Is Owning A Bakery Store Profitable?

Is Owning A Bakery Store Profitable?

Is Owning A Bakery Store Profitable?

Many people are looking into entrepreneurship at an earlier age than several decades ago. This has been triggered by the soaring levels of unemployment in many parts of the world.

Indeed, unemployment is a phenomenon that many parts of the world are not able to deal with.

This is not a problem of the third world countries but a problem that cuts across different economies.

One of the many profitable business ideas that you can consider as you plan to entrepreneurship is starting a bakery.

As long as you have a passion for cooking, starting a bakery store is a venture you can safely consider.

Although a bakery venture is capital intensive and requires much commitment, the output is worth the pain.

Since baked goods are quite popular, a bakery is an excellent business to invest in as a source of income generator.

Additionally, baked products move quite fast. Worth noting is the fact that a bakery doesn’t require a lot of training since there is very little formal training that is needed to run a bakery effectively.

What Is The Approximate Income Earned By A Successful Bakery Owner?

In the United States, the average annual pay that bakery owners would realize was $64,674 a year on Apr 27, 2021. That translated into hourly basis to about $31.09 an hour.

Is Owning A Bakery Store Profitable?

Calculated on a monthly basis, it would translate to $5,390/month. However, this amount can greatly vary from region to region and according to the skills, years of experience, and location.

Due to the diversity occasioned by different earnings in different parts of the world, there are great opportunities for economic advancement when you consider shifting or changing locations.

How Does a Bakery Make Money?

Donuts, Cakes, pies, as well as specialty coffee, goes a long way in making any bakery a beloved place in any neighborhood or town.

However, before starting to bake due to the promising revenues, it is needful to consider a few things associated with the venture.

First, the costs associated with the business venture need to be assessed well in advance. According to Entrepreneur magazine, you will need between $10,000 and $50,000.

What is the State of the Bakery Industry?

Bakeries can range from being retail to selling specific products to customers. They can also be wholesalers that provide items in bulk quantities to other businesses.

Additionally, bakeries have been known to function as online marketplaces.

First Research conducted a study and found that over 6,000 retail bakeries spread across the United States draw in $3 billion when it comes to annual revenue.

On the other hand, there are 2,900 commercial bakeries at $32 billion in revenue.

What is the Cost to Run a Bakery?

According to Entrepreneur magazine, you will need between $10,000 and $50,000 to start a successful bakery.

The costs that must be factored in are the lease for a physical store, like mixers, bowls as well as storage containers; manpower; raw materials; and furniture. Décor may also need to be considered.

If you are considering a smaller establishment, 25% of the funds can be allotted for ingredients and packaging, 35 percent of the funds for labor, 30 percent for overhead, and 10 percent of the total money for profit.

How can I secure Funds for a Bakery and Maximize Profit?

The easiest way to start a bakery business is when you have some savings of your own. Money can be saved and scraped together by aspiring bakery owners.

Additionally, this can be supplemented by securing a loan from a bank. The aspiring investor can as well consider looking for outside investors.

The overhead costs can be greatly reduced by DIY decorations and renovations. Therefore, if you have limited resources, you can consider doing some simple stuff yourself.

After the bakery starts to run, you will need to use all of your inventory in good condition. This will go a long way in preventing funds from being thrown away on wasted equipment or food.

The products will need a proper marketing strategy to stay successful in the market. You will need a proven budgeting and pricing strategy to ensure that all operations are within your means.

Is Owning A Bakery Store Profitable?

Again, the company cannot be undersold, neither should patrons be turned away by being extremely pricey. There is so much thought and planning that goes to the opening of any business.

Opening a bakery store is not different. It may prove a worthwhile effort to invest in over time.

How can I start a bakery business?

If you want to start a bakery business, there is no doubt that you also want to run it profitably.

Food businesses are considered among the best profitable businesses around the globe.

Due to their deliciousness, baked products stand out as some of the most demanded foods in the world. Among such products are cakes, cookies, loves of bread, among others.

Over time, the importance of baked products has grown overwhelmingly. Today, bakery products are an integral part of all celebrations across the globe.

Indeed, almost two-thirds of the world population uses baked products every day. Consequently, starting a bakery business is a very noble idea with lots of money to be made.

A skilled baker can start a bakery business provided they have a good amount of money for such investment.

How do you choose the type of bakery store?

Way before considering the marketing strategy for the baked products, it is important to select the type of bakery that you need to start.

The bakery can either be a wholesale or a retail bakery. Most start-ups will go for a retail bakery as wholesale bakeries require considerable capital to start.

This is because of the required bulk production that needs much investment in equipment and staff.

This will be coupled with the need for the investor to have much experience to coordinate the many bakers and support staff effectively.

