How Your Small Bakery Can Compete With Established Bakery Businesses

If you are planning on starting a small bakery business, or maybe you have but you’re having some doubts about your chances of success, this post is for you. You may have a dream of starting up your own bakery business, but you realize you don’t have such a large amount of capital. This can be scary and may seem almost impossible for you to start. I’m here to tell you that it’s not impossible, you can start your small bakery business and be successful. That is why I wrote a book on how to start a small bakery business successfully. It’s definitely a challenge and not everyone can do it, but it’s possible. It’s possible to enter the baking industry as a small startup business and be able to compete with established bakery business brands.

How you wonder? Well, I will share with you three ways on how it’s possible. I hope you’re up to the challenge – this is not for the faint-hearted.
1. Have a realistic and focused business plan

I have purposely underlined the words realistic and focused since they are very important. You can choose to write a business plan for your small bakery business that is unrealistic and lacks focus. How? By possibly having too many products that you want to offer, having too many target markets or not stating a target market for your products. You can also have unrealistic labor and management requirements or lack thereof. If you observe successful bakery businesses, they started by focusing on specific types of baked products. By being realistic in your bakery products menu; you’re able to target a specific market (set of customers). You’re able to offer products that you can cost realistically and improve quality over time due to focusing on only those types of products. As your small bakery grows, you can diversify your menu through research, feedback and in a strategic way that will not cause your business problems or losses.
Just to share two examples; Paul Cookiemans gained popularity for their cookies when they started, that is how they have maintained their success in the baking industry. Joybells gained popularity by having elaborate and unique wedding cake designs that caught their customers’ attention. They started small but are still growing successful with time. In order for you to have a higher chance of success in a very competitive industry, you have to be realistic and focused when planning.
2. Have and consistently execute a focused and measurable marketing plan

In order to gradually gain brand recognition and a gradual increase in your bakery sales; it’s important to market your bakery business. You have to make sure your marketing is consistent as well as measurable. The reason why it’s important for it to be measurable is the fact that as a small business, your marketing budget may be a small percentage of your financial budget or very limited. It’s therefore important not to waste the little resources you have on marketing that may or may not be increasing your sales. Make sure at least 95% of your marketing activities are measurable and this will help you in making decisions on whether to stop activities that don’t bring in sales to your bakery. It will help you focus your marketing activities effectively for business success. You cannot spend a lot of time on marketing that isn’t effective and you’re a small bakery business owner who has a busy schedule.

Make sure you learn as much as you can about marketing – you watch videos like this one on Facebook marketing as well.
3. Have a lean startup bakery business model
I’m sure you may have heard this, but if not, entrepreneurs who have a lean startup have a higher chance of success. By lean, I mean, not spending so much capital and resources on starting up. Lower your costs as much as you can and you don’t necessarily have to start big. A great example is starting as a home-based bakery at first. Make sure your labor requirements are at a minimum and if possible instead of hiring a monthly employee, you can outsource jobs as needed. You can also choose to get the minimum required equipment and ingredients necessary to start your bakery. This business model works because you will monitor your small bakery business over the first six months and make the necessary adjustments as it grows.
4. Have a clear, realistic and thorough financial plan
When writing your basic business plan, you will include your financial plan as well. It’s very important to be very clear on all your requirements (equipment, labor, raw materials/ingredients, expenses, etc.) Don’t leave out your expenses by telling yourself that you will figure out what to do when you have to pay your expenses at the end of the month, so you omit those figures. Make sure you state all the financial requirements.
As you write your plan, once again, be realistic on what you need to start – don’t be extravagant. As I mentioned above on having a lean startup, write down only what you require to get started and running for the first few months. Be very thorough and think of everything you will require in your bakery, even stationery has a cost and should be stated in your plan. Remember that you need to know where you will get your funding from as soon as you find out the total cost of starting and running your small bakery.
If you can stick to the top four ways I’ve mentioned above on getting started, you have a higher chance of success for your small bakery business. You will be able to compete in the same industry as already established bakeries.

For more baking for business tips; you can check out our ‘Baking for Business‘ video series on YouTube.

You can also check out the Baking for Business segment on this blog.

Thanks for reading and all the best on starting your very own small bakery business. 

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