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A Detailed Guide On How To Start A Bakery Business In India

The demand for baked items has witnessed a steady increase in the last couple of years. Baked goods offer customers convenience and affordability, and the growing demand has led to a lot of home-bakers and chefs venturing into the bakery business. As per a report , the Indian bakery market is estimated to grow at a CAGR of 8.5% between 2021 and 2026 and is set to reach a value of USD 12.39 billion by 2026, thus making bakeries a highly lucrative restaurant format. In this article, we will talk in detail about how to open a bakery business in India , but before that, let us understand the types of bakery businesses.

Types of Bakery Business

You must first select whether you want to create a retail bakery or a wholesale bakery before you can begin arranging the specifications of your bakery. Deciding this is crucial because it will influence how you engage with your clients and how much money you need to invest.

Types of Bakery Service

Now that you know what kind of bakery you’re planning to open, you need to decide what kind of services you’ll offer.

It’s crucial to decide what kind of bakery you would like to start because this will affect how your bakery business model is structured. It’s a big choice but also the most exciting part of your brand-new company.

10 Steps To Open A Successful Bakery Business In India

Follow the below-mentioned steps to open a successful bakery business in India in 2023:

1. Create A Bakery Business Plan

Before learning about how to start a bakery business in India, you should create a bakery business plan as it would help you in streamlining the operations, deciding the budget distribution, and planning the future development of your bakery business. It ideally should include:

Learn in detail how you can write a successful bakery business plan here.

2. Choose A Location For Your Bakery Business

One of the first steps to how to start a bakery business in India is to decide on 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 on 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, to build a functional kitchen on one level, and have a display cum serving area at another. However, this is subjective to the space 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 essential to ensure that the place has a proper water supply and drainage facility. Get an appropriate legal agreement for the property as it is also required in paperwork and other licenses. You should even get a No Objection Certificate (NOC) from the property owner that he has no problem that his place would be used for food outlet purposes.

This article will help you decide on the location of your bakery business .

3. Get All Licenses Required T o Open A Bakery Business In India

Similar to the QSR format, the bakery business also needs five licenses: FSSAI license, GST Registration, Local Municipal Corporation Health License, Police Eating House license, and the Fire License . Out of all the permits, FSSAI, GST, and Local Municipal Corporation Health License are the most important ones to have at 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 all the licenses in place before starting a bakery.

Here is a complete list of all the licenses required for opening a food business in India and the steps to procuring them.

4. Get Manpower Required To Open A Bake ry

Unlike the QSR and Food Truck, Bakery shops need an expert workforce because both the taste as well as the presentation is essential 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 approximate 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 .

5. Buy Equipment Needed To Start A Bakery Business

The kitchen equipment is costly for a bakery business since each piece of equipment is made up of stainless steel, which is sturdy and long-lasting. The major equipment required in the bakery is Planetary Mixers, Oven, Deep Fridge, Cooling Fridge, Working table, Gas stove, Cylinders, storage utensils , and other equipment. Unlike QSR or Food trucks, the bakery requires new equipment for better efficiency. But to lower the cost, you can get the working table second-hand.

6. Design The Display Area Of Your Bakery Business

The display area or the front end of the bakery business should be well designed and created in a manner that every item is noticeable to attract walk-in customers. You mainly require a Display fridge for cakes and pastries. Other than the refrigerator, the display area should have proper storage and a display rack for the items.

7. Install A POS & Billing Software In Your 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 , 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.

Learn how you can choose the best POS Software for your bakery here.

8. Do Right Marketing & Branding Of Your Bakery Business

Market and branding are essential 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 flyers, invest some money in a great display board to attract customers. Well-designed display board costs around Rs 25,000.

Apart from these, you must have a separate budget for restaurant management software, since it could also help you in running several marketing campaigns by utilizing customer data.

9. Decide On The Staff Uniform Of Your 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. All the staff members must look good, hygienic, and well dressed. You can choose from different types of dresses such as chef coats, smart shirts and t-shirts, and an apron.

10. Partnering With Online Food Aggregators

The demand for online food delivery is steadily increasing these days. For a new bakery business, it is highly recommended that you register your business on the online food aggregators to generate online orders.

This article talks in detail about how you can partner with online food aggregators.

It is also essential to have an online-ordering enabled website for your bakery business. This would help you boost your online presence and also generate online orders for your bakery.

Here we have mentioned the set-up cost of opening a bakery that will tell you how much it costs to start a bakery business in India. The total approximate cost of opening a bakery in India is around Rs 15 lakhs. However, the cost of equipment and location can lead to considerable variance in the estimated cost.

With this article, we hope you were able to gain an understanding of how to open a bakery business in India. Learn how you can make your bakery business successful here!

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bakery business plan startup cost in india

How to Start Bakery Business in India – Investments, Profits, ROI

How to Start Bakery Business in India

Everyone loves to have sweets and cakes. Cakes are almost synonym with the word ‘Birthdays’, it is a symbol to celebrate not just birthdays but also on special occasions. Be it cakes, pies, donuts, cookies, or sweets, the demand generated by the customers is enough to give you an idea of the amounts of profits that are generated by businesses that deal with a bakery. The numbers are also huge if a business deal with different types of Bakery items for sale.

