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How To Start a Bakery Business In India?

Love baking choco chip cookies for your kids? Do your cupcakes garner praises from everyone? Are you the person responsible for every single birthday cake for your family? Don’t let your talent sit pretty. It’s time to turn it into a revenue machine.

A recent report released in March 2019 by IMARC stated that in 2018, the Indian bakery market reached $7.22 billion. In the next five years, the market value is expected to exceed $12 billion.

These stats should be enough to make you jump on the bandwagon and start baking for money soon. But starting your own business is never a piece of cake. So we are here to guide you through it all. Read on to know how to start your own bakery business.

Steps to Start a Bakery Business in India

Follow these steps to start a bakery business in India.

1. Choose the type of business


Plan, plan, and plan! That’s the key to starting any small business. For a bakery too, you must decide your business type, before anything else. You have two options: be a wholesaler or a retailer.

For a wholesale bakery business, you’ll need significant investment. Everything from your equipment to the number of employees will tend towards large-scale production. So go for this option only if you have the budget.

A retail bakery business is the best option for those with less to invest. Here are different ways you can start a retail bakery:

●      Bakery Cafe

Ever been to one of those cute shops with cakes, coffee, and finger sandwiches? You can open your own now.

Bakery cafes are a hybrid of cafes and cake shops. They usually have a few savory snacks, beverages, and sweets for customers. Plus, they provide a place for people to hang out.

They are incredibly popular among youngsters in both large cities and small towns. To open one, simply expand your baking skills to include a few easy snacks on the menu. Keep a coffee machine and be ready to brew some tea every day. You’ll also need to arrange for comfy furniture and maintain a cosy ambience.

●      Online/ Home Bakeries:

Can’t afford renting a large commercial space immediately? Start online. Online or home bakeries have become even more popular after the pandemic started last year.

To start an online bakery, you should get a website. Design one with a sweet and fun look. Offer brilliant product images because people eat with the eyes first. Start taking orders through your website and make payment seamless too. You’ll still need equipment to process orders, but it’ll be far cheaper than renting a commercial space.

If you don’t want to invest in a website either, Facebook, Instagram, and Whatsapp are excellent options. Take orders through direct messages. But be prompt in responding to people. Remember, with an online bakery, your service and product are the only things that count.

2. Do Your Research

do your research

You may be an expert baker, but you might not be a polished businessperson. So when you dive into the market, be ready. And what makes you ready? Knowledge of what you’re doing.

Research every single thing about the bakery business. Begin with analysing the competition. What are the things they offer that you can too? Are there any that you can improve on? Check all these details and more.

Research the market and your target customers well. Do not follow market trends blindly. Do thorough research about what works and why. Only then, implement it.

Lastly, look for the best quality and durable equipment. Also, find out about the popular restaurant hubs in your city.

3. Find a Place

searching for a place

No matter which city you plan to open your bakery business in, you have to find a good business location. With restaurant and bakery businesses, this becomes all the more true.

Your location hunt could go two ways – establishing yourself at a hotspot or at a relatively less crowded location. Both approaches have their pros and cons.

  • In popular eating spots, you’ll find plenty of customers every day. But the competition would also be high in such spots. People would take time to warm up to your new bakery. The rent would also be high in these places.
  • If you open a bakery business in a less crowded locality, you might find fewer customers in the beginning. However, since the competition will be less, you can expect better profits. People living nearby would come to your bakery instead of going to some far-away spot. Over time, as your reputation improves, you can expect regular customers. You won’t have to pay a high rent either.

For a home/online bakery, you will need only a kitchen space with all the equipment. Having an office too will come in handy.

4. Get Your Licenses

Get your license

Food businesses in India have to attain specific licenses before commencement. For your bakery business, you will need them too. While their type might differ according to your state, here are some basic ones you’ll need.

  • FSSAI license
  • GST Registration
  • Health License
  • Police Eating House license
  • Fire License

You can apply for most of these licences online. But you might need to visit the police station, DM’s office, or your municipal corporation’s office for some. Even after attaining these licenses, keep these things in mind:

  • Make 2-3 copies of each licence. Keep one in your retail store if you have one. Always keep the original one safe.
  • If any licences need revisions after a certain time period, set reminders to get those done.

5. Arrange Funds

arrange funds

Bakeries aren’t zero-investment ventures. You’ll need enough money to at least buy or maintain baking equipment and ensure delivery. As mentioned before, physical retail stores will need more investment.

If you have saved this amount, all you must do is collect it in one place. However, if you must seek funding from outside, start as soon as possible with this process.

Look for loans from both government and private sources. If you qualify for government grants for small businesses, don’t forget to apply. Also, pitch to investors locally.

6. List of Equipment Required

making the list of equipment required

To bake goods more rapidly and service clients, your bakery must have robust equipment. Also, the appropriate equipment will depend on the items you will sell.

Some equipment required may be:

  • Dough preparing machine
  • Ovens
  • Storage containers and carts
  • Display cases and shelves
  • Cleaning and sanitation equipment
  • Point of Sale system software for billing

7. Hire and Train Employees

training employees

The kind of people you hire will also depend on your business type. For a retail establishment, look for employees who have certain experience handling ovens or coffee machines. You can also train people to handle such equipment.

For an online bakery, you’ll need delivery personnel. Also, someone to maintain your website would be needed.

For both of these, you might need to hire helpers or chefs unless you plan to bake everything yourself. Going solo might be a great option at the start, but try to hire people as you gain more customers. That way, you won’t be exhausted.

8. Marketing your Bakery

Bakeries can serve locals the best. So your marketing strategy should focus on locals more. Here are a few tips that’ll help you market your brand new bakery business:

●      Use Social Media

Use local ads on social media to boost your visibility. Make your ads geo-specific. Also, create fun and engaging social media pages on Facebook, Instagram, and Snapchat. These pages should contain your bakery’s address and contact details.

●      Google My Business

List your business on Google My Business. Use geo-specific google ads too. Make sure your address on Google maps is also correct so that people can reach you.

●      Host Events

Hosting promotional and inauguration events will quickly get you noticed. At these events, don’t shy away from providing a few freebies. If people like those, they’ll be prompted to revisit you.

●      Use Newspaper and Billboards

Local newspaper ads and billboards are a slightly expensive yet excellent marketing option. People almost always notice creative billboard and newspaper ads.

●      Collaborate

One of the best ways to earn both recognition and revenue is collaboration with local restaurants and shops. Sell your products in these places and keep a share of the revenue. This way, you’ll get money even if people don’t visit your bakery.

Get, Set, Go!

Setting up any new business is a lofty task. But with these steps, your journey to starting a bakery business will become a little more convenient. Now that you know what you need to do, don’t wait too long to let your delicious cakes and aromatic bread rock your city.

Sadiq Iqbal

Sadiq Iqbal is the Lead Author, Editor and Head of Operations at Business Definer. Sadiq has a Masters in Business Management as well as years of experience, working in various business management roles at multiple organizations. Since joining Business Definer, Sadiq has helped numerous founders and business aspirants solve their most difficult problems and get their entrepreneurship dreams kickstarted.

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