bakery project start up business plan

Bakery Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Bakery Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Bakery Business Plan

You’ve come to the right place to create your bakery’s business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their bakeries.

A bakery business plan is a plan to start and/or grow your bakery. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan, and details your financial projections.

How To Write a Bakery Business Plan & Sample

The following information will provide a description of what to include in your bakery business plan along with links to an example for that section:

• Executive Summary – The Executive Summary section provides a high-level overview of your plan. It should include your company’s mission statement, as well as information on the products or services you offer, your target market, and your business goals and objectives.
• Company Overview – The Company Overview section provides an in-depth look at your company, including information on your company’s history, ownership structure, bakery location, and management team.
• Industry Analysis – Also called the Market Analysis, in this section, you will provide an overview of the industry in which your bakery will operate. You will discuss trends affecting the industry, as well as your target market’s needs and buying habits.
• Customer Analysis – In this section, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
• Competitive Analysis – This section will provide an overview of your competition, including their strengths and weaknesses. It will also discuss your competitive advantage and how you intend to differentiate your bakery from the competition.
• Marketing Plan – In the Marketing Plan section, you will detail your marketing strategy, including your advertising and promotion plans. You will also discuss your pricing strategy and how you intend to position your bakery in the market.
• Operations Plan – In the Operations Plan, you will provide an overview of your store’s operations, including your store layout, staff, and inventory management. It also includes information on your warehousing and distribution arrangements and a list of long-term milestones or business goals.
• Management Team – In this section, you will provide information on yourself as the talented baker, your team, your experience, and your roles in the company.
• Financial Plan – In this section of your bakery financial plan, you will include your financial statements: income statement, balance sheet, and cash flow statement. It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Bakery Business Plan FAQs

How can i complete my bakery business plan quickly & easily.

Learn more about writing a successful plan by using this bakery business plan template .

Where Can I Download a Bakery Business Plan Template?

Get a downloadable bakery business plan template here . 

What Are the Main Types of Bakeries?

A bakery can be retail or wholesale. A retail bakery sells baked goods directly to customers, while a wholesale bakery typically sells products to other businesses, like restaurants, grocery stores, specialty shops, and cafes.

How Do You Get Funding for Your Bakery?

Bakeries are most commonly funded with personal savings and bank loans. Credit card financing and angel investors are also popular forms of funding for bakeries.

Learn More:  Seeking Funding from Angel Investors vs Venture Capitalists

What Are the Main Sources of Revenues and Expenses for a Bakery?

The primary source of revenue for bakeries is its baked good sales. This includes deliveries and online orders. Sometimes bakeries also earn from bulk orders from wholesalers or special occasions.

The key expenses for bakeries are rent, wages and salaries, ingredients and packaging.

What are the Steps To Open a Bakery Business?

Opening a bakery business can be an exciting endeavor. Having a clear roadmap of the steps to open a business will help you stay focused on your goals and get started faster.

1. Develop A Bakery Business Plan - The first step in opening a business is to create a detailed bakery business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your bakery business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your bakery business is in compliance with local laws.

3. Register Your Bakery Business - Once you have chosen a legal structure, the next step is to register your bakery business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to open your bakery business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Bakery Equipment & Supplies - In order to start your bakery business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your bakery business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful bakery business:

• How to Open a Bakery Business

Where Can I Get a Bakery Business Plan PDF?

You can download our free bakery business plan template PDF here . This is a sample bakery business plan template you can use in PDF format.

Sample Bakery Business Plan For Inspiration

Writing a business plan is a crucial step in starting a bakery. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring bakers, having access to a sample bakery business plan can be especially helpful in providing direction and gaining insight into how to draft their own bakery business plan.

Download our Ultimate Bakery Business Plan Template

Having a thorough business plan in place is critical for any successful bakery venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A bakery business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The bakery business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your bakery as Growthink’s Ultimate Bakery Business Plan Template , but it can help you write a bakery business plan of your own.  

Bakery Business Plan Example – Home Sweet Home Baked Goods

Table of contents, executive summary.

• Company Overview

Industry Analysis

Customer analysis.

• Competitive Analysis

Marketing Plan

Operations plan, management team, financial plan.

Home Sweet Home Baked Goods is a home-based bakery in Bend, Oregon that has been operating successfully for the last 3 years. Founded by talented baker Jill Davis and her husband Sam, Home Sweet Home Baked Goods specializes in creating custom cakes, cupcakes, pies, and other desserts from scratch. Now that their business has grown and they have expanded their customer base, Jill and Sam are looking for funding to open a brick-and-mortar storefront location in Bend.

The new location will be a modern bakery with an inviting atmosphere and welcoming staff. Through the use of high-quality ingredients, innovative recipes, experienced baking staff, and updated bakery equipment, Home Sweet Home Baked Goods is poised to become the premier bakery in Bend. The new store will create jobs for local residents while bringing delicious baked goods to the community.

Home Sweet Home Baked Goods’ mission is to use locally sourced ingredients whenever possible to create unique baked goods of uncompromising quality at an affordable price. With its commitment to excellence and creative approach to baking, the company will provide customers with a unique experience with each visit.

In order to achieve these goals within their budget constraints, Home Sweet Home Baked Goods has put together a comprehensive plan utilizing proven marketing techniques, operational efficiencies, and cost management strategies. By leveraging technology such as social media marketing platforms like Facebook and Instagram as well as partnerships with local businesses, Home Sweet Home Baked Goods has created a strategy for success that will allow them to not only meet but exceed customer expectations.

As part of this plan, we are seeking funding from investors or lenders who share our vision for creating an exceptional bakery experience in Bend. With your help, we can continue our growth while developing long-term relationships with our customers through quality products and outstanding service — all while supporting small business owners in our community.  

Company Description

Home Sweet Home Baked Goods is a home-based bakery in Bend, Oregon that has been operating successfully for the last 3 years. Founded by passionate baker Jill Davis and her husband Sam, Home Sweet Home Baked Goods specializes in creating custom cakes, cupcakes, pies, and other desserts from scratch. The company’s focus on quality ingredients, innovative recipes, experienced baking staff, and updated equipment sets them apart from its competitors.

Home Sweet Home Baked Goods strives to provide customers with an exceptional experience each time they visit the store by using locally sourced ingredients whenever possible. This commitment to excellence has allowed them to expand their customer base across the region, leading them to seek funding for a brick-and-mortar storefront bakery location in Bend that will bring even more delicious baked goods and job opportunities to local residents.  

The Bend, Oregon home-based bakery industry is a booming sector that has seen significant growth in the last three years. According to figures released by the Oregon Department of Agriculture, retail bakeries generated over $200 million in sales in 2019 alone, up 8.3% from 2018. The number of establishments operating within the state has also increased, with seven new businesses opening their doors in 2019.

The majority of these bakeries specialize in cakes and cupcakes, though some offer other items such as pies and donuts. The market for specialty items is particularly competitive, with many bakeries offering custom designs that cater to specific dietary needs or themes. This demand has encouraged a larger variety of offerings from existing businesses and attracted more upstart shops to enter the market.

Bend’s bakery scene is driven by its large base of tourists and university students who often seek out unique treats while visiting the city. As a result, many local bakeries have developed memorable branding campaigns that target these customers and feature unique flavors or design styles that set them apart from competitors. These efforts have been rewarded with higher rates of customer loyalty, allowing these businesses to enjoy continued success despite an increasingly crowded marketplace.

Despite its popularity as a destination for bakers and dessert lovers alike, Bend also faces certain challenges that may affect business operations going forward. High rent prices are one such issue; with real estate costs on the rise, it can be difficult for small local businesses to secure an affordable space without sacrificing quality or service standards. Additionally, Bend’s seasonal climate – boasting cold winters and dry summers – makes it difficult for certain items such as ice cream or frozen yogurt to remain popular year-round options for consumers.

Overall, however, Bend remains an excellent location for home-based bakers seeking to expand their operations into a storefront setting due to its vibrant culture and lively atmosphere. With proper planning and execution, Home Sweet Home Baked Goods can position itself as a leader in this growing industry while helping bring more culinary creativity and innovation to the area’s residents and visitors alike.  

Home Sweet Home Baked Goods has an ideal target market that includes both local customers and visitors to Bend, Oregon. The company is particularly passionate about providing locally sourced ingredients in its baked goods, making it a natural draw for people who live in the Bend area.

The local demographic consists primarily of working professionals, families with children, retirees, and university students. These customers are looking for high-quality desserts that cater to their individual dietary needs while also remaining reasonably priced. Home Sweet Home Baked Goods’ emphasis on using local ingredients appeals to this demographic as it shows their commitment to supporting the local economy and providing fresher products.

The company also seeks to attract tourists with its innovative recipes and memorable design themes. Tourists often seek out interesting treats while visiting cities such as Bend due to their limited time frames; baked goods created with original recipes can be a great way to provide these customers with an enjoyable experience that they won’t find anywhere else. Furthermore, its custom designs help create an even more unique experience for each customer – whether a visitor or local resident – by allowing them to customize their order based on specific dietary restrictions or preferences.

Psychographically, Home Sweet Home Baked Goods targets individuals who are looking for quality desserts made from fresh ingredients but don’t want to sacrifice taste or convenience. The company is committed to creating innovative recipes that appeal to customers of all ages and encourages its customers to interact with staff members for advice or suggestions when ordering customized items – this gives them an added sense of security when selecting special orders knowing that they are getting exactly what they need from the bakery’s staff of experienced bakers. Moreover, Home Sweet Home Baked Goods’ commitment to using locally sourced ingredients resonates strongly with individuals who value sustainability and ethical production processes; this connection can become even stronger if the company decides to partner with local farms or purveyors when sourcing their ingredients in the near future.

Overall, Home Sweet Home Baked Goods is aimed at professional adults and families looking for delicious yet affordable treats made from quality ingredients as well as visitors interested in finding original recipes while discovering Bend’s culinary scene. By providing customer service excellence paired with locally sourced ingredients whenever possible, the company seeks not only to build a loyal customer base but also to contribute positively towards the overall development of Bend’s culinary industry.  

Competitor Analysis

Home Sweet Home Baked Goods will be entering a very competitive market in Bend, Oregon. The local bakery market is saturated with many established businesses that have been around for several years, offering a variety of products and services. Therefore, the company must assess the competition and identify its strengths and weaknesses in order to create effective differentiation strategies that will allow it to stand out from the crowd.

One of the main competitors in the region is The Baker’s Dozen Bakery, which has been operating since 2000. The business offers a wide range of baked goods such as cookies, cakes, muffins, brownies, doughnuts and more; their prices are slightly higher than those of Home Sweet Home Baked Goods but customers are willing to pay for their quality products. Furthermore, The Baker’s Dozen Bakery has built a strong reputation by catering events in the area as well as providing custom orders for special occasions. In addition to this, they also offer delivery services throughout Bend; while this may not be a major advantage over Home Sweet Home Baked Goods now due to the pandemic-related restrictions on food service industry operations in most areas, it could potentially become an important asset when things return to normal.

Another competitor is Sweeter Things Bakery & Cafe which has been running since 2013. This business specializes in customized cakes made with fresh ingredients; these expensive desserts appeal to customers looking for something extra special for weddings or birthdays whereas The Baker’s Dozen Bakery focuses more on traditional baked goods such as cupcakes and cookies. Sweeter Things Bakery & Cafe also offers delivery services throughout Bend just like The Baker’s Dozen Bakery – again, this could be an important factor once restrictions are lifted.

Finally, there is Kate’s Cupcakery which opened up in 2016 and focuses solely on cupcakes. While this business does offer unique flavors and custom designs that appeal to customers looking for something different from traditional cupcakes (i.e., gluten-free or vegan baked goods), its menu is limited compared to those offered by both The Baker’s Dozen Bakery and Sweeter Things Bakery & Cafe which provides wider varieties of baked goods plus other pastries like pies or tarts. Additionally, Kate’s Cupcakery does not offer delivery services so customers would have to visit the store if they want one of their cupcakes – this could pose a potential disadvantage if other competitors start providing delivery services once restrictions are lifted due to the pandemic situation.

Overall, while all three businesses have great potential they do not necessarily provide what Home Sweet Home Baked Goods plans on delivering: locally sourced ingredients used whenever possible combined with innovative recipes and custom designs catering specifically towards individual needs – all at reasonable prices that appeal both local residents and visitors alike. By leveraging these aspects that differentiate them from other competitors in the area, Home Sweet Home Baked Goods should be able to position itself as a leader in Bend’s bakery industry while still maintaining a competitive edge.

In order to do so, Home Sweet Home Baked Goods must focus on creating an engaging and unique atmosphere that will draw customers in. This can be done by utilizing modern design approaches and incorporating eco-friendly materials when possible as well as providing custom flavors that cannot be found elsewhere in the city. Offering discounts for orders placed online or through their app could also help to attract more customers while simultaneously cutting operational costs. Additionally, they must ensure that their products are of high quality; offering samples and feedback forms at the store are great ways to get customer opinions on what they like or dislike about a particular product – this information can then be used to make necessary improvements as needed or create new recipes. With the right combination of these elements, Home Sweet Home Baked Goods should be able to stand out from all other competitors in Bend and establish itself as the go-to bakery for all locals and visitors alike.

Home Sweet Home Baked Goods is a home-based bakery that offers locally sourced ingredients and innovative recipes. Our goal is to provide our customers with freshly made, high-quality pastries at reasonable prices. We offer custom flavors and designs for special occasions like weddings or birthdays as well as more traditional items such as cupcakes, cookies, pies, and tarts.

