you’ll need.

I. Opening a Retail Bakery 

These types of bakeries you have seen in your neighborhood. A retail bakery generally sells baked items directly to customers instead of other distributors. Retail bakeries may be different forms, but very common bakery business is required at least one staff member who is packs and handover the item to the customers and also helps customers to select an item as per their choice.

Retail bakeries may also include both front- and back-of-house space. If you are planning a business that customers will come into your bakery and enjoy your food items with a cup of coffee and a sweet treat. In this type of business, you will need a space for them and also some extra budget for setup. But this will help you to allows you to exercise your creativity with an interior design that matches your bakery’s style.

Pros of Opening a Retail Bakery

• ·        More personal interaction with customers
• ·        Opportunity for creativity with front-of-house design
• ·        Usually less expensive to get up and running

Cons of Opening a Retail Bakery

• ·   Reliance on smaller, less steady orders for income
• ·     Need employees to run front-of-house area

II. Owning and Operating a Wholesale Bakery

Wholesale bakers sell their products to other small businesses, distributors, like restaurants, grocery stores, specialty shops, and cafes. This can be a huge benefit over retail baking. While you may not be able to customize your storefront or design a dining area, there are still plenty of opportunities for creativity with wholesale baking, like focusing more on your product and packaging.

The major drawback of wholesale baking is you need a huge investment. If you are managing a large amount of production, you need more employees for the operation of your business. If you have a limited budget then wholesale bakery items may not be good for you. However, just because wholesale bakeries can be as big as the Tastykake factory, it doesn’t mean that they have to be. A home bakery that sells to a few local diners also counts as a wholesale bakery, and it doesn’t require nearly as much capital as a large operation.

a. Pros of Opening a Wholesale Bakery

• ·        Large orders offer a steadier source of income
• ·        No front-of-house space needed
• ·        More flexibility in terms of location

b. Cons of Opening a Wholesale Bakery

• ·        More upfront costs than a retail bakery
• ·        High-volume production will require additional staff, which means more costs of operation.
• ·        Choose Your Bakery Service Style

Once you’ve decided whether you want to run a wholesale or a retail bakery, then, you can choose which service style you prefer. Your service method defines the way you move products from your kitchen to your customers.

There are several types of bakery businesses you wish to run, and your experience will determine where you can perform well. Here are 5 types of bakeries you can own: 

Bakery Cafe

A bakery cafe, or a sit-down bakery, is a retail bakery that includes a dining area for customers to sit and enjoy their food. Opening a bakery cafe with seating can be more involved than other bakery business models because you need a location with both back-of-house and front-of-house space. Most bakery cafes also offer food and drink in addition to baked goods. For example, you might specialize in cookies, cupcakes, and muffins, but you’d also want to consider serving items like coffee, tea, and sandwiches.

Counter Service Bakery

A counter service bakery is similar to a sit-down establishment because both models require a space for customers to order your products. However, counter service bakeries can be smaller, and they don’t have a dining area. This business model could potentially save you money on total budget, and you could sell coffee and other food items.

Bakery Truck

Bakery trucks are everyone's favorite, this business model is very much famous in Europe and western countries but last recent years this successful work in India also. Generally, bakery trucks offer readymade cupcakes, pastry, and other bakery items that are more popular in a particular area. In comparison to the price, bakery truck items are relatively inexpensive or reasonable to procure (especially when compared to a sit-down establishment). The bakery truck option also gives you the freedom to move around to different locations.

This business model is modern and profitable. You can bake and store your food items with the help of a fully-equipped kitchen, but it is to be very expensive. If you want to start your business with a limited budget, you can prepare your baked item in a base kitchen, sell it through your truck in different locations. This will help keeps your production costs under control.

Home Bakery

Baking at home is perfect for entrepreneurs for those who don’t have much capital to invest in their new business idea. To start, a home bakery just needs the proper equipment, adequate space, and necessary permissions. In recently, the government change norms now you have to get a food certificate before the sale of homemade baked goods. So, it is very important to check the norms and regulations in your area before starting a food business.

