If you have a passion for baking and an entrepreneurial spirit, setting up a bakery business is something you should consider -a bakery is a profitable business to start in South Africa. From a nutritional point of view, bread as well as other baked goods play a huge role in the nation’s diet. In South Africa, the average consumption of bread is three slices, or 100 grams per day. In fact, bread is the second most important staple food in the country after maize meal. Therefore, a bakery business is a profitable one worth venturing into. Most South Africans eat pastries, cookies, cakes, bread, and various other baked products on a regular basis. There are a lot of factors to consider if you want to set up a bakery. As much as you may not need formal education, you still need to learn about the business, study the market, and find ways to stand out if you want to run a successful bakery. The majority of South Africans have bread, and various types of baked goods as part of their daily meals. The increase in pastry sales in recent years is due to the growing middle class income group in the country.It is evident that a bakery is a business that is financially viable. This article will outline how to start a bakery business in South Africa, and the bakery business plan – PDF, Word and Excel.
Market Research
A bakery is a lucrative business, providing income for thousands of entrepreneurs, but there are some essential factors you need to consider before venturing into this type of business. You need to decide on the size of your bakery; location, the various baked goods you will provide, plus your target market. These factors will be affected by the amount of capital you have. Thus, you should carry out a feasibility study, market research and have a good bakery business plan before you venture into this business.
Business Model
There are 2 common types of business models when it comes to a bakery business: the retail bakery and the wholesale bakery. Retail bakeries are the most common because they are the easiest and least expensive to set up. These bakeries sell their goods directly to customers. Most of them are bakery cafes, home bakeries, cake shops, bakery food trucks, and counter services. Some of these bakeries bake the goods themselves, while others resell products bought from other bakeries. Wholesale bakeries supply retail bakeries with baked products. Wholesale bakeries are more expensive to establish because they require significantly more capital for machinery to bake large orders. More staff is required, and maintenance costs are high. Wholesale bakeries supply supermarkets, restaurants, hotels, and other stores. If you have the capital, equipment, and knowledge to start a wholesale bakery, you can go that route; otherwise, you can start with a retail bakery, where you can sell your own baked goods or resell products that are made elsewhere. In addition to the wholesale and retail models, you can consider choosing a niche product for your bakery. Some of the bakery models to choose from include gourmet, wedding cakes, bread and buns, cupcakes and muffins, or a versatile cafe. Another consideration when deciding what type of bakery to open is whether you want people to sit-in or simply buy and go. If you want your customers to sit in your bakery, you must think about the environment. Just like a restaurant, a bakery with a sit-in option will also be about the experience customers have in addition to the food itself. People must be drawn to your bakery because of the service you offer.
Location & Premises
The locations and premises of your bakery is an important decision to make before you start your business. It’s important that you locate your bakery store close to your target market. Consider the amount of road traffic, find an easily accessible location where people can stop and quickly get service. There are several possible locations, including shopping centres, malls, and the CBD. Opening a bakery close to places that typically have potential for traffic will be ideal depending on your target market. It is important to be strategic about your neighbouring businesses because you are more than likely going to feed into each other instead of competing. Your bakery business plan should cater for the costs of renting or buying premises.
Competitive Analysis
When it comes to competition, the market for baked goods is saturated, so your bakery has to have something that sets it apart. There are both large and small companies in South Africa that bake and distribute cakes, pastries, confectionaries, and various other types of baked products. The industry presents plenty of opportunities, and there is space for a bakery in nearly every community in the country. However, this doesn’t come without its challenges. Small- to medium-sized independent bakeries have to compete with large-scale industrial bakeries that can offer cheaper products. This is why it is essential to do a market analysis. Conducting a market analysis will help you find a gap that you can fill with a new bakery. This way, you can find out what the market is missing when it comes to baked products and close the gap. A market analysis will also help you determine what other bakeries are doing well, how to price your products competitively, and where to locate your bakery. A competitive analysis is one of the first things you should do before opening a business.
Equipment For Your Bakery
You need various equipment for your bakery store. The equipment you need will depend on the size of your bakery and the kind of products you intend on selling. There are different types of tools and equipment required for a bakery. Some of the required equipment includes ovens, mixers, weighing machines, baking trays and other essential utensils. You may need to invest in delivery bikes/vehicles especially if you plan on delivering meals to your customers locations. Your bakery store business plan should cater for these costs including the equipment you will need for your bakery.
Products
Your target niche will determine the kind of products you will sell. The common products found in a bakery shop include various types of bread and rolls, cakes, pies, muffins, and hot and cold beverages. So, it will be advantageous to have all these various pastries in addition to other complimentary products. It is also wise to provide complimentary services such as free Wi-Fi to attract and retain customers. Another essential factor in running a bakery is selecting the right suppliers for your shop. Consider suppliers who can provide affordable and quality ingredients consistently. Your bakery business plan should outline the various products and services you will provide as well as the costs associated with them.
Insurance & Business Bank Account
When you set up your bakery business, it is important that you separate your personal finances from those of the business. You should never mix funds that you use for your business with family funds. Keeping your business and personal bank accounts separate can help you obtain an accurate picture of your business cash flow. If you are going to put your personal funds toward the start-up costs of your business, you’ll want to track those expenditures correctly. It will be much easier to manage your financial statements, such as your financial position, and income statements. This can also help you better understand how your business is performing at any given moment, and it will help you forecast your future cash flow. In addition, make sure that your bakery is insured. Any business with assets needs to have insurance. You need to protect your premises, and assets against fire, theft, or even a natural disaster.
