How To Start Your Own Bakery Business in the UK

If you have a passion for baking and would love to own your own bakery shop, why not fulfil your dreams? Many thousands of people dream of starting their own bakery or cafe business, but few dare to take those first steps. But the pride and satisfaction gained can be hard to describe for those who do.

For those considering starting their own bakery business, this guide aims to help you think about all the critical elements you need to consider, from choosing the right bakery insurance to cover your shop to hiring staff and promoting your new bakery business.

As with any successful business, everything starts with a sound business plan.

How To Create A Bakery Business Plan

Creating a business plan for your bakery will help you clarify your objectives and give you targets to reach. Remember that your business plan isn’t set in stone, so once you have achieved your original objectives, you can expand on your business plan to include new objectives and set new goals for your bakery.

Some of the things your bakery business plan should cover include:

Research The Market:

Knowing your target audience and the local business landscape is essential if you are going to make your bakery a success. Check out what competition exists in your locality and see if your bakery can offer something your competitors are missing.

Look for opportunities:

Find a gap in the market, such as delivering freshly baked pastries and sandwiches to local businesses at lunchtime. Offer a way for your customers to place orders and pay online, so they can quickly pick up their order at a time that suits them without the need to queue or risk you being sold out of what they want.

Know Your Products:

You may want to specialise in producing artisan bread, rolls and fresh loaves for your customers to take away. Or you may want to diversify your range by offering pizza, sandwiches, wraps and sweet pastries to offer more variety.

It is vital to develop your own signature range of evergreen products that are popular all year round and will keep your customers returning week in, week out. You can then look at offering seasonal or limited edition baked goods to upsell alongside your regular staples.

Determine Health & Safety Obligations:

As a retail bakery business, you will have specific legal and health and safety regulations to meet. You should state in your business plan how you plan to cover your obligations concerning registering your business with HMRC (and Companies House if you plan to set up as a limited company), Health & Safety guidelines for safe food handling, and any related Health & Safety training you expect your staff to undertake.

How Much Does It Cost To Start A Bakery?

Funding your new bakery business starts with defining your start-up costs. This will often be based on the size and location of your business premises. You will need to factor in the shop rent, business rates, business insurance costs, utility bills, business licences, equipment and stock.

  • Location & Size: A large bakery shop well-positioned on a busy high street or popular shopping area will cost more than a small shop off the beaten track. Will your customers be encouraged to stay and relax, or do you plan a counter-only service?
  • Employees & Labour: Will you be running the whole operation by yourself, or will you need to hire staff, and if so, how many? You will need to organise a payroll system that pays your staff their wages, but it also manages their NI, pension contributions, holiday and sickness entitlements etc.
  • Equipment: What is the essential equipment needed to start your business? Can you get by on the bare minimum of an industrial-sized mixing/kneading machine and a couple of large ovens? Factor in any shop fittings you need, such as a serving counter, display cabinets and shelving.
  • Ingredients & Ongoing Costs: You cannot make bread without yeast, flour and water. You will need to source a regular supply of fresh stock ingredients and keep them somewhere safe and clean, protected from contamination from pests and unfavourable environmental conditions.

Bakery Business Marketing

Getting caught up in the thrill and excitement of starting your bakery business is easy, but it won’t be a success if no one knows your business exists!

If you plan to open your bakery in a busy shopping centre with plenty of foot traffic, you will easily attract curious customers inside to check out your new business. However, if your shop is situated on a quiet back street just a little off the high street, you will need to advertise your business to help raise awareness and showcase your offerings.

The fastest and least expensive ways to market your new bakery business are by building a website, setting up social media pages and promoting them through local advertising.

  • Social Media: Depending on your available spare time, you should set up and manage a social media page dedicated to your bakery business. While Facebook and Twitter are popular social media platforms, you may do better pushing your range on Instagram. Baked goods are beautiful products that do well on visual sites where you can showcase your range.
  • Website: Having a business website is a must in this day and age. Prospective new customers will automatically check for a company website when they discover a new and exciting business opening in their neighbourhood. Make sure you have one set up and ready to go!
  • Local Advertising: Promoting your new bakery to customers on your doorstep is needed to help you create regular customers who will become your business’s bread and butter. You can start with free advertising in the form of a press release in your local newspapers to help feature your business and give people an insight into you and your team behind the scenes.

Protect Yourself

Running a brick-and-mortar bakery shop is a wonderful business that your customers will love. But it will come with some risks. You can never predict emergency events, but you can reduce some risks and protect your business from the financial fallout these events can cause.

Security For Your Business: You should secure your bakery shop premises by replacing existing locks. Choose modern deadbolt locks that offer more protection and provide a deterrent to opportunistic thieves wanting to break into your premises.

You can fit motor sensor alarms and cameras that send alerts and live footage to your smartphone in Real Time to notify you of any issues on your premises.

Your bakery will need comprehensive insurance coverage depending on your needs. You may want to start small in your own home, but you will still need home baking insurance in the beginning before expanding into a brick-and-mortar premises. You may only need baking from home insurance for a short time until you raise enough capital to move your business into retail premises.

If you plan to employ staff, you will need employer’s liability insurance as standard. This is required by law. You will also serve customers face to face, so you will need bakery public liability insurance. This will help protect your business from any claims your customers may make for accidents, injuries or damage to personal property while on your premises.

Bakery product insurance is an excellent idea to protect yourself should a customer claim they became ill from eating your baked goods and want to claim compensation. You will also need contents insurance and stock insurance, and you may want to look at individually ensuring essential equipment that your bakery business couldn’t function without.

Meet The Food Standards Agency

The Food Standards Agency (FSA) is responsible for food safety and food hygiene in England, Wales and Northern Ireland. The FSA works with local authorities to enforce food safety standards and regulations.

When you start a new food business or take over an existing business, you must register it with your local authority. You should do this at least 28 days before opening your bakery to the public.

Once registered, your bakery will be inspected by your local authority and given a food hygiene rating under the Food Hygiene Rating Scheme. To meet with FSA regulations, your bakery premises must comply with rules to allow for safe food preparation.

You will need to consider how to manage:

  • Food preparation areas
  • Equipment
  • Food waste

You must also meet the requirements for fire safety and health and safety in the workplace.

Conclusion

There is a lot to consider when setting up a brick-and-mortar bakery shop in the UK. You must give yourself enough time to read up on your legal compliances and ensure you have the right insurance to protect you from the most common risks you may face.

Opening your own bakery business can be a dream come true. As long as you know how to protect your business and look after your staff, you will have a wonderful bakery that will quickly sit at the heart of your local community.

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