Bakery Business Plan Template

Bakery Business Plan

If you want to start a bakery or expand your current bakery, you need a business plan.

The following sample bakery business plan gives you the key elements to include in a winning business plan. It can be used to create a business plan for a dessert bakery, bread bakery, cake bakery, and other businesses that sell baked goods.

You can download the bakery business plan template (including a full, customizable financial model) to your computer here.

 

Bakery Business Plan Sample

I. Executive Summary

Business Overview

[Company Name], located in [insert location here] is a new, upscale bakery focusing on providing organic, healthy, premium food products. Our product line fits nicely with health trends nationwide – while people still want pastries and baked goods, they want them to be as healthy as possible.

Products Served

[Company Name] will sell several baked goods including bagels, croissants, cookies, cakes, danish, muffins, scones and strudel. All products will use 100% all natural and organic ingredients. Several products will have regular and low-fat varieties.

In addition to baked goods, [Company Name] will sell breakfast and lunch sandwiches, salads and soups, and serve a variety of coffees and teas.

Customer Focus

[Company Name] will primarily serve the residents within a 5-mile radius of our store. The demographics of these customers are as follows:

• 67,827 residents

• Average income of $74,700

• 58.9% married

• 49.6% in Management/Professional occupations

• Median age: 38 years

In addition to this prime adult demographic for an upscale bakery, there are five elementary schools, a middle school, and a high school. Students from these schools will be sure to frequent [Company Name].

Management Team

[Company Name] is led by [Founder’s Name] who has been in the bakery business for 20 years. While [Founder] has never run a bakery herself, she has taught baking classes as the local high school for 20 years and has worked part-time at bake shops throughout the region over the past 10 years. As such [Founder] has an in-depth knowledge of the bakery business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:

• There is currently no upscale bakery in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.

• Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passerby’s each day.

• The management team has a track record of success in the bakery business.

• The upscale baker business is a proven business and has succeeded in communities throughout the United States.

• Market trends such as healthy and organic living support our business opportunity.

Financial Highlights

[Company Name] is currently seeking $370,000 to launch. Specifically, these funds will be used as follows:

• Store design/build: $250,000

• Working capital: $120,000 to pay for Marketing, salaries, supplies and lease costs

Topline projections over the next five years are as follows:

Financial Summary	FY 1	FY 2	FY 3	FY 4	FY 5
Revenue	$560,401	$782,152	$1,069,331	$1,379,434	$1,699,644
Total Expenses	$328,233	$391,429	$552,149	$696,577	$776,687
EBITDA	$232,168	$390,722	$517,182	$682,858	$922,956
Depreciation	$7,000	$7,000	$7,000	$7,000	$7,000
EBIT	$225,168	$383,722	$510,182	$675,858	$915,956
Interest	$6,016	$5,264	$4,512	$3,760	$3,008
Pre Tax Income	$219,152	$378,458	$505,670	$672,098	$912,948
Income Tax Expense	$76,703	$132,460	$176,985	$235,234	$319,532
Net Income	$142,449	$245,998	$328,686	$436,864	$593,416
Net Profit Margin	25%	31%	31%	32%	35%

 

II. Company Overview

You can download the Bakery business plan template (including a full, customizable financial model) to your computer here.

Who is [Company Name]?

[Company Name], located at [insert location here] is a new, upscale bakery focusing on providing organic, healthy and/or premium baked goods. We also sell breakfast and lunch sandwiches, salads and soups, and serve a variety of coffees and teas.

[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the bakery business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented a bakery that enjoyed tremendous success. After several discussions with the owner of the bakery, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.

Specifically, the customer demographics and competitive situations in the Fort Lauderdale location and in his hometown were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.

[Company Name]’s History

Upon returning from Fort Lauderdale, surveying the local customer base, and finding a potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

The business is currently being run out of [Founder’s Name] home office, but once the lease on [Company Name]’s retail location is finalized, all operations will be run from there.

