Profits in Online Bakery Business (Cost to Start)

Introduction to profits in the online Bakery business

If you’re planning to start a Bakery business, read this article, congratulations! That’s the first step taken already. Now it’s time to take this information into action and start working on your plans. Online bakeries have become a trending type of Bakery business nowadays. You just need to start a website with the images of all the products that you offer along with a payment gateway integrated into the website to collect the payments online. Later you just need to bake the product and deliver it to the customer.

On the other hand, anyone starting a Bakery or sharing their homemade recipes with people should also consider starting an online Bakery. Offer traditional baked goods such as bread, cakes, cookies, and pastries or specialty items such as birthday cakes or sugar-free products. Not only this will create an income stream during these uncertain times, but it could also commence a sustainable, life-long business for you. Now, let us see how we can get food profits with low-investment in the online bakery business in India.

Ideas to start and get profits in the online Bakery business

With the increasing demand for online services, there is an immediate need for home bakers to seize this opportunity! While it was quite difficult to set an online store earlier, it has now become a child’s play with the availability of eCommerce platforms. With simple steps of registration, and having a proper business plan and location, one can now have an online store within 24 hrs! Nevertheless, there are a few basic aspects that you need to work upon before setting up an online store.

So in this article, we let you know about the online Bakery business plan with a step by step guide.

How to start an online Bakery business in India for maximum profits

To make a business plan for your Bakery business, you must check and decide about various factors that can help you run the Bakery business successfully. Let’s discuss some of the factors that you need to consider while making a plan.

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Follow the below steps to open a Bakery business that are as follows:

1. Location for the Bakery business

One of the first steps to start a Bakery business is to set a good location for office and kitchen. It is advised that a 500 sq ft shop should be divided into two floors, one kitchen should be constructed on the one floor, and another area will be an office area. In addition, while finalizing the location of the Bakery, it is important to ensure that this place has the facility of proper water supply and drainage facility. Get a proper legal agreement for the property as it will also be required in the paperwork and other licenses. You should also get a No-Objection Certificate (NOC) from the property owner that there is no problem that his shop will be used for food outlet purposes.

2. Secure funding for online Bakery business in India

To secure funds for an online Bakery business in India, you can approach a bank and other financial institutes along with your business plan.

3. Create your online platform

You’ve done with planning—what comes next? It’s time to start building your online presence to bring your food to hungry customers. Start by creating a website, either using a custom domain or web application.

4. Permits and licenses you need to open a Bakery

Before you launch your site, you’ll need to officially register your baking business under your local government. This means obtaining a license to certify that you can produce and distribute your baked goods to customers.

FSSAI license: It is a unique 14 digit registration number that is given to manufacturers, traders, and restaurants. FSSAI license is also known as the Food license, you can apply for it on the FSSAI website.

Documents required for the FSSAI license

These are the documents required for FSSAI license registration:

• ID proof and Address proof
• Valid email id
• Phone number
• Affidavit
• Declaration of Food Safety Management Plan
• Kitchen layout plan
• List of food categories
• Water testing report from ISI approved facility
• No Objection Certificate (NOC) from the owners of the site
• Medical certificates of employees

GST Registration: It is one tax that you need to pay unlike different taxes (VAT, Service Tax) earlier. You can easily register your Bakery business for GST online and get it sanctioned with minimal struggle.

Health License: This license ensures that your Bakery stands corrected under the health concerns of the Health Department. After submitting the application, it will take around 60 days to be issued to you. Apply for it on your State Municipal Corporation website.

Police Eating House license: The Eating House License is provided by the Licensing Police Commissioner of that city where you would want to open the Bakery. The approximate cost of this license to issue for three years is Rs 300.

Fire License: A No-Objection-Certificate (NOC) from the fire department is required to run a Bakery. There is no fee required and it is free of cost for NOC as of now.

FSSAI License can be acquired through the website where an online application for a Food license can be made. You can also do this through various agencies, they charge around 5000 for complete paperwork and license fee. For five years the FSSAI license fee is 15,000 rupees. GST registration can be done with the help of a Charted Accountant (CA) or a consultant. By visiting the MCA official website, business registration can be done after choosing a business entity such as Private Limited Company, LLP, Partnership, etc. You can also get registration under MSME and Startup. You also may need to get a license under the shop and establishment act from the State Government as per your state rules.

5. Investment to start a Bakery business

To start a Bakery business, based on the amount of money required for various things such as rent for the space, baking equipment, salaries of staff, costs of licenses, etc you must estimate the minimum amount of initial investment required.

If you have low capital to invest then either get a loan for your business or else partner with few other bakers so that you can get started with the Bakery business.

How much money do you need to invest to open a Bakery in India?

