In India, the bakery business has grown to be one of the most popular food services. People are in high demand for products such as pastries, cakes, bread, cookies, and other snacks.
In 2020, the Indian bakery market was estimated to be worth roughly USD 7.60 billion. Between 2021 and 2026, the market is expected to increase at an annual rate of 8.5 percent, reaching a value of USD 12.39 billion.
Whereas, During 2021, The Asia-Pacific region dominated the worldwide bakery ingredients market, with a CAGR of roughly 6.6%.
This business model is unquestionably profitable, given the rapid expansion in this industry. If you want to operate a bakery shop in India, you’ll need a thorough understanding of how to start a bakery business. This blog will walk you through specific steps on how to start a successful bakery business in India.
Bakery Business Plan
The concept of your bakery business, as well as the type of service you’ll give, must be included in your bakery business plan. It should include information about your bakery’s layout, choosing the right restaurant management system, and service style. An overview of your restaurant’s legal structure and ownership and your restaurant’s future goals must also be included within your business plan.
Elements that assist you in your bakery operation, such as order-taking, customer service, employee management, and more should all be included in your bakery’s operating Plan.
Your bakery business plan should also include a marketing strategy to increase your business presence. It should precisely elaborate how your business is going to attract clients and advertise your bakery.
Understanding Food Industry
Before you start a bakery business, you must conduct an industry analysis. It will assist you in identifying your bakery’s target demographic and analyzing local competition.
The operational costs, cash flow statement, and other expenses should be included in your bakery business plan’s financial analysis to get an overall idea of your business’s financial position.
Deciding a Bakery Format
These are a few bakery options to explore:
In all Indian cities, this is the most frequently found business. It can be started by anyone with a small team and basic baking skills. This business model requires a little more space than a standard grocery shop where customers can pick up baked goods.
Counter Style Bakeries
This is the most common and recognizable bakery format, and it has its advantages. With this style, you can serve any number of customers but because of the lack of a dining area, your options for serving meals and retaining consumers on-site are restricted.
These types of bakeries don’t have a large selection of products, but they do take prior orders for special parties and occasions. People offering these types of bakery services are highly experienced and their products are of greater quality and taste better, although they are significantly more expensive.
Launching a food truck is a low-cost alternative for launching a bakery business and can help you reach a wider audience. You can enable your food truck with baking equipment by customizing it or you can simply bring along your baked products and park your food trucks on the streets and near offices.
If you are not ready to renting or purchase large-scale equipment, then starting a bakery from home can be a great alternative. You’ll need less money to get started, and you’ll be able to sell your products online and at local markets. You could even be able to work out a contract with local coffee shops or cafes.
Bakery Cafes require renting a commercial facility in a busy area. You will also need to hire bakers and maintenance staff that can add up to your expenses. These bakeries usually offer quality products and recruit experienced employees.
Choosing the Right Location
Discovering a commercial real estate agent who specializes in finding business spaces for buy or rent might make your hunt a lot easier if you’re creating a physical presence. You’ll want to make sure your agent has a lot of expertise in the town you’re interested in. You should also obtain a No Objection Certificate (NOC) and other legal agreement from the property owner stating that he has no objections to his property being used for commercial purposes related to food industry. Also, make sure that the area has an adequate water supply and drainage system.
Purchasing Bakery Equipment
You’ll need commercial-grade bakery equipment to help you crank out all those baked goods. You can also save money by purchasing used bakery equipment because operating a bakery requires modern equipment to improve efficiency. Below is a list of equipment you will need for your bakery business:
List of Baking Equipment:
- Aprons, Gloves and Hairnets
- Refrigerator and freezer
- Air-tight storage boxes
- Turn Over Machine
- Cake Decor accessories.
- Packaging Bags
Get the Required Licenses
It is advisable to obtain all necessary permissions prior to opening a bakery.
To obtain this license you can apply on the government’s website (www.fssai.gov.in). You can also get this done through a variety of firms for roughly 5,000 INR, which includes all paperwork and a license cost. The FSSAI permits for a five-year tenure cost 15,000 INR. With this you can avoid annual renewal expenses, it is recommended that you obtain a five-year food license.
Health license can be obtained from the Municipal Health Inspector. It certifies that your company follows all of the Health Department’s health-related regulations. Getting this license can cost you around 2,000 to 3,000 INR.
The Fire Department will issue you a Fire NOC after everything is in place. Once your fire extinguisher cylinders are all in place, you can obtain a fire license for a nominal charge. This one can cost you around 1,000 to 2,000 INR.
Every bakery deals with readymade food products, thus they must pay tax on their goods and services, which necessitates GST registration.