To drive foot traffic to our storefront location in Bend:

• Products : We will focus on creating unique flavors (gluten-free/vegan options) along with custom designs catering specifically to individual needs.
• Price : We will offer competitive prices that appeal both to local residents and visitors alike.
• Promotion : We will use digital marketing methods such as a website, social media platforms, and app ads to reach a wider audience. Additionally, we will create promotional offers like discounts (e.g., 10% off orders placed online or through our app) and free samples at the store.
• Place : To ensure quick delivery times, we will focus on developing relationships with local suppliers so that we can get ingredients quickly and efficiently whenever possible. This way customers can be sure that their orders are always freshly made when they arrive.

Home Sweet Home Baked Goods is a home-based bakery that offers locally sourced ingredients and innovative recipes to customers at reasonable prices. We specialize in custom flavors and designs for special occasions such as weddings or birthdays, as well as more traditional items such as cupcakes, cookies, pies, and tarts. As we expand to a storefront location in Bend, our goal is to create an engaging atmosphere that will draw customers in while providing quality products that can’t be found elsewhere.  

Daily Operations:

We will begin each day by prepping the ingredients and baking batches of our products. This includes sifting flour and pre-measuring all other ingredients so that our pastries are made with the utmost care and precision. In addition, we will also make sure to check the expiration date on all ingredients used to ensure freshness. Once this is done, we will start the baking process using various techniques such as panning dough into sheet pans or molds or piping batters onto parchment paper for cupcakes. After baking has been completed, we will package up the products for sale or delivery depending on customer orders. Finally, we will clean up any messes from the kitchen area before closing for the day.  

Milestones to Achieve:

The following milestones will be necessary to ensure the success of Home Sweet Home Baked Goods.

• Develop Relationships with Local Suppliers – We will create relationships with local suppliers to get fresh ingredients as quickly and efficiently as possible.
• Create a Website and Social Media Platforms – We will need to build a website that advertises our products, informs customers about delivery options, and provides contact information for orders. Additionally, we will develop social media accounts on popular platforms like Instagram and Facebook in order to reach a wider audience and engage customers through content marketing strategies.
• Offer Promotional Offers – We will need to create promotional offers such as discounts or free samples at the store in order to draw more customers into the shop.
• Develop Innovative Recipes – We will need to come up with new flavors, designs, and recipes in order to keep customers coming back for more.
• Increase Visibility – We will need to use strategies such as app ads and digital marketing campaigns in order to increase the visibility of our business and reach more potential customers.

By achieving these milestones, we will be able to create a successful storefront location that provides quality products and an enjoyable atmosphere. Our goal is to become a fixture in the Bend community by creating a safe space where people can come together over delicious baked goods.  

The management team at Home Sweet Home Baked Goods is comprised of Jill Davis and her husband Sam. Jill and Sam have been a dynamic duo since they first met in college, and their enthusiasm for baking has helped them to build an empire out of their passion.

Jill is the co-founder and head baker at Home Sweet Home Baked Goods. She is a talented pastry chef with a keen eye for detail, ensuring that every product they produce meets their high standards. She has spent years perfecting her craft, creating innovative recipes with locally sourced ingredients to meet the needs of their customers. Her creativity and skill in the kitchen have earned her renown among local bakers, and she often receives requests from customers to create custom flavors or designs for special occasions such as weddings or birthdays.

Sam serves as co-founder and CEO of Home Sweet Home Baked Goods. He brings his wealth of business knowledge, acting as a strategic partner to Jill by overseeing operations, developing marketing strategies, and securing connections with suppliers. Sam’s dedication to customer service ensures that every customer gets the best possible experience when ordering from Home Sweet Home Baked Goods. His commitment to excellence has enabled them to consistently provide quality products at reasonable prices.

Together, Jill and Sam have turned a hobby into a successful business that specializes in fresh baked goods made with love for each customer who comes through its doors or orders online. Their passion for baking has enabled them to grow from a small home-based bakery into an established storefront location where they can continue providing exceptional products while getting to know their community better than ever before.  

Home Sweet Home Baked Goods is dedicated to providing quality baked goods and an enjoyable atmosphere for their customers. To ensure the success of their storefront, they need to create a comprehensive financial plan that outlines their projected growth and profitability.

In summary, Home Sweet Home Baked Goods’ financial plan is based on the following assumptions:

• Initial Start-Up Capital – We will need to raise initial start-up capital of $30,000 in order to cover expenses such as rent, equipment, and inventory for our storefront location.
• Profitability – We anticipate a 10% increase in sales every month, resulting in a steady growth of profitability.
• Cost of Goods Sold – We estimate our cost of goods sold to be 35% which is lower than the industry average due to our commitment to quality ingredients and competitive prices.
• Working Capital – Our working capital requirement will need to be adequate enough to cover at least three months of inventory, wages for staff, and other operating expenses.
• Financing – We plan to raise funds from a combination of personal savings, investors, and bank loans in order to meet our initial start-up capital requirements.
• Expansion – We anticipate the need for additional space or equipment within 12 months of opening.
• Taxes – We plan to pay estimated taxes quarterly throughout the year in order to remain compliant with federal regulations.

These assumptions will form the basis of our financial plan for Home Sweet Home Baked Goods and will help us to determine how we should allocate funds in order to reach our desired business goals. With this financial plan, we hope to transition Home Sweet Home Baked Goods into a successful storefront business.  

Sample Menu

1. Fresh Bread:

• White Sandwich Loaf
• Whole Wheat Loaf
• Raisin Walnut Bread
• Italian Herb & Cheese Loaf
• Cinnamon Swirl Bread

2. Cookies:

• Chocolate Chip Cookies
• Peanut Butter Cookies
• Vanilla Layer Cake with Strawberry Filling and Cream Cheese Frosting
• Carrot Cake with Cream Cheese Frosting
• Red Velvet Cupcakes with Cream Cheese Frosting

4. Pies and Tarts:

• Apple Pie with Crumb Topping
• Lemon Meringue Tart

5. Specialty Desserts:

6. Coffee Drinks & Teas:

• Cold Brew Coffee

7. Smoothies & Shakes:

• Strawberry Banana Smoothie
• Mango Pineapple Shake

Financial Statements

Balance sheet.

[insert financial statement]

Income Statement

Cash flow statement, bakery business plan example pdf.

Download our bakery business plan pdf here. This is a free bakery business plan example to help you get started on your own bakery plan.

How to Finish Your Bakery Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

How to Write a Bakery Business Plan + Sample

Makenna Crocker

7 min. read

Updated February 7, 2024

Free Download:  Sample Bakery Business Plan Template

Your friends and family have long marveled at your baking skills. Now, you’re ready to jump from passionate amateur to bakery business owner .

Making cakes and pastries in your kitchen is one thing—buying commercial-grade equipment, setting prices, and serving customers is a far greater challenge.

So, how does a new bakery owner maximize their chance of success? 

By writing a business plan. 

This article will guide you through crafting a bakery business plan, from describing your offerings and creating a marketing strategy to assessing your competitors and managing your finances. 

Need more guidance? Download our free sample bakery business plan .

Why write a bakery business plan?

Launching a bakery requires more than perfect recipes; it’s about strategically planning for success. 

A business plan gives you :

Clarity and direction

The plan helps you define your bakery’s identity, from your signature products to your brand ethos.

A financial foundation

A simple financial plan you update periodically gives you a major advantage, helping you manage a budget and understand how decisions affect revenues, expenses, and cash flows.

Market insights

Researching and documenting your target market and competition helps you position your bakery and stand out.

Operational strategies

The operational plan outlines how you will manage staffing, supply chain, and other logistics so your bakery runs smoothly.

Attracting investors

If you’re seeking funding , investors need to see a comprehensive plan demonstrating your bakery’s growth and profitability potential.

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How to write a business plan for a bakery

1. conduct market research.

Start by pinpointing your target market. 

Not every bakery appeals to all customers. Ask yourself, who do you see coming through your doors? 

It could be:

• Health-conscious individuals looking for gluten-free or low-sugar options.
• Professionals looking for a quick treat on their way to work.
• Families looking for fresh, wholesome bread and treats to eat at home.

Consider age, income level, dietary preferences, and local demographics. 

Remember, identifying your target market is more than just understanding the demographics of your customers. It’s about understanding their lifestyle, dietary habits, and what they value in a bakery. 

Are you targeting health-conscious individuals, families, or specialty dessert enthusiasts? Tailoring your products and services to your chosen clientele ensures your bakery meets their unique tastes and needs.

Market research tips

When conducting market research for your bakery, consider the following:

Customer preferences

Identify the types of baked goods that are in high demand. Do customers prefer traditional treats, artisanal bread, gluten-free options, or vegan pastries? 

Location analysis

Evaluate potential locations for your bakery. Consider foot traffic, visibility, parking availability, and proximity to complementary businesses. 

Product differentiation

Identify what sets your bakery apart from the competition. Is it your secret family recipe, organic ingredients, or unique flavor combinations? 

2. Analyze the competition

When evaluating competitors , you need to look beyond just other bakeries. 

Anyone who provides baked goods is a direct competitor or alternative. You must account for patisseries, cafes, and even grocery store bakeries. 

Then, focus on identifying strengths, weaknesses, and unique selling points by reviewing the following: 

• Product offerings and pricing: What kinds of baked goods do they offer, and at what price points? Are there items that are universally popular or notably absent from their menus?
• Customer experience: How do these establishments present themselves? Is the ambiance inviting? What level of service do they provide?
• Operational insights: Observe their staffing levels, speed of service, and any visible supplier partnerships.
• Marketing strategies: How do they attract and retain customers? Look at their promotional activities, online engagement, and customer feedback.
• Long-term trends: Have they expanded their product range or services recently? Any noticeable changes in their operation hours or customer demographics?

Visit local bakeries, patisseries, and cafes to understand their offerings, pricing, and customer experience. Identify their strengths and weaknesses, and look for opportunities to differentiate your bakery. 

What unique products or services can you offer? Is there a gap in the market that you can fill? 

3. Detail your operations plan

Misjudging resources needed to manage inventory, staffing, and other day-to-day requirements is one of the biggest mistakes an owner of any business can make. 

A solid operational plan will keep you from blowing your budget.

The operations plan covers aspects of your business like:

Where your business will operate, as well as the characteristics of the neighborhood and factors that may lead to a competitive advantage.

Licensing needs

Track what you need to remain compliant with regulations, from a business license to food handlers permits for employees.

Operating hours

What days and times do you plan to be open? When do you expect your peak hours to be? Listing these will help you plan staffing and determine promotions to offer. 

Staffing needs

It’s crucial to understand how many employees you’ll need to hire and when you will need them to work. Many bakeries make their goods before most people wake up, so you may need staff ready to work irregular hours.

4. Market your business

The market analysis should have uncovered valuable insights into who might come to your bakery. 

You can use that information to develop a comprehensive marketing plan to showcase your bakery’s offerings, build brand awareness, and attract a loyal customer base.

Consider the following promotional strategies for your bakery:

• Establish a strong social media presence: Be visible on platforms like Instagram and Facebook to showcase your bakery’s products and engage with your audience.
• Build an appealing website: Create a strong online presence through a user-friendly website with photos and promotions to build an online following.
• Get out in the community: Participate in local events, sponsor community initiatives, and support local charities to create awareness and goodwill.
• Collaborate with local businesses: Consider partnering with nearby coffee shops, restaurants, or event planners to expand your reach and offer joint promotions.
• Offer sampling and tastings: Give potential customers a chance to try your baked goods and entice them to purchase.
• Create eye-catching displays: Invest in appealing window displays and enticing signage to create a visually appealing environment that attracts customers.

5. Financials and pricing

No matter how effective your marketing campaigns are, running a successful bakery requires staying on top of your finances.

You must be realistic to develop a solid financial plan and pricing strategy . 

Understand the costs of employee wages, ingredients, and supplies, and try to figure out how long you expect to operate before becoming profitable. This will be especially important if you seek a bank loan or outside investment.

Consider the following financial aspects when creating your bakery business plan:

Startup costs

Determine the initial investment required to set up your bakery, including equipment, leasehold improvements, licenses, and inventory. Factor in costs for marketing and branding efforts as well.

Ongoing expenses

Identify the recurring expenses in running your bakery, such as rent, utilities, ingredient costs, staff wages, and marketing expenses. 

Regularly review these costs to ensure they align with your revenue projections.

Pricing strategy

Set your prices based on a thorough understanding of ingredient costs, overhead expenses, and the local market. Consider factors such as quality, portion sizes, and the value you provide customers. 

Monitor pricing trends in the industry to remain competitive.

Sales forecasting

Develop a sales forecast based on your market research, pricing strategy, and capacity. Consider seasonal fluctuations, holidays, and events that may impact your bakery’s performance. 

Continuously review and adjust your forecast based on actual results.

6. Set milestones and goals

Setting milestones and goals helps you track your progress toward key achievements. 

These goals can be both short-term and long-term, covering areas like revenue targets or break-even projections , the number of customers served, menu expansions, or partnerships with grocery stores.

Consider the following tips when setting milestones and goals for your bakery:

Create “SMART” goals  

Ensure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound . 

For example: Instead of aiming to “increase sales,” set a specific target, such as “increase monthly sales by 15% within six months.”

Include your employees

Get your bakery staff involved in setting goals and milestones. Their input and commitment are essential to achieving your bakery’s objectives.

Evaluate regularly

Monitor your progress toward your goals and assess whether adjustments are necessary. Periodically review your financials, customer feedback, and broader market trends to stay on track.

Free sample bakery business plan template

If you’re ready to start your own bakery business, you can download our free sample bakery business plan from our library of over 550 sample business plans . 

