Bakery Business Plan

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:

  1. Summary of the bakery business
  2. Business survey
  3. Analysis of the bakery industry
  4. SWOT analysis
  5. Planning operations
  6. Financial evaluation
  7. Marketing plan

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:

  1. A well-known and reputed market area.
  2. High end shopping streets that experience a surge of youngsters or students flocking the area.
  3. Front area shops, ideally on the ground floor for easy accessibility.
  4. Area that has a proper drainage facility and 24*7 water supply to main good hygiene standards.

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:

  1. FSSAI license – you can get online on the official FSSAI website or through an agency that will charge you processing fees.
  2. GST Registration – this can be processed with the assistance of your Chartered Accountant.
  3. Local Municipal Corporation’s Health License – this can be acquired with the help of a local Municipal Health inspector.
  4. Fire License – you will acquire this license after the installation of fire extinguisher cylinders.

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:

  1. Head chef
  2. Chef De Partie
  3. Commi level Chefs
  4. Waiters/helpers
  5. Cashier
  6. Cleaners

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:

  1. Oven
  2. Deep fridge
  3. Cooling fridge
  4. Gas stove
  5. Planetary mixers
  6. Crockery and storage utensils
  7. Cylinders
  8. Working table

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.

  1. Design your logo, pamphlet and display board
  2. Well-designed menu.

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

Types of Loans

  1. Asset bases loans, wherein you can use assets like inventory, real estate or machinery as collateral.
  2. Term loans, which are useful for long term big investments for a tenure of 1 – 10 years.
  3. Working Capital Loans, which have a high interest rate, are useful for short term requirements and that are payable within a year.

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:

  1. Straightforward application process, free from the bureaucratic red tape.
  2. Low one time processing fee of 1 -2%
  3. Quick disbursals and turnaround time
  4. Wider loan window which provide loans up to Rs 2 Crore
  5. Express same day loan approvals and processing with online application process
  6. Best rates of interest
  7. learning to determine the lowest interest rates
  8. Zero hidden costs and charges.

Documents required

  1. VAT Registration
  2. GST Filing
  3. Business Registration Certificate
  4. Trade License
  5. Taxpayer Identification Number
  6. Gumasta License

Bakery business Loan procedure with Lendingkart

  1. Submit your application online by entering the required personal, business and financial information.
  2. Upload your documents for verification.
  3. Get your loan sanctioned and disbursed within 3 business days!

Business loan interest rates and charges

Customized Rate of Interest

1 to 2% monthly

Charges for Pre-Closure


Instalment period

Monthly or Bi-Weekly

Loan Tenure

Up to 3 years

Bakery Business Plan FAQs:

1. Is it possible to expedite the loan sanction process?

The only way to ensure quick loan approval is to provide accurate details to your lender at the right time.

2. What is the EMI one needs to pay for the bakery business loan?

EMI will depend on the loan amount and the repayment tenure.

3. Can we cancel the loan application after approval?

Yes, you can cancel your loan application before the loan amount has been disbursed.

4. How can we ensure success of our bakery business?

The success of your bakery business will depend on the quality of your products, pricing, expenses and marketing.

5. Does a bakery business have good long term potential?

The potential of a bakery business can be improved if it focuses on retail as well as wholesale of bakery items.

6. What is a good profit margin in a bakery business?

Profit margins vary depending on multiple factors, though a 10% to 20% net profit margin is generally considered decent.

7. What are the different types of Bakeries that one can open?

Before, one thinks of starting up a business in Bakery, he needs to be particular about the kind of bakery he would want to open from the following types: • Bakery Café – It provides a seating arrangement for its customers to relax and relish the sumptuous bakery items along with a few health drinks which also encourages high volume of sales. In this case, an apt location and design of the café needs to be considered before opening a bakery café. • Home Bakery – Before opening a full-fledged bakery, if an individual is sceptical about the taste of the customers and how they respond towards the menu provided by the bakers, they gradually start the business at home, test the market before going mainstream. • Delivery or Cloud Kitchen – The advantages of this kind of a bakery is a low client interaction and a low investment, as this kind of a business accommodates itself in the available space of one’s own kitchen or back-house to bake goodies and sell it out to the main vendors.

8. What is the bifurcation of major costs involved in opening a bakery?

Before opening a bakery, one must consider the following costs – • Location charges • Purchase of Bakery Equipment • Licensing and other legal formalities • Staffing • Billing and POS • Cost of Raw Material • Cost of Marketing

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