Do you want to start a vegan bakery business? If YES, here is a detailed guide on how to start a vegan bakery business with no money and no experience.
The truth is that if you are a baker, it is easier for you to venture into vegan bakery because almost the same ingredients and processes that are used in making conventional breads and cakes et al are used in making vegan baked foods except for all animal – based ingredients.
One thing about the vegan bakery business is that it is your creativity that can stand you out of your competitors. No doubt, people that are into vegan baking are very creative, which is why you can come across vegan baked goods in different shapes, designs and flavor.
A vegan bakery business is indeed a profitable business because you can operate the business with your family members from your kitchen thereby cutting operational cost to the barest minimum.
Also, if you are able to secure a strategic high traffic location, with a robust demography of vegetarians to open a shop, you can be rest assured to rake in good returns from your business.
Steps to Starting a Vegan Bakery Business
1. Understand the Industry
Vegan bakery are bakeries that baked foods that are made without eggs, dairy butter or dairy milk. They substitute each of these standard ingredients with plant-based ingredient, such as banana or flaxseed for eggs, non-trans fat margarine or oils for butters and plant milks for milk.
Vegan bakery is a niche idea in the bakery cafés industry and operators in this industry basically produce baked food that is flour-based in an on-site oven for immediate consumption.
Typical products include bread, cakes, pastries, pies and bagels, as well as complementary products, such as sandwiches, soups and salads. Purchases may be consumed on-site or taken to go.
The Bakery Cafés industry is indeed a major sector of the economy of the world and the industry generates over $11 billion annually from more than 11,533 bakery cafés scattered all around the world. The industry is responsible for the employment of over 180,291 people.
Experts project the bakery cafés industry to grow at a 2.9 percent annual rate. Panera Bread Company is only the company that can boast of having lion shares of the available market in this industry.
A recent report published by IBISWorld shows that The Bakery Cafes industry has expanded considerably over the five years to 2019. Consumers have been drawn to the health-conscious and customizable options emerging on operators’ menus.
As a result, industry growth has outpaced others in the food service sector. Industry performance has been supported by growing per capita disposable income and increased coffee consumption. However, franchise operations have produced a threat for many small, independent bakery cafes that have traditionally serviced local markets.
Over the five years to 2024, as consolidation persists, larger operators will have access to greater resources, enabling them to further their franchise operations. Smaller operators, unable to compete with the geographic reach and marketing capital of major chains, will be forced to specialize.
Some of the factors that encourage aspiring entrepreneurs to venture into vegan bakery business is the fact that you can start the business on a small scale from the comfort of your home kitchen. All you need to spend money on are baking ingredients and relevant non animal ingredients.
As a matter of fact, you can start by supplying vegan baked bread to mom and pop shops around your community or you can even open a small shop/kiosk in front of your house.
If you are hardworking and lucky enough, you can secure contract from the start to supply vegan baked food to vegan communities and organizations. This is why it is important to network and enter into strategic business alliance with key vegetarian communities.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
If you are thinking towards starting a vegan bakery business, you should be aware that aside from vegetarians and partial vegetarians, other people once in a while also try out vegan baked foods.
This goes to show that the target market for vegan baked goods is wide and far reaching, you can create your own make niche yourself to serve a specific purpose. Having said, here are some of the groups of people and organizations you can sell your vegan baked food to;
- Vegetarian communities
- School Children
- Sport Lovers/Fans (In Stadiums during live sport events)
- International and Local Tourists
- Corporate Organizations
- Families/Households in and around your neighborhood
- Event and Wedding Planners
3. Decide Which Niche to Concentrate On
Vegan bakery is a niche market in the bakery cafe industry hence it is difficult to come up with different niche ideas within the industry because almost of vegan bakeries bake foods such as;
- Vegan Cinnamon Banana Bread
- Healthier Chocolate Cupcakes
- Lemon Poppy Seed Muffins
- Vegan Coffee Cake
- Fudgy Avocado Brownies
- Easy Vegan Sticky Buns
- Vegan Chocolate Chip Cookies
- Blueberry Bread Loaf
The Level of Competition in the Industry
First and foremost, the fact that anybody with baking skills can decide to start vegan bakery business means that the business is open to all and sundry, hence it is expected that there will be high-level competition in the business. In recent time, there is hardly any busy community that you won’t find one or more shops retailing vegan baked food.
As a vegan baker, it is important to note that gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your regular customers or distributors.
