Bakeries are a growing industry in the US. It’s easy to see why, as people shop for their daily bread or seek out cakes and other sweet treats. Specialty baking is on the rise too, with products designed for people who have particular dietary choices or digestive issues.
We want to help you get your bakery business off the ground. Since 2004, we’ve helped over 100,000 people to become entrepreneurs, starting exciting businesses and bringing their ideas to life. We’ll give you the support, guidance and advice you need to create a business and make it into a success.
Here is our simple guide to starting up a successful bakery business. From exploring the types of business you can start, through research, to the legalities of setting up your business and the realities of your day to day operations, this guide is here to help.
Read on for some insight into creating your own bakery business and becoming an entrepreneur.In this guide we will cover:
The following products make up the bakery market in the US:
The time to take advantage is now — we’ll help you be a part of that success!
Before deciding to open a bakery, it’s important to understand the skills and approach you’re likely to need.
Here are some of the typical tasks you’ll be performing for your bakery business on a daily basis.
The following skills will be very useful in your role as a bakery small business owner.
Someone coming to your bakery is likely to want:
If you want to start a successful bakery business, it’s important to know what your options are. Here are some of the more popular business ideas:
These areas are just starting points — there are many different types of bakery businesses. Once you’ve identified the type of bakery you’d like to run and what you want to sell, you need to validate your business idea.
Start by checking you have the right skillset. Bakers work long hours and need sufficient technical skill to make great products. You’ll need to deal with employees and customers too, and there’s a lot of planning that goes into running a successful bakery.
Before committing too much time, energy and money into your new bakery business, it’s important to test the marketplace.
The thing to learn here is that it’s okay to say “no” to your first, second or third bakery business ideas. Very few entrepreneurs get it right first time. In fact, getting it wrong is often a badge of honor! Still, you don’t want to waste too much time, energy or money on the wrong initiatives, so ask and answer these questions honestly to find the right way forward.
You need to define how you’re going to run your bakery business, market yourself, get sales, make a profit and grow. This can only come about through creating a watertight business plan. It will help you get your thinking in order and show your commitment to your bakery business.
You will also need to look at financial projections for your bakery business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others?
If you can, try to plan your revenue for the next month, three months, year and two years. It’s vital to take into account the cost of setting up a bakery business in the first place, also factoring in utility, staff and other costs.
We’ve got the perfect guide to writing your business plan.
There are five main business structures you can have in the US, and it’s important to choose the right one. We’ve shared your options below. They are:
If you don’t choose to form a legal business entity for your bakery business, you will be a sole proprietor by default. This won’t give you the legal protections you need, so we do not recommend this.
This is a type of business that is formed when two or more people work together without creating a more formal business entity. Like a sole proprietorship, it may not give you all the protections your bakery business may need.’
The most common type of business entity. An LLC is fast, simple and inexpensive to setup and maintain. It protects your personal finances and assets and is a great way to start your bakery business.
This is a more complex type of business and isn't generally recommended for smaller organizations, like a bakery business.
These are the largest and most complex types of businesses and are typically far more than the average entrepreneur or bakery business owner will need.
For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you've still got questions, we've answered them to help you choose the right business structure for your bakery business.
In most cases our recommendation would be to create an LLC, We've got a complete guide to everything you need to do. LLC formation dose vary from state to state, but we've got you covered, wherever you are.
Once you've legally created your bakery business, you’ll need to get some other things in place.
The location you choose will depend on the type of bakery you want to run. If you’re only producing baked goods to sell to other businesses, you won’t need a shop front. On the other hand, if you’re selling to the public or operating as a bakery cafe, you’ll need a retail location.
Bakeries will require specialized equipment. You’ll need a professional kitchen that’s licensed for commercial food production. You’ll need counters, shelf fixtures, display cases and other furniture to show your products. You’ll also require tables and chairs if you want people to eat at your bakery.
Marketing will probably be part of your bakery business. At the very least you’ll need signs to attract people in, but you should also look into local advertising, both offline and online. It’s also a good idea to create a website where you can share details and photos of what you bake.
There’s some specialist bakery software out there, and of course you’ll need a point of sale (POS) system. There are many other apps that can help you, see our list at the end of this guide.
Unless you want to do everything yourself, you’re going to need employees. Bakery owners often work very long hours, and you can’t be making products and service customers at the same time. You’ll need to attract and employ great staff that are well-versed in customer service.
You will need a separate business bank account for your bakery business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes. Here at Incfile we can even help you file your taxes.
Our Start a Business Checklist will get your business going in the best possible way.
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