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Start a Bakery in India: A Checklist to Open Bakery Business
Shivani Jain
| Updated: Jul 23, 2020 | Category: FSSAI

Start a Bakery in India: A Checklist to Open Bakery Business

Every budding baker wants to start a bakery in India because of the growth in the demand for oven-baked delicacies like cakes, donuts, and cupcakes. Moreover, this business will never be out of trend as today cakes and other baked products have become an essential part of our lives. We need them in almost every celebration of our lives.

In this blog, we will discuss the concept, legal requirements, and factors to consider for starting a bakery in India.

Overview of Bakery Industry in India

The term “bakery” denotes a combination of creativity, novelty, reviviscence, and presentation, with each passing day. And with time, the bakery sector has emerged as a topgallant, in terms of business growth, quality, and acceptability.

Further, the reason behind the growth of this sector is the continuous consumer demand for new options in bakery products. As a result, the Indian bakery industry is one of the biggest contributors to the overall food sector. The baked products, like biscuits and bread, form a part of more than 82% of the total baked items produced in India.

As per the recent data published by IMARC[1] , the Indian Bakery Industry is expected to reach the market capital of around US $882 million by the end of the year 2024. Further, this sector will have the CAGR (Compound Annual Growth Rate) of 12.5% from 2019 to 2020. In the year 2019, the bakery industry market reached the worth of US $8 Billion.

Checklist to Start a Bakery in India

The steps that an entrepreneur must follow to start a bakery in India are as follows:

checklist to Start a Bakery
  1. Choose A Type of Bakery;
  2. Draft an Effective Business Plan;
  3. Pick a Suitable Location
  4. Obtain Mandatory Licenses;
  5. Get required Manpower;
  6. Robust Kitchen Equipment;
  7. Attractive Display Area;
  8. Billing Software;
  9. Product Marketing;
  10. Customer Satisfaction;
  11. Miscellaneous Factors to Start a Bakery in India.

Choose a Type of Bakery

The first step to a start a bakery in India is to decide the type of bakery an entrepreneur or baker wants to begin. The typical two types of bakeries are Retail Bakeries and Wholesale Bakeries.

A wholesale bakery needs a lot of investment in the form of capital, manpower, equipment, and raw material, etc. Moreover, it requires a lot of experience and patience to co-ordinate subordinate bakers.

However, a retail bakery requires comparatively low capital and experience than a wholesale bakery business. The types of Retail Bakeries are as follows:

Types of Bakery
  1. Home Bakeries;
  2. Specialty Bakeries;
  3. Bakery Café;
  4. Online Bakery.

Home Bakeries

Home Bakeries are considered as the best way to start a bakery in India. This business structure does not require much investment and is best for those who want to give a try before starting a fully-equipped bakery.

Initially, the owner of the bakeries starts with a small menu and, eventually, after earning profits and sales, shifts from a home-based bakery to a shop.

Some of the renowned examples of Home Bakeries are:

  1. Mad Batter;
  2. Miha;
  3. L’Amour Sugar;
  4. Firefly India;
  5. H Street Baker;
  6. Droolicious

Specialty Bakeries

The option of Specialty Bakeries is also the most chosen alternative by entrepreneurs who want to start a bakery in India. These bakeries do not offer a wide range of baked products to their products. They accept orders in advance period and then deliver them to their customers.

Further, the baked items offered by this bakery are comparatively better in taste and design than a typical bakery. That’s the reason even after high-pricing, the sales of these bakeries are much higher than any other retail bakery.

Some of the renowned examples of Specialty Bakeries are:

  1. Love Is Cakes, Gurgaon;
  2. Feel Mighty, New Delhi;
  3. Bakingo, Noida

Bakery Café

If an entrepreneur decides to start a bakery café in India, then he/she needs a lot of pre-planning. The term “pre-planning” refers to the amount of investment, sitting space, chairs and tables, staff, equipment, source of raw material, etc.

Usually, these cafes offer a wide variety of beverages, such as coffee, tea, lemon ice tea, and other soft drinks, together with cookies, cakes, muffins, etc. Further, the USP (Unique Selling Proposition)[2] for these outlets is that the people can peacefully sit and have their food.

However, the only constraint with this type of bakery is to find a perfect location with ample sitting space and ambiance.

Some of the renowned examples of Bakery Cafes are:

  1. Landour Bakehouse, Landour;
  2. Le15 Café, Mumbai;
  3. Ahdoo’s, Srinagar.

Online Bakeries

If a person wants to start a bakery in India, but do not want to spend much on rents, sitting space, and workforce, then he/she must choose the option of starting an online bakery. In this, the owner will receive the orders online, and he/she just needs to deliver the same to the respective customer.

The concept of an online bakery has evolved recently and is very much in trend nowadays. Further, the only two requirements of this bakery format are:

  1. Create a Website together with images of all the baked products;
  2. Integration of Payment Gateway into the website for online payments.

Some of the renowned examples of Online Bakeries are:

  1. Crème Castle Cake;
  2. Ferns and Petals;
  3. Bakingo.

Also, Read:How to Start a Virtual Kitchen Business in India

Draft an Effective Business Plan

The next significant step in the process to start a bakery in India is to draft an effective business plan. This step will help the budding bakers or entrepreneur to streamline their operations, strategies, budgets for the future growth of the bakery business.

Further, a Bakery Business Plan must include the factors as follows to attract the target customer:

  1. Brief about the Bakery Business;
  2. Overview of the Bakery Business;
  3. Trends and Outlooks of the Bakery Industry;
  4. SWOT (Strengths, Weakness, Opportunities, and Threats) Analysis;
  5. Efficient Operation Plan;
  6. Accurate Financial Analysis;
  7. Effective Marketing Plan.

