25.2.2022

How to Start a Baking Business

Written by Lauren Valensky

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If you haven’t baked a banana loaf in lockdown over the last two years, where have you been? Throughout the COVID-19 pandemic, people have been coming up with inventive ways of passing the time. However, for a number of entrepreneurs, baking has started to mean business, with the number of home baking businesses in the UK rising by 157% between 2019 and 2020 [1]So if you want to get a good piece of the pie, we’ve compiled a list of everything you knead to know about how to start a baking business.

(Rye)search 

Before you start building your baking business, it's crucial to do your research.  You’ll need to know your target market, what they want and how much they’re willing to spend. If you’re not sure where to start, the Small Business Association is a great resource for market research.

You also need to assess your competition. Take a look at other bakeries in your area and online and see what they’re offering. What can you do differently to make your business stand out?

Exploring and understanding the trends of the baked goods market also allows you to establish your unique selling proposition (USP). Just like your bakes, you don’t want your business’ main selling point to be overdone.

Plan au Chocolat 

Even after setting out the angle your business is going to take, without a plan in place, your bakery becomes susceptible to sinking.

While business plans will vary between businesses, two things they should always include are your marketing strategy and business model.

Since these hospitality venues can range from a 'coffee & cake' spot to a boujie baking boutique, your plan should lay out which blueprint will work best for your business. There are a few options to consider:

Online

You don't need a business location to start a bakery. You can easily run your baking business out of your house, with the help of a fantastic website, photos of your work, and an ordering procedure.

Sit-down

If you want customers to have the experience of coming into a bakery and enjoying the smell of fresh baking, then you might want to consider opening up a sit-down bakery. Make sure you have enough space to accommodate tables and chairs, as well as a place for people to line up and order.

Mobile 

Have a knack for baking on the go? Start a mobile bakery! A food-van style business is great for those who want the flexibility of being their own boss and setting their own hours. Plus, it's a lot less expensive to open up a mobile bakery than it is to rent out a commercial space.

Counter service 

A bakery with a counter service is perfect for those who want to have a little bit of everything. This type of set-up allows customers to order whatever they’re in the mood for and then take it to go

Speciality service

If you want your bakery to become a destination spot, consider opening up a specialty bakery. This could entail anything from gluten-free to vegan options.  Bake out of your physical store or set up at home.

Cut out your costs 

How much does it cost to start a bakery business? That depends on which type you want to open. If you’re starting a mobile bakery, your costs will be lower than if you were to open up a sit-down store for instance. But no matter what, there are some unavoidable expenses that come with starting any baking business:

  • Licences and permits: Depending on your location, you may need to get a licence or permit to sell food.
  • Equipment: When it comes to commercial-grade baking equipment, the sky’s the limit. But if you’re just starting out, you don’t need the fanciest oven on the market. A used one will do just fine. The same goes for mixers, blenders and other appliances.
  • Ingredients: While you can use other people's recipes in your bakery, you will need to purchase your own ingredients.
  • Insurance: All businesses should have liability insurance, and bakeries are no exception.
  • Location: If you’re not starting a mobile or home bakery, then you need to find a location for your business. This could be a storefront or commercial space.
  • Employees: If you’re not planning on running your bakery by yourself, then you’ll need to factor in paying your employees.

The proof is in the promo

Once you’re set up, you can start looking at how to promote your bakery. Here are a few options to consider:

Social media

This is a great way to connect with customers, showcase your baked goods, and extend your business' reach.

If social media is your selling platform of choice, Instagram, Facebook, and Twitter are all great options. To engage customers, you can hold promotional competitions/raffles. Also, consider targeted paid advertising options to increase the number of people who will see your page. With the right mixture of engaging video and picture content across your accounts, you can patrons and see your profits become self-raising. 

Develop a website

Even if you do set up on social media, don't let your website glaze over. If customers are looking for a bakery company nearby and your competitor's site provides better images, easier navigation and answers to their queries, you run the risk of losing business.

Also, if consumers praise you and your contact information can't be found on the internet, you miss a valuable opportunity to stay in touch with those customers.

Work on word of mouth

Word of mouth is crucial for bakery businesses. To encourage this, you could offer referral discounts, or even just send a thank you note to customers who recommend your business to others.

Keep customers sweet

While attracting people to your business can be profitable, being able to retain your customers is really the icing on the cake. Especially since baking businesses rely heavily on word of mouth, it's important to build a customer community. Here are some simple ways to keep your customers coming back:

  • Loyalty: Offering rewards and loyalty programs are a great way to keep customers returning. This could be giving them a free treat after they've purchased ten, or offering discounts on their favourite items.
  • Events: Hosting regular events is another great way to get people through your doors. This could be anything from a kids' baking class, to a 'meet the baker' evening.
  • Go the extra mile: Accommodate as many customers as possible by providing a range of dietary choices. This could be offering free-from bakes for allergy sufferers or having vegan options available.

Bring home the bakin'

Having a variety of service choices and being able to change with the times is critical. Since the demand for remote business is increasing, it's helpful to know the steps for building your baking business from home:

  • Register as self-employed: If you have more than one client, run your own company, and sell items and services for profit, you're required to register with HMRC.
  • Register your business: UK law states that after you start a bakery, you must register with your local authority within 28 days.
  • Prepare your area: Ensure that the kitchen or space in which you'll create your goods, meets Food Standards Agency requirements.
  • Permissions: If you're renting, you must get written permission from your landlord to run your bakery business from home.
  • Insure: While you and your company are protected by both public and commercial liability insurance, employer's liability, business contents, and stock insurance are additional sorts of coverage to think about.

Sift small bakery management with EPOS system.

Setting up your payment options is the final step to starting a bakery. You’ll need to decide if you want to accept cash, check or credit cards and set up your payment processing system before taking orders. 

To increase your bakery’s sales, whichever payment method/s you choose should provide ultimate ease for your customer base. Epos Now point of sale systems can be decorated with state-of-the-art software dedicated to the bakery sector. With the right software for your small business, you can give attention to other operational areas, like efficiency and taking care of your customers… so you really can have your cake and eat it. 

Epos Now  systems offer award-winning systems that let you choose the tools and insights to help make your business achieve its goals:

  • Access our multi-award-winning inventory management system.
  • Review profitability reports based on individual product performance, trending items, and best and worst sellers.
  • Automate stock purchasing so you never miss a sales opportunity.
  • Save customer contact details and shopping preferences for more targeted marketing on our CRM system.
  • Integrate with the business automation apps that are right for your business.

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