Here is what you need to know.
The decadently baked cakes, cookies, puffed pastries, pies, and much more that never cease to lure us into a sinful indulgence - have you ever wondered what goes behind these goodies? The magical touch of a baker. Some secret recipes. Yes, of course! But also, something more than that! It includes - very good quality ingredients and baking tools.
The major differentiating factor for a bakery business depends on its ability to source the best quality ingredients at a competitive price. Because the mouthfeel of any baked food never lies. It is either a supreme treat to the senses or an absolute put-off. Hence, be it a home-baker who operates on a small scale, a hotelier, or a supplier of baked items who manage mass production - every baker worth his salt follows a very stringent protocol when it comes to sourcing the baking tools and ingredients.
Starting a bakery supply store is one of the most promising small business ideas that has sustained generations of business owners since time immemorial and continues to be a sweet spot for aspiring entrepreneurs even now. The scope and opportunity of this business segment have always been high and will continue to be in the times to come.
Considering the boom in the demands for designer cakes, the gluten-free and sugar-free variants and other customisations, the expanse of the palate is evidently expanding. The industry stats are also very encouraging.
The aspiring entrepreneurs who are planning to start a business in this segment are eyeing a thriving business opportunity with exponential growth potential. The bakery ingredient market size is touted to reach $19.2 million in 2027 5.7% up from $13.9 million in 2019. The market size for bakery equipment was estimated to be more than $7.5 billion in 2019 and is expected to grow at a CAGR of over 6.5%.
How To Start A Business of Bakery Supply Store
1. Market Survey
A market survey is a mandate before starting a business. It helps you to identify the gaps in the market that you can fill in. You need to reach out to all the bakeries in your city and talk to them. A bakery supply store can prove to be the most profitable small business idea provided you incline to identify the needs of your customers and serve them diligently. Conducting a market survey helps you understand that one factor you wish would be there to make their job a little easier.
Find out if the bakery supply stores in your city are organised enough to help the customers make easy and quick buying decisions?
Can you facilitate the delivery of bakery supplies without any minimum order or time constraints?
Find out what other bakery supply stores are doing. And then, think what can you do differently from them?
2. Make a Business Plan
Every business starts with making a detailed business plan. Making a business plan is like creating a route map that shows us the way to proceed. The business plan entails meticulously writing down each and everything about the business under different categories.
- Summary - Creating a business plan starts with writing a business summary. It starts with the mission statement and lays out the legal structure and ownership details along with a brief history or background in case it is a continuation of an existing business unit.
- Business Overview - It details the concept of the business, the layout plan, and details about the core management team.
- Market Analysis - Helps you evaluate the scope and potential of the industry, the level of competition within your area of operations, identify your target audience, and find the right location for your business.
- SWOT Analysis - Strength, weakness, opportunity, and threat - abridged as SWOT, is significant to identify the stamina and tenacity of your business and how well it is equipped to fare in the test of time.
- Operations Plans - A supply business, in general, harps more on logistics. Hence, the operations plan would include the warehousing details, transportations to manage the deliveries, customer service, HR policies, etc.
- Financial Analysis - Finance management is at the core of a successful business. Before you focus on your earnings, you should know how much you have. Rather, it is all the more important to know how to allocate the finance efficiently to help your business grow. Financial analysis helps you in this regard.
- Marketing Plan - If you want to watch your business grow, you should know how to market your business. It helps you to attract more customers and promote your business.
Also read: Cake Box Manufacturers in India
What do you sell?
A bakery typically stocks a complete range of molds and bakeware, icing tools, turn-tables, cake stands, cake toppers, paper molds, cake bases, boxes, and other packing options, along with food ingredients such as essence, extracts, chocolate molds, whipping creams, etc., for commercial bakeries as well as hobby bakers.
Some bakery supply stores can even stock stand mixers, ovens, and other equipment to support high-volume production.
Who do you sell?
Before you start a bakery supply store, you should know your target customers. As a supplier, it is significant to know your target customer. This helps you to determine the scale at which you want to operate.