License Required for Bakery Business

Before putting your business into practice, you would require various licenses that are necessary to obtain. The various licenses that are required for the Bakery business are as follows. A. FBA License B. FSSAI License C. Health License D. Bakery Permit E. Current Bank Account F. Trade Mark G. GST Registration H. Trade License I. Business Pan Card

Raw Materials required

Just like any other business, you’d require some raw materials, that would act as a base for your product quality. The following are the various types of raw materials that are required for the Bakery business. A. Baking Powder B. Salt C. Sugar D. All-Purpose flour E. Ghee F. Milk G. Eggs H. Assorted fruits I. Caramel Colour J. Yeast K. Buttercream L. Jam

Equipment Required

Along with raw materials, you would also require various equipment that would help you to process the Baking items further at each stage. The Equipment ranges from various start to end processes. A. Ovens, or B. Microwave C. Deep Freeze D. Milk Pots E. Weighing scale F. Planetary Mixers G. Mixing Bowls H. Baking Trays I. Working table J. Gas Cylinders K. Utensils

Manpower Required

Manpower is another important aspect of your business, you need to hire staff or the laborers according to the requirement. The number of manpower required would vary for small, medium, and large-scale businesses, and also on the number of bakery items that you plan to deal with.

Investment required

After having a glance at the various equipment, raw materials, and the labour, or the manpower that would be necessary, we can take an estimate of investment that is required for operating your baking business on a small and medium scale basis.

Expected Profits from Baking Business

Right after analyzing our investment in the Bakery business, the next area to explore and analyze is the profits that can be made through the Bakery business each month. Profits are necessary to run a business on a regular basis and also for marketing and expansion purposes. The average profit that can be earned from a baking Business running on a small-scale could be around 60,000 to 1.2 Lakhs, per month. The profit earned would depend on the number of bakery items that you deal into, if your product dealing is multiple, then you can even earn more than 2 lakhs a month.

Targets for Bakery Business

Local shops: Bakery items are such which is used by a lot of people. You can start to pitch your product to the local shops that are near your own house. This would help you to reach the audience that resides in your area.

Retailers: Retailers have a variety of products that they would display in their store. Bakery items are one of the fast-moving products for their store and hence with a good enough profit and price, they would be willing to have a tie-up with few of your items

Supermarkets: Supermarkets have many products in stock that are related to the bakery, be it sweets, donuts, bread, and so on. If you are dealing with multiple bakery products then this is the best stop of business for you, as supermarkets would order products in huge stocks.

Sweet shops and Cake shops: Aside from supermarkets, you can also target various sweet shops that are situated inside or outside your locality and sell your bakery products in huge stocks with such shops. Cake shops can be targeted for cakes and pastries as well.

Cafes and Decent Tea stalls: As we already know that cookies, biscuits, and various bakery items are used by people as a complementary item to have tea with. You can approach cafes and good tea stalls to sell your bakery products as a complementary product along with their offerings.

Profit Margin

We already discussed about the expected profits that we can earn through the Bakery business, however, let us also take into account the profit margin that can be earned through this business. With a well-settled business, you can expect to earn around 20% to 40%.

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Bakery Business Plan, Setup Cost, License, Permit

Introduction to Bakery business plan, licenses, permission, and cost involved in: people in India are igniting their passion for food through their open food business undertakings. Apart from that, the trend of starting up self-business cannot be kept aside if we are about to discuss regarding food business as that has hit the country and stimulated a lot of people, especially women to open their own hotel venture. Recognized as retail or for wholesale, baked items are sold to customers in the Bakery.

A guide to Bakery business plan, setup cost, license, permission

The tradition of selling baked products has been there for several years. However, it has also changed over the years due to the recognition and wish that the art of baking has received. While grocery stores and hypermarkets are keen on selling pre-sliced bread , pastries, and cakes, many still desire to get their kind of flour baked from a small artisanal Bakery. This may be because of its taste and for its age-old household culture. The recent trend of commercialization of baked goods has augmented the quality characteristic in the profession of baking. Thus, the passion for baking is now gathering up into the big and small Bakery business.

Bakery business setup license, permission.

Follow the suggested ideas to open a Bakery business in India:

Create a Bakery business plan

Before knowing about how to start a Bakery business in India, you must create a Bakery business strategy as it will aid you in streamlining the processes, critical to the budget circulation and preparation for the future growth of your baker. It majorly should include:

Summary of the Bakery Business Plan

The steps on how you can start up a successful Bakery business plan here.

Choose a location for your Bakery business

One of the major steps about starting a Bakery business in India is to select a good place. For a Bakery, the prominent location is a well-known market or high-end shopping lanes where footfall is majorly available. Ideally, front area stores on the ground floor which are simply accessible and noticeable are ideal for having kitchen operations at one level and have a serving area and items display at another. However, this is subject to your budget constraints and space availability.

