Do you want to know exactly how much it cost to start a bakery business? If YES, here is a detailed cost analysis for starting a bakery and raising finance.

Selling of baked foods became the trend and before long, baked products were getting sold in the streets of Rome, Germany, London, Paris et al. Over time, bakeries no longer rely solely on retailing their baked breads and snacks in the street, in open market or home delivery, but they can now comfortably open their bakery for customers to come in and order for their freshly baked bread and snacks.

Having provided you with a:

  1. Industry Overview
  2. Market Research and Feasibility
  3. Bakery Business Plan
  4. Bakery Name ideas
  5. Licenses and Permits
  6. Bakery Marketing Plan
  7. Cost of Starting a Bakery
  8. Marketing ideas & Strategies

We will consider how much it cost to start a bakery business from scratch including the operating costs.

  • Industry Overview

Bread and all flour based foods are generally consumed by almost everyone in the world, and as such anyone who chooses to establish a bakery in any part of the world is sure going to get good returns on his or her investment as long as they are doing the right thing when it comes to running a business.

Aside from bread which seems to be the face of the bakery industry, cake is also one of the products of the bakery industry that is doing pretty well in the market all over the world. Yes, people eat bread and other flour made snacks on daily basis, but you will quite agree with me that cake making is also one of the major money spinners for bakers. Although not all bakers are specialized in cake making, but those who are into cake making alongside bread and snacks making are the people who are maximizing the bakery industry.

The fact that people order for cakes during their special events like birthday parties, wedding ceremonies, wedding anniversaries and other anniversaries and parties makes the bakery business a high–in–demand business.

How Much Does It Cost to Start a Bakery Business?

The cost analysis as it relates to starting a standard bakery in the United States of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations. For example, the cost of setting up a standard bakery facility which has the following; Standard commercial oven, Proof boxes, Baking Sheets and Racks, Mixers, Work Tables, Sinks, Slicers, Scales, Cake decorating Tools, Ingredient Bins and baking utensils et al are same especially when bench–marked against the US Dollars.

For instance, if you live in Australia and you decided to import the bakery equipment listed above from China, you will pay same price for this equipment no matter the part of the world you live in, the only variation will be the cost of shipping the goods to your destination.

Other factors that may be slightly different in terms of costing when it comes to starting a standard bakery business in any of the countries listed above are cost of labor, cost of bakery ingredients, cost of transportation and logistics, local tax, insurance policies, business incorporation fee, promotion and branding cost, rent/leasing amongst other factors.

Over and above, when it comes to starting a medium scale bakery business, you should be prepared to either rent or lease a standard and centralized facility with good human and vehicular traffic; this is going to be one of the areas where you are expected to spend the bulk of your start–up capital.

How Much Does It Cost to Start a Bakery Business in the United States?

These are the key expenses you are expected to make when starting a medium scale but standard bakery business in the United States of America;

  • The total fee for registering the business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Commercial Kitchen/Bakery permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the bakery in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in good and centralize location – $200,000
  • The cost for remodeling the facility and construction of a commercial bakery – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory and commercial bakery equipment (Baking ingredients (flour, yeast, dough, sugar, butter, milk et al), Packaging materials supply, Standard commercial oven, Proof boxes, Baking Sheets and Racks, Mixers, Work Tables, Sinks, Slicers, Scales, Cake decorating Tools, Ingredient Bins and baking utensils, Filing Cabinets, Noticeboard and Staff Uniform et al) – $100,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $5,000
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, flat screen TVs, sound system, computers, tables and chairs et al) – $25,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous – $5,000

You will need an estimate of seven hundred thousand Dollars ($700,000) to successfully set up a medium scale but standard bakery business in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard bakery business that can only concentrate in baking cupcakes and other flour snacks and with fairly used baking equipment in the United States of America will cost about fifty thousand dollars to one hundred and fifty thousand Dollars ($50,000 to $150,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and with a distribution network that covers just the immediate community.