Before, start a home bakery, a blueprint you have to prepare from start to end process. In the whole process, you have to decide on your customers. Will you sell your baked food online? If so, do you have to deal with online delivery partners like Zomato, Swiggy, and others? If you plan to sell your own you will all need a refrigerated van.

Specialty Bakery

A specialty bakery specializes in making one type of product particularly well either a wedding cake, birthday cake, cookies, biscuits, bread, etc. these types of the shop would be considered as a specialty bakery. Specialty bakeries also offer flexibility, because although you’ll focus on a specific type of product. As per your demand, you can choose either retail or wholesale.

1. Choose the best location for your Bakery Business:-

           A good location is decide the profit of the bakery business in India, the ideal location is a reputed market or high-end shopping street where footfall is high. If possible, it is advisable to divide the total area into two different parts, one side to build a functional kitchen on another side, which you can use as a display cum serving area.

However, this is subjective to the space available and your own choice. Get an appropriate legal agreement for the property as it is also required in paperwork and other licenses. You should even get a No Objection Certificate (NOC) from the property owner that he has no problem that his place would be used for food outlet purposes.

2. Proper Documentation:-

Take all the required permission from the government agencies before starting your Bakery Business. Following are five necessary licenses for every Bakery business:-

1. FSSAI license

2. GST Registration

3. Local Municipal Corporation Health License.

4. Eating House License

5. Fire License (As per your area specifications).

3. Required manpower

Food Truck, Bakery shops need an expert workforce because both the taste as well as the presentation is essential in the case of baked goods. For a high-end bakery, you need a professional Chef specialty in bakery and Helpers, plus Service Boys and a Cashier. The manpower required depends on your business.

4. List of baking equipment

There is a list of equipment for the bakery kitchen, you will need commercial mixers, food processors, or choppers of different capacities to handle the raw materials for tasks such as mixing, blending, and grinding, A turnover machine to handle the dough, Slicers to prepare bagels and loaves, Necessary utensils such as spatulas, dough rolling mats, rolling pins, icing grates, etc., Cake décor accessories and supplies for custom cakes, Ovens for baking, storing and warming up, Different types of pans, Fryer, Storage Equipment, Shelves, both in the kitchen and display area, Refrigerator, and freezer to store perishable items and save prepared items overnight, Air-tight storage boxes to store raw materials, Food bags for customers who make large purchases, Display and Packaging, Display boxes at the front of the store with refrigeration and heating function to display the items and keep them fresh, Good quality packaging which is also environment-friendly.

5. Bakery products display

A well-designed display complements all the items you bake and gives them an irresistible appeal to anyone who walks into your store. You also require a display fridge for cakes and pastries. The idea is to look full and fresh all the time so people can know they can count on your quality. Get a custom-built display rack that goes with the layout of your store. Add attractive lighting that lights up the baked items and add a scrumptious glistening that makes anyone want to take a bit out of it. 

7. Require POS & Billing Software for bakery

The POS software is an integral part of a business entity. It also helps to maintain Inventory management. POS software is all you need in your business. While purchasing one for your bakery business, ensure that the POS software has features to manage the shelf life of the baked items, robust inventory management as you would be dealing with perishables. The rate of POS software is maybe differ based on the functionality.

8. Marketing & Branding of your Bakery Business

Marketing is a strategic part of any business to develop or grow. Branding gives your business a unique identity in your country and state. A unique designed logo and a matching name on a display board attract the customers who cross the bakery. This will not only help you to create your own unique identity but will also help in your branding while packaging. 

For marketing purposes you can distribute pamphlets in your locality also you can use social media like Facebook, Youtube, Instagram for marketing. Invest some money in display boards to attract customers.

9. Partnering with online food aggregators

After COVID Pandemic and guidelines for social distancing demand of online food delivery is steadily increasing. For a new bakery business, it is highly recommended that you must register your business on online food platforms like Swiggy and Zomato to generate online orders.

10. How much does it cost to start a bakery in India? 

Here we have mentioned the set-up cost of opening a bakery that will tell you how much it costs to start a bakery business in India. The total approximate cost of opening a bakery in India is around Rs. 8 to 15 lakhs. However, the cost of equipment and location can lead to considerable variance in the estimated cost.

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