Do you enjoy baking and are planning to start a bakery business? Baking a cake for friends or family is different, but starting a bakery shop business requires proper planning and strategy. There are multiple factors involved like cost and finances, registration, licensing, hiring a team of professionals, and overall management.
The bakery business has evolved over the past decade. It is not just about cakes and pastries anymore; bakeries today sell a versatile range of desserts as well. The home baking business in India is considered one of the most profitable and high-earning businesses today. Indeed, many people passionate about baking have successfully started their baking business from home and cracked the market. Like any other business, a home-based business too requires full-time attention and focus for growth and better revenue.
This comprehensive guide will help in a better understanding of how to start a bakery business at home. With the right tactics, baking can be converted into a profitable, high-earning venture.
1. Kickstart a full-fledged bakery business
An online home bakery does not require a lot of initial capital investment and is perfect for people passionate about baking. Begin with a small menu, manage orders and delivery, prepare the items, and gradually grow the business. All you need is a little space to bake in your home, the right baking tools and equipment, a passion for baking, and a stellar website to reach customers.
2. Cost to set up a home bakery
The good news is anyone can start a home bakery with a bare minimum investment in a good oven and basic ingredients. However, a tentative budget and plan are crucial for expanding this business. Budget planning helps in understanding how to open a bakery shop both from home and outside. Setting up an online bakery business from home means there is no cost involved in renting or lease. However, a dedicated baking space is essential for running the business smoothly. Here are the other expenses involved in starting a baking business from home.
- Business license and registration: Even if you are running a business from home, registering the business and obtaining the license is essential. It is highly recommended to spend on fire license and FSSAI registration for expanding into a commercial setup. However, if the home-based business gives profitable income, it is recommended to get the business license for filing tax and other purposes. FSSAI can levy a fine on even a home-based baking business if it runs without registration.
- Cost of equipment: A home baking business requires a primary investment in equipment and tools. To start with, a baking oven, trays, tins, spatulas, mixing bowls, frosting equipment, etc., helps in baking an assortment of items. Plan the purchase of the equipment depending on the budget and space available.
- Purchasing the ingredients: A specific budget must be set aside for ingredients. The raw material differs depending on the type of products like cake, bread, brownies, pie, tarts, frosting, cupcakes, buns, etc. Most of the ingredients are standard for all types of products, while some are specific. Always purchase the ingredients depending on the menu or recipes.
- Packaging and delivery cost: A home-based bakery requires good packaging, which helps sell the products better. The way the products are packaged is one of the major attractions for the customer. It is crucial to set a budget for investing in a cake box, muffin liners, cupcake papers, etc. Customised packaging with logo and brand name helps in building the brand reputation. Home delivery also requires a specific daily expense with logistics and transportation.
3. Why do you need a business plan?
Starting a bakery from home on a small scale does not require much planning. However, from a business point of view, it is crucial to have a business plan. This helps in streamlining the management and better marketing for business growth. Planning for the business means deciding on the recipes, testing recipes, setting up an online website for orders, marketing, and promotion.
Before starting the business, make sure to get all the necessary registration and licensing done. This helps in the calculation of GST and even receives an exemption. The GST exemption depends on an annual turnover of Rs 20 lakh.
The brand logo and name play a crucial role in the branding of the bakery business. The logo and name act as the face of the business.
Once the recipes are decided, ingredients and equipment are procured, the next big step in the bakery business plan is marketing and promotion. There are tons of ways to promote and market the business. The online presence of the business helps in better sales and revenue.
4. Go for marketing and promotion to increase revenue
Starting a bakery shop business is fairly easy and simple, but it requires proper branding to achieve better growth and revenue. Online marketing helps in better visibility of the business and rise in the customer base. Here are a few ways which help in marketing the home-based bakery business:
- Create a great SEO-optimised website through which customers can place orders. The website ensures that the business is legit and hence makes it more reliable. A secure and encrypted website with a safe payment gateway allows customers to make an online purchase. Always make sure to upload well-described and attractive photographs of the products for better sales.
- Make use of social media promotion for marketing the bakery business. Social media tools like Instagram or Facebook are indispensable for marketing. Keep uploading attractive pictures and videos of your products on them, along with relevant information and hashtags.
- Start a YouTube channel as an additional promotion and traffic generation tool for the website. Decide on the recipes, prepare the recipes, and upload for generating more views. A video of preparing recipes and bakery products garners more views and generates better leads.
- Invest in good photography and videography for better promotion. Excellent and high-quality images on social media or websites attract more customers. Once you get a sufficient number of orders, make sure to take customer feedback for better business and customer reach.
5. Price the products appropriately and keep the menu versatile
How to start a bakery is a tricky question as it requires a lot of dedication and passion for the profession. Limited bakery items, recipes, or cakes will eventually limit the customer base. It is vital to keep a menu that is versatile and is a mix of multiple items. A home-based baking business proliferates better with upgraded skills and techniques.
Start with the basic items that you always have hands-on experience and expertise in. Gradually upgrade your skills and include more recipes, better cakes, and a wide range of bakery products by attending workshops or classes. A well-designed menu allows the customers to navigate through multiple options and place the order conveniently.
Apart from the items or recipes, fair pricing is essential. Exorbitant prices are a big turn-off for customers, especially if you are new in the baking business. It is necessary to list the items and tag a fair purchase price against them. The cost of manufacturing and operation of the business for you is different from others and hence the prices must be decided accordingly.
6. Participate in events or go for partnerships
Reach out to event and wedding planners amongst friends or family and partners for orders of cake or other bakery items. Try signature recipes that will help you gain a reputation and create a niche. Seek help from family and friends for promotion.
Home-based bakery business has helped many people become entrepreneurs and get a steady monthly income. A lot of small home bakery businesses have grown exponentially to expand into a commercial setup. Starting a home-based baking startup requires proper planning, managing finances, rigorous clever marketing, and constant skills upgrade. These tips will help you understand and figure out how to start a bakery shop.
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Q. Is registration and license necessary for a home-based bakery business?
Ans. Yes, the business license and registration is necessary as it is mandatory by the FSSAI as well as for filing GST and tax. This prevents any government body or regulation from interfering with the business. Hence, a business license helps with uninterrupted work.
Q. What is the cost of starting a home bakery business?
Ans. The cost is variable, and it depends on the types of business and bakery items. It also depends on the scale and size of the business. Normally, if it starts from home without renting a place, it can be started in as low as Rs 10000/-.
Q. What is the best way of marketing for better sales?
Ans. The best way of marketing and promotion is starting a website optimised with SEO to allow the customers to place the order. The social media handles are great for promotion and marketing.
Q. What are the three significant factors for a home-based bakery business?
Ans. The three major factors are the budget for the setup, deciding on the menu or recipe, and handling the marketing and promotion for a better customer base.