Don’t hesitate to adopt successful strategies from your competitors, but understand that directly competing with an entrenched rival is a bad idea for a new vegan bakery. Creativity and diversification is the key in this regard which is why people with low startup capital opt for homemade vegan baked food – business.
4. Know Your Major Competitors in the Industry
Please note that vegan bakeries are categorized into two groups; those who bake from home and those who are big-time vegan baked food producers. Here are some of the well-known vegan bakery brands in the Bakery Cafe industry in the united states;
- Vegan Treats, Inc.
- Dulce Vegan Bakery and Café
- Vegan Folie’s
- Bernds Welt
- The Green Stove
- Viva Cupcakes
- The Vegan Cakery
- Crust Vegan Bakery
- Mud Pie Vegan Bakery & Coffeehouse
- Batter & Crumbs Vegan Bakery and Café
- NiceBites Vegan Sweets and Treats
- Happy Zoe Vegan Bakery
- The Baked Vegan Bakery
- Lushlife Vegan Bakery
- Bettersweet Vegan Bakery
- Blondies Vegan Bakery & Café
- C&J’s Vegan Sweets
- Vegan Vee Gluten-Free Bakery
- Back To Eden Bakery
Just like any other business, when starting a vegan bakery business, you just have to get your economic analysis right if your intention of building the business is to generate profits, grow the business, and perhaps expand the business beyond one location to other locations within the United States.
When conducting economic analysis for your vegan bakery business, you just have to critically examine these key factors; place, product, pricing, and promotion.
As a matter of fact, you would have to continue to review these key factors at regular intervals while running your vegan bakery business. As a vegan bakery business owner, you just have to have a proper grasp of your competitive landscape.
Vegan bakery business owners should also know that running their own single homemade vegan bakery business is different from managing or operating a standard vegan bakery company that has the potential to manufacture and distribute vegan baked foods all across their city.
Managing or operating a standard vegan bakery company or franchise attracts additional impediments like incentive alliance, bureaucracies, growth strategy, and operational guidelines et al.
It is important to note that payment of utility bills, rent, packaging and promotion and of course the purchase of vegan baked food ingredient and supplies is one of the most important factors contributing to the overall cost of a vegan bakery business and should be considered as a major factor when carrying out your economic analysis.
5. Decide Whether to Buy a Franchise or Start from Scratch
You can actually find some of the leading vegan bakery – brands in the United States in different cities in the U.S. This was achieved because some of the companies decided to venture into selling their franchise and at the same time operating chains of distribution outlets.
No doubt, the franchise model has indeed help vegan bakery companies to successfully expand both locally and globally at a very fast pace.
If you are considering starting a vegan bakery business, then you have the options of either buying a franchise from an existing vegan bakery brand or starting from the scratch. There are advantages for starting your own vegan bakery business from the scratch and of course there are disadvantages. So also, there are advantages for buying a franchise and there are disadvantages as well.
Part of the factors that can influence your decision when it comes to choosing between starting your own vegan bakery business from the scratch or buying a franchise are the type of vegan bakery Business model that you want to build, your business goal and vision, your finance, the competition available within the location you intend starting your vegan bakery business, and the available market et al.
6. Know the Possible Threats and Challenges You Will Face
The threats and challenges that is likely going to confront a startup vegan bakery business is the fact that they will be competing with already established brands and also other bakeries that are likely going to be launched in same location as yours.
We are not ruling out the fact that you will be competing with manufacturers of other forms of flour snacks. Other threats and challenges that you will face are economic downturn which usually affects purchasing power and also unfavorable government economic policies.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
If you are considering starting a standard vegan bakery business, a business that hopes to sell franchise, then you should take the selection of your legal entity seriously. When it comes to choosing a legal entity for a business, the nature of the business, the industry the business falls into and your business goals should inform your decision.
When it comes to choosing a legal entity for a vegan bakery business, you have the option of choosing from a sole proprietorship, general partnership, a limited partnership, an LLC, a “C” corporation, or even “S” corporation. It is important to clearly state that these different forms of legal structures have their own advantages and disadvantages; which is why you must weigh your options properly before making your choice.
These are some of the factors you should consider before choosing a legal entity for your vegan bakery business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to study the various legal entities to use for your vegan bakery business especially if you want to build a standard vegan bakery business, you will agree that Limited Liability Company; an LLC is most suitable.
