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How to start a bakery and confectionery Business

A complete guide to set up a bakery and confectionery Business in the USA
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Category : > New Business Setup
Posted On : Mon Nov 21st,2016

A complete guide to set up a bakery and confectionery Business in the USA

What is a bakery?

A bakery is a place where baked food items are sold such as pies, cakes, pastries, cookies, and bread.

What is a confectionary store?

A confectionery store is a sweet shop where sweet baked products are sold.

Operating a bakery and confectionery business requires a mix of business skill and experience. For a successful bakery business, you need to produce attractive products, a comprehensive business plan, and unique advertising strategies.

Despite the challenges, opening confectionery and bakery business can be very rewarding and offer a wide scope for regional expansion.


Why start a bakery and confectionery business?

Bakery and confectionery are two popular businesses because the products remain in-demand throughout the year and are not hugely affected by the economic factors such as; wheat products will always be required in large quantities. The bakery and confectionery business is also for the beginners’ entrepreneurs who want to start with low start-up cost.

What are the common types of bakery and confectionery business?

The most common type of bakery offers a selection of savory goods along with fresh bread such as sweet goods like pastries and cakes. The wide bakery products range helps you to target your potential market. Some bakeries provide confectionery and bakery services on various events that demand extra skills and equipment. Once you build a reputation, starting a bakery for day to day supplement will maintain your daily expenses and income.

The common types are:

  • Retail baking business
  • Wholesale baking business
  • Manufacturer
  • You can start online bakeries to sell your products through a website


Key points to make your bakery business successful

  • Pricing is important- your bakery products must compete the market and customers range. It also depends on your potential customers along with the ingredients you are using. Set a price that gives you a decent profit
  • Cleanliness and décor-  ensure your bakery and confectionery premise is welcoming and clean. Maintain a hygienic environment.
  • Learn from the customers- be in touch with your customers to know their remarks and quality of the products. Meet their demands too as it will show that you are caring towards them.
  • Choose a USP- offer special deals according to the events. A customer and location based USP will keep you dominant in the crowd.
  • Diversify your business by working with catering companies or adding a food truck.
  • You can also offer additional services such as wedding cakes in order to stand out from the crowd and to bolster income.


Choose a business structure for your bakery and confectionery business

You can choose one of the following legal structures to setup confectionery and bakery business:

  • LLC- (Limited Liability Company): an LLC gives you an opportunity to enjoy taxation and other advantages of Limited liability such as sole proprietorship and partnership. You can incorporate an LLC with one member.
  • Sole Proprietorship- it offers the simple form of business structure. Ensure that Trade/DBA should be registered with the county or secretary of the state.
  • Limited Partnership- you can register your bakery and confectionery business under Limited Partnership or Limited Liability Partnership. It is a business structure with Limited Liability and can be registered with one person.
  • General Partnership- in this type of business structure, you need at least two partners.
  • Corporation or an S Corporation and it can be registered with one person.


How to plan budget to operate a bakery business?

Undertaking a proper budget plan is your first step for a successful bakery and confectionery business. Different factors come when deciding the budget such as:

  • Business Location
  • Size
  • Products
  • Equipment
  • Marketing Strategies
  • By forecasting expenses and planning for the unexpected challenges can help you to formulate a budget.

Preparing a budget to open a USP bakery includes:

  • Baking and designing a custom event
  • Staffing
  • Advertisement
  • Website Development for promotions

What are the operating expenses to open a bakery and confectionery business?

Operating expenses are the expenses you will face from running your bakery. You will incur both direct and indirect expenses.

Direct Expenses- Direct expenses are incurred from maintaining the primary activities of the business. For instance, ingredients to bake a variety of bakery or confectionery products.

Indirect Expenses- Indirect expenses include the advertising, management cost and expenses other than baking activities.


What are the legal requirements to set up bakery and confectionery business?

Get zoning License- Before opening a retail business you may need to check with the local municipality either the property is zoned for that specific business or not.

Health Requirements- all food related business may need to maintain an inspection by the local health department to ensure that you are meeting the necessary requirements to prepare food items.

How to start bakery and confectionery business marketing?

Create an online presence-   Build a website that presents all prominent services on the landing page. Give an option to your customers to buy your products online. Offer them easy payment options like credit or debit cards.

Get Customer Trusted Seal- Getting customer trusted seal option will help you to build mouth to mouth traffic. It enables you to remain in contact with your customers. user’s reviews will help you to bring the positive exposure of your business.

Build a social media page- Social networking is an easy way to convey your message to a large audience. Keep your page updated with your latest products and promotions.

Expand your line of services and products- Consider adding new services and bakery products, such as seasonal special.


The Author of this article is a M.Phil in English Literature

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