Get started today, and discover why businesses that plan grow 30% faster than those that don’t .

Makenna Crocker is the Marketing Specialist at Richardson Sports. Her work focuses on market and social trends, crafting gripping and authentic content, and enhancing marketing strategy to foster stronger B2B and B2C relationships. With a master’s degree in Advertising and Brand Responsibility from the University of Oregon, she specializes in generating a strong and responsible brand presence through content that positively influences and inspires others.

Table of Contents

• Why you need a plan
• How to write a business plan
• Free business plan template

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How to Write a Bakery Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for bakery businesses who want to improve their strategy or raise funding.

A well-crafted business plan not only outlines the vision for your company but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every bakery owner should include in their business plan.

Download the Ultimate Bakery Business Plan Template

What is a Bakery Business Plan?

A bakery business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Bakery Business Plan?

A bakery business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Bakery Business Plan

The following are the key components of a successful bakery business plan:

Executive Summary

The executive summary of a bakery business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your bakery /
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your bakery , you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your bakery firm, mention this.

You will also include information about your chosen bakery business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a bakery business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the bakery industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.  

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a bakery’s customers may include:

• Families with young children who are looking for birthday cakes or other special occasion desserts
• Businesses that need to order large quantities of pastries or other baked goods for their office functions
• Individual customers who want to purchase small quantities of freshly-baked goods for their personal consumption

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or bakery services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service: Detail your product/service offerings here. Document their features and benefits.
• Price: Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place: Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion: How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your bakery business via word-of-mouth.

Operations Plan

This part of your bakery business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. 

Examples of milestones for a bakery business include reaching $X in sales. Other milestones could include adding new products/services, opening additional locations, or increasing employee headcount.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to the foodservice industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue: how much revenue you generate.
• Cost of Goods Sold: These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss): Once expenses and revenue are totaled and deducted from each other, this is the net income or loss

Sample Income Statement for a Startup Bakery  

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Bakery  

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup bakery business.

Sample Cash Flow Statement for a Startup Bakery  

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your bakery . It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it. 

Creating a business plan forces you to think through all aspects of your business including marketing, finances, operations, and more. Ultimately, a well-thought-out business plan is key to a successful bakery.  

Finish Your Bakery Business Plan in 1 Day!

Wish there was a faster, easier way to finish your bakery business plan?

With our Ultimate Bakery Business Plan Template you can finish your plan in just 8 hours or less!

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Bakery Business Plan: How to write it [Complete Guide]

• January 3, 2023
• Food & Beverage

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your bakery, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan for your bakery. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for a bakery?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write your bakery’s executive summary?

Provide a precise and high-level summary of every section that you have included in your bakery business plan. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately. Ensure that the executive summary doesn’t exceed 2 pages in total.

The executive summary usually consists of the five major sub-sections that include:

• Business Overview : give a brief introduction to your bakery and quickly describe your brand, its offerings, the pricing list of products and what sets you apart from your competitors
• Market Overview : the market analysis segment will contain an overview of the expected bakery market size and growth in your area, as well as an analysis of your competitors and target audience
• Management & People : introduce your bakery’s management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, speak here about your hiring plans and the reporting lines
• Financial Plan : how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? Include here a chart depicting your key financials such as revenue, gross profits, and net profit
• Funding Ask : what loan/investment/grant are you seeking? How much do you need? How long will this last?

Bakery Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Bakery Business Overview

In this section of your bakery business plan, you will provide an overview (slightly more detailed) of your business. If there is something unique about your baked products, mention that in this segment.

Some of the most important questions that you must try to answer in this section include:

• Why are you opening a bakery?
• Where will your bakery be located and why did you choose that location?
• What type of baked products will you sell (low-calorie, vegan, gluten-free, etc.)?
• Why do you want to offer those product lines?
• How will you price your food offerings?
• Will your operating hours be the same as your competitors?
• Who is your target audience?
• What will be the legal structure of your company?

Let’s look at different subsections that you must include:

a) History of the Project

Any business must have two components:

• Passion & experience of the business owner
• Rationale behind the business

Passion & Experience

It is not necessary to have any prior experience with a bakery. As long as you are passionate about it and you know your market, you are good to go. 

However, if you have any experience, make sure that you are mentioning that. For example, you may have been a head pastry chef and a creative cake decorator in a popular bakery for 6 years and now you want to launch your own bakery.

No matter what, ensure that you demonstrate not just passion but also some industry knowledge that you must garner through thorough research.

Every business has a rationale behind its existence. What’s yours? Are you going to solve some problems that exist in the current bakery business scene? 

For instance, the target market may have a very high percentage of pastry-loving obese people. You may be the first one to introduce low-calorie pastries, cakes, and other baked items. 

Similarly, if the area has a high vegan density, you may want to introduce a line of vegan products that no other bakery in the area is offering.

You must also ensure that the market is conducive for the business to exist. For instance, if you are a master cake maker who makes ultra-realistic cakes that cost a lot and try to sell them in a low-income neighborhood, your cakes will probably not sell.

Therefore, it is important to understand the market before starting a business to prevent extreme losses, and eventually closure.

b) Business Model

This is where you will talk about the business model and the type of bakery you want to open. Some points that you need to briefly describe here are:

• Will you buy a new bakery, or will you buy an old one and remodel it?
• Will you open a specialty bakery, a counter service bakery, or some other bakery type?
• What equipment, technologies, inventory, and tools will you need to operate your bakery?
• Where will you source your ingredients from?

There are various types of bakeries that you consider:

• Bakery Café : It is a sit-down bakery. It is a retail bakery with a dedicated dining area. There will be front-of-house and back-of-house spaces and people will often order food and other drinks apart from your baked items like muffins, cupcakes, cookies, etc. People can also order tea, coffee, sandwiches, etc.
• Counter Service Bakery : These bakeries do not have any dining area. People will order food and take them away. You can sell other food items like drinks, burgers, sandwiches, etc. apart from your usual baked goods.
• Specialty Bakery : These bakeries focus on a very specific set of products. For example, wedding cakes, gluten-free baked products, etc.
• Retail or Wholesale Bakery : The difference between a retail and a wholesale bakery is that in the retail model, you will sell to your direct customers (B2C). In the wholesale model, you will be selling to other businesses like cafes, restaurants, specialty shops, etc.

Irrespective of the type of bakery you want to open, make sure that there is adequate demand for the products you want to sell. For instance, if you are trying to sell a vegan line of baked products to customers who want non-veg-based baked products, you will not succeed. There must be enough vegans in your target market.

c) Products & Services

In this sub-section of your bakery business plan, you will provide a list of your products and services . For instance, if you intend to open a specialty bakery such as wedding cakes, you must provide a menu listing all that you have to offer.

Similarly, if you want to sell bread, cookies, and pastries only, make sure that your sample menu lists them. If there are too many items that you intend to sell, make sure that the sample menu you are providing includes the major attractions. You don’t need to list all the items.

d) Pricing Strategy

This is where you will explain your pricing strategy . Of course, your prices can vary significantly from your competitors. However, if there is a significant price variation, you must explain such differences.

For instance, you may be selling custom-designed birthday and wedding cakes instead of generic designs. That may be the reason for higher costs. Similarly, the quality of the ingredients you use for baking can also account for the price differences.

Irrespective of the case, include a pricing chart for your menu items. No need to include the price of every product or product bundle you intend to sell. Instead of listing the price for every product individually, you can just provide a pricing range.

For example, you can do something like this:

• Multi-decker cakes with custom fondant-crafted figurines: $350 to $1,000
• Gluten-free cookies: $3 to $6

Offering a pricing chart is important because your pricing strategy will also allow investors to tie your pricing strategy with your financial projections later on.

e) Legal Structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Bakery Market Overview

A complete understanding of the market where you want to operate is important for the success of your business.

For example, there may be a large number of cafes in the area with regular and high demand for baked goods like pastries and cookies. Thus, opening a wholesale bakery to serve the B2B demand instead may make sense here.

Therefore, you must cover here 3 important areas in the market overview or market analysis section of the business plan of your bakery:

• Market trends : how big is the bakery industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition overview : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis : who is your target audience? What type of bakery setup do they prefer? How frequently do they buy baked goods? What is their average spending at bakeries? 

a) Bakery Industry Status Quo

How big is the bakery industry in the us.

According to the American Bakers Association, the US bakery market represents $154 billion and employs over 800,000 people..! The commercial segment is by far the largest (91% industry size) vs. retail bakeries that only represent 9% of the total US bakery market.

In terms of products, here is the breakdown of the most common bakery products as a percentage of total bakery sales in the US:

How big is the bakery industry in your area?

Once you grab the exact data for the US market and add it to your business plan, you can then divert your attention to the area where you want to operate. It might not be possible to find region or area-specific studies, and hence, you must estimate the size. For more information, read our article on how to estimate TAM, SAM and SOM for your startup.

Let’s now see how to estimate the market size of the bakery industry size for your business plan . We know that:

• The total US market size for retail bakeries is $15 billion (10% of the total $154 billion)
• The total number of retail bakeries is around 23,000

Therefore, the average annual revenue for each retail bakery is around $650,000 (that’s an average of $1,800 in sales per day).

So, if there are 20 already bakeries in the area where you will operate, we can reasonably assume the market size of the bakery industry in your area is around $13 million.

How fast is the bakery industry growing in the area?

Now, you must show the expected growth rate of the bakery industry in your area. This information may not be available via online research papers. However, assessing the growth rate will not be difficult.

You can approach each bakery separately and ask for their year of establishment. You will get a clear picture of the overall growth rate.

For instance, if there were 18 bakeries in 2018 and 20 bakeries in 2022, the average annual growth rate is 5.1%.

b) Bakery Competition Overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their bakery product offerings, marketing strategies, etc., will allow you to provide a better service.

If your competitors are offering nearly the same products & services, then what is their market share and how do they market their products & services to attract new customers?

It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their product & service offerings, marketing strategies, target audience, etc.

Here is a sample table that you can use:

The competition analysis table you will add to your bakery business plan will depend on what information you need and want to include based on your business model.

Bakery SWOT Analysis

Try to provide a SWOT analysis . It must be crisp and highly focused. SWOT stands for Strength, Weakness, Opportunities, and Threats.

Here is a sample that you can use as a reference:

• Strengths : Baking & Pastry Arts degree from Culinary Institute of America; 6 years of cake and pastry baking & decoration experience in a renowned bakery chain
• Weaknesses : Startup cost, zero reputation
• Opportunities : Increasing demand for healthy baked food because of increasing health consciousness in the target market
• Threats : Big brands like Dewey’s Bakery, Insomnia Cookies, Bare Snacks, etc., are flooding the market

A clear understanding of your strengths and weakness along with opportunities and threats in the real market can help you to design your marketing strategy . It also helps potential investors to assess the risk and reward profile of your business.

c) Bakery Customer Analysis

This is the sub-section where you will provide a detailed analysis of your target audience. Some important points that you must include in your customer analysis include:

• Age and gender distribution (you can get local demographic data from census.gov )
• Per capita expenditure on baked food items
• Frequency of bakery visits
• Average monthly income and disposable income
• Average bill size per visit
• Type of bakery preferred
• The expected price range for baked items
• Preference for healthy snacks and willingness to pay for high-quality products
• Any seasonal preferences they have

You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers.

4. Sales & Marketing

This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:

• What is your USP ?
• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?

Let’s expand a bit on a few questions below:

What marketing channels do bakeries use?

A few marketing channels that bakeries typically use are:

• Online listing & reviews (e.g. Google Business)
• Bakery directory listing
• Signage and billboards
• Print media (newspapers, etc.)
• Loyalty programs
• Coupons & gift cards
• Social media interactions and social media ads

It is not necessary to use all channels. You can start by focusing on a few of them. You can include other marketing strategies later.

Also, you must have a fair and nearly accurate estimate of your marketing budget. Failure to display a well-planned and adequate cash flow for advertising and marketing can lead to investors losing confidence. That’s because investors are fully aware that if adequate funds are not allocated for marketing, the business will be derailed before becoming a success.

What is your unique selling proposition (USP)?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs are:

• Low Calorie : Craving for sweets while burning fat? We have the perfect pastries!
• Vegan : Dairy-free vegan cheesecakes that melt in your mouth
• Doorstep delivery : We will reach your door to satiate your cravings

Your USP will depend on your business model, competitor analysis , and target audience. Whatever your USP be, it should appeal to your potential customers and attract them. Plus, The USP you offer should be convincing enough for investors and lenders.

5. Management & People

You must address two things here:

• The management team and their experience/track record
• The organizational structure: different team members and who reports to whom?

a) Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your bakery business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the bakery you are proposing. If they have specialized training, and experience (such as a degree in baking and pastry arts degree, 6 years of baking experience in a renowned bakery chain, etc.), add that information.

b) Organization Structure

Even if you haven’t already hired production bakers, pastry chefs, kitchen helpers, marketing & accounts personnel, etc., you must provide a flowchart of the organizational structure defining the hierarchy of reporting.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for a bakery.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your bakery is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your project (if you plan to start a new bakery, purchase new equipment, renovate your store, etc.)
• The 5-year financial projections

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project. For a bakery, startup costs are all the expenses you incur before you open your bakery and start making sales. These expenses typically are:

• The lease deposit for the space (if you rent) or the cost to purchase the real estate
• The renovation / refurbishment of the building / space
• Equipment & furniture for the bakery

Of course, the startup costs depend on many factors like the bakery shop size, its location, the number of staff, quality of the equipment, etc. 