When it comes to starting a standard and large scale bakery business with several distribution outlets in key cities in the United States of America, a bakery business with the intention of selling franchise and also baking bread and all forms of baked flour like snacks and cakes, then you should look towards budgeting well over two million dollars ($2 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Bakery Business in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard bakery business in the United Kingdom;

  • In the United Kingdom, online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House’). There’s a same day service costing £100.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – £13,300
  • Marketing promotion expenses for the grand opening of the bakery in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – £28,400.
  • The cost for leasing a standard facility in good and centralize location – £180,000.
  • The cost for remodeling the facility and construction of a commercial bakery – £95,000.
  • Other start-up expenses including stationery (£300) and phone and utility (gas, sewer, water and electric) deposits (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000
  • The cost for start-up inventory and commercial bakery equipment (Bakery ingredient (flour, yeast, dough, sugar, butter and milk et al), Packaging materials supply, Standard commercial oven, Proof boxes, Baking Sheets and Racks, Mixers, Work Tables, Sinks, Slicers, Scales, Cake decorating Tools, Ingredient Bins and baking utensils, Filing Cabinets, Noticeboard and Staff Uniform et al)- £95,500
  • The cost for store equipment (cash register, security, ventilation, signage) – £9,500
  • The cost of purchase and installation of CCTVs: £4,500
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, flat screen TVs, Sound System, tables and chairs et al): £20,500.
  • The cost for building and hosting a website: £600
  • The cost for opening party – £6,300
  • Miscellaneous: £8,000

You will need an estimate of six hundred and fifty thousand Pounds Sterling (£650,000) to successfully set up a medium scale but standard bakery business in the United Kingdom. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard bakery business that can only concentrate in baking cupcakes and other flour snacks and with fairly used baking equipment in the United Kingdom will cost about forty-five thousand Pounds Sterling to one hundred and forty thousand Pounds Sterling (£45,000 to £140,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and with a distribution network that covers just the immediate community.

When it comes to starting a standard and large-scale bakery business with several distribution outlets in key cities in the United Kingdom, a bakery business with the intention of selling franchise and also baking breads and all form of baked/flour snacks and cakes, then you should look towards budgeting well over one million, eight hundred thousand Pounds Sterling (£1.8 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Bakery Business in Canada?

These are the key expenses you are expected to make when starting a medium scale but standard bakery business in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Center ($250 if filed through other means).
  • Legal expenses for obtaining licenses and permits (Health department license and business license)and permits (Fire department permit, Commercial Kitchen/Bakery permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the bakery in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in good and centralize location – $200,000
  • The cost for remodeling the facility and construction of a commercial bakery – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory and commercial bakery equipment (Bakery ingredient (flour, yeast, dough, sugar, butter and milk et al), Packaging materials supply, Standard commercial oven, Proof boxes, Baking Sheets and Racks, Mixers, Work Tables, Sinks, Slicers, Scales, Cake decorating Tools, Ingredient Bins and baking utensils, Filing Cabinets, Noticeboard and Staff Uniform et al) – $100,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $5,000
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, flat screen TVs, sound system, computers, tables and chairs et al) – $25,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous – $5,000

You will need an estimate of seven hundred thousand Dollars ($700,000CAD) to successfully set up a medium scale but standard bakery business in Canada. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard bakery business that can only concentrate in baking cupcakes and other flour snacks and with fairly used baking equipment in Canada will cost about fifty thousand dollars to one hundred and fifty thousand Dollars ($50,000CAD to $150,000CAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and with a distribution network that covers just the immediate community.

