How to Start a Bakery Business in the UK (2023)

Disclaimer: Nothing in this article should be construed as legal, financial or tax advice. Please always consult a knowledgeable professional advisor.

Starting and running your own business is an aspiration for many. And for those whose life calling involves starting a bakery café, it’s a dream that most likely started at home, the seeds planted when cooking family recipes in their childhood kitchen. This is a dream close to the heart, but turning dreams into a successful reality does require careful planning. So, we’ve put together advice on how to create a bakery business plan.

(Video) How to Start a Bakery Business | Including Free Bakery Business Plan Template

How to start a bakery business plan

In order to create a plan that best supports your bakery business, consider your objectives and the specific factors unique to your business, in addition to general operations. Writing a business plan is a good way to organise the steps you need to take. Some of the things a good business plan includes:

  • Know the market. Understanding and explaining the market landscape includes following competition and trends in your industry and neighbourhood. Research what makes your competition strong and where there are opportunities for your unique selling proposition (USP) to shine. Know what your target customer is looking for and how you can meet those needs.
  • Know your business. It’s also wise to have a strong company point of view and an executive summary, as well as deep knowledge of your product, management, and sales structures. A well-run business attracts customers.
  • Perform a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Being prepared for potential roadblocks helps you visualise the future and avoid mistakes. Asking yourself the right questions is the key to a beneficial SWOT analysis.
  • Determine legal and health and safety obligations. Knowing how to follow codes and obtain permits, register your business, and get a food licence (variable by state) in advance pave the way for successful bakery business set up. To start a bakery, Australian laws include both business guidelines and food handling laws, and the process is similar to how to start a coffee shop.

How much does it cost to start a bakery?

Defining your start-up costs can depend on things like size and location. The costs of running a cake baking business from home, for instance, will differ from operating in a brick-and-mortar bakery. Once you understand the costs, you can know whether or not you are financially ready for your venture. Some possible costs to consider include:

  • Location and space – Do you want a place where customers will stay and relax, or do you envision counter-only service? Starting a bakery café vs. how to start a small coffee shop bakery or how to start your own bakery business from home require different considerations and are very different endeavours. How important is foot traffic and word-of-mouth to your business, or are you an expert in how to advertise your cake business? Is the space ready for operations or will there be building costs in addition to rent and utilities?
  • InventoryManaging inventory is a crucial part of a bakery business’ financial health. There are many ways to organise inventory, but one of the best is through online inventory management systems specifically designed to track and edit your quantities.
  • Labour – Paying your employees includes their hourly wages, but it also includes training, benefits, and insurance. These business operations are made easier with systems that help you set up payroll and organise employee management.
  • Equipment – Bakery business costs include a lot of equipment. Some may exist in your location, but you will have to make sure you budget early on for things like worktables, proofing cabinets, dough preparation equipment, and bakery ovens.
  • Design and interiors – The aesthetics of your space communicate the personality of your business. How you want people to feel when they walk in—whether it’s warm and comforting or sleek and polished, interiors are part of an overall bakery business plan.

How to take payments at your bakery

It’s important to be set up to accept all kinds of payment from day one. Knowing how to start a cake business or run a successful bakery business includes getting paid. This means a seamless connection between online orders, in-store purchases, and catering invoices. Things to consider when taking payments include:

(Video) How To Start A Home Bakery Business STEP-BY-STEP Starter Guide | Start A Food Business

Square Online

Sell in more ways with a free online store.

(Video) Top 3 Money Makers for Home Bakers for a Profitable Cake Business

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  • Choose the right online store provider. If you plan to sell goods online, Square Online allows you to create a bakery website to sell and ship orders or offer Curbside pickup and local delivery. You can also sell on Instagram, Facebook, and more through the system.
  • Use a bespoke POS for transactions. Customise the Square POS for your specific bakery business needs. It helps manage your sales, records, and inventory. Employees can easily learn the functions and customers enjoy a quick and easy checkout experience.
  • Opt for a restaurant-specific POS. If your menu is more complicated or the workings of your business resemble those of a restaurant, the Square for Restaurants POS will help you manage menus, orders, and payments.
  • Consider all your payment options. Other ways of accepting payment include Square Online Checkout for at-home orders, Square Virtual Terminal enables you to process credit cards from your computer, Square Invoices to create and track incoming and outgoing orders, and in-person contactless card readers like Square Reader.

How to reach and keep your customer base

Making people aware of your business is a crucial step in moving it to the next level. Customer retention after you get them in the door is step two. Here are some ways to get your name out there and keep your customers coming back.