As an example, it costs on average $109,250 to $310,050 to open a 1,500 sq. ft. bakery in the US .

Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a bakery, read our article here .

b) Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model for your bakery.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your bakery.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 15%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of customers over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of customers as a small change in these assumptions will have a big impact on your revenues.

7. Funding Ask

This is the last section of your bakery business plan. Now that we have explained what your bakery business model is, what you sell and to whom, what’s your marketing strategy, etc., this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any bakery business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit and the renovation?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our Bakery financial model template , you won’t have any issues answering these questions.

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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Bakeries bring joy and convenience to their communities, but the customers aren’t the only ones who will benefit from this small business. The owner has a lot to gain too. Imagine calling a kitchen filled with tasty treats your office. Starting a bakery will be hard work, but fun at the same time. With equal parts passion and elbow grease, you can start a business that has customers lined up around the block waiting for a chance to try your delicious treats. This guide on how to start a bakery will help you figure out how to get your business off the ground.

How to start a bakery in 12 steps

Once you have the recipes chosen and perfected, you'll need to focus on some of the other elements associated with starting a bakery: picking the right location, create an inviting atmosphere and learning to manage your finances. Let’s learn more about these aspects.

1. Choose a bakery format

There are multiple bakery formats that you can choose from. There are even some options without the overhead startup costs of a pricey store location. These are a few bakery formats worth considering, but feel free to get creative.

Counter style. This format is the most typical and recognizable format of a bakery, and it has its benefits. Very little space is required in the front of the bakery if you simply offer a counter that customers can order from. (Of course, you’ll still need space in the back for your kitchen.) Usually, there is no dining space, which keeps this type of bakery a lean and efficient operation. But this format does limit your options for serving food and keeping customers on-site where they might order more food and drinks over time.

Bakery and cafe hybrid. This option has plenty of seating for customers, which can allow you the space you need to serve meals if you want to expand past baked goods. Even if you don't, you can still add seating if you want to encourage customers to stick around for a while. You may want to add coffee or tea to the menu, as well. Plus, if you offer comfy seats and free Wi-Fi, you’ll likely find success amongst the working crowd.

Food truck. Starting a food truck is a cost-effective venue for opening a bakery and can help you reach a variety of customers. Take your baked goods along for the ride and park your food trucks at street fairs, by offices and at special events. Generally, you won’t have the space to bake in the truck. But you can easily pack up your truck with baked goods you made in your home or commercial kitchen space.

Home bakery: Not ready to make the leap into renting spaces or buying industrial-sized equipment? Keep things simple and opt to start a bakery from home instead. You’ll require less startup capital and can easily sell your goods online, at local farmers markets, or offer catering services . You may even be able to make deals with local coffee shops or cafes to sell your goods in their locations by offering them a cut of the profits.

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Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. Write a business plan

Writing a bakery business plan is hard work, but it’s a step that will help guide you and provide focus. A business plan can also show stakeholders, such as investors, lenders and potential partners, where your business is heading.

A strong business plan will provide you with a structure to organize your ideas, plans, goals, services or products, financial plans and operational structure. Although you'll want to customize your business plan to suit your needs, it should generally contain the following information:

Executive summary . The executive summary should outline your business’s purpose, where it currently stands, where you see your business in three to five years and why your business will succeed.

Market analysis . Here, you’ll share an in-depth analysis of your industry, market and competitors.

Products and services . Provide a detailed look at exactly what your business will be selling. When you're starting a bakery, this section can look at your menu and how the bakery format you chose in the first step will serve your customers.

Marketing and sales plan . Explain how you’ll market and sell your bakery to customers.

Financial plan and projections . You should provide at least three years of financial projections as well as any financial data from your business’s past performance. You’ll want to prove that you have a plan to take your bakery from an idea to a profitable enterprise.

All in all, your bakery business plan will be a lot of information to pull together, but completing this document will ensure that you have a strategy to develop and grow your business.

Choose a Business Entity

As you’re writing your bakery business plan, particularly the business organization section, the question of how you plan to structure your business will likely come up. Choosing a business entity is an important step to starting a bakery (or any business). You may want to consult a business attorney, accountant or another resource to help you decide what type of business entity to form, as this decision will affect your taxes, legal responsibilities and more.

To start, you might consider one of the following most common types of business entities:

Sole proprietorship. Unincorporated business that either has one owner or is jointly owned by a married couple.

General partnership. Unincorporated business with multiple owners.

Limited liability company. Also known as an LLC; registered business with limited liability for all of its members.

Corporation. Incorporated business; most common types being an S corporation or C corporation.

Choose a Business Name

You may have already decided on a business name , but if you haven’t yet, now is the time. Once you have an idea of what you’d like your business name to be, you'll need to make sure it hasn’t already been taken by another business.

A quick Google search should be your first step. You can also search for trademark filings with the U.S. Patent and Trademark Office. Finally, a secretary of state business search will uncover if another business in your state is operating under your dream name.

If your budget permits, you can also hire an attorney to do this research on your behalf. You’ll save a lot of time and have some added peace of mind that you are legally safe to move forward with the name of your choice.

3. Find the right location

The next step in learning how to start a bakery is narrowing down your search for the right business location . If you’re opening a brick-and-mortar location, finding a commercial real estate agent who specializes in finding business spaces for purchase or rent can make your search much easier. Try to find someone who primarily assists the tenants, not the landlords, with the rental process.

You’ll want to make sure your agent has years of experience in your chosen community — that way, they’ll know what fair prices are and the best locations. They may even be able to help you find a restaurant lease that comes with some of the required bakery equipment like large refrigerators or ovens. Make sure the space you rent comes with plenty of room to store equipment and extra baking supplies.

If you’re more interested in the food truck route, you won’t need a real estate agent to help you with that. There are specialty car dealers online and in person that sell food trucks and trucks that can be adapted into food trucks.

To get a better deal, you may want to search for a used food truck on websites like Craigslist. Or, you might ask your local food truck owners, they may be looking to sell their own truck or know of other owners who are.

4. Get the appropriate licenses and permits

Each state will have different regulations, so you must check with your local government to see what business licenses and permits you’ll need to start a bakery in your area.

Even your city or county may require specific business licenses and permits. You should review the government websites for your state, county and city to make sure you have all the documentation you need. Your needs will vary depending on what type of bakery you start, but you may encounter the following licenses and permits when starting your bakery:

Sales privilege license. If you're opening a retail location, you’ll probably need a sales privilege license. This type of license will be necessary to sell your goods in a retail format. This allows your company to collect your state’s sales tax alongside what your goods cost.

Food handler's license. Any business that handles food will need a food handler’s license or a food and safety certificate. You will need to prove that you have the proper knowledge regarding food handling and storage. The owner will need this license as will any employees who assist in the cooking of your baked goods.

Catering license. If you choose to pursue a catering-style bakery business, then you may need a catering or food vendor license. This generally applies if you make the food yourself and deliver it, not if you prepare the food in the client’s kitchen.

Kitchen health and safety inspection. Any kitchen space will need to pass a health and safety inspection in order to be properly certified. Researching these rules is especially important if you want to learn how to start a bakery from home.

Zoning laws and permits. If you’re running a bakery out of residential space, you’ll want to review your local zoning laws to see if you can operate a business out of your home. In this case, other permits may be necessary. For example, a permit may be required if anyone is coming to your home to pick up food.

Homeowner association rules. If you want to start a bakery from home, you’ll need to check the homeowner association rules and regulations first to make sure that operating a business out of your home is allowed. This is more commonly an issue that affects those who live in townhomes or condos.

4. Register for taxes and obtain an EIN

All businesses have varying tax, licensing and employer requirements. Learning about these requirements before you start a bakery will help you avoid costly and time-consuming mistakes. Your chosen business entity, as well as some other factors, will affect the business taxes you’ll be responsible for paying. If you haven’t already, it’s a good idea to consult a tax professional to make sure you’re aware of your tax responsibility and on track to file the appropriate paperwork on time.

If you plan on hiring employees to help you run your bakery, you’ll also need to apply for an employer identification number , also known as an EIN or business tax ID number. You can do this through the IRS and this number will be used when filing your business’s income tax return or payroll tax return, as well as when you’re opening a business bank account, credit card or filing for a business loan.

Even if you don’t need to obtain an EIN — sole proprietorships and single-member LLCs without employees are the only businesses that don’t — there are still benefits of getting an EIN you should consider.

6. Brand your bakery

Finish this sentence: Break me off a piece of that…. You know exactly which crunchy candy bar goes with that song, right? Well, that’s because of branding. Good branding is key. The colors, logos, music, taglines and packaging can all tell your bakery’s story to the world.

There is no reason your bakery can’t make a splash thanks to some solid business branding. These are the following areas where you can start planning your bakery’s branding:

Color scheme.

Social media.

Product names.

Ask yourself, what story do you want your brand to tell? Then use that story to guide each of your branding decisions. Your story should be unique.

You want a name and logo that is immediately recognizable. The same goes for your decor and packaging.

Establishing social media pages for your bakery is also crucial to getting the word out about your new business while building your brand at the same time.

7. Separate your business finances

Starting a bakery can feel like a very personal affair, but you should do your best to separate your business and personal finances. One of the best ways to do this is by opening a business bank account. For some businesses, this step may be legally required.

When you open your business bank account, you’ll have to decide if you want a business checking or a business savings account. Usually, new businesses will be best served by a business checking account. Businesses that are more established, and have plenty of cash on hand, will probably prefer a business savings account so their money can grow with interest.

Either way, it's best to have some form of a business bank account to keep your business finances organized and running smoothly. The last thing you need to worry about is confusing your personal expenses with your business ones come tax season.

Another way to help keep your business and personal expenses separate is to obtain a business credit card . While you have several options available to you, you may also consider a business credit card with a 0% introductory annual percentage rate offer, which can be particularly helpful to cover any initial startup costs of your bakery. Keep in mind, though, you will need to make sure you have a plan to pay off your balance by the time the introductory offer ends for this to be a beneficial tool.

8. Secure business funding

Starting a bakery can be an expensive endeavor, so you should first find an answer to the following question: How much does it cost to start a bakery?

The answer will vary based on your location, type of bakery and required equipment, but you need to find a rough answer so you can plan your funding options accordingly. If you need help financing your new bakery, consider the following options:

Startup business loans. Finding funding as a new business can be difficult, which is where startup business loans come in. These can be anything from an SBA microloan to a small business grant. It’s worth noting that SBA loans are the most coveted funding option for their low interest rates and long repayment terms. While traditional SBA loans aren’t easy to qualify for — especially as a new business — the SBA microloan program can be a good alternative.

Business line of credit. With a business line of credit , you’ll have access to a maximum credit limit that you can borrow against for any business expenses. You’ll only pay interest on the amount of capital that you borrow from your credit line, and you don’t need great credit to qualify, which makes them appealing for new businesses.

Equipment financing. Bakeries require a lot of equipment, so you may want to consider equipment financing to help with the upfront costs. And since the equipment will serve as collateral on the loan, they are also easier to qualify for than some other funding options.

9. Decide on your menu

Remember the cronut? The combination of a donut and a croissant created by the famed Dominique Ansel, owner of Dominique Ansel Bakery in New York City, was so popular that people would line up around the block to try to get one. A few years later, however, the cronut isn’t exactly making headlines anymore — which is why it was smart for Ansel to also sell other baked goods, including classic favorites.

When figuring out how to start a bakery and make your menu, keep Ansel in mind. It’s OK to set and follow trends, as long as you're known for having some reliable staples available too.

That way, when everyone is over the latest trend, they know they can still come to you for their favorite classics. Ansel now has multiple bakery locations in New York, Los Angeles and London and sells new inventions (like frozen s’mores) and timeless baked goods.

10. Obtain bakery equipment

To turn your bakery into a legitimate, profitable business, you'll need commercial-grade bakery equipment to help you churn out all those baked items out without your tools breaking down in the process.

What equipment is needed to start a bakery? You may need to obtain:

Decorating tools.

Sheet pan rack.

Refrigerator.

Holding cabinets.

11. Price your products

When you're trying to price your food products, it's important to remember that pricing is determined by your expenses, operating costs, taxes and the market. To calculate the pricing of your baked goods, therefore, you’ll first need to figure out your monthly business operating costs. This will help you calculate how much you’ll need to make to cover the total cost to run your business.

Then, you’ll have to divide your production costs and overhead costs into your operating costs. Production costs take everything into account that’s needed to produce your baked items, such as ingredients and equipment. Overhead costs are expenses that are not direct costs — think advertising, accounting, labor, etc.

Once you’ve figured out your breakeven point and the production costs per baked good, you’ll be able to come up with pricing. For example, let’s say you own a cupcake business and it costs you $2,000 a month to operate your bakery. You project to sell 250 cupcakes per month.

To figure out how much you should charge per cupcake, you can divide the number of projected cupcakes into your monthly operating costs. If you divide 2,000 by 250 you should get eight. This means you should be charging $8 per cupcake just to cover overhead expenses.

Now, let’s factor in production costs. Let’s say each cupcake costs you $5 to produce. Add this cost to the minimum cost to cover your operating expenses (eight plus five) and you should get $13, which represents the minimum amount you should charge to cover your total operating expenses.

You can then decide how much profit you want to make and add that to the price of each baked good.

12. Set the atmosphere

The last step in learning how to start a bakery is customizing your space. If you choose to go with a storefront or cafe-style bakery, it’s time to amp up the atmosphere.

When it comes to the atmosphere, there are a few tricks of the trade that will help you create a successful bakery. For example, put your most eye-catching baked goods (like those fancy frosted cakes) at eye level in your display shelf. Less exciting staples like bread can take up some of the space on the lower levels of your display or behind the counter.

