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Bakery Business Plan

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Jolly's Java and Bakery

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

There is a shortage of coffee spots where customers can get high quality coffee and freshly baked pastries in a higher income market in Washington state.

JJB offers a broad range of coffee and espresso products, all from high quality imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail.

Because Washington has a cool climate for eight months out of the year, hot coffee products are very much in demand. During the remaining warmer four months of the year, iced coffee products are in significantly high demand, along with a slower but consistent demand for hot coffee products. Much of the day’s activity occurs in the morning hours before ten a.m., with a relatively steady flow for the remainder of the day.

Competition

Competition in the local area is somewhat sparse and does not provide nearly the level of product quality and customer service as JJB. Local customers are looking for a high quality product in a relaxing atmosphere. They desire a unique, classy experience.

JJB is a bakery and coffee shop managed by two partners. These partners represent sales/management and finance/administration areas, respectively. The partners will provide funding from their own savings, which will cover start-up expenses and provide a financial cushion for the first months of operation.

Expectations

JJB anticipates sales as shown below during the three years of the plan. JJB should break even by the fourth month of its operation as it steadily increases its sales. Profits for this time period are expected to be relatively low in the first two years, increasing somewhat in the third. We are projecting investment of $140,000 from the two founders.

Financial Highlights by Year

Financing needed.

Startup requirements:

• Startup expenses of $64K including $3K legal, $20K location premises renovation, $40K expensed equipment, and $1K other. These show up as negative retained earnings in the initial balance because they are incurred before launch.
• Starting cash in the bank of $70K. (in initial balance)
• Other current assets of $12K (in initial balance)
• Long-term assets of $65 (in initial balance)
• $110K initial investment from founders (Shows up in initial balance as Paid-in Capital.)
• $100K 10-year loan from SBA (in initial balance)
• $1K in accounts payable at startup. (in initial balance)

Problem & Solution

Problem worth solving.

There is a shortage of coffee spots where customers can get high-quality coffee and freshly baked pastries in a higher income market in the southwest area of Washington state. 

Our Solution

JJB offers a broad range of coffee and espresso products, all from high-quality Columbian grown imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail.

Target Market

Market size & segments.

JJB focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and espresso products.

Local Residents

JJB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure the stability of the business.

Tourist traffic comprises approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.

Current Alternatives

Leading competitors purchase and roast high quality, whole-bean coffees and, along with Italian-style espresso beverages, cold-blended beverages, a variety of pastries and confections, coffee-related accessories and equipment, and a line of premium teas, sell these items primarily through company-operated retail stores. In addition to sales through company-operated retail stores, leading competitors sell coffee and tea products through other channels of distribution (specialty operations).

Larger chains vary their product mix depending upon the size of each store and its location. Larger stores carry a broad selection of whole bean coffees in various sizes and types of packaging, as well as an assortment of coffee- and espresso-making equipment and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters, storage containers, travel tumblers and mugs. Smaller stores and kiosks typically sell a full line of coffee beverages, a more limited selection of whole-bean coffees, and a few accessories such as travel tumblers and logo mugs. According to the most recent data available, industry retail sales mix by product type was approximately 73% beverages, 14% food items, eight percent whole-bean coffees, and five percent coffee-making equipment and accessories.

Our Advantages

The retail coffee industry in the U.S. has recently experienced rapid growth. The cool marine climate in southwest Washington stimulates consumption of hot beverages throughout the year.

JJB wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.

Keys to Success

Keys to success for JJB will include:

Providing the highest quality product with personal customer service.

• Competitive pricing.

Marketing & Sales

Marketing plan.

Our marketing is rooted in the quality of the experience, to generate good word of mouth and repeat visits. That should generate good reviews on Yelp and Google Maps and similar review platforms. 

Of course we will pay attention to reviews and work with promotions to encourage reviews without being too blatant about it. 

We will also keep an up-to-date Facebook page and Twitter persona with regularly updated content. We will be slow to do promotions over social media, emphasizing useful content instead. Some of that will include community content. 

Locations & Facilities

JJB wants to establish a large regular customer base, and will therefore concentrate its business and marketing on local residents, which will be the dominant target market. This will establish a healthy, consistent revenue base to ensure the stability of the business. In addition, tourist traffic is expected to comprise approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market. JJB will have a storefront that is easily accessible from 2 different highways. 