(Video) From 0 Orders to Fully Booked | How I Gained Customers at the Start of My Home Bakery Business

  • Set up social media. Learn how to advertise your business on Instagram, Facebook, and Twitter. Consider targeted paid social media to increase the number of local people who will see your ad.
  • Build a website. A good website is part of the overall customer experience. If they are searching for a great bakery business near them, and your competitor’s site gives a better impression and answers their questions, you just may lose that business. Or, if a customer recommends you and details like your address and phone number can’t be found online, that’s another lost opportunity.
  • Deliver fast, easy service. No matter how delicious your pastries and cakes are, starting a bakery café relies on customer service. The customer experience is often only as good as the technology that gets customers through the line. Square Payments allow you to accept different methods of payment, including quick contactless payment, Apple Pay, and Google Pay. The all-in-one Square Terminal does it all in a compact, intuitive package.
  • Accept feedback. Feedback software is included in the POS system and lets you communicate openly with customers to resolve any issues. You can also track feedback right from the Square Dashboard to see the bigger picture of what is working and what needs improvement.
  • Stand out from the crowd. Think about what makes your business unique or what you could offer that is different. Companies like Black Star Pastry in Sydney, for instance include unique flavour offerings you won’t find elsewhere. Consider free-from foods for customers with allergies, healthy and vegan options, or featuring locally sourced ingredients.
  • Boost sales with online sales. Diversify your offerings and sell goods and merchandise from your website. Many business owners have adapted their business models since COVID-19 first struck, moving to selling the majority of their products through their Square online store. When businesses shut down, they had no other choice, and though COVID-19 hasn’t impacted Australians like many others in the world, small businesses are still finding this to be a more effective way of doing business.

How to manage a cake business from home

Whether cake is your passion or you want to know how to start a bread bakery business from home, it’s important to have diverse service options and be able to adapt to changing times. With the rise of remote work, some might be wondering how to manage a cake baking business from home. The main differences between how to set up a cake business from home and how to run one from a storefront include these steps:

  • Register your business. Start by getting an ABN and you might consider registering your business namewith the Australian Securities and Investment Commission.
  • Prepare your home for the job. Make sure your home kitchen or the space where you will prepare your goods meets the Food Standards guidelines in your state.
  • Get permission from your landlord. If you plan to run your bakery business from home, you must get written permission from your landlord if you are renting.
  • Make sure you are insured. Liability insurance, both public and product, protects you and your business. Other types of insurance to consider are business contents, employer’s liability, and stock insurance.
  • Keep close track. Tracking income and expenses can be difficult without the right tools, but it’s important to have everything in order for tax purposes and business management. The Square Marketplace includes many business apps you can sync with Square to keep your finances organised.

Whether from home or at a brick-and-mortar location, if you start a bakery in Australia, there is much to consider. With tools like Square POS and its dashboard feature, you can stay organised and ready to face the challenges and joys of owning your own cake baking business, from home or otherwise. You can truly sell anywhere with Square.


How much does it cost to set up a bakery UK? ›

Again, it depends on how ambitious your plans are, but generally speaking, you'll need to budget for the following: Licencing and legal fees: £500-1,000. Equipment: £1,000-£5,000. Start-up supplies and ingredients: £2,000-3,000.

Is bakery profitable business in UK? ›

You can run a profitable business in the recovering UK bakery industry by employing the right marketing strategy and setting realistic revenue targets. You will have to plan all the different aspects of the business to stay ahead of the competition and generate healthy profits from your bakery business.

Is a bakery a good business UK? ›

High demand. Bakeries and baked goods continue to be staples in the UK and are consistently in high demand. The bakery industry is one of the most lucrative industries in the country and is growing year on year. Food, including baked goods, is considered a recession-proof industry.

How much do bakery owners make UK? ›

So, how much do bakery owners make? The earnings of a bakery owner vastly vary. Depending on the success of the bakery, a bakery owner is likely to earn around £30-60K, but for many, it's a lot less.
How much do you earn from running a bakery?
Business earnings (£)Owner earnings (£)
Multisite bakery1000k100K
3 more rows
Jul 19, 2022

Do you need a license to sell cakes from home UK? ›

You need to register as self-employed when starting a food business, even if you are part-time or have another job. You should register at GOV.UK to verify your account and confirm the specifics of your food business. Failure to register may result in a fine.

What license do you need to open a bakery UK? ›

Register your business.

Within 28 days of trading after you start a bakery, UK law states you must register with your local authority's environmental health service. You can do this with the government's food business registration tool.

Are bakers in demand in UK? ›

Bakers are among the most in demand trades in the UK, according to a new study by business comparison experts Bionic, which has mapped the cities with the highest number of baker vacancies.

