How to Write a Bakery Business Plan
Starting your own bakery is no easy task. Many people have tried and failed to get their business ideas off the ground, or worse, their business flopped within the first year. So what sets a successful bakery apart from the ones that don’t make it? A solid bakery business plan that can help you stay organized and obtain the funding you need. We’ll talk you through every major part of a business plan, from creating a basic description of your establishment to offering financial projections to future investors. Why is a Bakery Business Plan Necessary? A bakery business plan can be used to garner interest from potential investors or loans from a bank. Additionally, it is helpful to you as an owner. Creating a bakery business plan allows you to thoroughly analyze every detail of your potential business. This includes things as small as the equipment you will need or as big as the space for your business.While your bakery may have started as a vision, evolving it into a solid plan will allow you to prove to yourself and others that it is a viable business venture. What Sections Should a Bakery Business Plan Include? When presenting a business plan for your bakery to potential investors, include the following information: Executive Summary Company Overview and Description Market Analysis Business Offerings Management Marketing and Public Relations Strategies Financial Projections Keep reading below to learn how to create an effective bakery business plan that includes each of these important sections. Bakery Business Plan Sample Breakdown Below we give you an in-depth look at each section in your bakery business plan. 1. Write an Executive Summary Although it’s the last thing you’ll write for your bakery business plan, an executive summary is the first thing you hand to bankers or potential investors. That’s because this is an over-arching summary of your bakery’s business plan. Investors will read the executive summary to determine if they’re interested in the rest of your business plan. Typically, executive summaries are between one and four pages in length, but vary depending on each individual’s business. The goal of this summary is to get your foot in the door and have face time with the investor. You should detail what makes your company special and why that will make your company successful, along with your expected growth. It acts as an introduction, but it should be completed last to reflect the most current business model you have developed. A few important questions to answer in your executive summary include where your bakery will be located as well as how much building space is required for operation. It’s important to also cover the expected cost of your building space and any necessary equipment. From there, be sure to cover your overall goals and projected profits. In order to make your executive summary as powerful as possible, consider some of the following tips: Write a strong hook. The first paragraph should serve as an introduction to your executive summary that explains what your bakery does. Use concise language. Take advantage of bullet points to allow investors to read through your summary faster. Be careful, however, not to sacrifice quality and the level of detail for conciseness. Discuss your business’s core strength. Maybe you have an excellent management team lined up, or you know that you make an exceptional product. You may even offer a unique service that nobody else in the area can provide. Be sure to include these details. Know who your investors are, and use language that will resonate with them. Make your executive summary easily understandable by whomever you are presenting it to, based on their profession or educational background. Change your executive summary when presenting to different investors. If your executive summary had too much detail the first time and the investor skipped right over it, then change it up for the next attempt. Avoid using superlatives, cliches, or claims that can’t be backed up. Don’t try to make claims such as “the best donuts in the world” if they can’t be backed up by proof. Stay realistic with your statements and instead offer tangible facts. For example, you can say you use the highest-quality ingredients in your donut recipes and make them to order. Be authentic. This business is something you’re obviously passionate about, so let it show in your plan. 2. Company Overview and Description The first step in writing a bakery business plan is to compose a company overview of your business. The overview should explain why you want to open a bakery, so you can show your financial source that you’re passionate about the business you want to start. While a bakery may sound self-explanatory, use this section to outline the finer details of your business plan. It is in this company overview that you can further develop ideas mentioned in your executive summary. In general, the company overview is your chance to discuss how and why you plan to open your bakery. When writing a company overview for your bakery, be sure to answer the following questions: What is your niche? Do you have a specific theme that your bakery will revolve around? Who is your target audience? Do you have any special recipes or promotions? What is your strategic differentiator? What is the legal structure of your bakery’s business? What are your short term and long term goals? 