One good thing about an LLC is that, you can start your vegan bakery business as a limited liability company and in future convert it to a ‘C’ corporation or even an ‘S’ corporation especially when you have the plans of going public or selling franchise.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your vegan bakery business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be innovative because whatever name you choose for your business will go a long way to create a perception of what the business will represent in the heart of your target market.
Usually it is the norm for people to follow the trend in the industry when naming their business. If you are considering starting your own vegan bakery business, here are some catchy names that you can choose from;
- Brownie Delight® Vegan Bakery Company
- Angelic Bite™ Vegan Bakery Production Company
- Fresh Food® Vegan Bakery, Inc.
- Go Green™ Vegan Bakery Company
- Ernesto Foods® Vegan Bakery, Inc.
- Doris Flickers® Vegan Bakery, Inc.
- Shannon Steve® Vegan Bakery, LLC
- Carol® Vegan Bakery, Inc.
- Eden Hero® Vegan Bakery, Inc.
- Nature Tasty® Vegan Bakery, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
When it comes to starting a standard vegan bakery business, there are key insurance policies that you must have in place same, applies to any other industry you intend starting a business. It is important to note that you can’t be permitted to run a standard vegan bakery business in the United States if you don’t have the basic insurance cover for your business.
These are some of the basic insurance covers that you should consider purchasing if you want to start your own vegan bakery business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Kitchen Insurance
- Workers Compensation
- Overhead expense disability insurance (optional)
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are running a franchise vegan bakery business model, it is compulsory that you file for intellectual property protection. It will become handy and very useful as your cookie brand begins to expand far beyond your reach. It is difficult to build your vegan bakery business from the scratch, and watch the brand name slip off your hands.
Even if you intend buying a cookie franchise, you would still need to contract the trademarks and service marks from the franchising company.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. Please note that the final approval of your trademark is subject to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
By and large, you might not have need for professional certification before you can be allowed to operate your own vegan bakery business in the United States of America, Canada, and Australia and even in Europe. But you would need to get clearance from local health authority, and food and drugs agencies before you can be allowed to open and operate a vegan bakery.
This is so because the vegan bakery business is considered to be delicate; it involves foods and drinks. You will also need a kitchen clearance certificate, food handler certificate and perhaps other relevant certification as it applies to your country or even your state.
12. Get the Necessary Legal Documents You Need to Operate
The legal requirements for vegan bakery business vary slightly from country to country, state to state and even from city to city. So, it is important to contact your local authority to know the legal requirements that you would need in order to open your own vegan bakery in your country.
Be that as it may, here are some of the basic legal requirements needed before you can successfully start and run your own vegan bakery business in the United States;
- Business and liability insurance
- Food handler certificate
- Health inspection Certificate
- Copy of license for the service support facility and/or a recent inspection report
- Tax Payer’s ID
- Fire certificate
- Kitchen insurance
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Building License
- Franchise or Trademark License
13. Raise the Needed Startup Capital
It is often said that money is the lifeline of any business. No doubt, raising startup capital is perhaps one of the major concerns for entrepreneurs; it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from investors.
The first thing to put in place before sourcing for startup capital for your business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business. The truth is that no bank can give you a loan if you don’t have a good and workable business plan.
Besides, investors will not take you seriously if you don’t have a business plan on ground before launching out to source for startup capital. There are several options when it comes to raising money to finance a startup business such as vegan bakery. Some of the options are;
- Raising money from personal savings and sale of personal stocks
- Raising money from investors and business partners
- Applying for loan from bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Sourcing for soft loans from family members and friends.
14. Choose a Suitable Location for your Business
The fact that there are different sizes of vegan bakery businesses scattered across the United States does not mean that vegan bakery business can thrive in every location. Before choosing a location for your vegan bakery business, ensure that you conduct thorough feasibility studies.
There possibility of you coming across a vegan bakery shop that just closed in the location you want to start yours can’t be ruled out. These are some of the factors that you should consider before choosing a location for your vegan bakery business;
- The demography of the location
- The purchasing power of the residents of the location
- Accessibility of the location (closeness to major road)
- The number of vegan bakeries in the location
- The local laws and regulations in the community / state
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
Aside from relevant software applications such as CRM software, accounting software et al and perhaps POS machines, there is hardly any technicality involved in the vegan bakery business. When it comes to operating a vegan bakery business, it is important to ensure that you acquire brand new bakery equipment.
