For Success In Your Bakery Start-ups

Running a bakery unit is a creative and challenging business, whether be it a stand-alone bakery, a retail bakery chain, or industrial bakery operations for that matter. However, in this feature we are concentrating on the points to be considered for the running of a start-up and stand-alone bakery business, especially in the context of India’s bakery and confectionery industry.

- Swarnendu Biswas

An entrepreneur venturing into bakery business should remember that simply love for baking wouldn’t do; neither creativity would be sufficient. The passion for baking should be complemented with knowledge and expertise on baking if the entrepreneur wants to survive the competition, especially with limited funds. Especially in India, the bakery business has great potential for growth, but the competition in this industry too is huge. An entrepreneur venturing into bakery business in India should remember that.

 

Location and Costs

First of all, as an entrepreneur starting a bakery unit one should be sure of the location of the unit. That is the entrepreneur should be sure that the location where she/he is thinking of starting the bakery business has a need for a new bakery or not, or whether the consumer profile there is suited for the kind of baked products which she/he has in mind or has expertise in producing. If the answer to any of these questions is no, the entrepreneur should proceed to another suitable location that is within her/his budget, without thinking twice.

Secondly, it is important to keep a close eye on the fixed and variable costs involved in running the bakery operations, especially for the first six months, when the profits are not expected to trickle in. Two examples of fixed cost are the rent of the outlet (assuming the entrepreneur doesn’t own the property where she/he decides to create a bakery) and the depreciation on the bakery equipment or the lease costs on them; two examples of variable cost are the cost of ingredients, and the cost of human resources or labour.

Though salary is often regarded as part of fixed costs, but since most of the bakeries in India operate in the unorganised sector, it is more pragmatic to assume that human resource or staff or labour costs as variable costs, which can fluctuate according to the production needs.