Let’s look at the cost break-up and investment for starting a Bakery in India:

Location: Depending upon your model the rent for a cloud kitchen space can be around Rs 25,000-Rs 40,000 per month and for a full-fledged cafe it can be Rs 70,000 to Rs 150,000 per month.

Equipment: The various equipment according to your menu requirement can cost anywhere between Rs 500,000- Rs 10,00,000

Licensing: All the required licenses and permits to start a Bakery will cost you about Rs 30,000

Staff: You will need to hire a few staff members and need to pay salaries for them. This figure can vary with the number of people you rope in, but assuming you take in 4 people such as head chef, manager, support chef, and housekeeping person, you’d need about Rs 1,20,000 in India (per month) for salaries and additions.

Billing & POS: Using POS is an important step in running a Bakery business. A good POS that acts as a central unit for your outlet can cost between Rs 24,000 – Rs 50,000, in India.

Marketing costs: Marketing will play a vital role in your Bakery. This would include both online and offline marketing. Using marketing methods suitable for your business would cost you almost Rs 40,000-Rs 60,000 (per month).

The total approximate investment to start a Bakery business is between 10 to15lakh rupees.

6. Manpower required for starting an online Bakery business in India

Depending on the type of Bakery, you need to hire the specifically skilled professionals along with a few others who have experience baking. To make your Bakery fully operational you would definitely need people for both baking and other activities such as receiving orders, washing the dishes, etc.

To initially start-up, you’ll require:

• A head chef
• A support chef
• Cashier
• Cleaner/Housekeeper

7. Kitchen equipment needed for a Bakery

Kitchen equipment is very expensive because the equipment for the Bakery business is made of stainless steel, which is tough and long-lasting.

The main equipment required in Bakery is:–

• Electrical equipment like ovens, mixers, whiskers and other equipment depending on what you intend to bake
• Packaging material like bags, boxes, etc. for customers take goods home
• Cooling racks and refrigerators for the food
• Working table
• Gas stove
• Cylinders
• Baking dishes, tins, and pans of different shapes and sizes
• storage utensils and other equipment 

8. Build your brand and marketing strategy

So you’ve finally done the heavy lifting: your products, website, and business are ready to roll. Now, your focus is on getting the word out there about your Bakery. Word-of-mouth is the most important marketing channel to build a loyal customer base. Marketing is important for any kind of business, get a properly designed logo with a professional designer.

Digital marketing is a powerful tool for small businesses to interact with a wide audience. With the advent of social media, customers have taken to online platforms to shop, review, and discuss. It, therefore, makes sense that your next step is to set up social media accounts, each for their own unique purpose. Instagram showcases photos of your products, while Facebook business is an amazing tool for customers to engage through community discussions and reviews.

9. Technical backbone: Online portal & Mobile app

Commencing operations for an online Bakery will still be a far-fetched dream if you do not have an engaging mobile app and website for reaching the customers. The essence here is to attract customers online with the promise of freshly-baked goods that will be delivered at their doorsteps. Surely, there are many things such as a staff hiring, delivery model, actual cooking, etc. but if you do not invest wisely in mobile app development, your dream of flying will break even before taking off.

Profits in the online Bakery business

Bakery owners can make at least a 30 percent profit margin to cover operational costs and earn income.

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How you price your baked items will impact your profits in the Bakery business. Pricing can be based on the cost of ingredients, your time, and delivery expenses plus a percentage for profit. You also can base your prices on what the market will bear. For example, if you are the one who is offering gluten-free cakes, you might be able to price your cakes higher than others.

Tips for starting a Bakery business

Here are some tips to start an online Bakery business:

• Hire a professional photographer to take photos of your baked goods
• To create a professional website hire a web designer
• Open merchant accounts with credit card providers accept online credit card payments
• Package baked goods in nonperishable food containers that keep baked goods from damage during shipping 

How to take Bakery business online

Since online ordering is increasing gradually nowadays, therefore, online tie-ups are also important. You should create your own website of a Bakery as it is highly recommended. Also, place ‘Order Online’ on your website to attract customers who make the online order. You can also create your online ordering app or you can register for an online food ordering app.

Advantages of starting a Bakery

• You automatically create a loyal customer base
• High traffic locations can make huge profits
• You can even start a Bakery out of your home
• There is a need for niche bakeries

The conclusion to make profits in the online Bakery business in India

So I hope after reading this article, you would be able to start a Bakery business and run it profitably by considering all the factors discussed above. Whether you want to turn your baking talents into a business or earn income through your hobby, the solution may lie in starting an online Bakery business.

You need to estimate your financial aspects carefully such as your investments, expenditures, and setting up realistic revenue goals to achieve in your business. The journey will be different for everyone but having a solid business plan, using the right tools, and connecting to your customers are all critical steps to long-term success.

Happy baking and business planning!.