GST is taxed 12% on bakery items and branded snacks while other commodities such as bread are taxed at 0%, pastries/cakes are taxed at 18%, and so on. The food GST rates vary depending on the item. As a result, the final payment is based on the total value of items purchased.
Your bakery’s logo must be registered in order for it to have a distinct identity.
How Much Does It Cost to Start a Bakery in India?
The cost estimates for starting a bakery in a commercial location look like this:
Rent in a respectable region might range from 20,000 to 40,000 INR per month, depending on the area covered by the business.
Bakeries require a variety of tools, including ovens, processors, grinders, and more. These might cost anything between 5,000 and 1,00,000 INR.
Billing and POS System
For any bakery to function, a POS (Point of Sale) billing system is required. A good unit might cost anything between 10,000 and 50,000 INR. A bakery billing software or a bakery POS software will also be required and it should cost you around 7000-15000 INR depending upon the features that you require.
You might require five to ten people to run a decent-sized bakery. Their monthly salary and other related expenses might reach 1,00,000 INR.
Permits and licenses might cost up to 20,000 to 30,000 INR in total. These costs are roughly estimated considering the mandatory requirements for opening a bakery business. Costs may increase in case you add other expenses like a marketing plan and more.
Preparing Display Area
To draw more customers, the bakery’s display area should be well planned and made in such a way that every item is visible. The display room must have a display rack and adequate storage for the products to showcase in the most effective way.
Find a way to make a freshly baked cookie smell waft into the foyer of your bakery. On your display shelf, place your most exquisite baked goods at eye level.
Marketing for Your Bakery
Marketing is critical to the success of any business. Hire a professional designer to create a well-designed logo and display board. Aside from fliers, consider investing in a display board to draw in clients. Printing attractive pamphlets, social media activities, interesting packaging, creative product names are a few areas to help you start planning your bakery’s marketing. This will not only assist you in developing your own distinct identity, but it will also assist you in branding and marketing.
Selecting Product Pricing
To figure out how much to charge for your products, you’ll need to first figure out your monthly business operating expenditures. Keep in mind your business expenses, operating costs, taxes, and marketing costs. This will assist you in determining how much money you’ll need to meet your complete operating costs. You’ll be able to come up with pricing once you’ve determined your breakeven point and production costs per baked food. After that, you may figure out how much profit you want to make and add it to the price of each product you offer.
Installing a POS Software
These are modern times and a reliable POS software like Billberry is now the only software you need to manage your entire restaurant operations. If you’re buying one for your bakery, make sure it has tools like inventory management monitoring because you’ll be restocking items more often. In case you are wondering to acquire a franchise business then you need the best franchise software that would help you maintain all your bakery business operations seamlessly.
Funding for Bakery
Consider taking a business loan to help you fund your new bakery because opening a bakery business can be expensive and not everybody can afford it. Also, it might be difficult to find finance for a new firm. Choose a loan with the lowest interest rates and the longest repayment terms possible.
Partnering with Food Delivery Providers
The demand for online food delivery is booming. For a new bakery business, it’s recommended that you register your business with food delivery partners to generate online orders. You will require a restaurant management software that lets you integrate with third party online aggregators. Food delivering players like Swiggy or Zomato are dominating the market and can be utilized to get started. It would help you boost your online presence and generate online orders for your bakery.
Register for Taxes
Learning about various taxes, regulations, and licenses before opening a bakery will save you money and time. Consider consulting a tax professional to make sure you understand your tax obligations and are on schedule to complete the necessary papers on time.
Bakery shops need an expert workforce because both the taste as well as the presentation is essential in the case of baked goods. For a high-end bakery, in most cases, a Head Chef, Helpers, Service Boys, and Cashier are required.
Deciding Staff Uniform
When starting a food business, it’s common to overlook the importance of staff attire. They are, however, necessary because they aid in the delivery of a professional appearance as well as the bakery’s branding. All employees must present themselves as well-dressed and hygienic.
Bakery Business FAQs
Following is a list of questions that are mostly asked by customers to bakery businesses. Read them carefully and prepare answers accordingly.
- What if I need to cancel once I’ve paid?
- Do you offer gluten-free options?
- Do you have a minimum order?
- What type of payments do you accept?
- Do you provide Fresh Flowers for decoration?
- Do you sell to wholesale clients?
- How long can our cake or pastries be left out?
- Do you accept a Last minute order in case of emergency?
- Do you sell Cake Toppers?
- What will happen to our bill if we move venues?
- Do you offer classes at your bakery?
- Is there a fee if I have to reschedule my wedding or celebration because of Covid?
To summarize, if you are enthusiastic about baking and want to build a brand around it, opening a bakery is a terrific choice. Your business can take off if you carefully follow above-stated steps.