On the other hand, a retail bakery will require little capital to start. Additionally, the investor will not need to be much experienced to run a retail bakery effectively.

Some of the retail bakeries that you may consider follow below.

Home Bakeries

Undoubtedly, this may be the best way to have yourself started in the bakery business. This is especially so if you desire first to test the profitability in a particular location.

The testing can be done on specific bakery products that you wish to introduce to the people living in the specific area.

In such an arrangement, it will be very easy to get an estimate of your profits.

It is also a good thing to note that this will not require a lot of investment. Such a venture can test the viability of the business before converting into a big business.

Specialty Bakeries

These types of bakeries scarcely offer a great variety of baked products. They major in collecting customer orders on baked products, which they deliver on the specified time or periods.

The bakeries that bake cakes for weddings are in this category. They make personalized cakes for specific needs that their customers have.

Due to their specialization, products from specialty bakeries are better than those that can be bought from regular bakeries.

They are also good at offering pastries and cookies.

Bakery Cafe

In this type of venture, the investor will need much space to have enough chairs and tables.

These categories are the ones that will also offer tea and other beverages to accompany their baked products.

Due to their liberty to have people sit and eat, it is easy to make more sales as people enjoy their baked products in a seated environment.

Many times, they will then buy takeaways to take home. To many people, it is fun to purchase baked products and eat them hot, and this works well in the bakery café.

Online Bakeries

In today’s’ business world, online markets are a huge place to maximize sales. Online Bakeries are now trending, and many investors are interested in the venture.

The requirement for this type of venture is simply a good website in which you will post photos showing all your products against their pricing.

There also needs to be a payment gateway to be done, and then the product is baked and taken to the customer.

This is a convenient way to save on renting space since your kitchen can be used for work.

What must you consider when starting a bakery store?

  1. Location

To run a bakery business effectively and successfully, there is a need to ensure that you choose the location carefully.

The issue of the presence of a competitor needs to be carefully considered to ensure that you wrestle an established competitor.

You will need to look at their weaknesses and purpose to exploit them.

A strong competitor with a clinch on all the customers may mean that you need to reconsider your intentions to work there. A SWOT analysis will come in handy in this venture.

Again, if the market is too saturated with the products that you wish to bake, there is always time to reconsider your intentions before it is too late to do so.

Is Owning A Bakery Store Profitable?

If you can choose the right location for your bakery, it will not be long before you recover the initial investment you use to start the bakery.

  1. Equipment Needed to Start a Bakery

Good technology comes in handy when it comes to starting a bakery business.

The appropriate technology will make it easy to bake your products and serve them to your customers quickly.

You will need to do some research on the equipment that you require since it will be guided by the specific products that you intend to bake.

Such equipment needs to be selected and sourced early in advance and tested in good time to not interfere with the production when the business starts.

  1. Staff Required

The staff that you will hire for your business will be guided by the type of bakery that you start. These staffs need to have the specific skills that are required in your bakery.

Avoid hiring staff with general knowledge in baking. You will need to get it right from the beginning to attract customers and build your reputation.

The staff should comprise bakers and support staff with the needed skills.

  1. Licenses

For a food business to be legally established, it must obtain all the needed licenses.

You may require to solicit for different types of permissions, depending on the state you are in. licenses are costly, but you can’t cut any corners.

  1. Investment

The minimum amount of your investment needs to be estimated before you start the business.

This is an amount that you will need to raise before you start the bakery business.

This money will cater to the rent, salaries, baking equipment, and license costs.

If there is a discrepancy in the required capital and what you have, it is good to get a loan to facilitate a smooth start of the bakery store.

Alternatively, you can still partner with another baker to pull resources together and start the business.

  1. Business Plan

A good business venture must have a business plan. Estimate all the costs that we have just looked into and prepare a business plan. This should show the revenue goals and monthly costs.

  1. Marketing Strategy for Bakery Business

A marketing strategy is one of the most important tenets of any business. You may have very good products, but if your marketing is poor, you are doomed to fail.

You will need to consider your most probable customer and navigate on the options of getting to them with your products.

Look at what your competitor is offering as well as their pricing strategy.


After considering all the information in this article, you are well-positioned to start a bakery business and steer it to great success.

Carefully consider all your financial aspects and then develop realistic revenue goals that can be achieved in your business.


Hi! I' am Tom. I was a manager in one of the biggest stores for over 10 Years, am also an SEO by night. I don't like to call myself a blogger; they are very analytical, do email marketing, and know all SEO stuff. I faced many questions from customers about different products, and there was hardly any help on the internet. After learning all the things about these products as a manager the hard way, I decided to start a blog and help other people.

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