How To start a Bakery business in Nigeria without stress.
According to a report published by the global audit and market research firm, Nigeria’s bread segment was worth ₦122 billion in 2015.
Bread is an affordable and convenient food that will always be in demand and supply. It’s been a dietary that have stayed over the years, and it continues to be consumed by most people today.
our normal Nigerian community bakery bread is always in demand. The owners of these establishments may moan about flour prices and energy costs, but you hardly find a house of bread lacking buyers for their bakes. It’s no wonder that bakeries are close to the top of many an intending entrepreneur’s lists of possible ventures to start up.
This point is borne out by analysts’ valuation of the industry. According to a report published by the global audit and market research firm, Nigeria’s bread segment was worth ₦122 billion in 2015. It was designated a fast growing one as well, with a Compound Annual Growth Rate of 14% in the five years preceding the report’s publication. It was also tipped to expand by a further 3% till 2019. In summary, the experts say bread will be raking in more money for a long while yet.
1. Select the kind of bakery you’d like to open
One of the first decisions you’ll have to make is the kind of shop you want to open. To do this, you’ll want to assess your talents, budget, and goals. Be sure you’re not making this decision in a bubble—you will want to have your ear to the ground on national trends in the industry—remember the cupcake shop craze (and the cupcake-focused reality TV shows) a few years back? But don’t simply take your findings at face value either.
It’s equally important to do local market research to figure out how national currents will affect your particular location and demographic. From there: take a look at the list below and decide which one is right for you.
• Online. You don’t need a storefront to open a bakery. You can start out online. With a killer website, pictures of your work, and a way to place an order, you can run it from your home.
• Counter service. With a small commercial space, customers can walk in and pick up baked goods from an employee-managed counter.
• Specialty service. If you plan to specialize in a certain kind of baked good, a specialty service is your best option. Whether you run the business from your home or rent a space is up to you.
• Sit down. More owners are trying to capitalize on the sit-down and dine option. It’s a growing trend in the bakery industry right now. Picture a space that has both an area to order baked goods and spot to sit and enjoy them.
Assess your startup funds
As part of your business plan, you’ll dive into finances. One of the numbers you’ll need to generate is startup cost.You’ll need to compile a list of equipment, from appliances like ovens and refrigerators, to smaller items like utensils and pans.
Make sure you create a full list of tools. The equipment will be a one-time hit, but you’ll also need money to live on while the business gets established. You won’t make profits overnight, so you need to sit down and figure out when you’ll break even and how much money you’ll need to survive until that time.
Get the Equipment You Need For Bakery
Bakery requires some core equipment that are necessary for the operation.
Here are some of the equipment needed in a Bakery.
Huge Ovens (Minimum of 2, depending on the size and scale of the bakery)
Big Tables (Minimum of 3)
Disposable Hand Gloves (For workers)
Worker’s Uniform (Optional)
The current prices of some of this equipment have been listed above.
Estimate For Bakery Plan. (Notice Only In Nigeria)
It is actually difficult to make an exact estimate of how much you will spend when setting up your bakery. This will be based on your personal plan and the type and scale of bakery you are looking a. This post highlights the major things you need and the steps you need to take when starting a bakery business.
Based on past experience and people’s testimonies, you will need a minimum of N700, 000 to start a bakery business. On average, one needs to have between strongN1,000, 000 – N5,000,000 depending on the scale of the business.
If you are among those that thing starting up a Bakery comes cheap, then you have either been fed with wrong information or have decided to ignore the obvious. Truth is, starting a bakery doesn’t come cheap.
In fact, they are among those businesses you venture into with some basic capital. Don’t get this wrong, you can start a mini bakery for with a low as a hundred thousand naira or even lower, but be sure it might not go beyond the name and level – mini. You will need a minimum of N500, 000 – N700, 000 and as high as N6 million, depending on the size and scale you want, to start a proper and standard bakery in Nigeria.
Processes and Cost of Starting a Bakery in Nigeria
It is not enough to have that idea to start a bakery business in Nigeria. A bakery business requires proper planning and setting up of right strategies, including putting the right things in place at the right time.
Starting a bakery is not a very difficult thing to do, sincerely, and the processes involved redirect, straightforward and provided things are done accordingly, less stressful and fun. Bakery business is a top one and a steady goldmine that can easily make one a millionaire.
Prices of Main Bakery Equipment in Nigeria.
