What Goes Into Starting Up a Small Bakery?

by Shelley Frost, Demand Media
A business plan should outline the scope of the bakery.

A business plan should outline the scope of the bakery.

bread shop image by .shock from Fotolia.com

A bakery is a sweet way to earn a living, but you need more than baking skills to be successful. The legal, financial and logistical components require your attention before you open the doors of your small bakery. If you aren't comfortable with the business aspect, professionals in accounting, management and advertising can help you in the beginning.


Finding a storefront for your bakery means balancing the location, size and cost. A location in a busy area gets your business more exposure, but you will likely pay more to lease a storefront in a busy area. The lease agreements vary in length, renewal requirements and options, deposit, costs included and who is responsible for various maintenance tasks like clearing snow from the parking lot and mowing, if there is any grass around the building. Read all of the details to ensure you understand your obligation. If the inside of the building isn't already set up as a bakery, you may need to invest money in reconfiguring and adding all of the necessary equipment to get the space up to code.


A bakery requires specialty equipment, even if it is a small business. Commercial-quality mixers and ovens allow you to produce your baked goods more efficiently, so you make a higher profit. You also need an assortment of pans suitable for the type of baked goods you plan to sell. Duplicates of the pans you use frequently keep the production moving. If you plan to sell baked goods to customers from the storefront, you'll need display cases and a cash register. If you only do custom orders you can get by without these items.

Legal Issues

The baking business requires you to deal with licensing and legal issues that govern businesses. Most states regulate baking facilities, including the specific equipment and procedures you need to follow to satisfy health laws. The process typically includes an inspection to ensure the environment is suitable for food production. Failure to comply with the requirements could cost you your license and result in fines. Liability insurance is essential in case any of your bakery products cause food poisoning.


Starting a bakery business requires you to decide exactly what you are going to sell. Targeting a specific niche withing the baking industry sets your bakery apart and may help you generate sales. For example, you might focus on vegan offerings or use only organic ingredients. A consistent product encourages repeat business from satisfied clients. Work out your recipes so you get the same results each time you bake the items. The presentation of the baked goods also makes an impression on the customers. Work on your product presentation before you start your bakery. Pricing is another aspect of developing your products. You need an accurate calculation of food costs and the time it takes to bake the products to ensure you are making a profit.


Even with an ideal location, advertising is necessary to reach a wide audience. Network with other businesses in industries related to baking. For example, you might partner with a children's party entertainment company and provide referrals for one another. Open house events that allow potential customers to taste your products for free allow you to get your product out into the public. Trade shows for weddings or parents give you the chance to meet potential customers who might order wedding or birthday cakes from you.

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