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Who doesn’t love the smell of fresh bread in the morning? Even better, the smell of fresh cupcakes? Bakeries bring joy and convenience to their communities, but the customers aren’t the only ones who will benefit from this small business. The owner has a lot to gain too. Imagine calling a kitchen filled with tasty treats your office. Sounds pretty great, right? Which is why you’re probably wondering how to start a bakery.
Starting a bakery will be hard work, but fun at the same time. With equal parts passion and elbow grease, you can start a business that has customers lined up around the block waiting for a chance to try your delicious treats. This guide on how to start a bakery will tell you everything you need to know to get your business off the ground. Let’s get started.
Before we get into the logistics of how to open a bakery, do you have what it takes? And by that we mean, do you have some really delicious recipes? One of the most important aspects of a bakery’s success is its baked goods, so get cooking!
Once you have the recipes chosen and perfected, it’s also important to pick the right location, create an inviting atmosphere, and to keep all of your financial ducks in a row. Let’s learn more about these aspects.
You don’t have to have a bustling storefront on your town’s Main Street for your bakery to succeed. There are multiple bakery formats that you can choose from. There are even some options without the overhead costs of a pricey store location. These are a few bakery formats worth considering, but feel free to get creative—you may just have a brilliant new idea for starting a bakery.
Writing a business plan is hard work, but it’s a step that will help guide you and provide focus. A business plan can also show stakeholders such as investors, lenders, and potential partners where your business is heading. You don’t need an MBA to write a strong business plan; in essence this process will provide you with structure to organize your ideas, plans, goals, services or products, financial plans, and operational structure. Getting these ideas all down on paper serves as a roadmap to help you plan and review the work you’ve done so far. While you can customize your business plan to suit your needs, it should generally contain the following information.
It’s a lot of information to pull together, but completing your business plan will ensure you have a strategy to develop and grow your business and will guide you through the process of starting a bakery business. You can also use a business plan template or business plan software to help you arrange your ideas and make everything look professional and polished.
As you’re writing your business plan, particularly the business organization section, the question of how you plan to structure your business likely came up. Choosing a business entity is an important step to starting a bakery—or any business. You may want to consult a business attorney, accountant, or another resource to help you decide what type of business entity to form, as this decision will affect your taxes, legal responsibilities, and more. Consider one of the following most common types of business entities.
You may have already decided upon a business name, but if you haven’t yet, now is the time. Once you have an idea of what you’d like your business name to be, you will need to make sure it hasn’t already been taken by another business. A quick Google search should be your first step for ensuring no other business is already using your desired name. Not only will this save you potential confusion with customers down the road, but you can also help escape any legal repercussions.
To really make sure you’re not infringing on any trademarks, you can search for trademark filings with the U.S. Patent and Trademark Office. You can also begin a Secretary of State business search to discover if there is another business in your state that operates under your dream name. Want to really cover your bases? If your budget permits, hire an attorney to do this research on your behalf. You’ll save a lot of time and have some added peace of mind that you are legally safe to move forward with the name of your choice.
Now that you’ve chosen the type of bakery you want to move forward with, you’ll be able to narrow down your search for the right location. If you’re opening a brick-and-mortar location, finding a commercial real estate agent who specializes in finding business spaces for purchase or rent can make your search much easier. Try to find someone who primarily assists the tenants, not the landlords, with the rental process. You’ll want to make sure your agent has years of experience in your chosen community. That way they’ll know what the fair prices are and where the best locations are. They may even be able to help you find a rental space that comes with some of your necessary equipment like large refrigerators or ovens. Make sure the space you rent comes with plenty of room to store equipment and extra baking supplies.
If you’re more interested in the food truck route, you won’t need a real estate agent to help you with that. There are specialty car dealers online and in-person that sell food trucks and trucks that can be adapted into food trucks. To get a better deal, you may want to search for a used food truck on websites like Craigslist. Or ask your local food truck owners, they may be looking to sell their own truck or know of other owners who are.
You’re well on your way to opening your bakery, but while you may have a business plan and location, you still need to take care of some of the legal processes. Each state will have different regulations, so you must check with your local government to see what business licenses and permits you’ll need to start a bakery in your area. Even your city or county may require specific business licenses and permits. You should review the government websites for your state, county, and city to make sure you have all the documentation you need. Your needs will vary depending on what type of bakery you start, but you may encounter the following licenses and permits when starting your bakery.
