How to Write a Bakery Business Plan
The bakery industry, whether it be a traditional bakery, or a specialty bakery such as desserts, bread, and ethnic foods, has been growing at an above-average rate for the last several years, which has driven the demand for bakery business plans, bakery business plan templates, and bakery proform financial projections.
Our business plan writer has found that there are numerous reasons for the growth of the bakery industry and the demand for bakery business plans. For example, bakery business owners continually come up with innovative bakery products, which leads to a loyal customer following. Innovative bakery items may include creative designs, improved raw materials used in their baked goods, and innovative processes which help the flavor and allure of their baked goods. Further, bakeries are also popping up at convenient locations for their customers. An example of this would be a cupcake bakery in popular malls.
No matter the reason for the growth and elevated demand for bakeries, having a bakery business plan written by a bakery business plan writer is an excellent strategic move to stay ahead of your competition. From this, our bakery business plan writer has come up with some tips and tricks to use when writing your own bakery business plan, business plan template, or pro forma financial projections (2/22).
Executive Summary for a Bakery Business Plan.
The executive summary for a bakery business plan should be short and sweet, kinda like a cupcake or cookie. However, dissimilar to baking, there are numerous topics that must be touched upon in this segment. For example, bakery business plan writers need to explain to the reader which specialty the bakery will follow, the location of the bakery, number of employees, operating hours, primary advertising channels, and a summary of their projected revenues and profits. It sounds like a mouthful, and it is. By including each topic briefly the reader will have a better opportunity to get a broad overview understanding of the proposed bakery.
Company Information and Location for a Bakery Business.
In the location and company information segment of a bakery business plan, an important key aspect will be to discuss the owner's passion and drive for baking. Unlike some businesses, starting a bakery requires, for the most part, a competitive advantage to separate the company from the local grocery store. Drilling down on an owner's experiences or recipes is a great opportunity to differentiate your organization while introducing your business concept and showing passion and drive for the proposed business.
The executive summary section for a bakery business plan should include important general information about the bakery such as location, bakery’s name, and baked goods sold. Further, our bakery business plan writer also recommends discussing why the business owner wants to start our why they started their bakery. In some cases, bakeries are started because the owner grew up in the kitchen and has a multitude of family recipes that they wish to use in their business. Other bakeries are started because, quite frankly, there are no other bakeries in the area. No matter what the reason is for starting or expanding a bakery, make sure to personalize your bakery business plan with your personal history (3/22).
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Product Description and Competitive Advantages for a Bakery Business
In the product description section of the bakery business plan, make sure to describe some of the products that will be offered at the bakery. For example, if you are starting a bakery focused on French desserts, then list a menu including items like croissants, Paris-Brest, Mille-Feuille, Croquembouche, and Pain au Chocolat, and beignets. Further, our business plan writer recommends including some of the ingredients that may be included in the products offered. By following the strategy, the business owner is able to set the reader's expectations as to the depth and breadth of the product service line offered by the bakery. Also, this is a great opportunity to show further differentiation from area grocery stores.
Target Market for a Bakery Business
The target market segments of the bakery business plan may follow a couple of different paths. The first path may be for the business owner to target local residents. For example, some bakeries will select a target market of residents and workers within a 5 miles radius of the organization. By focusing on a geographic location, these types of bakers are often generalists as compared to a specialist. An example of a generalist would be a bakery offering a wide array of desserts and bread. In contrast, some bakeries will select an ethnic target market. If a company is starting a Mexican-themed bakery, then its target market could be Hispanics seeking authentic Mexican bakery items. Always keep in mind, that just because an organization focuses on one target market does not mean that the business will not appeal to a wide demographic.
Industry research for a Bakery Business Plan
Industry research for a bakery business plan should focus on a national level, based on our business plan writer's experience. Important information that should be included in bakery industry research would include discussions about revenues, growth, and other aspects. For example, industry experts claim that the bakery industry generates approximately $30 billion in revenues on an annual basis. Also, there are over 3,100 commercial bakeries competing in the US market. Major competitors in the bakery industry would include Grupo Bimbo, Flowers Foods, and Campbell Soup. As for market segmentation, bread, rolls, and cakes consist of approximately 65% of all bakery items sales. These are just some of the statistics that a bakery business plan should explore and summarize.
Owner and Management Section of a Bakery Business Plan
In the owner and management section of the bakery business plan, make sure to touch upon both your educational experiences as well as your professional baking endeavors. Educational experiences do not need to be only traditional learnings. For example, our business plan writer has worked with authentic bakers from all over the world, and in these types of business plans, apprenticeships and even helping parents or grandparents in the kitchen as children may be appropriate topics to discuss. For professional experience, apprenticeships may also be touched upon in this area and include any jobs that were even remotely related to baking, kitchen work, or management. By covering both segments, a future bakery owner is able to paint a colorful picture of how their experiences led them to start a bakery.
Funding Request for a Bakery Business Plan
The funding request section for a bakery business plan should first start by explaining the equipment needed for the organization. Possible equipment may include ovens, walk-in refrigerators and freezers, Baker tools, and other specialty equipment. Once the equipment is covered, then our business plan writer recommends exploring startup costs like remodeling, training, and supply purchases. Once this information is gathered and input into an excel spreadsheet, then explore miscellaneous needs like working capital, advertising, and even research and development.
With this step complete, then total the dollar amount needed or budgeted for each category in a well-prepared excel template. Finally, determine the grand total for the startup costs. Once a grand total for a startup cost is complete, write up a one-page summary of your startup costs and the type of funding that you wish to obtain, debt, or equity. By following this process, potential investors or lenders are able to understand where their funds will be spent and whether there is too much ambiguity in the funding needs.
Financials for a Bakery Business Plan.
The financial section of a bakery business plan starts with daily sales. Under daily sales, lists popular bakery items, their corresponding sales price, and estimated variable costs. Once these components are identified, then the business plan writer is able to identify potential daily profits and costs for popular menu items. From this foundation, expand your financial projections to include monthly costs such as labor, rent, and loan interest payments. At the end of the day, your bakery business plan should summarize your financial findings in the executive summary section. A detailed outlay of your financial projections should be explained, segment by segment, in your financial projection segment of the business plan. This process will enable the reader to briefly become familiar with your financial projections upfront in the executive summary and obtain greater details in your financial projection segment.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author