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How to Launch a Successful Bakery Startup

If you're considering launching a new food-oriented business, you've likely heard the warnings. Restaurants, bakeries, and food markets often top lists of most challenging businesses to start.
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If you're considering launching a new food-oriented business, you've likely heard the warnings. Restaurants, bakeries, and food markets often top lists of most challenging businesses to start. Competition is usually fierce, especially with so many franchise businesses dominating the market. But with the right combination of careful planning and passion, a food startup can succeed.
Bakery businesses have been especially successful in recent years, as consumers look for a new way to treat themselves or celebrate special occasions. If you're thinking about opening a bakery startup, here are a few steps you can follow to increase your chances of success.

Line Up Financing
Unlike some other startup types, you'll need to put some money into your bakery before you can open the doors. This includes purchasing equipment to refrigerate and bake your items. You can finance your bakery equipment and use the proceeds from your early sales to begin paying off the loan. For some, this is a better alternative to purchasing the equipment and depleting any funds they have set aside.

Choose a Location
Bakeries are no longer limited to storefronts, where they must draw customers in to either dine in or pick up items to go. Your bakery can operate solely online, shipping items to buyers, or you could set up an omnichannel approach, letting customers buy online or in your store. Local shops still have an edge over the competition, since they can promise products that are fresher than when they're shipped. Selecting the right area for your bakery will be the next challenge, since you'll want to be in a central location while also having plenty of parking spaces.

One major mistake many new restaurants and bakeries make is in trying to sell too many different products. You'll likely find that by specializing in a niche, you'll be able to do one thing and do it well. Bakeries that are on the early end of on new trends are often successful at not only quickly becoming profitable, but also either expanding or capturing the interest of potential business partners.

Conduct Market Research
Market research is an important part of the planning process, potentially making or breaking your startup. Learn as much as possible about market demand for specific food types in your area. Ideally, you'll be able to identify a demand that isn't currently being fulfilled by other businesses in your area. There may be dozens of cupcake specialty shops nearby, for example, but none that specialize in pies or bundt cakes or healthier options for those who have limited diets.

Scale Carefully
Many small business owners who choose bakeries as a business specialty have a history of creating baked goods. Turning that into a business can be a big leap, though. It can be tempting to hire a full staff and buy a big storefront, but many business owners have better success by starting a bakery at home and gradually building a clientele. They may start by accepting small catering jobs or selling items online before committing to a fixed location.

Register and Prepare to Open
Whether you operate your business out of your home or you rent a storefront, you'll need to register for a business permit. Food-oriented businesses also must get a health permit, which means you'll have a visit by an inspector before you can start selling. You'll be required to apply for a food handler's permit, as well, which usually means taking a class on food safety. If you have employees who will be baking and packaging food at your location, they'll also need a permit.

Adhere to Strict Standards
Long after you've opened for business, you'll be expected to adhere to health department regulations in your day-to-day operations. Whether you have a storefront or operate out of your home, you can expect regular inspections from government officials, often without prior warning. Failure to keep your customers safe could quickly put your bakery out of business.

For those who enjoy baking, a food-based startup could be the perfect choice. However, consumables have their own unique requirements, especially when it comes to consumer safety. By planning well in advance and researching both the market and health department regulations, a business owner can reduce risks and build a thriving bakery.

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