Do you want to cater to hobby bakers and small bakery units or you want to cater to cafe chains, hotels, and large-scale commercial bakeries? You could even start it small and scale it up in the due course of time. Whether you start it small or plan to open an all-inclusive exhaustive supply unit from the beginning, identifying your customers will help you to plan the range and selection of your product line.
Also Read: Biscuit Manufacturers in India
Registration, License, and other Legal Mandate
Every business has to abide by some legal compliances and a bakery supply store would be no exception in this regard. If you are stocking edible ingredients such as essence, chocolate compounds, cake mixes, etc., you have to get your business registered to FSSAI. Other mandates include GST registration and fire license.
Get the Right Location
Albeit, the digital drive across all businesses has taken away the physical boundaries that a brick-n-mortar store brings along, yet, the importance of the right location for your store can not be ignored. If you plan to set up a store, make sure to find a hub where other stores cater to the commercial foodservice segment. Make sure you have a good parking space.
Even if you plan to operate online, you should have your warehouse in a well-connected and easily approachable location by hotels and other bakeries. It will make it easy for you to manage the deliveries.
How much do you need to start a bakery supply store?
How much money you invest completely depends on the scale at which you want to start your business. You could choose to start with a single product such as customised cake toppers or cardboard boxes and slowly expand into other categories. The initial investment will vary accordingly.
The bakery business thrives on customisation. This gives the scope for specialisation. Some bakers specialise in sugar crafting while some specialise in gluten-free products. Likewise, you could choose your niche.
This is one business that you can start at a very small scale from your house. The initial investment could range anywhere between Rs.2.5 lakh - Rs.5 lakh.
Hiring & Team Building
In an initial stage of a bootstrapped venture, you might have to handle it alone or take help from your spouse or a family member. You can wait till you start making money before you start hiring. However, you can’t carry on with it for a long time. In due course of time, you have to start hiring.
A small bakery supply store does well with just a few employees to keep a track of the SKUs and assist the customers. The first sign that your business is growing is when you increase your manpower. But it entirely depends on how good you are at identifying the right people who will help your business grow. As a start-up business owner, you need people who see their future in the success and prosperity of your company.
There are several online and offline options to reach out to your target customers. You should prepare a very strong brand communication strategy for your business. A supply business can operate through other online retailers. However, if you want to establish your brand, you must have your website. Use your social media handles, how social media groups for bakery supply business owners for networking and connecting to potential customers and other business associates.
Word of mouth publicity has always been the most effective promotional strategy. Hence, try to make the customers happy and request referrals and recommendations from your existing customers. Highlight their feedback and testimonials on your social media pages. This will help you win the trust of new customers and help your business to grow.
Bakery products are a staple for every household across the globe. And hence, the opportunity to supply to a bakery store will never go out of business. All you need is to know your customers and treat them with empathy and care. Help them to grow by providing them with everything that will make their lives as bakers easier. As they grow and flourish, so will you. And, with the rising demands for customised cakes and desserts, the opportunities in this segment are expected to move upwards.
I hope you find the information shared in this article useful. Please share your feedback in the comments below.
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Q. Can I start a bakery supply business without having any prior experience?
Ans. You don’t need any experience to start a bakery supply business. All you need to have is a penchant for managing inventories, logistics, and a willingness to serve your customers.
Q. How to get funding for my business?
Ans. There is umpteen number of funding options from bank loans to government schemes to investors and venture capitalists. Evaluate the pros and cons of each of the funding options and proceed accordingly.
Q. How do I sell my products online?
Ans. The best option is to host your own website and establish your brand presence through social media marketing. Alternatively, you could also sell through established online retail platforms.
Q. Does giving offers and discounts help to attract more customers?
Ans. Your product should be the best in the market and it should be priced at a competitive rate. As a rule of thumb, business owners who know how to add value to your customer tend to attract more customers. Hence, before blindly giving offers and discounts, consider the kind of value your offer brings to the table for your customers. Only then it will be worth it.