Since incorporation, the company has achieved the following milestones:

• Found office space and signed Letter of Intent to lease it

• Developed the company’s name, logo and website located at www…

• Created the menu

• Determined equipment and inventory requirements

• Began recruiting key employees with experience in the bakery industry

 

[Company Name]’s Products

Below is [Company Name]’s initial menu. All items will be 100% natural and organic. As you can see all items are classified under the following eight main categories:

1. Soups
2. Breakfast Sandwiches
3. Croissants and Danish
4. Muffins and Scones
5. Sandwiches and Wraps
6. Salads
7. Bagels
8. Cookies and Desserts

 

III. Industry Analysis

[Company Name] directly or indirectly competes with all food service providers nearby our store that offer similar products, mainly breakfast foods, breads, desserts, sandwiches and salads. Competition will come from supermarkets, restaurants, coffee shops, bakeries and other retail establishments. Direct competition will come from companies offering 100% natural, organic products like [Company Name].

Industry Statistics & Trends

The following industry statistics bode well for [Company Name].

According to the recent report entitled, “Retail Bakeries Industry in the U.S.” by Supplier Relations US, LLC, the retail bakery industry’s annual revenue is approximately $3.6 billion, with an estimated gross profit of 25.52%.

According to a recent report by Modern Baking, the median annual sales of retail bakery stores surveyed were $333,000 while the median store sizes was 2,120 sq. ft, and the average bakery sale per customer was $12.51.

According to a recent study by the IDDBA (International Dairy·Deli·Bakery Association):

• Health is strengthening as a food purchase mega factor, ranking third after-taste and price, and above convenience.

• Frequent bakery shoppers tend to be less health-conscious than the rest of the population, but they are still health-conscious.

• Shoppers say they are buying more reduced-fat milk (+30%), whole-grain bakery products (+29%), and yogurt (+19%).

• More than half of shoppers are trying to avoid trans fat, total fat and saturated fat. Frequent dairy, deli, and bakery shoppers are more concerned about trans fat than the average shopper, but less concerned about a reduced-fat claim on products.

• More than a third of shoppers say that the calorie content of foods is very important to them when they shop in the dairy, deli, and bakery departments. Frequent deli shoppers are the most concerned, with about 40% of full-service and a similar portion of self-service customers indicating they place great importance on calories.

• Frequent shoppers in the self-service deli and self-service fresh bakery are more likely to buy organic and natural foods.

• Seven in ten consumers tried to increase their consumption of whole grains last year.

• About half of frequent deli and bakery shoppers say it’s important for products in these departments to contain added nutrients, such as vitamins or fiber. Added nutrition is ranked even more important by frequent shoppers in the dairy and full-service deli departments.

A recent study by Modern Baking found the following:

• In-store bakery (e.g., bakeries in supermarkets) annual sales increased to $20 billion.

• Cake and bread are the top two products contributing to sales.

• Sales of bread products have been positively affected by the demise of the low-carb trend, growth of whole grains and an increased interest in crusty bread products.

• There has been growth in the cookie sales. Declines were reported for bagels, pies and donuts.

 

IV. Customer Analysis

[Company Name] will serve the residents of [company location] and the immediately surrounding areas as well as those who work in [company location].

The area we serve is affluent and has an affinity to healthy and organic foods and beverages like we will be offering.

We will primarily target the following four customer segments:

1. Soccer/stay-at-home moms: the town has a large population of stay-at-home moms who are active in the school and community. These moms often meet for lunch or coffee and [Company name] will provide a perfect place for them to congregate. (We also expect mothers to take their children to [Company name] for after school and weekend snacks and meals.)
2. Morning commuters: many local residents drive to neighboring towns or take the nearby train to work. [Company name] is conveniently located for these individuals to pick up coffee or a breakfast sandwich in the morning or pick up a sandwich in the evening.
3. Local office workers: approximately 5,000 individuals work in offices within a quarter mile of our location, and we expect a fair portion of these individuals to frequent us during the morning and lunch hours.
4. Students: there is a middle school and a high school in the town and the high school is within one half mile. Students from these schools will be targeted to frequent [Company Name].

