So you think you’ve got what it takes to be America’s Next Great Baker? Maybe you spend weeks leading up to Thanksgiving and Christmas binge-watching episodes of Holiday Baking Championship and thinking about what you would do if you were a contestant. If any of this sounds familiar to you, you might own a bakery – or you might be thinking about owning a bakery.
Even if you can bake a cake that would impress the Cake Boss Buddy Valastro, you still need goals for your business. Goals for the short-term and the long-term will put your business on a path of success. These goals will help you stay focused and avoid pitfalls. Here are some short-term goals and some long-term goals for a bakery business.
Short-term Goals for a Bakery Business
1. Find a Niche
One of the very first goals you should have for your bakery business is to find your niche. Competition in the food industry can be intense. Your niche can help differentiate your bakery from all the others. How many bakeries are in your area? How many have long-established reputations and a customer base? Is there an underserved segment where you can specialize?
Perhaps your bakery will focus on making the best wedding cakes. Or maybe your bakery will find its niche in making amazing gluten-free products. Whatever you do, find your niche – the thing that will make your bakery business stand out. Your niche should be something that is unique, specific, and profitable.
2. Identify Your Target Audience
Identifying your target audience is connected to finding your niche. Who will buy your product? In some cases, this is really obvious. If you’re selling wedding cakes, then couples will be your customers.
In other cases, it might not be so obvious. If your niche is great-tasting donuts and coffee, you might find a target audience in busy office workers on the way to work. Where people work and how they work are changing, so you’ll need to stay in tune with those patterns. Perhaps you’ll be a unique bakery on wheels – a food truck – selling a different donut each day of the week.
You might also decide to be a bakery that caters, building relationships with other businesses. Your target audience might not be lots of individual people, but restaurants, reception halls, and other businesses.
Conduct market research in order to narrow down who your target audience may be. Not doing market research is one of the major reasons why business owners fail to reach their goals. Regardless of your niche, knowing who your target customer is will guide your business strategy.
3. Create a Signature Item
What one item do you think of when you think of going to a bakery? A donut? Cake? Pie? Fruitcake at Christmas? Think about how your bakery can create a unique spin on that item that will keep people coming back for more. As episodes of Holiday Baking Championship show, there are many interpretations of the same item – what will be yours?
Think about how your bakery can create a unique take on something. That item can create a reason for your customers to visit your bakery and have a fun, memorable experience. Maybe you’ll take fruitcake – a controversial item – and create an unexpected take on it that everyone will love. Who knows, maybe your interpretation of fruitcake will keep people coming back during the holidays year after year, giving everyone something to talk about.
4. Become Profitable
Becoming profitable is an important step. Entrepreneurs might underestimate how important this is because they love what they do. Making the transition from an employee to a business owner means being business-minded, which means minding the numbers. It’s essential to know your equipment costs, labor costs, costs for baking ingredients, and costs to simply turn on the lights and the heat for the building. It’s normal for a bakery – or any business – to take some time to actually become profitable, due to all the costs.
Once your bakery has become profitable, the next step is to increase profitability. Increasing profits should be a goal of any new business. Some rough estimates of typical product margins on baked products range between 25% to 35. In order to make the most of your bakery business, maximize your profits without compromising the product.
5. Increase Brand Recognition Online
When you’re making something great, it’s important that people know about it. Creating a strategy to increase your brand recognition online is critical for your bakery. You can outsource this to a contractor or freelancer if necessary. Increasing your brand’s presence online is one way that people will become aware that your bakery exists, when you are open, and what products you have to offer. If you develop the capability to sell products on your website, it will make people aware of what you have to offer.
Long-term Goals for a Bakery Business
1. Decrease Cost of Production
Once you’ve accomplished your short-term goals, it’s time to think long-term. Decreasing the cost of production should be your first order of business. If you’ve lost touch with production costs – how much you’re paying your vendors – you’ll need to refocus on these numbers.
