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. 

There are numerous factors involved in this growth rate.  For example, as more and more food shows focus on breadmaking and desserts, demand for authentic desserts following similar recipes increases showing an interesting correlation.  This is just one of many reasons why starting and operating a bakery is an excellent entrepreneurial venture.

As the demand for bakeries continues to rise, more and more entrepreneurs will be entering this industry.  To help strategically plan for starting the bakery, our business plan writer has prepared some tips and tricks for when you need your own bakery business plan.

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, 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.  By drilling down on an owner's experiences or recipes, this is a great opportunity to differentiate your organization while introducing your business concept and showing passion and drive for the proposed business.

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, Pain au chocoat, 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 for 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 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 their target market could be Hispanics seeking authentic Mexican bakery items.  Always keep in mind, 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, breads, 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 lead 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 to start 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. 

Phone: 321-948-9588

Email: Paulb@Qualitybusinessplan.com

 

Author: Paul Borosky, Doctoral Candidate, MBA., Author

Owner of: Quality Business Plan, and Quality Business Consultant.

Date: 11/29/2020