Milestones & Metrics

Milestones table, key metrics.

Of course, the main metrics are the obvious ones: sales, direct, costs, expenses, and cash flow. But we will also be watching for units, customers, and social media metrics including Facebook likes and Twitter follows.  

Ownership & Structure

JJB is incorporated in the state of Washington. It is equally owned and managed by its two partners.

The company intends to hire two full-time  managers, one pastry chef and 3 part-time baristas to handle customer service and day to day operations.

Management Team

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Personnel Table

Financial plan investor-ready personnel plan .">, revenue forecast, revenue by month, expenses by month, net profit (or loss) by year, use of funds.

We will be financing initial assets of $65,000 long-term assets (equipment, etc.) and $12,000 current assets plus initial inventory and the early months before break-even occurs. 

Sources of Funds

Two owners each investing $70,000. Total startup investment is $140,000

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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Home >> #realtalk Blog >> Manage a business >> How to Start a Baker…

How to Start a Bakery Business in 10 Steps

By Shannon Mulligan

There are few things in this life as incredible and instantly transformative than a fresh pastry. Warm, gooey, delectable.  If you’re ever thought about taking a love of all things baked goods and pairing it with your entrepreneurial spirit, then this step-by-step guide on how to start your own bakery business is for you. 

Bakeries can be the heartbeat of a community or neighborhood, but you need to follow some critical steps first before opening your doors. Ahead, we’ll dive right into everything you need to know. From deciding what kind of bakery to open, to creating a business plan, to administrative tasks, right up to all the tools you’ll need to be successful: let’s dive in.

How to start your own bakery business 

By 2022, there were over 200,000 bakers working in the US. But the entire baking industry—vast as it is—employs over 800,000 workers overall, contributing over $186 billion to the economy. Food is an evergreen market—everyone needs to eat! While starting your own bakery business may seem like a lot in the face of this many bakers across the country, remember that no one will bake quite like you bake. 

Starting any kind of business can appear intimidating from the outset. With the right approach and considerations those fears can be quickly quelled. 

Some pros for starting your own bakery: 

• Control over your own job and finances
• Creativity of product offering
• Connect with community
• Low start-up costs if running out of home first

Of course, it’s important to measure the benefits of running your own bakery with the realities as well. 

Some cons for starting your own bakery: 

• Long working hours often beginning early in the day
• Food spoilage hits your profits
• Entrepreneurship can be stressful
• Quality ingredients may be pricey 

Still thinking about how to open a bakery business of your very own? Opening your own bakery is a big decision. But, it’s worth it if you’ve got the right plan in place and know how to manage potential stressors, financial factors, and hiring issues as they arise. 

We’ve got you covered on the 10 essential steps to running your own bakery. 

1. Decide what kind of bakery you’ll open

The million dollar question: what kind of bakery do you want to open? What do you want to serve? How do you want to serve it?

There are lots of different types of bakeries you can open, some with more overhead costs than others. Get creative in figuring out how to start a bakery business that suits your products and brand ethos. 

Some types to consider are: 

• Bakery and cafe hybrid. This is a typical format that offers plenty of seating for your customers. If you want to expand your offering into more complex meals, this is the ideal type. 
• Counter style. Less spacious than the above type, the counter style is yet still a very popular format because your customers can grab and go with their baked goods. 
• Home bakery. A home bakery offers a lot more flexibility and a lot less overhead costs. You can bring your products to markets, offer catering, or deliver to cafes in the neighborhood. 
• Food truck. Everyone loves a food truck. With a bakery food truck, you can have all of your essentials in one place but change neighborhoods and locations far more easily than a retail spot. 

2. Conduct market research

An important beginning part of your bakery business plans is conducting market research. Start with the question of where you want to sell your baked goods. From there, you can start to research if a bakery is a good idea in your neighborhood or if you need to go to a different location. 

You’ll need to consider who you’re selling to, what else is around, and more. Here are some more market research topics to consider: 

• Demographics and target buyer. Who’s your ideal buyer and how old are they?  
• Competition. Where else in your ideal location are there bakeries and what do they offer?
• Budget. How much do you have available to spend?
• Local retail and market trends. How many bakeries have opened and closed in your ideal location? 
• Segmentation. Are you offering just breads? Just cakes? A little bit of everything?