What is a bakers salary UK? ›

The average salary for a baker is £10.98 per hour in United Kingdom. 1.3k salaries reported, updated at 1 February 2023.

How much money does a baker make UK? ›

How much does a Baker make in United Kingdom? The average baker salary in the United Kingdom is £25,491 per year or £13.07 per hour. Entry level positions start at £22,500 per year while most experienced workers make up to £35,000 per year.

Do small bakeries make money? ›

The average bakery profit margins are low. A typical margin for a bakery is between 4% and 9%. The reason that bakeries have such small margins is due to competition. To sell your products, you need to offer them at prices that are market competitive yet still allow you to make money.

What mistakes do startup bakeries make? ›

Top 10 Mistakes to Avoid When Starting Your Bakery Business
  • Do not over-promise and under-deliver. ...
  • Starting a Bakery? ...
  • Give customers what they want, not what you THINK they want. ...
  • Be a good listener – listen to customer feedback and act on it. ...
  • Offer low prices for high-quality products. ...
  • Make sure your food is fresh.

How much does it cost to start up a small bakery? ›

The average startup cost to open a bakery is between $10,000 and $50,000. This is lower than the average cost of opening a restaurant, largely due to the reduced need for employees, seating, and inventory for most bakery businesses.

Can owning a bakery make you rich? ›

However, bakeries have great profit potential because they can be operated on lower labor and food costs than other food business models. Nationally, the average revenue for bakeries is between $325,000 and $450,000. Once you run a model of your sales forecasts, you can get an accurate picture of your sales potential.

What qualifications do I need to run my own bakery? ›

You don't need any formal qualifications to own and run a bakery, but that doesn't mean it's not a good idea to learn a few basic skills and get a bit of experience first.

Is owning a bakery hard? ›

Baking is a creative outlet for many, but running a bakery requires a hard skill set too. If you can take on the responsibility of directing and managing the business end, you'll creative side can start dreaming up any number of baked goods to sell. Starting a bakery business is possible.

How do I legally have a bake sale UK? ›

Legal information
  1. If you wanted to hold a bake sale on a high street, you would need to make sure you have your local council's permission by contacting them.
  2. You are required to have clear, eligible signage when selling food products. ...
  3. Make sure you have someone who has first aid training with you.

Can I run a cafe from my home UK? ›

With a good idea, a solid business plan, the right licences and the right equipment, you'll be well on your way to setting up a successful food business you can run from home.

Do you need a permit to sell food UK? ›

Overview. When you start a new food business or take over an existing business, you must register with your local authority. It's free to register, and your registration cannot be refused. You should register at least 28 days before opening.

How do I become a qualified baker UK? ›

You can do a college course, for example:
  1. Level 2 Certificate in Hospitality and Catering.
  2. Level 2 Certificate in Bakery.
  3. Level 3 Diploma in Professional Bakery.

How to sell cakes from home UK? ›

How to start a cake business from home – a 10-step guide
  1. Register as self-employed. ...
  2. Follow selling cakes from home legal requirements in the UK. ...
  3. Register your premises. ...
  4. Sort your home baking insurance. ...
  5. Tell your landlord or mortgage lender. ...
  6. Think about standing out. ...
  7. Develop an online presence.
Sep 27, 2022

Can I open a bakery without a degree? ›

You don't have to have a culinary degree or a bachelor's degree in business to own a bakery. However, having hands-on experience or academic knowledge of both the baking and business management aspects of owning a bakery will help you succeed.

Which country is best for bakers? ›

Bakery Products Production Value
#31 CountriesMillion Euros
1#1 Germany21,569.20
2#2 France21,223.70
3#3 United Kingdom10,668.30
4#4 Italy7,710.90
27 more rows

What is the most popular baked good in UK? ›

Victoria Sponge took the crown, followed by Chocolate Brownies and Chocolate Fudge Cake in joint second.
The UK's top 10 favourite bakes.
Ranking​Bake​No of votes​
1​Victoria Sponge16%
2​Chocolate Brownies/Chocolate Fudge CakeBoth 12%
3​Chocolate Chip Cookie11%
4​Lemon Drizzle Cake10%
4 more rows
May 12, 2021

What do British bakeries sell? ›

We've made a list of the most iconic British bakes from your favorite show:
  • Victoria Sponge Cake. The Victoria Sponge sandwich cake is the quintessential British dessert. ...
  • Lemon Drizzle Cake. ...
  • Chelsea Buns. ...
  • Sticky Toffee Pudding. ...
  • Bakewell Tarts. ...
  • Yorkshire Pudding. ...
  • Cornish Pasties. ...
  • Millionaires Shortbread.

