Prepare a Business Plan
A business plan is not as scary as it sounds. Even if you don’t intend to source any capital from banks or investors, it is important that you organize your thoughts on paper. It doesn’t have to be complex or too elaborate, just something to keep your eyes on the big picture. The business plan will allow you to easily identify the obstacles and anything you may not have considered.
Your business plan should consider the prevailing market price for the type of bread you want to produce and how much competition there is. You also need to estimate the profit you’re likely to make in the first, second and third years. Is it sustainable? Is it worth the time, effort and capital? It’s usually wise to keep 8-12 months working capital to adequately support a bread bakery business.
You Should Know Enough About Bread
Nobody says you must be a master baker to succeed in this business; you really don’t need to. However, you need to know the basics and tricks of the trade if you want to survive in this business. Sign up for a bread baking course and learn the basics about measurements, recipes, flavours, packaging, branding and marketing. You should not give in to the temptation of thinking it’s enough to just hire a manager and have the bakery make you money. Your ignorance is likely to open you up to financial losses and eventual failure.
Choose A Location That’s Close To Your Target Market
The types of bread in the African market appeal to different segments of consumers. You must ensure that the type of bread you intend to produce will find a sizeable market in your area. What kind of people live around you? Are they high, middle or low-income earners? Are they students, single people or households with families? Are they predominantly young or old people?
If you live in a closely knit community like a residential estate or a university campus, it may be a great opportunity to run this business from your home kitchen.
Look for newly established or developing suburbs and high traffic locations that have little competition. It’s also important to focus on areas that may not be well serviced, like industrial estates or high density office blocks where you can draw eager customers.
Would You Need a Permit or License to Operate?
Depending on your country and location, you may require a permit or license from a government establishment or Consumer Health office to operate a bakery. What are the requirements and standards for approval? Would you need to have specific equipment like fire safety tools? Is there a standard qualification you must obtain to be eligible for a permit? You must know these requirements in advance and take the necessary steps to ensure you get the approval you need to open your doors to the public.
You Need to Use The Right Equipment
The size and quality of your equipment will depend on how much bread you intend to produce for the market and the amount of startup capital you have. It’s very important that you don’t spend too much on equipment at the beginning of this business. Look out for any good quality, pre-owned (second hand) bakery equipment you can find at a bargain price. The basic equipment you need to start a bakery business include: an oven, mixer, dough moulds, dough divider, fermentation chamber (proofer) and maybe a bread slicer.
Putting it all together…
Because most people WILL eat bread most of the time, the bread business can be a very rewarding venture if entrepreneurs can find a large market with few competitors. With some creativity and higher quality, a new bakery can easily win consumers over from an established bakery. When properly planned and operated, bakeries can become a rich source of lasting income.
If you believe this type of business will work for you, start working on a business plan and take action as soon as possible.