You can download the bakery business plan template (including a full, customizable financial model) to your computer here.

V. Competitive Analysis

The following retailers are located within a 2-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Joe’s Supermarket

Joe’s Supermarket is the town’s leading grocery store and has been in business for 32 years. Joe’s offers a wide array of all the products that you typically find in a grocery store.

Joe’s also has an in-house bakery. However, less than 10% of the products served in their bakery are made with organic ingredients. In addition, Joe’s offers little variety in their items. For example, they only offer 2 types of soups, 3 types of cookies, etc. [Company Name], on the other hand, offers numerous options for each product type.

Old Time Bakery

Old Time Bakery has been in business for 14 years. It offers a variety of baked goods, primarily cookies and desserts.

However, [Company Name] has several advantages over Old Time Bakery including:

• Old Time Bakery offers few products baked with organic ingredients

• Old Time Bakery does not offer sandwiches, soups or salads

• Old Time Bakery does not offer customer seating

• Old Time Bakery has little parking

• Old Time Bakery is located over one-quarter of a mile from us, and, as such, is less convenient for the office workers who work next to our store.

 

Freddy’s Deli

Freddy’s Deli is located four stores to the East of us. It has been in business for the past 21 years and enjoys great success, primarily due to its prime location (which we will also have).

Freddy’s primarily offers breakfast and lunch sandwiches and soups, some cookies and cakes, as well as a variety of packaged goods.

[Company Name] has several advantages over Freddy’s Deli including:

• Freddy’s Deli does not offer products, including pastries, sandwiches, soups and more, made with organic ingredients

• In our product categories, Freddy’s does not offer a wide variety of items.

While we expect that Freddy’s Deli will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent [Company Name] based on the high-quality and organic ingredients we use and product selection.

Supermarket is the town’s leading grocery store and has been in business for 32 years. Joe’s offers a wide array of all the products that you typically find in a grocery store.

Competitive Pricing

Here is the pricing of our key competitors:

Type of food	Joe’s	Old Time	Freddy’s
Coffee / Tea	$2.75 - $5.75	$2.95 - $4.50	$2 – $5.50
Breakfast	$5 - $12	$6.95 - $12.95	$8.95 - $16.95
Lunch	$9 - $18	$7.95 - $12.95	$12.95 - $15.95
Pastries	$2 - $4	$1.75 - $2.50	N/A
Cakes / Bakery	$2.75 - $7 / slice/piece	N/A	N/A

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantage include:

• Location: [Company Name]’s location is near the center of town, giving us access to commuters going and leaving the train station, local office workers, and passerby’s going to local shops. We also offer adequate parking making it easy for customers to patronize us.

• 100% Natural/Organic/High-Quality Ingredients: getting 100% Natural/Organic baked goods, soups, sandwiches and more in the local market is challenging if not impossible. No other retailer offers direct substitutes or competition for most of our products.

• Management: Our management team has years of business and marketing experience that allows us to market and serve customers in a much more sophisticated manner than our competitors.

• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders, newspapers and other influencers. As such, it will be relatively easy for us to build branding and awareness of our bakery.

 

VI. Marketing Plan

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Offering organic, high-quality food items including baked goods, sandwiches, soups, salads and more.

• Offering a convenient location that offers both eat-in or take-out options.

• Providing excellent customer service

 

Promotions Strategy

[Company Name] expects its target market to be individuals working and/or living within a 5-mile radius of each of its store. The Company’s promotions strategy to reach these individuals includes:

Direct Mail

[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will provide general information on [Company Name], offer discounts and/or provide other inducements for people to frequent the store.

Public Relations

We will contact all local and area newspapers and television stations to tell them about the opening and unique value proposition of [Company Name].

Advertising

[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.

Sampling

[Company Name] employees will initially give free food samples to passerby’s to enable them to taste the quality of our products and learn about us.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products and more.

Pre-Opening Events

Before opening the store, [Company Name] will organize pre-opening events designed for prospective customers, local merchants and press contacts. These events will create buzz and awareness for [Company Name] in the area.

Pricing Strategy

[Company Name]’s pricing will be moderate, so customers feel they receive great value when patronizing the stores.

 

VII. Operations Plan

Functional Roles

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

• General & Administrative functions including legal, marketing, bookkeeping, etc.

• Sourcing and storing ingredients

• Hiring and training staff

Kitchen Functions

• Food preparation

• Ongoing menu creation and modification

Store/Retail Functions

• Order taking and fulfillment (for take-out and dine-in)

• Customer service

• Janitor/maintenance personnel to keep the store clean

Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

• Level of Priority Time to Implementation

• 0–2 Months 3–4 Months 5-6 Months 8–12 Months

• Urgent Strategic Planning & Business Plan Development Secure Capital Partners Develop Website, Branding & Marketing Content Grand Opening

• High Raise Capital & Funding Required to Launch Acquire Bakery

• Purchase Initiate Hiring Plan

• Moderate Neighborhood Interest Party Sales and Marketing Plan Execution (Focused on Community Branding)

• Low Launch Official Naming / ribbon cutting

 

VIII. Management Team

Management Team Members

[Company Name] is led by [Founder’s Name] who has been in the bakery business for 20 years.

While [Founder] has never run a bakery herself, she has taught baking classes as the local high school for 20 years. Two courses that he taught included:

1. How To Bake Wedding Cakes
This course was designed to give students an overall understanding of baking wedding cakes. The student were taught to bake and decorate traditional and contemporary wedding cakes, and cakes for special occasions.

2. How To Bake Bread
This course was designed to give students an overall understanding of baking breads, and included four units teaching students to bake the following types of breads: Levain, baguettes, pain bordelaise; baguettes, bagels, flatbread; brioche, croissants, and challah; pizza, focaccia, ciabatta.

[Founder] has also worked part-time at bake shops throughout the region over the past 10 years. Specifically, he has worked for Giana’s Bakery where he has prepared all wedding cakes. He has also trained several others in the art of creating commercial cakes and pastries.

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Founder] will serve as the store manager. In order to launch our store, we need to hire the following personnel:

• Wait staff (2 full-time equivalents to start)

• Short-order cook (1 to start)

• Baking staff (1 to start)

• Assistant Store Manager (will manage cash register and other administrative functions)

 

IX. Financial Plan

You can download the Bakery business plan template (including a full, customizable financial model) to your computer here.

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of natural and organic food products to its customers.

The Company will have dine-in, takeout, and possibly delivery systems to cater to a broad spectrum of customers in its target market.

The major costs for the company will be food production costs and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $370,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Store design/build: $250,000

• Working capital: $120,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

 

Key Assumptions

Assumptions

Number of customers per day	Per location		Number of locations started
FY 1	100		FY 1	1
FY 2	105		FY 2	0
FY 3	110		FY 3	0
FY 4	116		FY 4	0
FY 5	122		FY 5	0
Average order price	$14.00		Cost of goods sold
			FY 1	23.00%
Annual increase in order price	5.00%		FY 2	22.00%
			FY 3	20.00%
Annual Lease (per location)	$60,000		FY 4	19.00%
Yearly Lease Increase %	2.50%		FY 5	18.00%

 

