How do I Write a Bakery Business Plan?

One of the questions we often hear at Berica is “how do I write a bakery business plan?”  Have you ever thought, when you come to write a plan like this you just don’t know where to start? And whenever you start looking everyone is wanting you to pay them for their advice?

In this article, we will discuss why a bakery business plan is a necessity.  We’ll walk you through every part of a business plan; from creating a basic description of your establishment to developing advertising strategies.

Why is a Bakery Business Plan a necessity?

Creating a bakery business plan allows you to thoroughly analyse every detail of your business, including what equipment you may need and gaining bank loans if required or perhaps gaining investors.  Although your business may have started as a “personal vision”, the continual evolvement into a solid plan will allow you to prove to others and yourself that it is a viable business venture with return on investment being paramount.

What are the key headings in a Bakery Business Plan?

There are 7 main headings that your plan should have.  These are:

1. Executive Summary
2. Company Overview and Description
3. Market Analysis
4. Business Offerings
5. Management
6. Marketing and Public Relations - Strategies
7. Financial Projections

Keep on reading below to learn how you will create an effective living document which includes these important headings.

(1) Executive Summary

Although this heading is at the start of your plan, it will actually be the last thing that you will write.  The Executive Summary is an over-arching summary of your Bakery Business Plan.  Banks and investors read this section to determine whether they are interested in the rest of your business plan.  Think of it as your elevator pitch.

Executive Summaries are typically between one to four pages in length and vary dependent on the size of the business.  You need to crystalise here what makes your company special and why that will make your company successful, along with the expected growth you envisage.

The important questions that you will need to answer when starting out are (1) where your bakery will be located as well as (2) how much building space is required for operation.  Remember you will need to discuss the expected cost of your building space and any necessary equipment.  If you are already in business the questions you will need to answer are around (1) sustainable or augmentive growth.  This needs to tie in with your overall goals and projected profits.

Consider some of these tips:

• Use concise language: Take advantage of bullet points to read your summary faster.

• Write a hook: The 1^st paragraph should explain what your bakery does.

• Know your audience: Ensure your Executive Summary is easily understood by whoever you are presenting it to.

• What are your business’s core strengths: Do you make an exceptional/unique product? An excellent management team?

• Don’t use claims you can’t back up:

We have all heard examples of bakeries saying “The World’s Best …..”.  However, stay realistic and offer tangible facts.  An example would be, “we only source organic ingredients for our recipes”.

And finally… be genuine. You will obviously have the passion for what you are doing and invested heavily both financially and personally into it – let it show.

(2) Company Overview and Description

The next step is to undertake a company overview, this should explain why you want to “open” a bakery.  In this section you will be able to drill down on the top-line points you will put into your Executive Summary at the end.

Think of the “Company Overview and Description” as the platform to showcase how and why you plan to open your bakery.

Remember to answer these questions:

• What are your long-term goals?
• What are your short-term goals?
• Who is your target audience?
• What is your strategy and how does it differ from the competition?
• Do you have any special recipes to differentiate yourself?
• Will your bakery be built around a specific theme i.e. Swiss bakery, etc?
• What is the legal structure of your business?

(3) Market Analysis

This section of your plan will require the most research.  The details here will reflect your research and provide the sound confirmation of all the conclusions that you have come to up to this point.

Areas to consider are:

What are the demographics of your area?

• Incorporate disposable income of your potential customers.
• Customer segmentation according to age.

Know your competitors:

• Can you learn anything from their success.
• How can you position/differentiate yourself.

Trends:

• Seasonal trends.
• How much do people spend eating out in your area.

Pricing:

• What will your price points be.
• What gross margin are you needing and working capital availability.

Regulations:

• Are you up to date with the latest Health and Safety.
• Employment law changes.
• What regulations will apply to you being able to operate.
• How do you plan to comply with these regulations.

(4) Business Offerings

In this section you need to drive down and detail specifically what type of baked goods you will supply to your customers.  Why are you wanting to sell these items and how will selling these elevate your bakery business to become the next “hot spot”.

To enable clarity, remember to answer the following questions:

• Where do you intend to purchase your ingredients/equipment?
• Will you have supplier contracts?
• Are you undertaking a product “innovation”?
• If so, do you want to have patent protection from competitors?
• How do you plan to reinvent your offering over time?
• What factors may cause a decline in consumption of your product?
• What percentage of your business will be custom-made or specialty items?

(5) Management Plan

Organisation is key and this section is a critical component of writing a Bakery Business Plan.  What is the management structure of your bakery? You can include personal information and shares of ownership if there are several owners.

Take time to answer the following questions:

• How many employees do you wish to employ, including full-time and part-time headcounts?
• How much of the business do you plan to own?
• Is there a business partner?
• Is there a sleeping partner?
• Who is actually going to be doing the “doing” – i.e. baking or running the bakery behind the scenes?
• Will you employ an accountant?
• Who else will have input into decision making (even they though don’t have ownership)

(6) Marketing and Public Relations - Strategies

Your business needs a solid strategy for entering the market or being a disrupter and hence attracting new customers.  Building a strong community presence and the “go-to” place for locals is a critical step in entering into the existing bakery market.

This section is about explaining and developing the steps you will take to reach your potential customers, by being creative with your name and logo to entice customers, as well as your unique offerings.  Having a clear direction on developing your brand and its translation to awareness in the community.  Remember the 4Ps of marketing; product, place, price and promotion.

How do I Reach my Target Audience?

Through the process of market analysis you would have identified your target market.  When working on marketing strategy you may need to give consideration on:

• How you will offer special or competitive pricing to appeal to your target market.
• Promoting your product range – perhaps seasonally.
• Informing your target audience about bakery items that are unique to you.
• Appealing to your customers senses, eg: location of ovens

Development of an Advertising Strategy

Developing an advertising strategy needs to align to your target market.

Questions to ask are:

• Will you use social media?
• Will you use local print media?
• How will you create a continued online presence for your bakery?
• Who is going to be responsible for updating your website?
• Will you host a grand opening with competitions?

Do you Want to Grow?

Perhaps you are already thinking about expansion plans within the local area or in another town.  Use this section to write down your expansion plans and, if so, what do you envisage it will look like – i.e. will you need to hire more staff?

(7) Financial Projections

This section allows you, the business owner, to elaborate on all the financial aspects of your business.  The key here is to research and explain the potential success of your business and what that may look like.

At this stage of your Bakery Business Plan you would have analysed the market you are entering and be able to write the financial goals for your company.  Remember to:

• Detail all the costs; including bills, salaries and supplies required.
• Provide projections on when you expect to break-even?
• Discuss your working capital.
• Be realistic in your goal setting.

Conclusion

Creating a formalised Bakery Business Plan leads to clarity and being able to obtain financial investment.  The clarity that comes from formalising enables you to have “peace of mind” that your business venture will be both viable and profitable.

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