The rise of the gig economy, the COVID-19 pandemic, and advances in technology have all contributed to more people working from home and even pursuing their own home business ideas. Entrepreneurs across the globe continue to find ways to leverage their unique skills to set up an income stream. One of those skills is baking.
If you consider yourself a talented baker with entrepreneurial dreams, a bakery is an excellent food business idea you can do from home or from another brick-and-mortar space. But before you launch into how to start a food business with your baking prowess, it’s important to write a bakery business plan.
Below, we’ll take you through your bakery business plan, section by section, using this business plan guide as a base. Follow along by downloading our business plan template and modifying it to fit your needs.
The importance of your bakery business plan
Not every business starts out with a formal plan, but those that do have an easier road to success. There are a few key benefits to writing a bakery business plan:
It objectively evaluates your business ideas. Researching and documenting your ideas can help you take a step back and see if there’s really an opportunity there.
It builds a blueprint for moving forward. Writing a business plan can identify the next steps you need to execute your idea. You can keep referring back to your business plan to make sure you’re on track for your original vision.
It figures out what you need. Listing exactly what you need to start your bakery business can give you clarity on what you need to do to make it a reality.
It helps you get capital. You won’t be able to secure funding for your business, whether from investors, lenders, banks, or even through crowdfunding, without a business plan for your bakery.
How to write a bakery business plan
The executive summary section of your bakery business plan is a summary of the document and its contents. Remember, this is meant to highlight what’s to come in your business plan, not serve as a summary of your business idea.
The executive summary should be about a page in length and answer the following questions:
This part of your bakery business plan should drill down further into your business idea. Here, you’ll want to identify your bakery’s business structure—sole proprietorship, limited liability corporation (LLC), general partnership, etc.—and business model.
You’ll also use this section to talk about the baked goods industry and about your specific niche—things like keto-friendly, gluten-free, cakes; catering; frozen desserts; savory items, etc. Cape Whoopies, for example, sells gourmet whoopie pies made in Maine. Its bakery business plan would make note of that in the company description section.
The company description should also outline your vision and mission statement and your value proposition. Your vision and mission statement encompass what you hope to do with your bakery, and your value proposition sums up why people would want to buy from you. Pastreez shares its mission and vision statements on its About page:
Use this section to talk about your team, including key personnel and their salaries. La Monarca, for example, would identify its two founders as well as any board members or employees.
Finally, list your short- and long-term business goals. Your business goals should be quantifiable and measurable, eliminating objectivity. You’ll also want to put an estimated timeline for your business goals and when you hope to accomplish them.
The market analysis section of your bakery business plan quantifies how big your potential market is and validates there’s enough demand for your business.
You may include the following in your marketing analysis:
Management and organization
Here, you’ll talk about the business structure of your bakery and whether you’ve elected to incorporate as a sole proprietorship, limited liability corporation (LLC), corporation, or something else. Keep in mind that you don’t have to use your official incorporated name as your public-facing name forever—you can always file for a DBA (doing business as) or just drop the “Inc.” or “LLC” at the end of your name. Balkan Bites, for example, is technically an LLC called “Balkan Bites LLC.”
Additionally, if you have a management team, you’ll identify them here as well. It helps to visualize the team with an organizational chart to show how roles and responsibilities are structured and contribute to your bakery’s bottom line.
Products and services
Here, you’ll list which products and services you’ll sell through your bakery. You’ll likely sell something like cakes, cookies, chocolates, pies, or even baking kits, and potentially branded merchandise products. You’ll also want to consider other non-bakery items: do you want to sell coffee as well, for example?
Dough Dealer doesn’t actually do any baking, so it doesn’t sell any baked goods. Instead, it sells kits with baking supplies, as well as merchandise, online. You can do the same thing fairly easily with a print-on-demand company.