For a 1000 sq ft area separated between two floors, the rental charges must not be more than Rs 60-70k. Your expenses would be approximately around Rs 1, 80,000 to obtain the place where the Bakery will function.

You should not miss the Organic Store License and Permits, Setup Cost .

Also, while finalizing the Bakery location, it is vital to ensure that the place has an appropriate water supply and drainage ability. You must also need an appropriate legal agreement for your property as it is also needed in the documentation and other licenses. You must even get a NOC-No Objection Certificate from the property landlord that he has no problem that his store will be used for the food business. This post will guide you on how to select the ideal location for a Bakery store.

Get all licenses needed to start a Bakery business in India

Similar to the QSR plan, the Bakery business also requires 5 licenses: GST Registration, FSSAI license, Police Eating House license, Local Municipal Corporation Health License, and the Fire License. Out of all the permissions, FSSAI, GST, and Local Municipal Corporation Health License are the vital ones to have at the starting of the business. Once you begin your operations you can acquire the other two-Police eating house and fire license. However, it is acclaimed to have all licenses before starting for hassle-free operations of the Bakery.

Get manpower needed to open a Bakery

As you are aware that QSR and food truck doesn’t need proficient, Bakery shops need a professional workforce because of the presentation and taste play a vital role in case of baked goods. For a high-end Bakery, you require a head chef, Commi level Chef, Chef De Parties, and helpers, along with service boys and cashiers. The total manpower necessary in the Bakery is around 15. The remuneration of the chefs, Commi, and helpers are based on their experience.

Purchasing Equipment required to start a Bakery business

The kitchen equipment is expensive for a Bakery business as each piece of equipment is made up of stainless steel which is long-lasting and tough. The major apparatus required in the Bakery is the oven, Planetary mixers, cooling fridge, deep fridge, working table, cylinders, gas stove, storage utensils, and others. Unlike food trucks or QSR, the Bakery needs new equipment for improved efficiency. But to reduce the cost, you can get the working table in second hand.

Design the display area of the Bakery business

The display area or the front end of the Bakery business must be well planned and fashioned in a manner that each item is noticeable to attract walk-in consumers. You mainly needed a Display fridge for pastries and cakes. Other than the fridge, the display area must have a display rack or proper storage for the items.

Install a POS and billing software in your Bakery

The POS software is currently not the only software as it is having powerful integrations such as Inventory management and billing. While purchasing the software, you should know whether it can manage the shelf life of the baked products, robust inventory management as your baking will have perishables food items. The price of POS software differs based on the features you are planning to have inbuilt but a typical POS Software with modest features will cost approximately Rs 30,000 per year.

Do right branding and marketing of your Bakery business

Market and branding are vital for any business to flourish, and a Bakery is also one of them. Get a properly planned logo and display poster and a well-designed menu book from a professional. This will not only aid you to generate your own unique individuality but will also benefit in your branding while packing. For the starting months, around 30,000 brochures are nice to market your Bakery. These 30,000 brochures will price you somewhere approximately Rs 30,000 in quality paper . Apart from brochures, invest some money in an excellent manner to attract clients. A fashionable display board will charge approximately Rs 25,000.

Apart from it, you should have a separate budget for restaurant software, as it could also aid you in running several advertising campaigns by using consumer data.

Decide on the staff attire of your manpower

Staff attire is often ignored during opening a food trade. However, they are vital as they aid to deliver a proficient look and also in the marking of the Bakery. It is dynamic that all the staff look hygienic, good, and well dressed. They can be like chef coats, t-shirts, smart shirts, and an apron.

Other things required to run a Bakery business project

Since it is a Bakery store, it is obligatory to have a land phone and 2 mobile numbers with two phones which will be availed at Rs 2000 each. As online booking has become a passion now, it is also significant to have online bonding. It is heavily suggested that you have your own Bakery’s website. A nice website would not be greater than Rs 10,000. Also, keep in mind to have a menu ‘Order Online’ on your website to attract online ordering consumers.

Costs involved to set-up a Bakery business

Let us go through all the costs involved in starting the Bakery includes the following-

Frequently asked questions about starting Bakery business in India

In case if you miss this: Hand Sanitizer Making Business, License, Permission .

Frequently asked questions about Bakery business in India.

How much does it cost to start up a Bakery?

The total estimated capital to initiate a Bakery business in India is approximately Rs 15 lakhs. However, the charges of equipment and place of the store can lead to a considerable difference in the approximate cost.

How can I start a Bakery in India?

Kindly go through the below steps to open a Bakery business in India:

Is the Bakery business profitable?

There’s no such thing as an average income for a Bakery store, as not all bakeries are equally profitable. The retailing of few items in your Bakery will yield much more profit margins than others, so it really comes down to your size, place, and products.

How many square feet do you need for a Bakery?

The average gross margin of bakeries was around 45.5 percent the previous year, but the average size of the in-store Bakery was on the more, hoping to an average of 1,420 square feet in the year 2015, as compared with 1,310 square feet the last year.

What do most bakeries sell?