Staff & Management
As a customer-centric bakery store, it’s important that you hire employees that are friendly and efficient. Your employees should be passionate about serving your clients. If you want to hit the ground running it’s better to hire a team of people who have experience in this business. Your chefs and cooks should be able to bake quality products, and your staff members should be able to serve customers efficiently on a regular basis. Inexperienced staff members need to get extensive training before they can be given intricate baking or cooking tasks. The equipment and baking machinery used at bakeries can cause serious injury. Depending on the size of your shop, the actual number of your staff will vary however, you will need, pastry chefs, cooks, waiters, cleaners, and till operators, security as well as management. Your bakery shop business plan should cater for the salaries and day to day expenses of your employees.
Some of the day-to-day operations of this business involves:
- Operating machinery (cooking/baking)
- Serving Customers and doing deliveries
- Liaising with /suppliers
- Managing Staff
- Marketing and advertising
When you are handling food products and beverages you should always remain aware and alert by paying attention to how the food and beverages are prepared. Food contamination can cause serious health issues. It is also crucial to adhere to all industry related safety regulations. These safety measures cover the cleanliness of your environment; how your staff members dress plus how and where food is prepared and stored. Businesses related to the preparation and serving of food can be a great risk, that is why adhering to health and safety regulations is important.
Marketing And Sales Strategies
For any business to become successful, you need to market it, especially when you start out. You can make use of social media, print fliers, and consider building a simple website for your bakery. Encourage your clients to leave positive reviews and ensure that you post content regularly on your social media platforms to attract more customers. You can make short videos of how you bake your cakes, pastries, or anything else to keep your regular clients engaged and to attract new ones. You can even go as far as creating a newsletter that you can use to advertise new products or content relevant to your services. Continually update your menus and offer discounts and promotions to increase sales.
Market
Bread
For many South Africans cookies, crackers, muffins, and cakes are comfort food, regular snacks or a must have for gatherings and celebrations. Thus, there will always be a need for baked goods. Also, more consumers are becoming health conscious and opting for whole wheat and low GI products. In addition, the source of the ingredients now has great influence on the consumer, as more people buy from businesses that use local produce and from bakeries that use nutritious ingredients that are sourced in a sustainable way. Recently, there has been a growing demand in healthy options when it comes to pastries. Consumers are becoming health conscious although low income groups are price sensitive and may opt for the least healthy white bread or sugary snacks.
Keys To Profitability
The location of your bakery can determine whether or not your business is successful. If you plan to open a retail bakery, choose a location with high foot traffic near a mall and where your target market lives. This way of generating revenue is not difficult. Start small without investing too much too soon, and as the business grows, you can then add more equipment, more staff, and increase your production. Keep an eye on your overheads and watch your input costs too. Lastly, include healthy options to your baked products to broaden your market.
Is A Bakery A Good Investment?
There is no denying that there is a reasonable number of bakeries with a large market share in South Africa. Nonetheless, it is still possible for you to own your own brand or even go the less risky route by becoming a franchise. Many might find operating as a franchise limiting but being a franchisee can help you operate your business as part of an existing chain. Of course, building your own brand from scratch can be just as rewarding if done well. Whatever route you decide to take, investing in a bakery can be a profitable venture, but obviously, this will depend on many factors such as your target market. Apart from the obvious advantages of becoming financially independent and becoming your own boss, running a bakery can be a rewarding way of uplifting your community.
Given that the South African market is one of the leading emerging economies on the African continent there is potential for high growth. The food and beverages sector in the country has been growing steadily for the past 10 years, thus opening a bakery can be a good investment. Whether you are a young entrepreneur, a professional seeking to start your own business or someone who needs a retirement plan, investing in a bakery is something worth considering. One thing that can set you apart before investing in any venture is developing a business plan. A well thought out business plan will help you in both the short and long term. There are various risks associated with running a bakery, like any other venture, your business plan should clearly outline these risks and the various ways to minimise them.
PRE-WRITTEN BAKERY BUSINESS PLAN (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS
For an in-depth analysis of the bakery shop business in South Africa, purchase our bakery business plan. We decided to introduce the business plans after noting that many South Africans were venturing into the bakery business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.
Our business plan will make it easier for you to launch and run a bakery store business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the bakery shop business plan will lay out all the costs involved in setting up and running the bakery business. The business plan is designed specifically for the South African market.
USES OF THE BAKERY SHOP BUSINESS PLAN (PDF, WORD AND EXCEL)
The bakery 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 bakery store business
- As a bakery project proposal
- Assessing profitability of the bakery stores 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 THE BAKERY STORE BUSINESS PLAN (PDF, WORD AND EXCEL)
The business plan includes, but not limited to:
- Market Analysis
- Industry Analysis
- 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually),break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
- Marketing Strategy
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements
- Operational Strategy
- Why some South Africans in the bakery business fail, so that you can avoid their mistakes
- Ways to raise capital to start your bakery store business in South Africa
The Bakery Store Business Plan package consist of 4 files
- Bakery Business Plan – PDF file (Comprehensive – 93 pages)
- Bakery Business Plan – Editable Word File (Comprehensive – 93 pages)
- Bakery Business Plan Funding Version – Editable Word File (Short version for applying for a loan – 47 pages)
- Bakery Business Plan Automated Financial Statements – (Editable Excel file)
The financial statements are automated. This implies that you can change eg the markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change.
GET THE BAKERY BUSINESS PLAN (PDF, WORD AND EXCEL) - R500 Only.
We decided to make the business plan affordable to anyone who would want to start the business, and the price for the pre-written business plan is only 500 Rand.
We have several payment methods which you can use.
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The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on sales@bizbolts.co.za and we will assist you.
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Click Buy Now below to purchase. After you have purchased, you will instantly see the download link for the business plan package on the screen. We will also email you the download link. Get instant access to the business plan now!
If you want to purchase multiple business plans at once using Instant EFT then click here: Business Plans Store
The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on sales@bizbolts.co.za and we will assist you.
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