When you're setting the atmosphere, creating a good first impression is key. Just like a well-designed restaurant has a stellar entrance area, find a way to make that tempting freshly baked cookie smell waft into the entryway of your bakery.

Similarly, you can invest in plush couches, cozy decor and oversized coffee mugs. Make sure your customers feel at home. As the owner, get to know your customers. It’s important to train all of your staff members to be equally friendly. And of course, a free sample or two never hurts.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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Learn about small-business loans

NerdWallet has curated financing options to help meet business owners’ needs. If you’re not sure what types of funding and terms make sense for your business, you can use our small-business loans tool to see lenders and their loan products. We gauged lender trustworthiness, market scope and user experience, among other factors, and classified lenders into categories to help you find your best options based on criteria that include your time in business and yearly revenue.

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Bakery Business Plan

Ready to turn your love for baking baked goods into a successful business?

To ensure that your business endeavor happens to be a flourishing one, write a business plan specifically crafted for your unique bakery business.

From helping you finalize the bakery location to evaluating the financial position of your business- a detailed plan uncovers every detail essential to kickstart a successful bakery business.

Writing a business plan can get complicated. With this step-by-step guide, you will have all the information essential to write a bakery business plan . Also, download our free bakery business plan template and modify it to fit your needs.

Ready to dive in? Let’s get started.

Key Takeaways

• Conduct a detailed industry analysis of the bakery market to understand market trends, target market, and the growth scope of your business.
• Outline the business goals and devise a business strategy that is in line with your bakery’s branding image.
• Analyze the competitive landscape of your business and identify local businesses that will offer direct and indirect competition to your business.
• Make calculations, assumptions, and projections to form key reports such as income statement, balance sheet, Cash Flow statement, and Break-even analysis.
• Determine the operations of your bakery business by outlining the procedures, processes, and equipment required to kickstart the business.
• Determine the baked goods and services you will sell through your bakery business.

Why is a bakery business plan important?

A business plan helps achieve your business objectives by creating a roadmap that will guide your bakery business in a strategic direction. An actionable well-drafted plan offers an in-depth view of your business idea and are a few benefits you must know:

• A business plan instills clarity in your business idea. All the ideas that were messed up in your mind start getting a clear point of view once you start writing a plan.
• A business plan is your checklist to understand what different aspects of the business need- the resources, equipment, manpower, licenses, etc.
• It helps crystallize your business vision and what it aims to achieve in the bakery market.
• A business plan optimizes the bakery operations and brings down the operating expenses by ensuring the resourceful allocation of bakery resources.
• A plan evaluates the financial aspects and viability of your bakery idea before you actually invest money in the business.

And, of course, a well-crafted plan will get you essential funds to get started in the bakery market. Moving forward, let’s craft a spectacular plan for your bakery business.

How to Write a Bakery Business Plan: A Complete Guide

From writing an executive summary to creating your financial plan- let’s decode the key elements of writing a business plan.

1. Get a business plan template

Before you start writing a business plan, consider getting a sample template to simplify the entire plan writing process.

A lot of information goes into writing a comprehensive business plan. Addressing all the key components in brief details is a challenging task.

However, by using a template, you can add structure to your plan. Not only that, it will help you organize the information clearly in a cohesive manner. With appropriate prompts, you will know exactly what to write in each section.

We know you would start searching for a template. Well, the Upmetrics business planning template is perfectly relevant and suited for your bakery business. It’s intuitive, modern, and available for free download.

Need Assistance Writing a Bakery Business Plan?

Get Upmetrics’ business plan template, import data directly into the editor, and start editing using Upmetrics AI Assistant.

Start Planning Now

2. Write an executive summary

The executive summary is a concise description of your entire bakery business plan. It highlights the key findings and entices the reader to delve further into your business plan. So make sure to keep it interesting.

A well-drafted executive summary includes an answer to every question, a potential investor might have.

For instance,

• What is the core objective of your bakery business?
• What are the pain points of your target customers and what solutions can you offer?
• What type of baked goods will you offer?
• What is your target market?
• What is your marketing strategy?
• What are the financial highlights of your bakery business?

As you start writing, remember that the executive summary should summarize the plan and not your business idea.

Lastly, fit your compelling summary description in 1-2 pages.

3. Conduct a competitive and market analysis

The market analysis section paints a clear picture of your ideal target market, bakery industry trends, and your competitors in the market. In a way, this section is your chance to validate the potential success of your bakery shop.

The market analysis section of your bakery plan must include:

Market share, growth potential, and industry trends

Identify your targeted available market (TAM) through thorough market research and determine your share in the bakery market. Analyze the emerging trends in the bakery market and assess your growth potential as a retail bakery.

Understanding of the target market 

Who will be your potential customer at a bakery shop?

It gets much easier to succeed in the market when you have a clear understanding of who your target customers are.

In this section of customer analysis, you will create a buyer’s persona of your ideal customer by understanding their psychographic and demographic details.

Competitor analysis

This is an equally important part of the market study, where you evaluate the position and competitive landscape of your bakery shop.

Begin by identifying your top competitors and evaluate your strengths, weaknesses, opportunities, and threats against other bakeries. Establish your competitive edge and show the potential investors that your business stands a promising opportunity in the competitive market.

Want to Perform Competitive Analysis for your Business?

Discover your competition’s secrets effortlessly with our user-friendly and Free Competitor Analysis Generator!

4. Prepare a company overview

The company overview section of a bakery’s business plan is a brief description of your bakery business concept, its legal structure, location, and value proposition.

Be creative and write a compelling section that can propel the readers’ interest in your business idea.

Wondering what to include in your bakery’s company overview section? Let’s check:

• Type of bakery business: retail bakery, specialty bakery, cloud bakery, mobile bakery, etc.
• Business structure: Sole proprietorship, LLC, partnership LLC, corporation, etc.
• Mission statement
• Value proposition
• Quantifiable business goals and milestones
• History and background of the bakery, if applicable
• Partnership and ownership structure
• Name of owners/ partners
• Operating hours
• Service style

Drill down to details and make this section an engaging read.

5. Describe your products and services

After describing your bakery structure and mission statement in the previous section, you will now outline the product and service offerings of your bakery shop.

As a bakery business, you may sell a variety of delicious baked goods such as pastries, cakes, fresh bread, cookies, tarts, pies, donuts, sweet buns, etc. Add this to your product section and also non-baked goods such as savory snacks, coffee, etc, if it’s on your menu offering.

Specifically mention, if you will have products for special diets, i.e. gluten-free, keto-friendly, sugar-free, vegan baked goods, etc.

6. Bakery store design and layout

An effective bakery business plan must include a blueprint of your bakery shop’s layout and design to demonstrate the bakery’s concept practically to the readers.

Mention your bakery size and the space allocated for the back of the house and front of the house operations. Also, explain how the proposed layout will increase the efficiency of your business operations in great detail.

In this section, you will also talk about the decor and theme that will create a warm ambiance for your target audience. Keep in mind that the decor should reflect the branding image you want to create in your target market.

Offer an immersive experience to the readers while explaining this section.

7. Prepare a bakery marketing plan

The marketing plan offers a detailed outlook of marketing strategies you will use to market and promote your bakery shop. Consider it as a roadmap that will guide you in building a brand of sustainable value in the market.

So how do you build a perfect marketing plan?

Begin by identifying the marketing channels and different types of digital marketing campaigns that will work best for your potential customers. Now, allocate the monthly budget to different marketing activities. Lastly, devise a marketing strategy for each channel with a clear plan of action.

Here are a few marketing strategies that are popularly used by successful bakery businesses:

• Social media platforms for brand development
• Email marketing for promotional offers
• Video content such as easy baking recipes, tips, tricks, etc
• Online workshops and live sessions
• Influencer marketing
• Tasting events and sampling
• Customer testimonials

Now detail all your plans in this section and show your investors that you have a solid way to establish your business’s popularity in its target market.

8. Outline your organizational structure

In this section of your bakery business plan, you introduce the management team and employees at your shop. Also, highlight the organizational structure and hierarchy of employees in the organization.

Begin by introducing the owners and their role in your organization. Highlight their experience in the bakery industry and the key skills that can benefit the business.

Introduce your talented baker and their role in recipe development and standardization. Show their experience in the baking field and prove their asset worthiness.

Draw a clear flowchart depicting the flow of authority and responsibility in your bakery business. It is your chance to show the investors that you have a team and knack to take this business on a successful path.

9. Create a logistics and operational plan

The operations plan of your bakery business plan is a strategic document highlighting the processes, procedures, and resources needed to efficiently run your bakery shop.

A well-planned operations plan is like a business manual that has answers to all the questions one might have while running a bakery shop.

Wondering what to add to your operations plan? Well try to include answers to the following questions to make it detailed and comprehensive:

• Physical facilities: What will be your bakery location to produce bakery goods? Will you serve customers from that location or a different shop? Are you planning to sell the bakery goods online?
• Suppliers: Where will you get the raw materials and supplies for producing bakery goods? Who will supply non-bakery items like scones, sandwiches, and savory snacks?
• Inventory: Where will you store the raw material and ingredients? What will be the shelf life of these ingredients? How will you manage the stock levels? What are the minimum thresholds for different items and how long it takes to stock them?
• Production: Who will bake the goods? How long is the process? Will everything be made fresh or in batches to be stored for a few days? Will there be recipe cost cards for each menu item? How will you meet an unexpected spike in demand?
• Bakery Equipment: What type of bakery equipment will you require? Will there be a POS system at your store? What other technologies will you use? How will you take online orders?

The amount of precision here will help you regulate your operating expenses once the bakery starts serving the customers. Proper planning is advisable at this stage.

10. Create a Financial Plan

And now comes the most exciting part for investors- a financial plan. The figures in financial statements are helpful in determining the viability of your business idea. So this section holds a considerable weightage in terms of whether you will get funding or not.

To ensure you create a comprehensive financial plan, including financial projections for these key components:

• Cost of starting a bakery shop
• Sales forecast
• Revenue projection
• Operating expenses
• Pricing strategy
• Income statement/ Profit & Loss statement
• Break-even analysis
• Cash flow statement
• Balance sheet
• Business ratios

In this section, you will also evaluate your funding requirements and identify the funding sources for your business. i.e. bank loans, SBA-guaranteed loans, angel investors, and personal savings.

Having realistic financial projections at hand will help you realize your financial goals while evaluating the sustainability of your bakery business.

However, creating the projections for all these elements from scratch can get overwhelming. Additionally,  you also need to work on visuals and graphs to add impact and clarity to your plan.

Well, there is an easy way. Create your plan with the Upmetrics Financial forecasting tool . This tool will generate key reports and visuals that can be easily downloaded and added to your plan.

We hope this sample plan will guide you in writing a perfect business plan. Now, let’s move forward and check the industry trends ruling the bakery world.

Bakery Industry Highlights 2023

Before you open a bakery, here are some latest highlights from the bakery industry, you may find helpful:

• Bakery market size: The US bakery market size was valued at $99.47 billion dollars in 2023. It is projected to grow at a CAGR of 2.08% between 2023-2028.
• Retail Bakeries: According to IBIS World , there are 8,780 independent retail bakery shops in the US.
• Bakery consumption: In 2022, Americans consumed 8.6 billion kilograms of cake and pastry goods, a sizable amount compared to other countries.
• Bakery trends: There is a growing trend of providing healthier alternatives, i.e. gluten-free baked goods in the bakery market. The organic and gluten-free baked goods market grew by 2.45% in 2022.
• Market Saturation: 55% of commercial bakery revenue in the US is generated by 3 major players- Grupo Bimbo, Flower Foods, and Campbell Soup.
• Specialty bakery market: The US Specialty bakery market share is expected to grow by 10.54 billion US dollars by 2026.

Download a sample Bakery business plan

Need help writing your own bakery business plan? Well, download our bakery business plan pdf and write your plan section-by-section with utmost precision.

Upmetrics templates are perfectly suited for entrepreneurs who need a little help to kickstart their business planning. Import the data into the editor and start planning.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Write your business plan with Upmetrics

Optimize your business planning with Upmetrics .

With more than 400+ business plan examples , we offer invaluable guidance to help you write a cohesive business plan.

Whether you are writing a business plan to strategically grow your business or attract investors, Upmetrics’ invaluable resources like AI assistance, forecasting tools, and step-by-step guides will serve you perfectly.

Let’s bake a recipe for success together.

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Frequently asked questions, what should be included in a bakery business plan.

An effective bakery business plan must include:

• Executive summary
• Business overview
• Industry and competitors analysis
• Bakery goods and services
• Bakery design and layout
• Operations plan
• Key management team
• Financial bakery plan

How long should my bakery business plan be?

A bakery business plan should be not more than 15-20 pages including graphs, visuals, and charts. You are likely to lose the interest of investors with a lengthy plan. However, keeping it extremely short is also not favorable, as it would not cover important details. So try using crisp content for your business plan.

Can a bakery business plan template help in setting clear business objectives and goals?

Absolutely yes. A template offers a variety of prompts that will help you to write each section clearly and cohesively. Moreover, you will get a variety of bakery-specific examples that shall help in clearly determining your goals and objectives.

Do I need to have financial projections in my bakery business plan?

Yes, financial projections are important to assess the viability and profitability of your business idea. If you are planning to seek investor funds, this section is of crucial importance. Investors will evaluate the financial section and determine whether to invest or not.

Can I use the same bakery business plan template for different locations?

