Bakery Business Plan
If you want to start a bakery business or expand your current one, you need a business plan.
Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their bakery businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a bakery business plan step-by-step so you can create your bakery’s business plan today.
How To Write a Business Plan For a Bakery
Executive Summary
The executive summary is the introduction to your business plan, although it is often written last. It helps investors and lenders quickly decide whether they are interested and should read more, so the first page must get right to the point. Include a concise description of your bakery (or bakery concept if you are a startup), a short analysis of the market, proof that customers are willing to pay for products, and an explanation of the unique qualifications that ensure your bakery will be a success.
Company Overview
This section of your bakery business plan provides a comprehensive look at the company’s history. Include details on your bakery’s legal structure, founding, location, and current business stage, as well as your past accomplishments and unique qualifications. Clearly explain anything that makes you a strong competitor in this market, such as existing contracts with retailers, a head baker with impressive restaurant credentials, or exclusive access to award-winning recipes.
In this section you should also give an overview of the type of bakery you operate or will operate in the future.
For example, do you or will you operate a:
- Traditional bakery (selling breads, biscuits etc.)
- Commercial bakery
- Bakery specializing in wedding cakes
- Wholesale bakery
- Doughnut shop
- Pastry shop
- Bakery Cafe
- Food truck bakery
- Home Bakery
Industry Analysis
This section assesses that bakery industry and how your bakery fits into the existing landscape. Address any challenges that you unearth with a solid strategy for success. Also keep in mind that your market is not the entire baked goods market. Rather, it is your niche of that market.
For example, while the baking industry in the United States generates more than $30 billion per year in revenues, your bakery will only comprise a fraction of that amount depending upon your geography, focus, etc. So, zero in on the specific products and customers you plan to target and focus your analysis on those elements.
Customer Analysis
This section of your plan details your bakery’s target audience, that is the customers you will serve. Note that in many cases, a bakery might target multiple market segments.
Do you plan to target brides to be? Children’s birthday parties? Upscale families who regularly hold private events for 100 or more guests?
Or do you primarily serve walk-in customers. This segment usually comprises neighborhood resident who know about your bakery, and who tend to visit regularly.
Even if you’re not a commercial bakery, you might serve local delis, grocery stores and bodegas. Clearly, it helps a bakery’s sales if it has a greater number of distribution points. The same is true in the case of restaurants. A bakery can supply breads, bagels, cakes, pastries and other products to restaurants and hence create a larger customer base.
Whatever target markets you serve, clearly define them in your business plan. Detail the demographics of each. For example, are they wealthy males and females? Are they college students? Are they local restaurants? Whatever the target customers, you need to identify and detail them so you’ll know their needs and can better serve them.
Likewise, discuss the psychographics of your target customers. Are they price conscious? Is quality the most important issues they will use to judge your bakery? Do they insist on reliability and premium service?
In addition to documenting the demographic and psychographic variables that define your target market, detail how your bakery will meet their unique needs.
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Competitive Analysis
This section of your bakery business plan details your direct and indirect competitors. Direct competitors are other companies who fulfill the same need for the same target market, most likely others selling similar baked goods. Your indirect competitors are those who fulfill a different need for the same target market, or those who fulfill the same need for a different target market. An example of an indirect competitor could be a nearby coffee shop.
In your plan, name and describe your direct competitors individually, and explain what sets your bakery apart from them. Create a more general category for your indirect competitors and discuss them as a whole.
Finally, detail your areas of competitive advantage and what will make you distinct. Most successful bakery owners identify products that no other local bakeries offer, such as a treat that is exclusive to your bakery and that drive customers to frequent your store. Also, based on the demographics and psychographics discussed above, you may be successful being the only local bakery selling nut-free cakes, or making vegan and gluten-free baked goods with local and organic ingredients.
Marketing Plan
Your bakery marketing plan explains how you will penetrate your target market, based on the four P’s: Product, Price, Place, and Promotion.
The Product section explains all the products and services your bakery will provide. Price refers to the price points at which you will sell each item, along with your reasoning for choosing those prices. Place explains all your distribution methods, such as your retail stores, your company website, and third-party retailers. Promotion defines the ways you will entice customers to purchase your baked goods, such as free samples and web advertising.
In addition to describing the four P’s your bakery marketing strategy, you should explain how you will retain existing customers through loyalty programs or other methods. Also, in this section of your plan, particularly if you are startup retail bakery, you should detail the design and display of your location.
Clearly, your bakery’s storefront should be designed in a way that attracts walk-in customers. Consult an interior designer to get insight on how to create a warm and inviting ambience in your bakery.
Operations Plan
The operations plan explains the processes by which you will turn your vision into a reality. It includes the everyday short-term processes involved in physically baking your products, managing your retail space, packaging your baked goods, conducting sales transactions, choosing and working with vendors, and delivering the finished products to your customers among others.
Your operations plan must also include the long-term processes involved in growing your company, such as introducing new products or retail stores, achieving specific sales milestones, and hitting other important business-oriented goals such as hiring new employees, launching new locations, etc.
Management Team
This section provides biographies of the key members of your company’s management team, with an emphasis on strong business skills. Focus on educational background, previous experience with successful start-ups, and other elements that demonstrate your and/or your team’s ability to build a company. A strong advisory board can help make up for weaknesses provided you clearly articulate how your advisors will directly impact the company’s growth.
Financial Plan
The financial plan is often the most difficult part of the business plan to write, yet it is the section that potential investors and lenders spend the most time analyzing.
Provide a list of all revenue streams, including their relative importance and timeline for implementation, as well as the amount and expected sources of outside funding. Include a summary of past (if applicable) and projected Income Statements, Balance Sheets, and Cash Flow Statements. The assumptions made in these documents must be reasonable and verifiable based on an analysis of similar companies.
Make sure you don’t miss anything when putting together your financial projections or you could lose credibility in the eyes of readers of your plan. For example, make sure you adequately enter costs which most bakeries incur such as space (owned or rented), equipment (planetary mixers, cylinders, gas stove, cooling fridge, deep fridge, storage utensils, etc.), electricity and water, staff, furniture and decor, licenses, insurance and legal fees.
Appendix
The appendix includes your full financial projections, as well as any other documentation that supports the claims made in the business plan. For example, it might include a list of key existing customers or letters from potential partners. Likewise, if you’re a startup bakery, including sketches of the proposed store design should appear in your appendix.
Summary
Putting together a business plan for your bakery business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the bakery business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful bakery business.
To further help you, we have other articles on key aspects of how to start your bakery. and running it effectively. Specifically, our bakery marketing plan will help you develop the best promotions strategy. Our bakery startup costs post will let you know what costs to expect.
Bakery Business Plan FAQs
What Is the Easiest Way to Complete My Bakery Business Plan?
Growthink’s Ultimate Bakery Business Plan Template allows you to quickly and easily complete your Bakery Business Plan.
Where Can I Download a Bakery Business Plan PDF?
What Is a Bakery Business Plan?
A business plan provides a snapshot of your bakery as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why Do You Need a Business Plan?
What Are the Sources of Funding for a Bakery?
Finish Your Bakery Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Bakery business plan?
With Growthink’s Ultimate Bakery Business Plan Template you can finish your plan in just 8 hours or less!
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
See how our professional business plan consultants can create your business plan for you.
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