A Bakery (bakeshop or baker’s shop) is set up that produces and retails flour-based food items such as cookies, pastries, cakes, pies, and bread that are baked in an oven. Some bakeries are also serving as cafés, by offering tea and coffee to clients who wish to consume the baked items.

What type of industry is a Bakery?

A Bakery store is not only is an establishment that produces flour-based food baked items but sometimes is also blend with cafes, serving coffee and tea to people who wish to have beverages with baked food items.

How many types of Bakery are there?

8 types of bakeries are there and their specialty products include

Bakery food truck with sandwiches, traditional bakeries includes the biscuits and bread, Cake bakeries which bakes cakes and pies, wedding bakeries which bakes wedding cakes, café bakeries which make sandwiches and snacks, bread shops which bakes bagel, doughnut shops which makes different types of doughnuts, pastry shops which prepare pastries.

What is the target market for a Bakery?

Targeting the people with different varieties of confectionaries, tastes involved, attracting with different kinds of pastries, and other baked items. These attract many customers and refer others also. Customer satisfaction is the most important one.

What is Bakery Cafe?

A Bakery café is a retail Bakery that comprises a dining area for customers to sit and relish their food.

How do you attract customers to your Bakery?

Ideas and thoughts for promoting your Bakery: Rising to the occasion to win more customers-

What is the revenue margin in the Bakery business in India?

The average profit for a Bakery is associated based on the overhead and materials price of producing Bakery products. But, it is estimated that the Bakery proprietors do have a 30 percent profit margin to cover functional costs and for earning income.

In case if you are interested in this: How To Grow Strawberries in Greenhouse .

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Bakery Business Plan - How To Start A Bakery Business

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An online report suggests that the bakery market of India is estimated to grow at a Cumulative Annual Growth Rate (CAGR) of 8.5% between the years 2021 and 2026. Additionally, the report implies that it is set to reach a valuation of US$12.39 billion by the end of the year 2026, making bakeries a fairly lucrative restaurant format. This can be evidenced by the demand for baked goods that has witnessed a gradual but noticeable increase in the past couple of years. The same can be true as baked goods tend to offer customers convenient food options at an affordable price, hence the growing demand. This has also led to an increase in the number of bakers operating from their homes and chefs venturing into the bakery business from the comfort of their homes. In this article, we will talk in detail about how to open a bakery business in India and how one can secure a business loan for it.

Follow the below-mentioned steps to open a successful bakery business.

1. Create a Bakery Business Plan

Before going ahead and learning about the method of starting a bakery business in India, one must create a solid bakery business plan. This should help one streamline the operations, decide the distribution of budget, and plan the future development of the venture, among others. The first step should be the creation of:

Bakery Business Plan Summary– The business plan summary of one's bakery business should be an overview of the bakery. It should consist of the entrepreneur's mission statement, a review of their restaurant's legal structure, and ownership pattern. Additionally, it should contain a brief history of the restaurant if it is an existing establishment.

Overview of the Business– The overview of a bakery business plan must be made up of the concept and the type of service it intends on providing. On top of that, it should include the bakery layout. To give a clearer picture of the kind of eateries that will be offered, a future bakery business owner should furnish a sample menu and the details of the management team.

Analysis of the Industry– Conducting an Industry Analysis is extremely important to open a bakery. It helps identify the competition in one's area, analyse the target audience for the bakery, and help them select the right location for the eatery.

SWOT Analysis– The Strength, Weaknesses, Opportunities, and Threat (SWOT) analysis of one's bakery would help them identify their plus points, their minus ones, opportunities for growth, and barriers to trade and competition.

Plan of Operations– The plan of operations of one's bakery business should be home to information such as the functioning of the bakery, order-taking process, menu setting/printing, value-added services, management of staff, and procurement of raw materials, among others.

Analysis of the Finances– A bakery's finances should include the statement of cash flows, costs associated with day-to-day operations, and fixed/recurring expenses. This should help one in ascertaining the financial viability of the venture.

Marketing Plan– The marketing plan should discuss how the owner will attract customers and simultaneously promote their bakery.

2. Bakery Business Location Selection Process

The first step of starting a bakery business in India is to decide on a location. In the case of a bakery, the ideal location is a market of repute or a high-end centre complete with sports bars and other kinds of eateries that already draw attention to the place. Ideally, the front area shops on the ground floor that are easily visible and accessible are appropriate for bakery businesses. It is advisable to have a shop with a carpet area of 500 square feet at the very least, preferably divided into two floors to build a functional kitchen on one level and house the patrons in another. However, this is subjective to the available space.

For a commercial space spread over 1000 square feet, the rent should not go beyond ₹60-70k, and expenditure should be capped at ₹1,80,000 to acquire the place for the bakery’s operations.

Additionally, while finalising the location, it is essential to ensure that the place comes with proper drainage and water supply facilities. The owner should also procure a No Objection Certificate (NOC) from the property owner, stating that they have no problem using their place as a bakery.