How much does a cake maker earn UK? ›

Average £29,679 per year.

Can you make a living from baking? ›

People will pay good money for high quality baking. You can sell your food at parties, fairs, and even at local food markets. The beautiful thing about earning by baking is that it's straightforward, flexible and enjoyable. It isn't something that you necessarily have to do on a regular basis if you don't want to.

What is minimum wage UK? ›

From 1 April 2023, the increases will be: National Living Wage for over-23s: £9.50 to £10.42 an hour. National Minimum Wage for those aged 21-22: £9.18 to £10.18. National Minimum Wage for 18 to 20-year-olds: £6.83 to £7.49.

Where do bakers make the most money? ›

The best city in America for bakers with the highest pay is Nashua, NH. The median salary for bakers in New Jersey is $34,769.
1. New Jersey.
Total Baker Jobs:233
Average Annual Salary:$34,769
Lowest 10 Percent Earn:$25,000
Highest 10 Percent Earn:$48,000
1 more row
Apr 6, 2021

Are bakers in high demand? ›

Job Outlook

Employment of bakers is projected to grow 8 percent from 2021 to 2031, faster than the average for all occupations.

How much a Baker earns in the USA? ›

The average Baker salary in the United States is $36,123 as of , but the salary range typically falls between $30,575 and $41,829. Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, the number of years you have spent in your profession.

What are the weaknesses of a bakery? ›

When they are, the margins and profits are potentially high.
  • Staffing Weaknesses of a Bakery. Your employees are the face of the bakery to your customers and employees are one of the many problems encountered in bakery business models. ...
  • Operations and Cleanliness. ...
  • Financial Management Processes. ...
  • Bakery Marketing Challenges.

What is the most profitable item in a bakery? ›

The most profitable items for most bakeries are cakes, cookies and bread are also very profitable for most businesses. As for new and experimental products, their success tends to vary from one type of bakery to another.

How much do bakery owners make a year? ›

How much does a Bakery Owner make in the United States? The salary range for a Bakery Owner job is from $64,288 to $96,510 per year in the United States.

Why do most bakeries fail? ›

Marketing is one of the most common reasons your small bakery business will fail. You can have the best products in the world, but if people don't know you exist, they will not find you. It is not an “if you build it, they will come situation”.

What are the do's and don'ts in a bakery? ›

Baking Measuring Do's and Don'ts
  • DO get yourself a set of proper measuring cups and spoons. ...
  • DON'T use liquid measuring cups with dry ingredients. ...
  • DO read and follow directions carefully. ...
  • DON'T use your measuring cup to scoop out flour. ...
  • DO pack brown sugar into measuring cups and spoons.

What is the #1 reason why startups fail? ›

According to business owners, reasons for failure include money running out, being in the wrong market, a lack of research, bad partnerships, ineffective marketing, and not being an expert in the industry. Ways to avoid failing include setting goals, accurate research, loving the work, and not quitting.

How much investment is needed to open a bakery? ›

The rent for a bakery café space can range from INR 70,000 to INR 1,50,000 per month. Equipment: Bakeries need a range of equipment from grinders, processors to oven and display boxes. These can cost from INR 5,00,000 to INR 10,00,000. Licensing: The total costs for permits and licenses can come up to about 30,000.

How much capital is needed in a bakery? ›

Overall, you will need a sizable capital, around PhP 50K to 500K to start a bakery business in the Philippines.

What are 3 variable costs for a bakery? ›

So, the overall ingredients' cost increases as more cakes are made. These costs that increase as production volume increases, are variable costs. In this case, the flour, milk, sugar, eggs, and butter are examples of variable costs.

How much money needed to start bakery? ›

The rent for a bakery café space can range from INR 70,000 to INR 1,50,000 per month. Equipment: Bakeries need a range of equipment from grinders, processors to oven and display boxes. These can cost from INR 5,00,000 to INR 10,00,000. Licensing: The total costs for permits and licenses can come up to about 30,000.

How profitable is owning a bakery? ›

The average bakery profit margins are low. A typical margin for a bakery is between 4% and 9%. The reason that bakeries have such small margins is due to competition. To sell your products, you need to offer them at prices that are market competitive yet still allow you to make money.

How much do small bakery owners make? ›

How much does a Bakery Owner make? As of Jan 31, 2023, the average annual pay for a Bakery Owner in the United States is $71,525 a year.

Do you need any qualifications to open a bakery? ›

You don't need any formal qualifications to own and run a bakery, but that doesn't mean it's not a good idea to learn a few basic skills and get a bit of experience first.


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