Vendor costs eat into your profits, and without profits, you won’t be able to stay in business.
Here are some examples of costs:
- How much does it cost to buy paper bags? Styrofoam cups? Wrappers?
- Are there other vendors that provide these items at a lower cost, with the same quality?
- How much is flour and sugar? Can we get these items for less through another vendor? If so, would the quality be the same?
2. Obtain a Storefront
Not every bakery starts in a storefront. You might be baking in your kitchen and taking orders from your personal cell phone. Or, you might start selling your treats in a food truck.
At some point, once word of your business spreads and you’ve proven that your products are high-quality, you might find that the demand for your products has grown. Moving your bakery business out of your home or production location is a big next step.
Having a storefront gives your business added visibility. This can create chance encounters for people to discover your business and drop by. The extra space will allow you to create more products, and customers might even be able to remain inside while they eat. You will also take advantage of foot and drive-by traffic.
Your first storefront location will also help you decide the direction of the business. If the storefront turns out to be a profitable decision, you have the option of opening other locations or possibly franchising the business.
3. Create a Premium Line of Sweets
Once your bakery is profitable, and you’ve already obtained a storefront, what’s next? It’s time to create a premium line of sweets. These will be the treats that people brag about to their friends, neighbors, colleagues, and friends. Just as you did when you first launched your business, you’ll want to think carefully before you begin. Check out the competition – what are they cooking up? What are they good at, and maybe not so good at? What opportunities might they be missing to cater to the sweet tooth of your entire community? Now is the time to think about how you or your bakers can meet those needs.
Perhaps you’ll bake a line of donuts that will match the seasons or months of the year. Or maybe your bakery will be unique because it will also provide chocolates and candy. You can offer bite-sized cakes or bite-sized donuts. The possibilities are endless.
Don’t be afraid to conduct experiments and taste tests. Taste your donuts, cakes, and other treats to see – is there an ingredient missing? Is it sweet enough or too sweet? Is it too bland? Is the consistency right? Don’t stop until you get your recipes right, because once you do, success won’t be too far away.
4. Get Your Treats Sold in Local Stores
Once you’ve mastered your recipes and started selling your premium line of sweets, it’s time to start selling your treats in local stores. It’s ideal to package these in some way with a sticker, box, wrapper, or logo that has your bakery name. This will allow you to advertise your bakery and for word to spread about who you are.
Create a list of local stores you will contact that could be prospective customers. Find out who the person in charge is and be prepared to answer any questions they might have about doing business with you. As you create this prospective customer list, think of any local stores that might be interested in selling your treats. Where might people enjoy your products? Think about local retailers, and consider places like family-owned inns and shops. You might even drive through your neighborhood and the surrounding areas and consider all the places where residents and tourists purchase food. Add these local spots to your list for consideration.
If these sound like big goals, they are, but having a growth mindset can help you get there. Cultivating a growth mindset has many benefits.
5. Get Your Treats Sold in National Stores
After you’ve established relationships with local retailers, there will be some adjustments to make in your business. But, once this period has passed and you’ve become comfortable with these processes and demands, it’s time for the next level: going national.
The sweet treats that locals have loved could be enjoyed by people across the country. Begin to make a plan for how to get your treats sold in nationally-known stores. You could start by thinking about the stores that are already in your own backyard: chain stores like grocery stores or hotels that are found in other states. Gradually, you can then widen your efforts, building on your prior success with those companies. Success will build on success.
In the end, success is sweet, but it takes goals to get there. Knowing your goals is the first step toward achieving them. Setting good goals, charting those goals, and taking consistent steps towards the goals increases your chances of success.
Finding your niche, identifying your target audience, and staying profitable are just a few short-term goals for any bakery. For the long haul, obtaining a storefront and decreasing production costs are ideal. When you think big, selling your treats in stores locally and nationwide can be possible. Altogether, it creates a recipe for success.