3. Get All of the Required Licenses to Open Bakery

Similar to the Quality System Regulation (QSR) format, a bakery business also needs a total of five licences, namely:

FSSAI licence

GST Registration

Health Licence by the Local Municipal Corporation

Police Eating House licence, and

Fire Licence

Out of all of the above, the first three are the most important ones to have. Police eating house and the requisite fire licence can be acquired once the owner commences their operations. However, it is recommended that one has all of the licences in place before opening a shop.

Food Licence: The FSSAI website (www.fssai.gov.in) is one place where one can apply for the relevant food licences. Additionally, you can also get the same done through a myriad of agencies that charge around or up to ₹5,000 for the paperwork in its entirety along with the licence fee. The licence must have a validity of 5 years at least to avoid annual renewal fees. The licences that have a validity of 5 years cost around ₹15,000.

GST Registration: It can be done with a Chartered Accountant’s assistance. They will guide the entrepreneur every step of the way.

Health Licence(s): One must also obtain the requisite health licence, courtesy of the Municipal Corporation with the help of a local health inspector. This should cost the individual somewhere around ₹3,000.

Fire Licences: The requisite fire licence can be acquired by simply shelling out ₹1,000-2,000, after the fire extinguisher cylinders are installed.

4. Get the Manpower Required for a Bakery

Unlike the QSR and Food Truck methods, bakery shops need a relatively skilled workforce since both the taste and presentation aspects of a baked good are fairly crucial to its ultimate fate. In the case of a high-end bakery, one will need a chef de partie, a head chef, helpers and a commis chef, in addition to a cashier and service boys at the serving area’s display. The salary of the personnel will depend on their experience.

5. Buy Equipment Needed to Start a Bakery Business

The bakery kitchen equipment is costly as each equipment piece is made up of stainless steel because they are supposed to be sturdy and long-lasting. The essential pieces of equipment required at a bakery are ovens, planetary mixers, cooling fridge, deep fridge, gas stove, working table, storage utensils, and cylinders. Unlike QSR or Food Trucks, a bakery requires new efficiency equipment. But, to lower the cost, one can get a second-hand working table.

6. Design the Bakery’s Display Area

The display area or the front end of the bakery business should be well designed and created so that every item is noticeable to attract walk-in customers. You mainly require a display fridge for cakes and pastries. Other than the refrigerator, the display area should have proper storage and a display rack.

7. Install a POS and Billing Software in Your Bakery

The point of sale (POS) software is no longer just billing software. These things are equipped with powerful integrations like inventory management, making the POS software the only software one will need in their bakery. While purchasing one, the owner must ensure that the device's software has features that will help them manage the baked items' shelf life and have robust inventory management capabilities as one would be dealing with perishables all the time.

8. Do the Right Kind of Marketing for Your Bakery

Marketing and branding are essential for any entrepreneur who wants their business to flourish, and the list of such entrepreneurs includes bakers too. One must acquire a properly designed logo and display board from an experienced designer, and it is also important to get a well-designed menu.

Apart from the items mentioned above, one must also have set aside some money for the restaurant management software. It could also help them run multiple marketing campaigns by utilising data pertaining to customers.

9. Decide on the Employee Staff Uniform Pattern

Uniforms are usually ignored while opening a bakery. However, it must be noted that they are essential as they give out a professional feel and look, which usually works well for the branding of the bakery. All staff members must look hygienic, cleaned, and well dressed. One can choose from chef coats, smart shirts and t-shirts, and aprons, among others.

10. Partnering up With Online Food Aggregators

The demand for online food delivery is steadily increasing these days, with most of it coming from online food aggregators. For a new bakery on the block, it is highly recommended to get registered with online food aggregators to generate orders through such portals.

It is also advisable to have an online-ordering enabled website for the bakery. This would help one boost their online presence and generate online orders for their bakery. One can safely say that the approximate cost of getting a quality bakery started in India is around ₹15 Lakhs. However, the cost of equipment and location can lead to a significant amount of variance in the estimated cost.

Do not let the costs mentioned above deter you from bringing your culinary dreams to life, as almost all of the above expenses can be taken care of with the help of a single business loan. As a user of Bajaj Markets, one can be assured that the application process will take a negligible amount of time. If the applicant meets the eligibility criteria, the amount which they have decided on with the lender will find its way to the bank account of the future business owner in a matter of days. Apply now!

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How to Start a Profitable Bakery Business in India

The bakery business is one of the largest small-scale industries in the food sector in India. Moreover, the domestic demand for bakery products is huge across the globe. The bakery is one of the most profitable food processing business opportunities one can initiate by having owned or rented space.

Selecting the right product and proper marketing strategy is the major deciding factor in getting success in the bakery business. According to the demand and financial aspect, you will need to choose the specific products for your bakery business.

Bread and biscuits are the most common products but other items like cakes, pastries, cream rolls, cookies, etc. have good demand. Here are the basic steps to follow to start a bakery manufacturing business in India:

11 Steps to Start a Bakery Business in India

1. why start a bakery business .

Though there are sufficient automatic and semi-automatic bread as well as biscuit manufacturing units, there are still a number of people who prefer fresh bread and other products from the local bakery in India.