3. Create a bakery business plan

Plotting out a thorough bakery business plan is crucial at the beginning stages of your business aspirations. It’s what will help get financing (we’re gonna get there soon!) and keep you on track for what your goals are. 

To start, create an executive summary. This is an overview of what your business plan is and where it stands now, and includes where you’ll be in the next five years. Remember all of that market research you completed? Include that in your plan in a separate section. Next, you’ll want to list out all of the products and/or services you intend to offer. After that are the big financial and marketing ones: you’ll need to include how you plan to market your bakery to customers and your projected sales , along with a projection of your overall financial needs for at least three years to prove that this is indeed profitable. 

4. Finance your bakery business

Bakeries can cost anywhere from $20,000 to $700,000 in opening costs. That’s an incredibly wide amount! But remember that what you want your bakery business to be helps shape the finances you’ll need. 

These are some of your financing options when you’re thinking of how to start your own bakery business: 

• Business line of credit
• Personal savings

5. Find a location for your bakery

If you’re into creating a brick-and-mortar space for your bakery, you’re going to need some help finding the right space to lease or buy, depending on your financial situation. Hire a real estate agent who specializes in commercial or business spaces to help you find the perfect spot. 

From there, consider the following for finding the location for your bakery: 

• Accessibility. How do your customers get to your space? Is it accessible to everyone ?
• Layout . How is the space structured for your baking area, counter or cafe? 
• Competition. Who else is nearby? 
• Cost. How much is the space going to cost you?

6. Get your licenses and permits in order

Before you open your doors—before you do anything in the retail space, really—you’ll need to get your licensing and permits in order. This is crucial because without the right permits and licenses, you won’t legally be allowed to open your business and serve your customers. 

Some licenses and permits you’ll need:  

• Food handler license. You—and potential employees—need to certify that you know how to handle and store food properly.
• Sales privilege license. This allows you to sell your products. 
• Zoning permit. If you’re running a business out of your home, you’ll need this. 
• Health and safety inspection. Every food business needs to pass this inspection. 

7. Order your equipment and supplies

Now that you’re rolling in the deep of your bakery business, you’ll need to figure out what supplies and equipment you’ll need. Common equipment includes: 

• Refrigerator
• Cooling racks
• Utensils and decorating tools

8. Hire your bakery staff 

Doing this alone can be a lot. If you’ve got employees in your business plan, that’s great, but you’ll need the right folks to help out and use the right tools to hire them—and maintain their schedules. 

Homebase can help you easily post job information, track applications and help onboard new employees all in one spot. Homebase even has a library of pre-written job listings, customized for you, to take the hassle out of this task. Easily onboard with a paperless offering that remains in the Homebase app. 

9. Market your bakery business

Now we’re really cookin’! In today’s business world, you can get pretty creative with your marketing. It doesn’t always have to be traditional marketing, like advertising or going door-to-door, but those are still viable options! Word-of-mouth is still a powerful way to market your business so consider coupons, discounts, happy hour pricing, anything that can help customers reach others for you. Consider trying out social media , getting your customers to engage with you on the platform of your choice, and even getting the most out of the content they create about your business. 

10. Get the right tools to run your bakery 

With your bakery business in place, you’ll need some essential tools to make it run effortlessly for you. 

Consider the following:

• A point-of-sale system to serve your customers
• Social media scheduler to post to your social channels 

Homebase for all of your scheduling , payroll , and compliance needs.

How to start a bakery business FAQs

What should you know about running a bakery business.

Your bakery business is only as strong as the tools that you use. This ranges from the physical equipment you need to bake your products, to the point-of-sale system you need to run payroll. Homebase is equipped to handle all of your bakery business’s administrative needs like hiring and onboarding , scheduling , taxes , and knowing how much your employees have worked .

How much does it cost to start a bakery business?

Bakery start-up costs can range from $20,000 to $700,000, depending on where your bakery is and the size of your business. 

How important is it to hire the right people to help run your bakery?

You need the right employees to help you run your business effectively and efficiently. Homebase can help you find those workers from posting the job to scheduling interviews to sending onboarding documents—keeping everything in one place.

Remember:  This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.

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