Yes, you can. However, you need to alter the content of your business plan for different locations and target markets by making specific modifications.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How to start a bakery

The UK baked foods market is worth around £7.8 billion and demand for bakery products is continuing to rise. With more and more customers seeking healthier, organic or specialist baked foods, the future of independent retail and wholesale bakeries has seldom looked so good. 

However, although bakeries can be great businesses – typically delivering profit margins of 15% and giving owners a personal income starting from £26,000 per year – starting your own bakery is not without its challenges. You’ll need premises to work from, employees, funding, permits and licenses, plus a good marketing angle and an enticing range of products. 

So how to do this? How can you get the bakery you’ve always dreamt of owning up and running? Let’s find out. Read on to discover all you need to know about starting a bakery business.

1. Choose a bakery style

The first thing you need to decide is what kind of bakery to operate. There are two basic models – retail bakeries and wholesale bakeries. Retail bakeries sell direct to consumers, usually as a storefront, but more often in a café environment where customers can sit down to eat a light meal or drink a cup of coffee. Wholesale bakeries sell to businesses – such as grocery stores, restaurants and hotels . In the UK, wholesale bakeries represent 25% of all bakery businesses, but they capture 88% of industry revenues. 

Retail bakeries may be best for entrepreneurs who want to sell more creative, bespoke and artisan products, while wholesale businesses may be best for those who want to sell core products – such as bread – in high volumes and from an industrial type of setting.

Opening and operating a retail bakery

Retail bakeries typically sell cakes, pastries and bread in lower volumes and to specific types of customer. There are several types of retail bakery, but they all need a front and back of house operation. 

• Front-of-house – an area where baked products are displayed and customers can select what they want.
• Back-of-house – the bakery kitchen where baked products are made.

Types of retail bakeries

• Bakery café – the bakery sells baked products and provides a café style eating area.
• Counter service – no café area. The front-of-house operates as a walk-in store.
• Bakery food trucks – mobile bakeries take their products to wherever their customers are. Most bakery food trucks make their products in a commissary or home kitchen before leaving base. 
• Specialty bakeries – these types of bakeries sell niche products, such as vegan or gluten-free baked goods and cater to smaller sections of the market.
• Home bakeries – baked products are made in a home kitchen and then sold via food trucks, market stalls or even online. Many bakery entrepreneurs start off with a home bakery before moving into a commercial space.

Opening and operating a wholesale bakery

Because they’re making baked goods in high volumes and selling to businesses such as cafes and delis, wholesale bakeries tend to be larger and have more equipment and employees than retail bakeries. Wholesale businesses do not need a front-of-house operation and they can be located away from busy shopping streets. This can reduce location costs. However, the extra size of a wholesale bakery usually makes them more expensive to start than a retail operation.

2. Create a business plan

If you’re seeking external investment or a commercial business loan to open your bakery, you’ll need a detailed business plan to support your pitch or application. Investors and lenders will want to know why you need their funds and what the money will do for your bakery. Business plans should do more than paint a rosy picture – explain the risks involved, what the downsides could be – and how you intend to overcome them. 

Even if you don’t need investment or a loan, a business plan can still be an extremely useful tool. Use it as your business manual, referring to the contents to guide your strategy and manage your financials.

Find out more about creating your business plan here.

3. Manage your finances

Owning your own bakery may be your passion, but at the end of the day, the business has to make money. Getting your financial plans in shape is critical to success. If you don’t have a great head for numbers you should hire an accountant or bookkeeper to help you with this task. 

A key consideration is calculating your potential profits before you take the plunge. Proving your business can make money is important to you, your investors/lenders and major suppliers. How do you do this? Follow these simple steps:

Calculate your food costs

Add up the cost of all the raw ingredients you need to buy – and don’t forget to factor in delivery charges or any local taxes you cannot claim back. Break the total costs down into individual products until you know exactly what the raw ingredient cost per unit is.

Calculate your labor cost

Now total all your labor costs – employees, casual workers etc. This cost will include any benefits you may provide and should also include a contingency of at least 10% to cover costs like absenteeism and sickness. Don’t forget to add your own costs – what you pay yourself – into the mix. 

Once again, break the labor costs down into the unit costs of the food you make. (For example, if two employees take a whole day each to make 500 cupcakes, you can divide their total labor costs by 500 to get a labor cost per cupcake).

Calculate your overhead costs

Lastly there are your overhead costs – rent, energy, insurance , licenses and permits, delivery costs, vehicle costs, equipment costs, wear and tear on fixtures and fittings, etc. Because these costs are more general than ingredients and labor expenses it may not be possible to allocate them to individual baked goods. In such a case, take your total monthly overhead cost and divide it by the total number of products you make per month. This will give you a baseline overhead cost that can be attached to every product. (For example, £5,000 monthly overhead costs to make 10,000 products per month = 50 cents per product per month baseline cost),

Assess your cost of goods sold and calculate your profit

This means working out the total cost to produce all your baked goods – ingredients, labor, overhead. By combining your per unit ingredient and labor costs with your baseline overhead costs you can calculate how much it costs you to make each product. This information will support your pricing policy – allowing you to work out how much you can charge per product – and, most importantly, if you can generate a profit.

4. Licenses and permits

Like all businesses that sell food and drinks, bakeries need licenses and permits to operate. Your bakery must comply with local, state and possibly federal laws, but t he types of permits you need will vary depending on your location. 

Know your local cottage food laws

If you thinking of starting a home bakery, your business will generally be covered by a section of law called  cottage food . This classification can separate home-based bakeries from commercial or retail operations that have designated storefronts or production kitchens. Commercial bakeries have to meet certain requirements for equipment and sanitation while cottage-food operations have their own set of rules. (Cottage food is regulated on a state-by-state basis, but it’s often limited to shelf-stable products that don’t require refrigeration).

Create a business entity and get licensed

You’ll need to register your bakery with local and state authorities. But before you do that, you’ll need a name for the business. You’ll want a name that is not taken by another organisation, as infringing on someone else’s brand name and copyright could end up in a costly lawsuit. 

You will also want a website and branded email addresses for your bakery. Check to see if your preferred company name is also available. If your domain name is available, you should be able to buy it via any of the advertised web hosting services. 

Once you’ve settled on a name, you must decide if you want to run the business as a sole proprietorship, an LLC or a corporation. Although it involves more paperwork, operating as a corporation can protect you if the business does not succeed, as you are not personally responsible for the company’s debts. If you choose this route, you must submit your articles of incorporation to the secretary of state’s office in the state where you register. You can do this in-person, online, or by mail. You will have to pay a registration fee at the time of filing – typically £100.

Once your bakery is registered for business, you can apply for your operating licenses and permits. Retail bakeries are governed by different laws than commercial bakeries, especially if they offer a café style experience to their customers. Check with your local and state licensing agencies to discover which permits apply to your business.

5. Apply for funding

If you don’t have enough cash on hand to launch your bakery on your own, you’ll need funds from investors or lenders. Many new businesses get started using financial support from friends and family, but if that’s not an option, there are networks of venture capitalists and angel investors readily available online. Bringing in external investment can give you the cash you need to get your bakery started but be aware that investors will usually want a piece of the action in exchange for their money. This means you will need to give up a share of your ownership and you may lose overall control of the business. 

With a business loan you don’t have to surrender a share of your store to get the funds. Although it’s never easy for new businesses to borrow money, some lenders have special products and programs for startups and entrepreneurs. These types of financing include:

• Term loan – this is a lump sum that you pay back over time. Borrow up to £5million over as long as 25 years. Collateral may be required.
• Business line of credit – a loan that functions like a high-value credit card. Withdraw cash anytime up to the maximum of your credit limit. You only pay interest on the sum you withdraw, not the whole line. This can significantly reduce your borrowing costs. Collateral may be required.
• Merchant cash advance – borrow against the value of your credit/debit card sales. As your card sales increase, your credit l imit goes up. Pay the loan back with a small percentage of your weekly or daily card sales. No added collateral is required.
• Equipment loans use the asset you’re financing as security, similar to a car loan or a residential mortgage, so no added collateral is required.  Buy machinery, furniture, technology, etc. Use the equipment as you pay for it. 

To get these types of loan you can approach banks, credit unions and online lenders one by one, or you can use the services of a loan marketplace that will immediately introduce you to a choice of startup loans from different lenders. Some marketplace platforms can also give you advice and help you with the application process . This can be especially useful for borrowers who have never taken out a startup loan before.

6. Lease a commercial bakery space

If you’re not buying an existing bakery, you’ll need to lease a commercial space to work from. Keep in mind that strict hygiene laws extend to bakeries, so if you intend to operate a wholesale bakery and are considering leasing an industrial unit, you’ll need a location without any potential contamination hazards nearby. 

For retail bakeries, your store’s location can have a major impact on the success of your business. Take the time to research different locations, measuring the competition and the size of the local population. You want a site in an area with good foot traffic and local incomes that can support your store and the kind of baked goods you sell.

7. Plan your bakery

Once you’ve secured your operating premises, you can plan the way your bakery works. If you’re operating a wholesale bakery, you will need to factor in large storage and product cooling areas, bigger ovens, an employee break room, distribution area, maybe even a loading dock for truck delivery. If you choose a retail bakery you will have a kitchen and front-of-house area – which can be a simple shop front where customers order at the counter, or it can be a café style area where you will also need a dining area, serving stations, and customer rest rooms. 

Commercial bakery kitchen layout

All bakery kitchens have four basic sections – cleaning, storage, food preparation, meal cooking. Plan your kitchen based on the logical flow of food through the baking process. This starts with the storage area and then goes to the food preparation and meal cooking sections. Once you’ve prepared your baked goods, you can serve them to your customers, package them for display, or ship them to online customers. Finally, your dirty dishes, pots, and pans will end up at the cleaning station. 

Make sure you can fit all the major equipment – ovens, racking, refrigerators, etc. – into the available floor space without disturbing the operating flow.

Commercial bakery storefront layout

Retail bakeries need to optimise their front-of-house floor plan to make it pleasing for customers as well as presenting your baked goods in an attractive fashion. There are four basic layouts for a retail operation:

• Straight floor plan – your bakery display cases and/or dining areas are straight on, allowing customers to quickly browse products and easily move between the seating and tables.
• Angled floor plan – displays and dining areas are presented in curving layout. This can create a more upscale look and tempt customers to linger and browse more products.
• Diagonal floor plan – this type of floor plan can make your premises look larger than they are and create an interesting space for casual dining.
• Mixed floor plan – uses a combination of the options above.

8. Order bakery equipment

After your premises, your bakery equipment is the next major item on your ‘to do’ list. Key items you need include:

• Dough preparation – commercial mixers, work stations, dough dividers, dough sheeters and dough scales. You may also need dough proofing cabinets, holding cabinets, refrigerators and retarder/proofer combos.
• Storage –  your bakery will require shelving and storage racks. If you’re working with bulky bags of flour and sugar, you should invest in trucks, dollies, and carts to move large bags around your kitchen.
• Baking equipment –  convection ovens provide dry heat and bake evenly. If you’re preparing a lot of artisan bread, you may want to choose a deck oven to give your products a crispy base. Wholesale bakeries may want high-output ovens, such as roll-in rack ovens or revolving ovens.
• Display and sales equipment –  choosing the right display cases for your baked goods can help boost your sales. You can choose self-service or full-service cases, and there are refrigerated and unrefrigerated options. In addition to your display cases, be sure to also choose stylish boxes and packaging for your baked goods.
• Cleaning and equipment washing supplies – a three-compartment sink is necessary for any cleaning station. You will also need hand washing stations, disposable gloves, cleaning chemicals, sponges, scrubbers, etc.
• Bakery smallwares – in addition to your large equipment, you must stock your bakery with items such as mixing bowls, storage boxes, whisks, knives, and aprons.

9. Hire and train bakery staff

You will need to hire and train staff to produce the type of baked goods you sell. For example, if you intend to produce high-quality wedding cakes, you will need to hire experienced cake decorators and designers. If you are going for a high-volume, wholesale operation, you will need key staff who know their way around an industrialised bakery and understand the oversized equipment. You will also need workers to clean the kitchens, handle deliveries and perform general tasks. These employees need not have prior bakery experience. Lastly, if you’re operating a café style bakery with full-service wait staff, you’ll want some front-of-house workers with experience in hospitality.

10. Market your bakery

As the old saying goes, advertising pays – and you’ll need to market your new bakery to establish a solid customer base. Experts suggest allocating up to 20% of your operating budget to marketing activities in the first year of operation. 

Before you start any kind of marketing activity, conduct some basic research – what are your competitors selling? What kind of loyalty programs do they offer? Are there any successful promotional tactics that you can mimic? Create a plan that promotes your brand and sets your business apart from the rest. Utilise a range of marketing actions to get your story across:

• Social media
• Flyers to local residents and commercial locations such as office blocks, hospitals, bus stations
• Local advertising
• Promotions for special products, discounts and loyalty deals
• Product tastings
• Sponsorships of local school sports teams

Get started with Swoop

Running your own bakery can be lucrative and a lot of fun, but you’ll need a lot of dough to get you there. Funding is where Swoop can really help. No matter if you’re launching a brand-new bakery, or you’re buying an established business, chances are you’ll need finance to make the operation grow. Many types of business loans are suitable for bakeries, but working with finance experts can make all the difference when applying for funding. Contact us to discuss your borrowing needs, get help with loan applications and to compare high-quality business loans from a choice of lenders. Make your new bakery the toast of the town. Register with Swoop today.

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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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How to Start an Event Planning Business: Your Comprehensive Guide Not sure how to become an event planner? Use this step-by-step guide to launch your event planning business from scratch.