Bakery products are an item of mass consumption in view of their low price and with rapid growth and changing eating habits of people. The bakery industry has achieved the third position in generating revenue in the processed food sector.

The shining star of the sector remains the biscuits industry, which is expected to outperform the growth of the sector overall. Thus, opening a bakery business in India is considered a promising and profitable business venture for new startup entrepreneurs.

2. License & Registrations

In starting a bakery business in India, you will need to register the business first with ROC (Register of Companies). You have to apply for a food business operating license from FSSAI (Food Safety & Standards Authority of India). Additionally, you will need to require individual licenses from FSSAI for the delivery boy or delivery vehicle.

You will need to ensure compliance with all the fire safety guidelines. You may also register your bakery unit as SSI from the local DIC office. Obtain Vat Registration. You also need to have clearance from the Pollution Control Board.

3. Make Your Bakery Business Legally Compliant

You must register your business. You can form a sole proprietorship, OPC, LLP, or Pvt Ltd. company as per your requirement.

In addition, open a current Bank Account. You can register your business as SSI Unit also. Apply for GST Registration .

If you are looking forward to building a brand for your bakery items. registering Trade Mark must be considered.

4. Develop a Bakery Business Plan

It is always recommended to have a customized business plan in hand. It helps not only in arranging finance but also in preparing the unit, purchasing and installing the right machinery, and in other operational aspects. Before installing the machinery, having a layout plan and implementation schedule is essential.

5. Calculate the Cost of Starting a Bakery Business

The minimum cost of starting bakery products making business on a small scale is expected to be in the range of Rs. 15 Lacs to Rs. 20 Lacs. However, the cost will increase if the production output increases.

Most of the cost will be in buying equipment and machinery. Other expenses include legal costs, space rent, manpower costs, and procuring raw materials.

6. Arrange Finance

In initiating a bakery business, you will need to arrange two types of capital.

One is fixed capital for setting up the unit and purchasing machinery.

The second one is working capital. Hire purchase leasing is available from banks for machinery purchases. You can avail of cash credit or overdraft accounts to serve the requirement of working capital.

You can also apply for a loan for machinery and working capital.

7. Bakery Manufacturing Business Machinery

According to the desired product and production output, you can establish a bakery unit in two ways. One is a fully automatic setup and the other is a semi-automatic setup. Generally, you will need to have the following basic machines for making biscuits, wafers, bread, etc.

Apart from these, you will need to arrange electrification and water supply.

8. Raw Material

The major required raw materials are wheat flour, sugar, eggs, and ghee. You will need to procure other items like milk powder, yeast, salt, assorted fruits, baking powder, caramel color, vanilla, butter, cream, etc. in small quantities.

If you are starting on a small scale, you can procure all the raw materials from the local wholesale market. For a medium-scale unit, you can procure major raw materials from direct manufacturers.

If you are planning to start a large-scale bakery business, you can also set up your own flour mill.

9. Production Process of Bakery Business

In making biscuits, mix the calculated amount of maida, starch, vanaspati, water, etc. in a mixer to form a paste. Then pour the paste into the pre-heated mold to bake the wafer sheet.

Additionally, mix the other ingredients like sugar, vanaspati, colors, and the essence in a planetary mixer to form the cream. Then apply the cream to the sheets to form sand witch. Thereafter, cut the sandwich into biscuits and pack them in pouches.

To make cakes, mix thoroughly wheat flour and baking powder along with cream, sugar, and ghee till they become fluffy. Then add the mixture of beaten eggs to it along with caramel color and chopped fruits. Mix it before pouring the mixture into cake pans. Thereafter, bake it for around 30-40 minutes.

You can produce pastries in different shapes like square, rectangular, etc. from thick cake sheets, buttercream, jam, etc. placed between layers of cake. Then chill the layered cake and cut it with a sharp knife into the required shape and size.

The sides of the pieces are iced with buttercream or fudge and topped with finely ground cake crumbs or pieces of fruits or chocolate strips and decorated with proper design, color, and garnish.

This is a semi-automatic process, You can also go for a fully automatic bakery business production setup.

10. Manpower Recruitment

Keep in mind, manpower recruiting is a critical aspect to be successful in this business. You need to have skilled manpower, especially in the production process of bakery items.

11. Promote your Bakery Business

You can sell bakery items broadly in two ways. One way is to create a distribution network catering to local retailers. The other way is selling online. You can check our detailed guide on to open an online retail shop to learn more.

For physical distribution, you must contact retailers and local dealers and ask them to promote your brand of bakery products.

Frequently Asked Questions

Can i start a baking business from home.

Yes, you can start a home-based bakery business. However, to start a commercial bakery business from home in India, you will need a wide range of licenses like FSSAI, GST, Fire License, Police Eating License, etc.

Is Home Baking Business Profitable?

Yes, baking business from home can fetch good profit returns. However, to be successful, you need to create an effective business plan along with a good marketing plan.

How Much do Home Bakers Earn?

The earnings will depend on local demand, marketing strategy, and quality of bakery items. On average, successful bakers earn more than Rs 1 Lacs at ease.

Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.

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Bakery business plan – how to start (or) open a bakery business in india.

In today’s day and age, if there is one business that is blooming more than ever before, without a doubt, it is the bakery business. It wouldn’t be an overstatement to claim that almost every street in a city has at least one bakery/café. While this can partly be attributed to the growing influence of the western culture in India, we also need to acknowledge the fact that bakeries/cafes offer a comfortable and warm ambience along with affordable delicious food, which is a perfect combination one looks for when spending fun time with loves ones or for some quality work time.

Along with increasing demand, awareness of high quality bakery goods is on the rise more than ever before. So, opening a bakery business can be an attractive and lucrative option in the F&B sector, especially with the advent of modern technology and machinery which make it possible to prepare a wide variety of bakery goods. The current start up wave swiping the country is just the icing on the cake.

A systematic plan for opening a bakery business in India:

1. Make a detailed bakery business plan – creating a business plan will help you streamline the operations, plan the budget distribution as well as plan the future development of the bakery business. Your business plan should include the below:

2. Choose the location – Selecting an ideal location is a critical step in the process as it can potentially make or break your business. Some ideal location spots could be one of the below:

3. Acquiring all the licenses required for opening a bakery business – once you have finalised the location for your business, the next step would be to get all the below licenses:

4. Hire Manpower – to run a successful bakery business, employing a skilled workforce is vital because the taste of food and the look and feel of the place are the only factors that will draw people in. You will need to hire:

5. Purchase equipment – you will need to buy sturdy and long lasting kitchen equipment to ensure good quality products and maximum efficiency. Some of these would be:

6. Install billing software – you will need a POS billing software, which is equipped with inventory management and features that help manage the shelf life of perishables.

7. Marketing and branding of the bakery – as is the case with all business, effective advertising and branding is vital to the success of a bakery business as well.

8. Financing the business – the most vital step of the business plan will include getting the required business loan:

Types of Loans –

Loan providers – you can get an easy bakery business loan from banks or a non-deposit taking NBFC like Lendingkart, since it offers easy SME loans in India after an accurate and rapid analysis of the credit worthiness of a business with the help of latest technology and analytical tools.

Some of the other key features of borrowing a loan from us are:

Documents required

Bakery business Loan procedure with Lendingkart

Business loan interest rates and charges

Bakery business plan faqs:, 1. is it possible to expedite the loan sanction process, 2. what is the emi one needs to pay for the bakery business loan, 3. can we cancel the loan application after approval, 4. how can we ensure success of our bakery business, 5. does a bakery business have good long term potential, 6. what is a good profit margin in a bakery business, 7. what are the different types of bakeries that one can open, 8. what is the bifurcation of major costs involved in opening a bakery.

How to Start a Bakery Business in India?

Yash Khurmi | December 23, 2021 | Company Formation , GST

It is the dream of many people to start a bakery business in India. Many chefs and ladies love to bake. Moreover, it is their hobby but they can’t find a way to turn it into a business. Taking a leap of faith and efforts to start a bakery business in India can be profitable in the long run.

As per the studies, the bakery business in India will grow tremendously and an initial investment at this stage is a good time. Therefore, In this article, we will discuss all the things that you must know to start a bakery business in India.

What is a Bakery Business?

A bakery business is simply a business where you eat baked food items. For example, a bakery may generally contain food items such as cake, cupcakes, pastries, doughnuts, frozen desserts, etc.

Bakery Businesses can and work on both retail and wholesale levels. Furthermore, one can also start a franchise business of bakeries. However, the bakery business is also special for entrepreneurs having less capital.

You can even start a Bakery Business in India at home through modern social media or other means of marketing.

Is the bakery business profitable in India?

Yes, Bakery Business in India is profitable. The reason is there is a huge market and demand for bakery products. As per the studies, The typical monthly earnings from a small-scale baking business might be between 60,000 and 1.2 lakhs. The profit earned is determined by the number of baked products you sell; if you sell a variety of products, you may make more than 2 lakhs every month.

Similarly, The habits and lifestyles of people are changing. Most of us are shifting to healthy food alternatives. Nowadays, people are shifting towards eating healthy bakery items. Consumers are looking for hygienic and healthy bakery items. Therefore, they are also ready to pay the premium price for quality products and services.

However, the profit of the bakery business in India is dependent on entrepreneurial skills and a number of other factors.

Stepwise Guide on How to start a bakery business in India

To start a bakery business in India, you must know some essential things in mind. These important points are:

Registrations required to start a bakery business

Furthermore, business competitors can take advantages that may harm your business in the long run. The basic licenses and registrations for a bakery business in India are as follows.

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Choose a Location best suitable to start a bakery business in India

Choosing a decent site is among the first stages in learning how to establish a bakery company in India. A reputable market or high-end retail areas with substantial visitor numbers are good locations for a bakery.

The bakery company works best in front-area establishments on the ground level that is easily accessible and available.

It’s best to split a 500-square-foot business into two levels, with a working kitchen solely on a single level and a display and service space on the other. However, this is dependent on the amount of room available and your own preference.