When it comes to starting a standard and large scale bakery business with several distribution outlets in key cities in Canada, a bakery business with the intention of selling franchise and also baking breads and all forms of baked/flour snacks and cakes, then you should look towards budgeting well over two million dollars ($2 millionCAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Bakery Business in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard bakery business in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Commercial Kitchen/Bakery permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the bakery in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a standard facility in a good and centralized location – $200,000
  • The cost for remodeling the facility and construction of a commercial bakery – $100,000.
  • Other start-up expenses including stationery ($500) and phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
  • The cost for start-up inventory and commercial bakery equipment (Bakery ingredient (flour, yeast, dough, sugar, butter and milk et al), Packaging materials supply, Standard commercial oven, Proof boxes, Baking Sheets and Racks, Mixers, Work Tables, Sinks, Slicers, Scales, Cake decorating Tools, Ingredient Bins and baking utensils, Filing Cabinets, Noticeboard and Staff Uniform et al) – $100,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750
  • The cost of purchase and installation of CCTVs: $5,000
  • The cost for the purchase of furniture and gadgets (Telephone, printing machines, flat screen TVs, sound system, computers, tables and chairs et al) – $25,000.
  • The cost for building and hosting a website – $600
  • The cost for opening party – $8,000
  • Miscellaneous – $5,000

You will need an estimate of seven hundred thousand dollars (AUD$700,000) to successfully set up a medium scale but standard bakery business in Australia. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard bakery business that can only concentrate in baking cupcakes and other flour snacks and with fairly used baking equipment in Australia will cost about fifty thousand dollars to one hundred and fifty thousand dollars (AUD$50,000 to AUD$150,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation and with a distribution network that covers just the immediate community.

When it comes to starting a standard and large scale bakery business with several distribution outlets in key cities in Australia, a bakery business with the intention of selling franchise and also baking bread and all forms of baked/flour snacks and cakes, then you should look towards budgeting well over two million dollars (AUD$2 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Estimated Start–Up Cost for Bakery Business was Based on the following factors;

  • Staff/Manpower

When it comes to starting a standard bakery business on a large scale, you would need the services of the following professionals;

  • Chief Executive Officer
  • Chief Baker
  • Assistant Bakers
  • Human Resources and Admin Manager
  • Accountant/Cashier
  • Merchandise Manager
  • Marketing and Sales Executive
  • Drivers/Distributors
  • Cleaners
  • Security Guard

Can a Bakery Business be Bootstrapped on a Lean Budget Right from Home?

If you a looking for a small scale business that you can successfully bootstrap on a lean budget right from your home, then you should consider starting a bakery business. One good thing about bakery business is that you can successfully run the business from your home especially if you choose to operate on a small scale and to concentrate in baking cakes, cupcakes and other flour baked snacks for sale in your immediate community.

As a matter of fact, you can start a bakery business with as low as five thousand dollars or even less depending on how small you want the business to be. All you need to do is to register the business, purchase the basic needed baking oven, baking equipment and bakery ingredients and supplies, print your business card and market your products.

The challenge here is that you must be ready to take on more than half of the available roles in the business.

How Much Does it Cost to Buy a Bakery Franchise?

In the United States of America, the Average Cost of Purchasing a Bakery Franchise is $50,000. Examples of 3 Well – Known Franchising Companies in the United States of America are;

  • Corner Bakery Cafe®- Franchise
  • Great Harvest Bread
  • Bread smith

In the United Kingdom, the Average Cost of Purchasing a Bakery Franchise is £50,000. Examples of 3 Well – Known Bakery Franchising Companies in the United Kingdom are;

  • bake&TAKE a fully self-service Bakery and Coffee shop
  • Grainer Bakery
  • Waffledelight Franchise

In Canada, the Average Cost of Purchasing a Bakery Franchise is $60,000 (Canadian Dollar). Examples of 3 Well – Known Bakery Franchising Companies in Canada are;

  • Cobs Bread Franchise Canada
  • Michel’s Bakery Café
  • Grandma Lee’s® Bakery Cafe

In Australia, the Average Cost of Purchasing a Bakery Franchise is AUD$60,000. Examples of 3 Well – Known Bakery Franchising Companies in Australia are;

  • Bakers Delight Australia
  • A Fresh Change – Bakery Franchise – Ferguson Plarre Bakehouses
  • Simply Delicious Cakes

Financing Your Bakery

There is always need to financing any kind of business, therefore when it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for start – up capital for your private security company;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Applying for loan from your bank / banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends.