Mini bakery - a new word in one's own business 18.05.2014

Mini bakery - a new word in one's own business

Organization of mini-bakery is quite profitable business. So where do I start?

Recently bekerai is gaining popularity (from german Bäckerei – bakery) – establishments, offering a range of fresh pastries, usually of their own production, and beverages ( tea, coffee, juices , mineral water). However, traditional bakeries and factories of  cheap bread mass producing do not hand over their positions. Intermediate niche is occupied by small bakeries that are considered to be quite profitable business (depending on the range the profitability can vary from 10 to 50 %). The main advantage of these bakeries are a wide range of bakery products (breads both classical and exotic and "elite"  as well as bakery products ), an attractive price (which is usually lower than in bekerayah ) and product freshness (achieved by the relatively small production volumes ).

Currently there are about 400 small bakeries in different formats, that control about 4.5 % of the national market of bakery products in Ukraine. Experts predict a further increase because they offer a wider range of products (compared with state factories) and exhibit a relatively high and stable profitability. In addition, they react faster to market needs and adapt more easily to new conditions.

However, if you plan to open your own bakery do not expect a quick "promotion" with a minimum investment. Drawing up a business plan and strategy should be approached with great responsibility. Perhaps the first thing to do on stage is to think about the project, to identify future technology of production.

In the mini-bakeries with complete production cycle all stages of making bread and pastries are performed from the flour sifting and dough kneading to the organoleptic properties of the product cheking. Opening a bakery of this type requires a very solid investment – premises renting, purchase of equipment and raw materials, hiring of qualified personnel will cost an average of 90 thousand dollars. At the same time these investments will pay off immediately, but at least in three years.

Much easier and cheaper is to open a mini-bakery of incomplete cycle where for  production the frozen foods are used. Such a production process can be described in three words: defrosting, baking, sale. Naturally, the initial capital required to open such proceedings is significantly lower (about 250 thousand UAH), while it pays off quickly (in a year and a half).

So, after the profile of future bakery is defined it is worth to think on the business plan and the specific steps to be taken to implement the idea.

Step one. Registration.

Firstly you need to register the company for having a private company registered in the tax office.

Step Two. Finding a suitable location.

This is one of the most important moments, as the sales depends on location. In addition to supplies in shops and supermarkets, it is advisable to establish a sale "on the spot" – it will provide additional revenue and will help popularize products. We are talking not about a cafe or bekerae, but the point of sale of bakery products. Probably often it is a lease, since the purchase of industrial space in the city will increase the starting value of the project and significantly increase the payback period. On the other hand, you can purchase business premises in a small town or village and sale products in large cities nearby. However, in this case it is necessary to think in advance about the points of sale.

Typically, production workshop area should occupy not less than 40 sq.m. It is also desirable to provide a separate room for the storage of raw materials.

In addition, the selected area must meet all the requirements and standards of SES, otherwise you just will be not given a permission. 

Step Three. Paperwork.

First of all you need "Sanitary-Epidemiological Conclusion on production." Just having this permission, you can start baking test. In addition, for getting permission to sell products you will need " Sanitary-Epidemiological Conclusion on production" (gives all the same SES) as well as certificates from a state center of standardization, metrology and certification, environmental and fire inspections.

Step Four. Purchase of equipment.

Let us dwell on the list of units that you need to bake bread. The enterprise with incomplete production cycle (for the production of semi-finished products) need a minimum equipment: it will need freezer to store semi-finished products (from 10 000 USD), proofers for aging products before baking (63 000 UAH)  steamer oven (5 thousand UAH for the oven and 20 thousand USD per steamer ) for cooking and hot cabinet for finished products.

In a list of equipment for full-cycle bakery are:   

- flour sifters,
- dough kneader,
- dough divider,
- proofers,
- formers,
- climate control systems,
- rotary ovens (or, alternatively, hearth ovens).

If you plan to bake not only bread but also muffins, it makes sense to purchase additional sheeters, creamer machine and molding machine for baguettes and rolls.

Moreover, extra trays, molds, as well as scales and tables are advisable in any bakery.

Step Five. Search for suppliers of raw materials and contracts.

Needless to say, it is better to choose domestic producers and work with them directly without intermediaries. Perhaps the best option would be to negotiate with the agricultural firm or collective farming.

According to GOST 1000 kg baking white bread need: wheat flour (740 kg), compressed yeast (7.4 kg), salt (9.6 kg) and vegetable oil (1.2 kg) .

At this stage it is advisable to consider future range of products and calculate the amount of raw materials. So, if in addition to bread you are going to produce bakery products you will need eggs, butter, sugar, baking powder variety, perhaps, milk, etc.

Step Six. Recruitment.

The technologist is one who does not worth saving. On his skills depends the quality and taste of bread, and hence its popularity. Apart from a few bakers (usually four, if a bakery will work in two shifts), it is worth hiring a driver, accountant and sales manager, although at an early stages this jobs can be done by the bakery owner.

At the first stage it is also worth thinking about advertising and promotions of  products. However, in order to know and began to recognize your brand, you need to tell about it. Options can be different: flyers, advertisements in the media or, for example, in supermarkets tasting, excursions to the production followed by a tasting etc.

And finally. We deliberately did not give specific figures. Sometimes 150-200 thousand hryvnia will be enough for mini-bakery openning and sometimes a million "is not enough". This article aims to outline a common strategy that can be used as a basis. So good luck!

Author: Natalia Platonova
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