All businesses have varying tax, licensing, and employer requirements. Learning about these requirements before you start a bakery will help you avoid costly and time-consuming mistakes. Your chosen business entity, as well as some other factors, will affect the business taxes you’ll be responsible for paying. If you haven’t already, it’s a good idea to consult a tax professional to make sure you’re aware of your tax responsibility and on track to file the appropriate paperwork on time.
If you plan on hiring employees to help you run your bakery, you’ll also need to apply for an employer identification number, also known as an EIN or business tax ID number. You can do this through the IRS and this number will be used when filing your business’s income tax return or payroll tax return, as well as when you’re opening a business bank account and credit card or filing for a business loan. Even if you don’t need to obtain an EIN—sole proprietorships and single-member LLCs without employees are the only businesses that don’t—there are still benefits of getting an EIN you should consider.
Finish this sentence: Break me off a piece of that…. You know exactly which crunchy candy bar goes with that song, right? Well that’s because of branding. Good branding is key. The colors, logos, music, taglines, and packaging can all tell your bakery’s story to the world. There is no reason your bakery can’t make a splash thanks to some solid branding. These are the following areas where you can start planning your bakery’s branding. Now is the time to let your creativity shine.
Ask yourself, what story do you want your brand to tell? Then use that story to guide each of your branding decisions. Your story should be unique. You want a name and logo that is immediately recognizable as belonging to your bakery. The same goes for your decor and packaging. Establishing social media pages for your bakery is also crucial to getting the word out about your new business while building your brand at the same time.
Starting a bakery can feel like a very personal affair, but you should do your best to keep your personal finances separate from your business finances. One of the best ways to do this is by opening a business bank account. For some businesses, this step may be legally required.
When you open your business bank account, you’ll have to decide if you want a business checking or a business savings account. Usually, new businesses will be best served by a business checking account. Businesses that are more established, and have plenty of cash on hand, will probably prefer a business savings account so their money can grow with interest. Either way, its best to have some form of business bank account to keep your business finances organized and running smoothly. The last thing you need to worry about is confusing your personal expenses with your business ones come tax season.
Another way to help keep your business and personal expenses separate, is to obtain a business credit card. While you have several options available to you, you may also consider a 0% introductory APR business credit card, which can be particularly helpful to cover any initial startup costs of your business. Keep in mind, though, you will need to make sure you have a plan to pay off your balance by the time the introductory offer ends for this to be a beneficial tool.
You have the tasty recipes and passion to start a bakery, but do you have the funding to make your dreams a reality? Starting a bakery can be an expensive endeavor, so you should start your funding process by doing some serious research. Find an answer for the following question: How much does it cost to start a bakery? The answer will vary based on your location, type of bakery, and required supplies, but you need to find a rough answer so you can plan your funding options accordingly. If you need help funding your new bakery, consider the following options.
Some popular bakery funding options include:
See Your Business Loan Options
Remember the cronut? Well the cronut was a combo of a donut and a croissant created by the famed Dominique Ansel, owner of Dominique Ansel Bakery in New York City. This buttery creation was so popular people would line up around the block in the early hours of the morning to try to get their hands on a cronut before they sold out. Well a few years later, the cronut isn’t exactly making headlines anymore. Which is why it was smart for Ansel to also sell other baked goods, including classic favorites.
When starting a bakery and crafting your menu, keep Ansel in mind. It’s okay to set and follow trends, as long as you are known for having some reliable staples available too. That way, when everyone is over the latest trend, they know they can still come to you for their favorite classics. Ansel now has multiple bakery locations in New York, Los Angeles, and London and sells new inventions (like frozen s’mores) and timeless baked goods.
If you do choose to go with a storefront or cafe-style bakery, then it’s time to amp up the atmosphere. You want your bakery to offer all the good vibes, right? There are a few tricks of the trade that will help you create a successful bakery. For example, put your most eye-catching baked goods (like those fancy frosted cakes) at eye level in your display shelf. Less exciting staples like baked bread can take up some of the space on the lower levels of your display or behind the counter.
Find a way to make that tempting freshly baked cookie smell waft into the entryway of your bakery. Vanilla or freshly baked bread scents will have you selling out in no time. Invest in plush couches, cozy decor, and oversized coffee mugs. Make sure your customers feel at home and like they know who is running their favorite bakery. As the owner, get to know your customers. It’s important to train all of your staff members to be equally friendly. And of course, a free sample or two never hurts.
Hopefully, these 10 steps helped you learn how to start a bakery. Once you find the right space, have the funding you need, and are up to date on all your licenses and permits, you can get to the best parts. Baking, branding, and getting to know your lovely customers.
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