Deck Oven == N900,000 – N1,000,000
Dough Mixer == N1,200,000 – N1,300,000
Dough Mixer (25kg) == N450,000 – N500,000
Tabletop Slicer == N250,000 – N300,000
Shop for space
If you’re running a bakery from your home, you’ve already got your space figured out. If you plan to invite customers into your shop, you’ll need a formal spot with a kitchen and an area for the public. Some bakers decide to rent out commercial kitchen space only. It’s a good option if you don’t want customers to walk through your shop, and just need a bigger, more equipped kitchen.
Whatever your needs, be picky. Shop around, compare prices, talk with neighboring businesses, and research the area to make sure you find the right space. It’s never a bad idea to look into small business incubator programs that might offer space and business training or mentorship at a reduced rate. Do not forget to consider the legal necessaries—which will vary state to state—such as obtaining a license to bake out of your own kitchen.
Baking from home at sometimes can be a challenge, mainly in the realm of time management and little fingers wanting to try all the frosting. I am also limited on certain ingredients that I am allowed to use depending on their acidity ratio and their storability because I am not a commercial kitchen, Wherever you decide to run your bakery, be sure to think through the pros and cons and their related costs.
Price your baked goods
Most bakers base their retail price points on the cost of supplies and the time it takes to make the goods, but Green says this formula is flawed.
“Your prices should include things like clean up time, packaging, and time spent promoting your business on social media,” she says. “The biggest hidden cost in a bakery is time. It’s easy to forget the time you spent making flowers because you were watching TV while you did it.
Have a defined friends and family policy
Before you sell your first scone, be aware that friends and family will probably ask for a discount.
When you’re selling cakes and cookies as a side gig, it’s fine to give the neighbor or the CDA or ACDC chairman a discount, but when you start your business, it’s different. “All those wonderful people who previously bought cakes off of you for the cost of ingredients are going to need to be re-educated about what you’re doing now,”
“Those who really love and support you will also understand your need to feed your family and pay your rent.” If you want to offer a 10 percent discount to friends and family, that’s fine, but whatever your policy is, make sure it’s consistent.
Find support and Loan
There are lots of Loan Company on this website that will be glad to support and give out their loan when you can show them a very good business plan for your bakery business. Because they know that it is a very lucrative business and never die. Contact any of the loan company and submit your bakery business plan to get your loan without stress.
1. Be the best, the first, or the only one
Be original. These two words might seem like generic advice, but to survive, you can’t be a carbon copy of your competitors. “Be the best, the first, or the only one baking the kind of treats you make,” Green says. “If you can be all three of those things, that’s even better.”
Know what kind of competition you have in your area and work to set yourself apart. “I really find happiness in seeing any child be able to have a decadent cupcake or piece of cake on their birthday that otherwise would not be able to because of food allergies.
I have experimented relentlessly to create recipes that taste amazing, even know they are free of animal by products, gluten, pesky preservatives and all that other nasty stuff.” It’s an approach that resonates in her community where so many people value natural and locally sourced food.
2. Be prepared to market your product
You can spend all day and night in the kitchen creating the next best cake, but if no one knows about it, it doesn’t matter. That’s why you have to set aside time and money to market your business.
“Being a fabulous baker doesn’t guarantee success You also have to be a fabulous marketer too.” Too many bakers get wrapped up in technique, but “perfect ganached edges mean nothing if you have no actual orders on which to have perfect ganached edges.
Here are a few low cost or free marketing ideas:
• Write a blog: To promote your bakery inform people around your community about your bakery and always give promo and discount for them to appreciate your bread always.
• Use social media: Social media is a great way to promote your business. If you’re short on time, pick one social media site and post consistently.
• Join groups: As with any business, networking can bring in more customers. Join local business groups like your chamber of commerce or small business association and forge relationships.
3. Focus on your customers
Your customers are your key to success. Happy customers become repeat customers, so work to make each customer experience memorable.
Ask your customers for feedback, talk with them at the counter, and ask for product suggestion once in a while. Make the customer experience count, that’s the best way to get repeat customers and money in the register.
Click here to get the complete guide on the above business plan Click Here
Uses of this Business Plan (PDF and Word)
This business plan can be used for many purposes including:
• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your business
• As a business proposal
• Assessing profitability of the business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation
Contents of this Business Plan (PDF and Word)
This business plan include:
• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in this business fail, so that you can avoid their mistakes
• Ways to raise capital to start your business