Decide the Type of Bakery Business

How to Start Food Business in India

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How to Start a Home-Based Bakery Business in India [Investment, Profit]

Do you enjoy baking and are planning to start a bakery business? Baking a cake for friends or family is different, but starting a bakery shop business requires proper planning and strategy. There are multiple factors involved like cost and finances, registration, licensing, hiring a team of professionals, and overall management.

The bakery business has evolved over the past decade. It is not just about cakes and pastries anymore; bakeries today sell a versatile range of desserts as well. The home baking business in India is considered one of the most profitable and high-earning businesses today. Indeed, many people passionate about baking have successfully started their baking business from home and cracked the market. Like any other business, a home-based business too requires full-time attention and focus for growth and better revenue.

This comprehensive guide will help in a better understanding of how to start a bakery business at home. With the right tactics, baking can be converted into a profitable, high-earning venture.

1. Kickstart a full-fledged bakery business

An online home bakery does not require a lot of initial capital investment and is perfect for people passionate about baking. Begin with a small menu, manage orders and delivery, prepare the items, and gradually grow the business. All you need is a little space to bake in your home, the right baking tools and equipment, a passion for baking, and a stellar website to reach customers.

2. Cost to set up a home bakery

The good news is anyone can start a home bakery with a bare minimum investment in a good oven and basic ingredients. However, a tentative budget and plan are crucial for expanding this business. Budget planning helps in understanding how to open a bakery shop both from home and outside. Setting up an online bakery business from home means there is no cost involved in renting or lease. However, a dedicated baking space is essential for running the business smoothly. Here are the other expenses involved in starting a baking business from home.

Also read: Cake Box Manufacturers in India

3. Why do you need a business plan?

Starting a bakery from home on a small scale does not require much planning. However, from a business point of view, it is crucial to have a business plan. This helps in streamlining the management and better marketing for business growth. Planning for the business means deciding on the recipes, testing recipes, setting up an online website for orders, marketing, and promotion.

Before starting the business, make sure to get all the necessary registration and licensing done. This helps in the calculation of GST and even receives an exemption. The GST exemption depends on an annual turnover of Rs 20 lakh.

The brand logo and name play a crucial role in the branding of the bakery business. The logo and name act as the face of the business.

Once the recipes are decided, ingredients and equipment are procured, the next big step in the bakery business plan is marketing and promotion. There are tons of ways to promote and market the business. The online presence of the business helps in better sales and revenue.

4. Go for marketing and promotion to increase revenue

Starting a bakery shop business is fairly easy and simple, but it requires proper branding to achieve better growth and revenue. Online marketing helps in better visibility of the business and rise in the customer base. Here are a few ways which help in marketing the home-based bakery business:

Also Read: Biscuit Manufacturers in India

5. Price the products appropriately and keep the menu versatile

How to start a bakery is a tricky question as it requires a lot of dedication and passion for the profession. Limited bakery items, recipes, or cakes will eventually limit the customer base. It is vital to keep a menu that is versatile and is a mix of multiple items. A home-based baking business proliferates better with upgraded skills and techniques.

Start with the basic items that you always have hands-on experience and expertise in. Gradually upgrade your skills and include more recipes, better cakes, and a wide range of bakery products by attending workshops or classes. A well-designed menu allows the customers to navigate through multiple options and place the order conveniently.

Apart from the items or recipes, fair pricing is essential. Exorbitant prices are a big turn-off for customers, especially if you are new in the baking business. It is necessary to list the items and tag a fair purchase price against them. The cost of manufacturing and operation of the business for you is different from others and hence the prices must be decided accordingly.

6. Participate in events or go for partnerships

Reach out to event and wedding planners amongst friends or family and partners for orders of cake or other bakery items. Try signature recipes that will help you gain a reputation and create a niche. Seek help from family and friends for promotion.

Home-based bakery business has helped many people become entrepreneurs and get a steady monthly income. A lot of small home bakery businesses have grown exponentially to expand into a commercial setup. Starting a home-based baking startup requires proper planning, managing finances, rigorous clever marketing, and constant skills upgrade. These tips will help you understand and figure out how to start a bakery shop .

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Q. Is registration and license necessary for a home-based bakery business?

Ans. Yes, the business license and registration is necessary as it is mandatory by the FSSAI as well as for filing GST and tax. This prevents any government body or regulation from interfering with the business. Hence, a business license helps with uninterrupted work.

Q. What is the cost of starting a home bakery business?

Ans. The cost is variable, and it depends on the types of business and bakery items. It also depends on the scale and size of the business. Normally, if it starts from home without renting a place, it can be started in as low as Rs 10000/-.

Q. What is the best way of marketing for better sales?

Ans. The best way of marketing and promotion is starting a website optimised with SEO to allow the customers to place the order. The social media handles are great for promotion and marketing.

Q. What are the three significant factors for a home-based bakery business?

Ans. The three major factors are the budget for the setup, deciding on the menu or recipe, and handling the marketing and promotion for a better customer base.

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