Pick a Suitable Location

A good and suitable location is a must for making the business successful in India. Normally, it is presumed that the places with high footfall, like shopping lanes or crowded markets, are the best for starting a bakery.

Moreover, the bakeries opened on a ground floor will be more chosen than the one on the upper floor. The reason is the high accessibility and visibility.

Further, it is always suggested to have at least 500 to 600 sq ft shop, divided into two areas. The first area will have a decent kitchen, and the other area will serve and showcase the product

Before selecting a place to start a bakery in India, the owner must make sure that the place has proper sewage system and water supply. Moreover, the prospective owner needs to enter into a rent agreement with the landlord, and also obtain NOC (No Objection Certificate) from the landlord.

Obtain Mandatory Licenses

Mandatory Licenses for Bakery

The primary six licenses required to start a bakery in India are as follows:

  1. FSSAI License: All the bakers and entrepreneurs who want to start a bakery in India need to obtain FSSAI License or Food License. The reason for acquiring this license is to confirm that all the bakery products are prepared as per the guidelines passed by the FSSAI (Food Safety and Standard Authority of India).
  2. GST Registration: All the baked products are taxable under the Goods and Service Tax. That means a prospective owner must obtain GST Registration if the annual turnover of the bakery is more than Rs 20 lakhs.
  3. Health License: A Health Trade License conforms that the bakery business adheres to all the health-related guidelines issued by the Health Department. One can obtain Health License from the Municipal Health Inspector by paying the prescribed fees.
  4. Eating House License: One can obtain an Eating House License from the State or City Police or the Commissioner of Police.
  5. Fire License: After the installation of Fire Extinguishers in the Bakery, the owner needs to obtain Fire License or Fire NOC from the Fire department after paying a specified fee.
  6. Trademark Registration: All the bakeries must obtain trademark registration for their logo and brand. It will assist the bakers in setting a unique and distinctive identity.

Get Required Manpower

Unlike any other shop or business, a bakery requires expert and professional workforce who have necessary cooking and baking skills. The reason is that the taste and presentation are the sole basis for the profits generation of a bakery.

Therefore, to start a bakery in India, it is a must to have an experienced team. The term “experienced team” refers to chefs, assistant helpers, cashiers, and service teams.

Robust Kitchen Equipment

All the equipment used in the bakery business must be of good and robust quality. Normally, the utensils made of stainless steel are preferred. The term “equipment” includes ovens, mixers, deep fridges, storage, utensils, gas stoves, molds, appliances, baking tools, piping bags, etc.

Attractive Display Area

Another important step in starting a baking business is the attractive display area. A well-designed bakery will earn more than a normal average looking bakery. Therefore, to increase footfall and attract customers in the outlet, it is always suggested to design the front-end of the business in an attractive and eye-pleasing manner.

Billing Software

Efficient billing software will ease the stress of a prospective owner, as it will assist him/her in inventory management. Further, it will also help in tracking the shelf life of the baked items. Hence, choosing efficient and effective billing software is a must to start a bakery business in India.

Product Marketing

It does not matter when you are working day and night to bake tasty cakes, muffins, and other baked products, but no one knows about it. Thus, every business must save an amount and time aside to market and socialize your business.

Further, some of the cost-efficient marketing strategies are as follows:

  1. Write a Blog: One of the easiest ways to promote a bakery is to create or write blogs about it. However, these blogs must showcase the best features and products of your bakery.
  2. Use Social Media: Nowadays, social media is at its peak and is a great way to promote or showcase your business. That means if you want to attract a maximum of customers in a short period of time, and then choose this medium.
  3. Join Groups: For any business, whether developed or start-up, networking can attract more customers. Therefore, join a local business or corporate group, such as a small business association or chamber of commerce, and establish good relations with them.

Customer Satisfaction

A Happy and Satisfied Customer is enough to take any business at the top. Therefore, every business must strive to achieve customer satisfaction, because one satisfied customer will bring more loyal customer to the business, which will indeed increase the goodwill and reputation in the market. That means “word of mouth” is enough to make or break a business.

Further, a business must incorporate the facility of feedback and product suggestions from its customers. This will help them in deciding future strategies and the areas where the business is lacking.

Miscellaneous Factors to Start a Bakery in India

The Miscellaneous Factors to Start a Bakery in India are as follows:

  1. Staff Uniform: Uniforms not only provide a professional look but also adds to the brand value and goodwill of the bakery shop. Therefore, it is essential that all the staff must look clean and hygienic.
  2. Facility of Online Ordering: Nowadays, online tie-ups help the business to grow fast. Thus, it is advisable that one should have a good and attractive website, together with tie-ups with various online apps and websites.

Conclusion

If you are wanting to start a bakery in India, and have thoroughly read this article, you have already started your journey to have a bakery in India.

Further, the licenses mentioned above are mandatory to acquire if you want to start a bakery in India. At Swarit Advisors, our experts will provide you end-to-end assistance in obtaining FSSAI License. Our professionals rank high in delivering on-time registration.

More on Food Business: How to Start a Restaurant Business in India

Shivani Jain

Shivani has completed her B com LLB (Hons) and has the experience of writing various research papers during her college time. Earlier she was working as an Associate in a Delhi based Law Firm, but her interest in writing made her pursue Legal Content Writing as a career. Her core area of interest is in writing about various legal enactments, tax, and finance.

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