Bakery Management

Tips for a successful business plan for your bakery

For thousands of years, bread, in its various forms, has been part of our meal. Investing in a bakery is therefore often a lucrative business.

It is a fairly healthy, well segmented, stable market, for which it is necessary to properly weigh the initial rules and constraints to get started.

Also, before taking any action, it is important to ensure that you produce a well-defined business plan for your future bakery.
It is a market that cannot be extinguished but remains to be monitored because it is constantly evolving.

Unlike many other activities, the bakery easily resists all attacks, even those of supermarkets, and retains about 75% of the market share of bread sales. That is a total turnover of 11 billion euros.

The bakery is one of the most popular local shops in France, just like the post office, it is an essential place in our towns and villages. Its market is therefore stable and business takeovers are the majority: around 2,000 per year compared to 380 creations.

Concerning the investment, you will need about 150 000 euros of investment to start this activity (source: L’Express).

Bakery is not only the favourite business of the French: it is also that of the banks. It should therefore be possible to finance most of the initial investment with bank loans.

What type of bakery should be opened?

It is important to ask yourself from the outset whether you want to get involved in craft manufacturing or industrialization, whether you will be a tradesman or a businessman. These are simple questions but they will guide the whole business plan of your bakery and of course your own activity in a different way.

Certain external factors can strongly influence the choice of the type of bakery to be set up according to the targeted catchment areas: the consumer’s enthusiasm for various types of bread, the SPCs of your local customers, or even the advertising of alicaments could direct you towards the traditional bakery while an establishment in a commercial area, a place of rapid consumption, towards the industrial bakery.

Also, let’s take the time to segment the sector in order to establish its perimeter.

Artisanal or traditional bakery

The law of 25 May 1998 strictly regulates the businesses that wish to receive the so-called Bakery appellation.

Indeed, and to do this, it is necessary to respect different criteria: the baker chooses his own raw materials, he guarantees on the spot, i.e. at the point of sale, the kneading of the dough, its fermentation, its shaping and the baking of the bread.

If your business only sells bread and pastries, thawed and/or baked on site, then you cannot proclaim yourself a Bakery, under penalty of a fine of up to 37,500 euros and/or a two-year prison sentence.

In addition, if you wish to be recognized as an Artisan-baker, you will need to hold a CAP or a BEP, register with the Chamber of Commerce and Industry, and meet the requirements of very strict health, safety and competition regulations.

The law of 5 July 1996 drastically restructured the activity with a view to professionalizing it and ensuring compliance with health and safety rules.

So not everyone can be a baker!

The BVP, Bakery-Viennoiserie-P√Ętisserie industrielle

The industrial bakery market, commonly known as BVP, has good growth potential. This is partly due to the multiplicity of distribution channels (fast food, supermarkets and supermarkets, etc.) and therefore to a different enhancement of the offer (snack areas, major traffic areas such as stations, airports, shopping areas, etc.).

This market is very healthy – bread contributes to a continuous dynamic – and is not driven by promotions. In addition, the decline in purchasing power is contributing to the growth of the sandwich factory, a fairly important growth reservoir for the coming years.

In concrete terms, in BVP, the bread is delivered moulded, frozen or vacuum-packed, ready to bake on site. As a result, commercial premises are reduced at the baking terminal and sales area, which reduces the cost of rent.

The supply of suppliers is multiple and can therefore respond to different commercial positioning. In addition, you can also consider joining one of the many franchised networks that have now proven their worth and are even exporting internationally (Pomme de Pain, etc.).

The points to remember when developing your bakery’s business plan
Whether it is a traditional bakery or a BVP, you will first need to do a local market study before setting up.

If you expand your bakery to include snacking, you will also need to look at this market in detail.

Your success will depend heavily on the location you choose. In rural areas, you will have to take care of grocery activities and the links of the inhabitants with their fixed and mobile businesses. A meeting with a local elected official could only be beneficial. In urban areas, proximity to a high traffic area is key.

If you are tackling BVP, it will be interesting to explore the various franchise options. Being part of a franchise network will allow you to benefit from operational support and brand recognition that greatly reduces your company’s risk.

It is also important to remember that schedules are atypical: a lot of work on weekends, the most profitable period of the week, as well as on public holidays and during school holidays.

This particular pace will have repercussions on your personnel management, but also on supply and inventory management. Your raw materials are perishable and regulations require regular renewal of finished products. Therefore, consider taking into account the costs associated with stock renewal in your bakery’s business plan.

What should a bakery business plan contain?

The business plan of your bakery will serve as a reference document in the search for financing. It is indeed the document that you will present to banks or investors in order to convince them to follow you in the adventure.

Although there is no strictly imposed form, a bakery’s business plan must nevertheless respect a certain formalism.

This should start with an executive summary summarising the key points of the project and highlighting your need for funding.

You will then have to present in detail the project, its assets, and the risks associated with it, through several parts: presentation of the company (legal form, shareholders and managers, locations, etc.), the products offered for sale, market research and presentation of the commercial strategy, overview of the operational organization (suppliers, personnel plan, etc.).

Finally, the last part of a bakery’s business plan is devoted to the provisional financial plan: presentation of the assumptions used in the business plan, the sales forecast, the cost structure, the financial statements and the financing plan.