Financial Projections

5 Year Annual Income Statement

		Year 1	Year 2	Year 3	Year 4	Year 5
Revenues
	Product/Service A	$151,200	$333,396	$367,569	$405,245	$446,783
	Product/Service B	$100,800	$222,264	$245,046	$270,163	$297,855
	Total Revenues	$252,000	$555,660	$612,615	$675,408	$744,638
Expenses & Costs
	Cost of goods sold	$57,960	$122,245	$122,523	$128,328	$134,035
	Lease	$60,000	$61,500	$63,038	$64,613	$66,229
	Marketing	$20,000	$25,000	$25,000	$25,000	$25,000
	Salaries	$133,890	$204,030	$224,943	$236,190	$248,000
	Other Expenses	$3,500	$4,000	$4,500	$5,000	$5,500
	Total Expenses & Costs	$271,850	$412,775	$435,504	$454,131	$473,263
EBITDA		($19,850)	$142,885	$177,112	$221,277	$271,374
	Depreciation	$36,960	$36,960	$36,960	$36,960	$36,960
EBIT		($56,810)	$105,925	$140,152	$184,317	$234,414
	Interest	$23,621	$20,668	$17,716	$14,763	$11,810
PRE-TAX INCOME		($80,431)	$85,257	$122,436	$169,554	$222,604
	Net Operating Loss	($80,431)	($80,431)	$0	$0	$0
	Income Tax Expense	$0	$1,689	$42,853	$59,344	$77,911
NET INCOME		($80,431)	$83,568	$79,583	$110,210	$144,693
Net Profit Margin (%)		-	15.00%	13.00%	16.30%	19.40%

5 Year Annual Balance Sheet

		Year 1	Year 2	Year 3	Year 4	Year 5
ASSETS
	Cash	$16,710	$90,188	$158,957	$258,570	$392,389
	Accounts receivable	$0	$0	$0	$0	$0
	Inventory	$21,000	$23,153	$25,526	$28,142	$31,027
	Total Current Assets	$37,710	$113,340	$184,482	$286,712	$423,416
	Fixed assets	$246,450	$246,450	$246,450	$246,450	$246,450
	Depreciation	$36,960	$73,920	$110,880	$147,840	$184,800
	Net fixed assets	$209,490	$172,530	$135,570	$98,610	$61,650
TOTAL ASSETS		$247,200	$285,870	$320,052	$385,322	$485,066
LIABILITIES & EQUITY
	Debt	$317,971	$272,546	$227,122	$181,698	$136,273
	Accounts payable	$9,660	$10,187	$10,210	$10,694	$11,170
	Total Liabilities	$327,631	$282,733	$237,332	$192,391	$147,443
	Share Capital	$0	$0	$0	$0	$0
	Retained earnings	($80,431)	$3,137	$82,720	$192,930	$337,623
	Total Equity	($80,431)	$3,137	$82,720	$192,930	$337,623
TOTAL LIABILITIES & EQUITY		$247,200	$285,870	$320,052	$385,322	$485,066

5 Year Annual Cash Flow Statement

	Year 1	Year 2	Year 3	Year 4	Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)	($80,431)	$83,568	$79,583	$110,210	$144,693
Change in working capital	($11,340)	($1,625)	($2,350)	($2,133)	($2,409)
Depreciation	$36,960	$36,960	$36,960	$36,960	$36,960
Net Cash Flow from Operations	($54,811)	$118,902	$114,193	$145,037	$179,244
CASH FLOW FROM INVESTMENTS
Investment	($246,450)	$0	$0	$0	$0
Net Cash Flow from Investments	($246,450)	$0	$0	$0	$0
CASH FLOW FROM FINANCING
Cash from equity	$0	$0	$0	$0	$0
Cash from debt	$317,971	($45,424)	($45,424)	($45,424)	($45,424)
Net Cash Flow from Financing	$317,971	($45,424)	($45,424)	($45,424)	($45,424)
SUMMARY
Net Cash Flow	$16,710	$73,478	$68,769	$99,613	$133,819
Cash at Beginning of Period	$0	$16,710	$90,188	$158,957	$258,570
Cash at End of Period	$16,710	$90,188	$158,957	$258,570	$392,389