The customer segmentation section of your bakery business plan should talk about the different groups of shoppers you intend to target with your bakery. Include the following information about each of your segments:
- How old they are
- Where they live
- Where they work and what they do
- Education level
- What technology they use
- Their values, beliefs, and opinions
- Common behavior patterns
- How they shop
Here’s what that might look like: Levain serves a few distinct geographic markets in Puerto Rico, including San Juan, Aguadilla, Mayagüez, and Rincón. Each of these regions represents a specific customer segment for the bakery, and they may have different shared characteristics. So Levain adjusts its promotional and marketing strategy according to its audience.
Your marketing plan is a high level overview of how you plan to promote your bakery. The marketing plan should outline which channels you plan to use for marketing and advertising, as well as any budgets you might have. At a minimum, this section of your bakery business plan should define the following:
- Price: How much your products cost and why.
- Product: What you’re selling and how you differentiate it in the market.
- Promotion: How you’ll get your products in front of your ideal customer.
- Place: Where you’ll sell your products, including online and in person.
SunDays is using email marketing to promote its bakery business and build buzz pre-launch. The brand allows people to subscribe so they can be alerted when the online store launches. This approach is also an excellent tactic for email list-building.
Here are some more resources to help put together the marketing section of your bakery business plan:
Logistics and operations plan
Your logistics and operations plan outlines exactly how you’ll create and sell products and fulfill orders. Be sure to address each of the following:
- Suppliers. Identify where you’ll purchase the raw ingredients you need to make your baked goods and where they’re produced. Will you purchase anything pre-made or make everything from scratch?
- Production. Outline whether you’ll make, wholesale, or even dropship your products. Write how long it takes to receive raw ingredients and how long it takes to produce your baked goods. You’ll also want to think about a contingency plan: How will you handle a busy season or an unexpected spike in demand?
- Facilities. Where will you and any team members work? Do you plan to have a physical retail space as well as the bakery? If yes, where? Will they coexist or exist in different locations?
- Equipment. List which tools and technology you require to get you up and running. Think things like ovens, mixers, refrigerators, etc., as well as business tools like a POS system or card reader. You’ll even list things like lightbulbs, counters, and anything else you need to purchase to open your bakery.
- Shipping and fulfillment. Will you be handling all the fulfillment tasks in-house or will you use a third-party fulfillment partner? Will you have a space for in-person shopping or pickup?
- Inventory. How much raw ingredients will you keep on hand, and where will it be stored? How much finished product can you keep on hand, and where? How will you ship products to partners if required, and how will you approach inventory management?
Wildgrain, for example, operates on a subscription-based business model. The brand outlines how it works on its website, and this information would also be suitable for the logistics and operations section of its bakery business plan.
Florets offers a subscription plan as well as in-person pickup at its Auckland-based bakery location or at a weekly farmers market.
The financial plan shows you’ve done your math homework and crunched the numbers to figure out how much money you need to launch, how much you need to operate, and whether you can turn a profit.
The financial plan typically includes the following financial statements:
We’ve put together a spreadsheet template that includes everything you need to create the above financial statements, including some sample numbers. Just edit it as needed.
Launch your bakery business with Shopify
Starting your new venture with a bakery business plan is a surefire way to set yourself up for success from the get go. Your bakery business plan will keep you and your team accountable and aligned with your vision and goals.
When you’re ready to launch, build your website on Shopify. With Shopify, you can seamlessly integrate your retail and ecommerce tech stack to maintain complete control of your growing business.
Ready to create your first business? Start your free 14-day trial of Shopify—no credit card required.
Bakery business plan FAQ
How do I start my own bakery business plan?
How much money can you make owning a bakery?
The average bakery earns $450,000 in annual revenue, and the average bakery owner earns an annual salary of $30,234 according to Bizfluent, or $64,674 according to Ziprecruiter.
What equipment is needed for a bakery?
- Food processor
- Dough proofer
- Dough sheeter
- Bread slicer
- Refrigerator and/or freezer
- Baker’s rack
- Baking pan and dishes
- Bowls, measuring cups, spoons, spatulas, etc.
- Pastry bags
- Work counters
- Dry storage
- POS system
Is a bakery business profitable?
A bakery business can be profitable, especially if you start with a business plan like the one in this post. The average bakery earns $450,000 in annual revenue.