By Laura Tiffany Edited by Brittany Robins May 21, 2024

Key Takeaways

• Event planning can be a great business if you have the right skills.
• People need help executing personal and professional events of all sizes.
• Based on how you structure your business, your startup costs will vary.

Opinions expressed by Entrepreneur contributors are their own.

Some people have a special ability to plan parties — whether they be weddings, large corporate events or smaller gatherings. If you have a knack for tackling complex problems and making big days run smoothly, you might have a future as a professional event planner. Whether you choose to work alone or with a team, starting an event planning service is no small task. Here are some important questions to consider before launching an event planning business, and a step-by-step guide to starting and scaling your business.

Related: Find Your Event-Planning Niche

What is an event planning business?

Event planning is the art and science of ideation, planning, coordination and operation. When a major event needs to run smoothly — whether it's a trade show, nonprofit gala or a major anniversary — people will enlist an event planning service or coordinator. Event planners are key service providers who ensure event production and execution goes off without a hitch , most often used for purposes like:

• Corporate events, like after-work cocktail hours and galas.
• Educational conventions, like graduations or conferences.
• Major promotional events including product launches and fashion shows.
• Celebrations and social events including parades, weddings, birthdays and reunions.

The primary duties of full-time or part-time on-site event planners include:

• Researching venues and vendors prior to the event.
• Selecting the appropriate site for the event.
• Event design and team-building for project management.
• Creating budgets and running fundraisers if necessary.
• Coordinating decor, entertainment and food for the event.
• Sending invitations to attendees.
• Coordinating transportation for attendees to and from the event.
• Arranging accommodations, including seating charts and place settings.
• Coordinating tasks for onsite event personnel, including caterers or entertainers.
• Being on call for any questions or problems that arise in the event-planning process.
• Supervising activities at the event site.

Why do people hire event planning services?

People primarily hire event planning services for two reasons: So that hosts and guests don't have to focus on the inner workings of the event, and so that the event runs smoothly from beginning to end.

Consider a wedding. Many engaged couples hire event planners or event planning services to coordinate, organize and carry out their wedding plans. This helps the couple enjoy their special day and gives them the freedom to focus on getting married rather than worrying about details like catering, parking or the timeline.

Some events are so complex — particularly those with hundreds of guests or more — that it's almost impossible to properly plan and organize them without the help of a specialist. Knowledgeable, experienced event planners know how to organize groups of people, how much food to provide and other details that can make or break an important event.

Related: The Price Is Right: Turning a Profit in the Event Planning Business

Who should become an event planner?

You might consider becoming an event planner if you're organized, love hosting parties and find the challenge of coordinating large events to be thrilling. Planners handle many moving parts at once, some of which require overseeing chaotic work and competing agendas. Event planners also often work weekends and holidays since these are the days when most people schedule events.

Many event planners have backgrounds as managers or coordinators in other industries. The events industry, both for wedding planning and other events, requires excellent communication skills. Obtaining a bachelor's degree in public relations , marketing or related fields can be helpful but is not required. You should also consider acquiring certification for your event planning service, as it can help you cultivate relevant professional skills and attract more job opportunities. Meeting Professionals International (MPI) offers a list of degrees and certificates from various colleges and universities.

You can also become a Certified Special Events Professional or Certified Meeting Planner , both of which are offered by the MPI or the International Live Events Association (ILEA). By earning these certifications , potential clients will know you have the training and experience necessary to take on a complex event.

How to start an event planning business

Step 1: form your company.

To get your event planning business off the ground, you must first form a company, file the right paperwork and create a business plan — which should include the following details:

• The business's name.
• The business's tax structure (Sole proprietorship, LLC, S corp etc.).
• What services you'll provide.
• Market research .
• A management plan.
• Financial factors, including how you'll turn a profit.

Related: Check out these business plan templates to get started.

You'll also want to apply for an employer identification number (EIN), which is essentially a social security number for your business assigned to you by the Internal Revenue Service (IRS). This will allow you to operate your business independently of your personal affairs, help you hire employees and make it easier to file taxes quarterly.

Step 2: Choose your target market

Building on the research you performed to create your business plan, it's essential to find the right market for your services. For instance, if you want to primarily work with weddings, you need to determine how many other planners are in your area, how much you should charge for your services and what offerings you'll need to be competitive.

By doing enough research ahead of time, you'll know exactly what kind of clients to target and what their expectations will be. This will help you advertise your event planning service to be competitive relative to other local planners.

Step 3: Make a financial plan

When you start an event planning business, you'll have to consider not only startup costs but also how the enterprise will grow and how many clients you'll need in order to be profitable. For instance, working from home and primarily by yourself will keep costs low. But if you hire employees, rent office space, or expand to new markets, your monthly expenses will significantly increase – all of these things can add up.

You can always scale your business after acquiring steady work. You may start off as a one-person event planning service that only takes on small events. As you earn money from successful jobs, you can hire employees and rent a warehouse for your equipment, like cameras, chairs and more. You don't have to have all of the growth questions answered when you launch your business, but you should at least have them in mind.

Step 4: Understand the work involved and consider hiring employees

For your event planning service to be successful , you need to fully grasp the nature of each job and determine if — or when — it's time to hire employees. This will vary event to event, so you'll need to determine how much work each event will require. Even the smallest event demands careful attention to detail and advance planning, but as you acquire experience you'll become more adept at forecasting how much help you'll need, if any. For instance, you might hire two or three people to be on-site for a specific event, just to make sure things run smoothly.

Related: The Event Planning Recipe for Success

Step 5: Settle on a price structure and fee basis

How you price your event planning offerings will impact how much business you attract. You can determine your pricing structure and fee basis by things like:

• The market segment you serve: For instance, nonprofit events may have different fee structures than weddings or corporate events. By understanding your event type, you'll know how much to charge and how to structure your fees.
• Your location: If you live in a place with a higher cost of living or a competitive events market, you'll need to price your services accordingly.
• Your reputation: As your business gains a reputation for success — and especially if you're so busy clients are competing for your services — you'll be able to charge a higher premium.

Step 6: Start marketing your event planning service

Once you know how much to charge your clients, it's time to start marketing your event planning service. Consider using tools like Google ads, social media profiles and other digital marketing efforts like email to get the word out about your business. You may even consider newspaper ads, flyers in public buildings or other traditional low-cost marketing tactics . As your business grows, so too will your reputation, meaning you'll likely have to spend less on marketing once you're known. Before you get there, though, it's important to dedicate significant time and resources to marketing your services (learn more here about the tools and strategies that should be part of creating your marketing plan).

Related: 8 Savvy Ways to Promote Your Event Planning Business

Costs of starting an event planning business

The costs of launching your business will vary greatly based on where you live, what kind of clients you work with and how large you intend to scale your operation. At a minimum, you'll need to pay fees to incorporate your business , purchase basic technology like a computer, buy business insurance and spend money advertising. But there are many other potential costs, including certification programs, hiring additional employees , renting office space and more. Here's a breakdown of common expenses associated with event planning, as well as a range of what it might take to get your enterprise off the ground.

Consider Startup Costs

As with any business, the startup costs for event planning vary by the region, the size of your operation and the type of clients you attract. Below are estimates that will help you determine what you can expect to spend in your first year.

*All figures are estimates and subject to change based on factors including location, business size and clientele.

Check out Entrepreneur's other guides and resources today.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Wednesday morning First Alert weather forecast with Jessica Burch - 5/22/24

On Wednesday, expect winds to increase, particularly along the coast and in the North Bay. Coastal highs are in the 60s, while highs will reach the 80s inland. Jessica Burch has the forecast. Website: http://kpix.com/ YouTube: http://www.youtube.com/CBSSanFrancisco Facebook: https://www.facebook.com/CBSSanFrancisco Instagram: https://www.instagram.com/kpixtv/ Twitter: https://twitter.com/KPIXtv

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Worcester brewery contributes to unique preservation project at state park in Princeton

A Worcester brewery’s second location will cap an arduous restoration project on one of the oldest structures still standing amid 450,000 acres of Massachusetts state parks.

This weekend, Double Down Brewing Co. begins a residency at Mountainside Bakery & Café in Princeton, about 20 miles from the city, at the foot of a trail in Wachusett Mountain State Reservation, the state’s first public park.

Once a boarded-up, broken-down, vandalized building needing hundreds of thousands of dollars in renovations just to sniff an occupancy permit, the home known as the Superintendent’s House has been transformed into a living historical exhibit and community gathering place. The 121-year-old former office and living space, up until the late '60s, hosted a handful of park superintendents and their families.

Double Down will have a tasting room inside the carriage house, where park rangers were once stationed, connected to the Superintendent’s House. Meanwhile a beer garden will span the grounds around the pine green and white-trimmed house, now a café run by Princeton residents Katherine Huck and Robin Springfield.

Double Down co-founder Christian McMahan found an idyllic setting for his brewery, which opened in 2021 in the back of Peppercorn's Grille & Tavern on Park Avenue, while expanding in his own backyard. He and his family have long supported Mountainside’s efforts to move to the Superintendent’s House after it won the bid for the renovation project in 2018.

“This is a dream come true,” he said. “I have always imagined that space could be an amazing beer garden since I first moved into the area. Now with the transformational renovation project and great food program already offered there, adding in fresh, locally owned beer to their property will make it an even more destination location for people to come visit.”

Double Down on Mountainside plans to stay through the summer and fall, McMahan said, with the brewery keeping the prospects for a winter outpost on the table.

A unique partnership between the state and café, along with a love of nature, history, baked goods and, now, beer combined to bring an old, decrepit building back to life.

The last superintendent to live in the 12-room Dutch colonial retried in 1969 around the time the state stopped offering housing to park officials. After, the stately building sat vacant, gradually devolving into a hilltop eyesore, incongruous with the natural grandeur of the reservation.

Breathing life into park landmark

Huck and Springfield aren’t merely café owners but also curators of a piece of state history.

Under the state Department of Conservation & Recreation’s Historic Curatorship Program, they received a long-term lease for their business in exchange for their commitment to rehabilitate, manage and maintain the Superintendent’s House. DCR provided them with information about the house’s history, such as details on the park’s original superintendent, Guy Chase, and pictures taken of the house and its residents through the years.

Many of Huck and Springfield’s customers initially questioned their plans to move their business, then called Mountainside Market, from Route 62 in Princeton to the crumbling Superintendent’s House.

“It was vandalized. It was a wreck. The posts in the staircase were kicked out. Someone had built a fire in the living room. The ceiling was falling down,” she said. “It was a lot.”

There were reasons for them to remain optimistic the building and its grounds could captivate again. DCR had invested quite a bit into the property already, including fortifying the basement and installing a new septic system. The agency also assisted with creating parking, a process that would have otherwise involved navigating a quagmire of bureaucracy.

“They wanted us to succeed,” Huck said of DCR.

Armed with a bank loan and a 60-page proposal laying out their plans for revitalizing the space, Huck and Springfield easily won over DCR and took over as curators of the Superintendent’s House, completing the project in late December 2019.

“We opened three months before everything shut down,” Huck said. “It was horrendously heartbreaking. We had vendors that were on standby, telling us to pay them when you can. We crawled back slowly but surely.”

Their business has evolved, too. Their café lies within the reservations 3,000 acres, which includes 17 miles of trails, making it a destination for hikers. The sheer beauty of the setting means guests want to take advantage of the Superintendent’s House for events like weddings.

Brewery always part of the plan

In negotiating the lease with DCR, Huck and Springfield asked for the right to open a brewery in the carriage house. They didn’t have any particular brewery in mind then but knew one could thrive there.

The COVID-19 shutdown put those plans on hold. Then one of their regulars told them about his background in the beer business. Huck and Springfield have been going back and forth with McMahan about bringing his brewery to the hilltop oasis since.

“The property speaks to that brewery feel,” Huck said. “The lawn is expansive and beautiful. It’s peaceful. You can bring your dogs and your kids.”

With the partnership, Mountainside has the chance to expand its hours too, as they’ll get additional staffing help from Double Down.

Should Double Down decide to stick around — or another brewery move in — there is a three-bay garage below the carriage house, Huck said, plenty of space for a brewhouse.

About 25 other properties have been resurrected as part of the DCR program, but only one other, The Charles River Speedway in Brighton, has a brewery component.

Double Down on Mountainside, 213 Mountain Road in Princeton, opened May 25 and will be open every Saturday from noon to 8 p.m. and Sunday from noon to 6 p.m. Huck said those hours will increase next month.

Other than Double Down’s brews, they’ll offer cider, wine, hard seltzers and nonalcoholic drinks to pair with bites from their café.

“There are lot of amazing breweries in the state. And we will have an amazing brewery to go along with an amazing space that nature provided.” Huck said. “It’s the best of both worlds.”

This article originally appeared on Telegram & Gazette: Double Down Brewing partners with Mountainside Bakery in Princeton

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• What Is the Internal Rate of Return?
• Formula and Calculation

Understanding IRR

What is irr used for, using irr with wacc.

• IRR vs. CAGR
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Limitations of IRR

Investing based on irr, the bottom line.

• Corporate Finance
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Internal Rate of Return (IRR): Formula and Examples

What Is IRR?

IRR, or internal rate of return, is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a  discount rate  that makes the  net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis .

IRR calculations rely on the same formula as NPV does. Keep in mind that IRR is not the actual dollar value of the project. It is the annual return that makes the NPV equal to zero.

Generally speaking, the higher an internal rate of return, the more desirable an investment is to undertake. IRR is uniform for investments of varying types and, as such, can be used to rank multiple prospective investments or projects on a relatively even basis. In general, when comparing investment options with other similar characteristics, the investment with the highest IRR probably would be considered the best.

