With the startup wave hitting the country, and a major disruption seen by the Restaurant Industry has encouraged a lot of people to start up their own restaurant venture. Professionals and home cooks alike, people are now fuelling their passion for food and getting in the food business. (This article will tell you all you need to know about opening the various restaurant formats.) Baking is one such passion which has been catching up lately, with a number of big and small bakery businesses cropping up. Therefore, bakers who are aspiring to bring their dream to life; we bring to you a small breakup of investments, and the process to start a bakery business in India.
How to Start a Bakery Business
Follow the below-mentioned steps to open a bakery business. We have given the set-up cost for opening a bakery in the image below. The total approximate investment to start a bakery business is Rs 15 lakhs. However, the cost of equipment and location can lead to a considerable variance in the approximate cost.
1. Choosing a Location for the Bakery Business
One of the first steps to start a bakery is to decide a good location. For a bakery, the ideal location is a reputed market or high-end shopping streets where footfall is high. Ideally, front area shops at the ground floor which are easily accessible and visible are apt for the bakery business. It is advisable to have a 500 sq ft shop, divided into two floors, so as to build a good kitchen on one floor, and have display cum serving area at another. However, this is subjective to the area available, and your own choice.
For a 1000 sqft area divided between two floors, the rent should not exceed more than Rs 60-70k. Your expenditure would be around Rs 1,80,000 to acquire the place where the bakery will operate.
Also, while finalizing the location of the bakery, it is important to ensure that the place has a proper water supply and drainage facility. Get a proper legal agreement for the property as it is also required in paperwork and other licenses. You should also get a No objection certificate (NOC) from the property owner that he has no problem that his shop would be used for food outlet purpose. The NOC is required in obtaining the TIN number/Vat registration, Local Municipal License, and Food license. This article will help you decide the location of your bakery business.
2. Licenses Needed to Open a Bakery
Similar to the QSR format, the bakery business also requires five licenses: FSSAI license, TIN/VAT Registration, Local Municipal Corporation Health License, Police Eating House license, and the Fire License. Out of all the licenses, FSSAI, Tin and Local Municipal Corporation Health License are the most important ones to have in the starting of the outlet. Police eating house and fire license can be acquired once you commence your operations. However, it is recommended to have the entire license in place before opening the outlet. Find out how to get the FSSAI License for your restaurant here.
- The Food License can be applied for online, through its website (www.fssai.gov.in). You can also get this done through various agencies which 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.
- TIN and VAT registration can be done with help of a Charted Accountant. The total cost of the registration will be somewhere around Rs 10,000. Also, you need to have a current account with any of the reputed banks for the VAT registration.
- You can get the Municipal Corporation health license fee with the help of a local Municipal Health inspector. This would cost you around Rs 3,000.
- You can get the fire license with a mere fee of Rs 1,000-2,000, after the installation of fire extinguisher cylinders.
2. Manpower Required to Run a Bakery
Unlike the QSR and Food Truck, Bakery shops need an expert manpower because both the taste as well as the presentation is important in the case of baked goods. For a high-end bakery, you need a Head Chef, Chef De parties, Commi level Chef and Helpers, plus Service Boys and a Cashier at the display and the serving area. The total count of manpower required in the bakery is 15. The salary of the chefs, Commi and helpers depend on their experience. Find out how to create a Human Resource structure for your restaurant here.
3. Kitchen Equipment and Raw Material Needed for a Bakery
The kitchen equipment is very expensive for bakery business since each equipment is made up of stainless steel which is tough and long lasting. The major equipment required in the bakery are Planetary Mixers, Oven, Deep Fridge, Cooling Fridge, Working table, Gas stove, Cylinders, storage utensils and other equipment. Unlike QSR or Food truck, the bakery requires new equipment for better efficiency. But to lower the cost you can get the working table second hand.
4. Display Area Required for a Bakery
The display area or the front end of the bakery business should be well designed and created in a manner that each and every item is noticeable so as to attract the walk-in customers. You mainly require a Display fridge for cakes and pastries. Other than the fridge, display area should have a proper storage and a display rack for the items.
5. POS and Billing Software Needed for a Bakery
The POS software is not just billing software anymore. Equipped with powerful integrations such as Inventory management, the POS software is now the only software you need in your restaurant. While purchasing one for your bakery business, ensure that the POS software has features to manage the shelf life of the baked items, a robust inventory management as you would be dealing with perishables. The price of POS software is likely to differ based on the features you wish to include. The cost of the POS would range around Rs 30,000 a year.
6. Marketing and Branding of a Bakery Business
Marketing and branding are important for any business to flourish, and a bakery is no stranger to this. Get a properly designed logo and display board from a professional designer. This will not only help you to create your own unique identity but will also help in your branding while packaging. Also, do remember to get a well-designed menu. For the first few months, around 30,000 pamphlets are good enough to market your bakery. These 30,000 pamphlets will cost you somewhere around Rs 30,000, with good paper quality. Apart from pamphlets, invest some money in a good display board to attract customers. A well-designed display board costs around Rs 25,000.
7. Staff Uniform of the Employees
Staff uniforms are often ignored while opening a food business. However, they are essential as they help deliver a professional look and also in the branding of the bakery. This article will tell you how to do the branding of your bakery business. It is important that all the staff members look good, hygienic and well dressed. You can choose from different types of dresses such as chef coats, smart shirts and t-shirts and apron.
8. Other Things Needed to Run a Bakery Business
Since it is a bakery, it is mandatory to have one landline and two mobile numbers with two decent phones which would not cost more than Rs 2000 each. As online ordering has become a rage these days, it is also important to have online tie-ups. It is heavily recommended that you have your own bakery’s website. A good website would not cost more than Rs 10,000. Also, remember to have an ‘Order Online’ widget at your website to attract online ordering customers. You can also go for your own Online Ordering App as well. Ask how to get it here.
“If baking is any labor at all, it’s a labor of love. A love that gets passed from generation to generation”- Anonymous.
Now go on, open that dream bakery business of yours! You would also find this detailed guide on how to write a Business Plan for your Bakery Business useful.