3. Market Analysis This section of your bakery business plan will probably require the most research. Here you will expand on how you will fit into the existing bakery market. The details will demonstrate your knowledge of the industry and market because your research findings should be a sound confirmation of the conclusions you have stated up to this point. When conducting research for your market analysis, be sure to consider the following: Look at the demographics of your area. What’s the largest age group? What is the income level of your intended customers? Learn about trends. How much do people in the area spend on eating out? Are there any seasonal trends that would likely prevent people from coming to your bakery? Research your competitors. What can you learn from their success? How can you take that one step further to be a contender in the market? Become familiar with codes and regulations. What regulations will apply to your bakery? How do you plan on complying with these rules? Detail relevant financial information. What will your pricing structure be like? 4. Business Offerings Use this section to specify what type of baked goods you will supply to your customers. Whether you’re focusing on fresh-baked breads or colorful macarons, go into detail about your offerings. In addition, be sure to explain your reasoning behind selling these particular items. How will these goods help your bakery become the next neighborhood hot spot? When detailing your business offerings, be sure to answer the following questions: Will you have specialty items, including gluten-free or custom-made products? Did you create a completely new product? If so, do you intend to patent it? Are any of your items unique to the culture of the area you plan to sell in? Do you plan to develop new recipes over time? Is there anything that might cause a decline in the demand for your particular goods? Where do you intend to buy ingredients and equipment? 5. Management Plan Developing a plan on how your company will be organized is a very important step in writing your bakery business plan. In this section, you should lay out your bakery’s management structure. If there are several owners of the business, it is in this section you can include personal information and shares of ownership. Showing future investors a management plan allows you to prove you’re qualified to run a bakery. When preparing your management plan, take time to answer the following questions: Will you have a business partner? What percentage of the company do you plan to own? How many employees do you plan to hire? Will you be doing the actual baking or running things behind the scenes? Will you have a financial advisor or accountant who handles the business aspects? Will anyone else be included in the day-to-day decision making process? 6. Marketing and Public Relations Strategies Before you can start profiting, your business needs a solid strategy for entering the market and attracting customers. Building a strong community presence is a very important step to entering the existing bakery market. It’s in this section that you should explain and develop the steps you will take to reach potential customers. Aside from offering unique goods and services, coming up with a creative or catchy name can quickly draw in curious customers. Begin thinking about how you want to develop your brand as you outline how you want to market your business. Reaching Your Target Audience During your market analysis you should have identified your target market. When working on a marketing strategy, consider offering special or competitive pricing to appeal to your market. Promote certain products or flavors that will entice potential customers, or highlight special services or goods unique to your business. Additionally, you’ll want to consider how you plan to appeal to your audience’s sense. For example, some restaurants or bakeries will go as far as to place their ovens closer to the front of the store, which allows enticing smells to waft out onto the street. Develop an Advertising Strategy It’s important to develop an advertising strategy that will work most effectively with your target market. Will you use social media to create an online presence for your business? Or will you have more success with newspapers and flyers? Additionally, you may want to consider hosting a grand opening to draw in a crowd and promote your business. Exploring Expansion Even before opening day, you’ll want to begin thinking about possible plans for expansion. Investors will want to know whether or not you plan to expand your store down the line. Will this require opening another location? If so, will you be eventually hiring more employees? 7. Financial Projections For the final section of a business plan for your bakery, you’ll need to elaborate on the financial aspects of your business. While you can’t know for sure how your business will fare in the future, you’ll need to outline your costs and do some research to explain the potential success of your business. By this point you have analyzed the market demographics, so you need to use this to set up financial goals for your company. Detail all of the costs of supplies, bills, and salaries that are necessary to keep your bakery up and running. After taking all of this into consideration, carefully try to determine the period of time in which you expect to turn a profit. When creating financial projections, it’s important to be realistic. This will help you secure investors. You are trying to assure them that they would be making a good investment by aligning with your business. Creating a formal bakery business plan is a crucial step in obtaining financial investors and staying organized. This plan can turn your vision into realistic goals and expectations meant to impress and interest investors. When done right, your bakery business plan can provide you with peace of mind that you’re entering a viable and profitable business venture.