Key Takeaways

• The internal rate of return (IRR) is the annual rate of growth that an investment is expected to generate.
• IRR is calculated using the same concept as net present value (NPV), except it sets the NPV equal to zero.
• The ultimate goal of IRR is to identify the rate of discount, which makes the present value of the sum of annual nominal cash inflows equal to the initial net cash outlay for the investment.
• IRR is ideal for analyzing capital budgeting projects to understand and compare potential rates of annual return over time.
• In addition to being used by companies to determine which capital projects to use, IRR can help investors determine the investment return of various assets.

Investopedia / Julie Bang

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The Formula for IRR

The formula used to determine IRR is as follows:

0 = NPV = ∑ t = 1 T C t ( 1 + I R R ) t − C 0 where: C t = Net cash inflow during the period t C 0 = Total initial investment costs I R R = The internal rate of return t = The number of time periods \begin{aligned} &\text{0}=\text{NPV}=\sum_{t=1}^{T}\frac{C_t}{\left(1+IRR\right)^t}-C_0\\ &\textbf{where:}\\ &C_t=\text{Net cash inflow during the period t}\\ &C_0=\text{Total initial investment costs}\\ &IRR=\text{The internal rate of return}\\ &t=\text{The number of time periods}\\ \end{aligned} ​ 0 = NPV = t = 1 ∑ T ​ ( 1 + I RR ) t C t ​ ​ − C 0 ​ where: C t ​ = Net cash inflow during the period t C 0 ​ = Total initial investment costs I RR = The internal rate of return t = The number of time periods ​

How to Calculate the IRR

The manual calculation of the IRR metric involves the following steps:

• Using the formula, one would set NPV equal to zero and solve for the discount rate, which is the IRR.
• Note that the initial investment is always negative because it represents an outflow.
• Each subsequent cash flow could be positive or negative, depending on the estimates of what the project delivers or requires as a capital injection in the future.

Because of the nature of the formula, IRR cannot be easily calculated analytically and instead must be calculated iteratively through trial and error or by using software programmed to calculate IRR (e.g., using Excel).

How to Calculate IRR in Excel

Using the IRR function in Excel makes calculating the IRR easy. Excel does all the necessary work for you, arriving at the discount rate you are seeking to find.

• Enter Cash Flows: In an Excel spreadsheet, list all the cash flows associated with the investment or project. These cash flows can be both positive (inflows) and negative (outflows).
• Arrange Cash Flows: Organize the cash flows in chronological order, with the initial investment (usually a negative value) at the beginning and subsequent cash flows listed in the order they occur.
• Use IRR Function: In a cell where you want the IRR value to appear, use the IRR function. The syntax for the IRR function is: =IRR(values)
• The "values" are the range of cells containing the cash flows. Make sure to select all cash flows including the initial investment.
• Example: Let's say your cash flows are in cells A1 through A5, where A1 represents the initial investment and A2 through A5 represent subsequent cash flows. You would input the following formula in a cell where you want the IRR displayed: =IRR(A1:A5)

Here is a simple example of an IRR analysis with cash flows that are known and annually periodic (one year apart). Assume a company is assessing the profitability of Project X. Project X requires $250,000 in funding and is expected to generate $100,000 in after-tax cash flows in the first year and grow by $50,000 for each of the next four years.

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In this case, the IRR is 56.72%, which is quite high.

Excel also offers two other functions that can be used in IRR calculations: the XIRR, and the MIRR. XIRR is used when the cash flow model does not exactly have annual periodic cash flows. The MIRR is a rate-of-return measure that includes the integration of the cost of capital and the risk-free rate.

The ultimate goal of IRR is to identify the rate of discount, which makes the  present value  of the sum of annual nominal cash inflows equal to the initial net cash outlay for the investment. Several methods can be used when seeking to identify an expected return, but IRR is often ideal for analyzing the potential return of a new project that a company is considering undertaking.

Think of IRR as the rate of growth that an investment is expected to generate annually. Thus, it can be most similar to a compound annual growth rate (CAGR) . In reality, an investment will usually not have the same rate of return each year. Usually, the actual rate of return that a given investment ends up generating will differ from its estimated IRR.

In capital planning, one popular scenario for IRR is comparing the profitability of establishing new operations with that of expanding existing operations. For example, an energy company may use IRR in deciding whether to open a new power plant or to renovate and expand an existing power plant.

While both projects could add value to the company, one will likely be the more logical decision as prescribed by IRR. Note that because IRR does not account for changing discount rates , it’s often not adequate for longer-term projects with discount rates that are expected to vary.

IRR is also useful for corporations in evaluating stock  buyback  programs. Clearly, if a company allocates substantial funding to repurchasing its shares, then the analysis must show that the company’s own stock is a better investment—that is, has a higher IRR—than any other use of the funds, such as creating new outlets or acquiring other companies.

Individuals can also use IRR when making financial decisions—for instance, when evaluating different insurance policies using their premiums and death benefits. The consensus is that policies that have the same premiums and a high IRR are much more desirable.

Note that life insurance has a very high IRR in the early years of the policy—often more than 1,000%. It then decreases over time. This IRR is very high during the early days of the policy because if you made only one monthly premium payment and then suddenly died, your beneficiaries would still get a lump sum benefit.

Another common use of IRR is in analyzing investment returns. In most cases, the advertised return will assume that any interest payments or  cash dividends  are reinvested back into the investment. What if you don’t want to reinvest  dividends but need them as income when paid? And if dividends are not assumed to be reinvested, are they paid out, or are they left in cash? What is the assumed return on the cash? IRR and other assumptions are particularly important on instruments like  annuities , where the cash flows can become complex.

Finally, IRR is a calculation used for an investment’s money-weighted rate of return (MWRR) . The MWRR helps determine the rate of return needed to start with the initial investment amount factoring in all of the changes to cash flows during the investment period, including sales proceeds.

Most IRR analyses will be done in conjunction with a view of a company’s weighted average cost of capital (WACC) and NPV calculations. IRR is typically a relatively high value, which allows it to arrive at an NPV of zero.

Most companies will require an IRR calculation to be above the WACC. WACC is a measure of a firm’s  cost of capital  in which each category of capital is proportionately  weighted . All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.

In theory, any project with an IRR greater than its cost of capital should be profitable. In planning investment projects, firms will often establish a  required rate of return (RRR) to determine the minimum acceptable return percentage that the investment in question must earn to be worthwhile. The RRR will be higher than the WACC.

Any project with an IRR that exceeds the RRR will likely be deemed profitable, although companies will not necessarily pursue a project on this basis alone. Rather, they will likely pursue projects with the highest difference between IRR and RRR, as these will likely be the most profitable.

IRR may also be compared against prevailing rates of return in the  securities  market. If a firm can’t find any projects with an IRR greater than the returns that can be generated in the financial markets, then it may simply choose to invest money in the market. Market returns can also be a factor in setting an RRR.

Analyses will also typically involve NPV calculations at different assumed discount rates.

IRR vs. Compound Annual Growth Rate

The CAGR measures the annual return on an investment over a period of time. The IRR is also an annual  rate of return ; however, the CAGR typically uses only a beginning and ending value to provide an estimated annual rate of return.

IRR differs in that it involves multiple periodic cash flows—reflecting that cash inflows and outflows often constantly occur when it comes to investments. Another distinction is that  CAGR is simple enough that it can be calculated easily.

IRR vs. Return on Investment (ROI)

Companies and analysts may also look at the  return on investment (ROI) when making capital budgeting decisions . ROI tells an investor about the total growth, start to finish, of the investment. It is not an annual rate of return. IRR tells the investor what the annual growth rate is. The two numbers normally would be the same over the course of one year but won’t be the same for longer periods.

ROI is the percentage increase or decrease of an investment from beginning to end. It is calculated by taking the difference between the current or expected future value and the original beginning value, divided by the original value, and multiplied by 100.

ROI figures can be calculated for nearly any activity into which an investment has been made and an outcome can be measured. However, ROI is not necessarily the most helpful for lengthy time frames. It also has limitations in capital budgeting, where the focus is often on periodic cash flows and returns.

IRR is generally ideal for use in analyzing capital budgeting projects. It can be misconstrued or misinterpreted if used outside of appropriate scenarios. In the case of positive cash flows followed by negative ones and then by positive ones, the IRR may have multiple values. Moreover, if all cash flows have the same sign (i.e., the project never turns a profit), then no discount rate will produce a zero NPV.

Within its realm of uses, IRR is a very popular metric for estimating a project’s annual return; however, it is not necessarily intended to be used alone. IRR is typically a relatively high value, which allows it to arrive at an NPV of zero. The IRR itself is only a single estimated figure that provides an annual return value based on estimates. Since estimates of IRR and NPV can differ drastically from actual results, most analysts will choose to combine IRR analysis with scenario analysis . Scenarios can show different possible NPVs based on varying assumptions.

As mentioned, most companies do not rely on IRR and NPV analyses alone. These calculations are usually also studied in conjunction with a company’s WACC and an RRR, which provides for further consideration.

Companies usually compare IRR analysis to other tradeoffs. If another project has a similar IRR with less up-front capital or simpler extraneous considerations, then a simpler investment may be chosen despite IRRs.

In some cases, issues can also arise when using IRR to compare projects of different lengths. For example, a project of a short duration may have a high IRR, making it appear to be an excellent investment. Conversely, a longer project may have a low IRR, earning returns slowly and steadily. The ROI metric can provide some more clarity in these cases, although some managers may not want to wait out the longer time frame.

The internal rate of return rule is a guideline for evaluating whether to proceed with a project or investment. The  IRR rule  states that if the IRR on a project or investment is greater than the minimum RRR—typically the cost of capital, then the project or investment can be pursued.

Conversely, if the IRR on a project or investment is lower than the cost of capital, then the best course of action may be to reject it. Overall, while there are some limitations to IRR, it is an industry standard for analyzing capital budgeting projects.

IRR Example

Assume a company is reviewing two projects. Management must decide whether to move forward with one, both, or neither. Its cost of capital is 10%. The cash flow patterns for each are as follows:

• Initial Outlay = $5,000
• Year one = $1,700
• Year two = $1,900
• Year three = $1,600
• Year four = $1,500
• Year five = $700
• Initial Outlay = $2,000
• Year one = $400
• Year two = $700
• Year three = $500
• Year four = $400
• Year five = $300

The company must calculate the IRR for each project. The initial outlay (period = 0) will be negative. Solving for IRR is an iterative process using the following equation:

$0 = Σ CFt ÷ (1 + IRR)t

• CF = net cash flow
• IRR = internal rate of return
• t = period (from 0 to last period)

$0 = (initial outlay * −1) + CF1 ÷ (1 + IRR)1 + CF2 ÷ (1 + IRR)2 + ... + CFX ÷ (1 + IRR)X

Using the above examples, the company can calculate IRR for each project as:

IRR Project A

$0 = (−$5,000) + $1,700 ÷ (1 + IRR)1 + $1,900 ÷ (1 + IRR)2 + $1,600 ÷ (1 + IRR)3 + $1,500 ÷ (1 + IRR)4 + $700 ÷ (1 + IRR)5

IRR Project A = 16.61 %

IRR Project B

$0 = (−$2,000) + $400 ÷ (1 + IRR)1 + $700 ÷ (1 + IRR)2 + $500 ÷ (1 + IRR)3 + $400 ÷ (1 + IRR)4 + $300 ÷ (1 + IRR)5

IRR Project B = 5.23 %

Given that the company’s cost of capital is 10%, management should proceed with Project A and reject Project B.

What Does Internal Rate of Return Mean?

The internal rate of return (IRR) is a financial metric used to assess the attractiveness of a particular investment opportunity. When you calculate the IRR for an investment, you are effectively estimating the rate of return of that investment after accounting for all of its projected cash flows together with the time value of money. When selecting among several alternative investments, the investor would then select the investment with the highest IRR, provided it is above the investor’s minimum threshold. The main drawback of IRR is that it is heavily reliant on projections of future cash flows, which are notoriously difficult to predict.

Is IRR the Same as ROI?

Although IRR is sometimes referred to informally as a project’s “return on investment,” it is different from the way most people use that phrase. Often, when people refer to ROI, they are simply referring to the percentage return generated from an investment in a given year or across a period. However, that type of ROI does not capture the same nuances as IRR, and for that reason, IRR is generally preferred by investment professionals.

Another advantage of IRR is that its definition is mathematically precise, whereas the term ROI can mean different things depending on the context or the speaker.

What Is a Good Internal Rate of Return?

Whether an IRR is good or bad will depend on the cost of capital and the opportunity cost of the investor. For instance, a real estate investor might pursue a project with a 25% IRR if comparable alternative real estate investments offer a return of, say, 20% or lower. However, this comparison assumes that the riskiness and effort involved in making these difficult investments are roughly the same. If the investor can obtain a slightly lower IRR from a project that is considerably less risky or time-consuming, then they might happily accept that lower-IRR project. In general, though, a higher IRR is better than a lower one, all else being equal.

The internal rate of return (IRR) is a metric used to estimate the return on an investment. The higher the IRR, the better the return of an investment. As the same calculation applies to varying investments, it can be used to rank all investments to help determine which is the best. The one with the highest IRR is generally the best investment choice.

IRR is an important tool for companies in determining where to invest their capital. Companies have a variety of options to help grow their business. These include building out new operations, improving existing operations, making acquisitions, and so on. IRR can help determine which option to choose by showing which will have the best return.

Microsoft. “ IRR Function .”

Microsoft. “ XIRR Function .”

Microsoft. “ MIRR Function .”

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