Bakeries are quite popular in India. Almost every street in Indian cities has a bakery. Opening a bakery presents many unique challenges that are different from other types of businesses.
Here are 13 Simple Steps to Start a Bakery or a Cake Shop:
1. Get your Licenses and Permits
- Apply for any in-state required licenses and food permit from the health department.
- Select one of the main operating structures for your small business, such as a corporation, limited liability company, partnership or sole proprietorship.
- Your bakery business needs 5 licenses: FSSAI license, GST Registration, Local Municipal Corporation Health License, Police Eating House license, and the Fire License.
- Food License: You can apply online, through its website (www.fssai.gov.in). You can also get this done through various agencies that charge around Rs 5,000 for the complete paperwork and license fee. It is advised to get a five-year food license to avoid renewal fees every year. The fee for the five years FSSAI licenses is Rs 15,000. Find out how to get the FSSAI License for your bakery here.
- GST Registration: It can be done with the help of a Charted Accountant. Find out how you can do GST Registration for your Bakery here.
- Health License: You can get the Municipal Corporation’s health license fee with the help of a local Municipal Health inspector. This would cost you around Rs 3,000.
- Fire License: You can get the fire license with a mere fee of Rs 1,000-2,000, after the installation of fire extinguisher cylinders.
2. Choose your location well
Although a great location may not guarantee success, a bad location will almost always guarantee failure.
- A location with adequate parking is recommended.
- Also, look out for the competitors in the area. Lesser the competition, easier is the sales.
- The best location combines visibility, affordability and lease terms you can live with.
- Rent for a place can be as small as Rs 10,000 to Rs 10 lac depending upon the city, location and size of the Bakery Shop. Well, it shouldn’t be more than 4% of sales on the safer side.
3. Prepare for the upfront cost.
- The total approximate investment to start a bakery business in India is around Rs 15 lakhs. However, the cost of equipment and location can lead to considerable variance in the approximate cost.
4. Raise the necessary capital for opening your bakery.
- Ask your bank for a business loan.
- Usually, small bakeries are family funded.
5. Buy Equipment Needed To Start A Bakery Business
- The kitchen equipment is costly for a bakery business since each equipment is made up of stainless steel which is tough and long-lasting. The major equipment required in the bakery is Planetary Mixers, Oven, Deep Fridge, Cooling Fridge, Working table, Gas stove, Cylinders, storage utensils, and other equipment.
- But to lower the cost, you can get the working table second hand.
6. Hiring Staff if required
- The salary of the chefs, accountant, and helpers depend on their experience
- Of course, you can run most of the official “behind the scenes” business yourself if you so desire. But, you will need at least minimal help attending to your customers.
7. Research the competition in your area
- Visit other bakeries in your area. Find out if there’s a demand for the type of baked goods you want to sell.
- List out all the bakery menu ideas you get from the best performing bakeries around.
8. Treat your customers well
- Prepare quality bakery items, because “quality” is the best strategy after all.
9. Set reasonable selling prices
- Fix prices by looking at the prices set by other nearby Bakery shops.
- If no other bakery shops exist nearby, then know how much profit a non-organic store makes on each item it sells. Now, roughly base your pricing on that.
- Setting your prices too low may put you at loss.
- Pricing too high may turn off price-sensitive customers.
You may have to shift prices back and forward until you find the optimal pricing points for your Bakery items
10. Advertise your Bakery OFFLINE!
- Word of mouth, local advertising and promotion are ways to drive traffic to your store.
- Advertise in print. Place an ad in the newspaper, distribute flyers around town during store launch.
- If possible, consider passing around a limited number of coupons to draw potential customers into the store.
11. Advertise ONLINE!
- Firstly, utilize your store’s website and social media platforms to market your bakery business.
- Secondly, mark your store on Google Maps.
- Alongside, use Social media like Facebook to reach the growing online consumer population.
12. Adopt technology to manage your bakery business
- Firstly, know how to track down inventory that you sell in your cake bakery. Start using inventory management App that gets the done effortlessly.
- Managing small business in India single-handedly or with a bunch of people without any confusion is today’s biggest challenge. Consider a business accounting software like Vyapar to help you run the bakery, manage inventory and ease up accounting stuff. Most of the bakery owners out there use GST accounting software like Vyapar to ease up their life.
13. Install A POS & Billing Software In Your Bakery
- The POS software is not just a billing software anymore. Equipped with powerful integrations such as Inventory management, the Vyapar App is now the only software you need in your Bakery Shop.
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