Some of the kitchen/bakery utensils and equipment that you would need to launch your vegan bakery are; Industrial Oven, Microwave Oven, Fridge, Pans, Cutleries, sound system, flat screen TVs, and POS machines
If you have the required finance, it is to your advantage to acquire a property or lease a facility to be used for your bakery; it usually gives you the freedom to design the facility the way you want to it to be. But if you are low on cash, then you don’t have any option other than to rent a facility for your bakery.
As regard manpower, if you are running a small scale homemade vegan bakery business, you may not need full – time employees if you have family members that are willing to lend helping hands.
But a vegan bakery company would usually hire production manager, professional bakers, factory workers, accountant, sales rep, delivery drivers, cleaners, and security men. On the average, a standard medium scale vegan bakery should have between 10 and 20 employees.
The Services Delivery Process of the Business
The business process involved in a vegan bakery business is simple and straightforward; it involves getting your recipe right as regards the flavors, shapes and varieties of cakes and breads and other baked food that you intend baking.
Once you have the exact details and numbers you want to bake for the day, then you are expected to get your ingredients and the packaging (nylon, foil, and cardboard casing et al) on ground and then go into baking.
Once the healthier chocolate cupcakes, lemon poppy seed muffins, vegan coffee cake, fudgy avocado brownies, easy vegan sticky buns, vegan chocolate chip cookies and blueberry bread oaf are baked and well packaged, then it will be display in the shop, supplied to events as required, delivered via dispatch riders/van riders to customers or filled in the ATM as the case may be.
After the day’s sales, the books will be balanced, stocks will be taken and if need be, ingredients and supplies will be re-stocked, the bakery, bakery equipment and shop will be thoroughly cleaned as requested by local kitchen inspectors (regulating authority) and all the kitchen utensils and equipment placed in the right position so as to get set for the next day’s job.
16. Write a Marketing Plan Packed with ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a vegan bakery business, then you must employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the industry.
People will buy your vegan baked food if they know that they are going to get good tasting products and of course value for their money.
As a matter of fact, your marketing strategy should center on quality and pricing, and above all excellent customer service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet (videos/YouTube) to market their services or products. In other words, a larger percentage of your marketing effort will be directed to internet users. These are some of the marketing ideas and strategies that you can adopt for your vegan bakery business;
- Introduce your vegan bakery business and brand by sending introductory letters alongside your brochure to vegan community, corporate executives, students, sports men and women, tourists, and every adult in the neighborhood where you intend retailing your vegan baked foods
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business, so as to give your business an online presence
- Directly market your products.
- Join local chambers of commerce and industries for business networking and industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your vegan baked food at rock bottom prices is to purchase your ingredients and packing items directly from farmers and manufacturers in pretty large quantities. The truth is the higher the quantities of items that you purchase directly from the manufacturers and farmers, the cheaper you tend to get them.
Another strategy that will help you retail your vegan baked food at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; they will help you save cost for paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of a wide range of different flavors of chocolate cupcakes, lemon poppy seed muffins, vegan coffee cake, fudgy avocado brownies, easy vegan sticky buns, vegan chocolate chip cookies and blueberry bread oaf under your brand, your business process and of course your pricing model, are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your product can favorably compete with the some of the leading brands.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps to attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your products and service delivery, they can hardly source for alternative service provider or products.
If you can continue to make available a wide range of different flavors of chocolate cupcakes, lemon poppy seed muffins, vegan coffee cake, fudgy avocado brownies, easy vegan sticky buns, vegan chocolate chip cookies and blueberry bread loaf, and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive complaints and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be.
One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
If your intention of starting a vegan bakery business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of distribution channels, then you must be ready to spend money on promotion and advertisement of your brand.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your vegan bakery business;
- Place adverts on both print (newspapers and related food magazines) and electronic media platforms
- Sponsor relevant community based events / programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your Billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your vegan baked food – brand
- Distribute your fliers and handbills in target areas
- List your vegan bakery business in local directories / yellow pages
- Advertise your vegan baked food in your official website and employ strategies that will help you pull traffic to the site.
- Position our Flexi Banners at strategic positions in the location where your vegan bakery is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo et al.
21. Create a Suppliers/Distribution Network
If you are running a vegan bakery business, it is very important that you create channels for vendors to supply you with vegan baking ingredients and supplies.
It will save you time and perhaps cost especially if they are the manufacturer or wholesale distributor. In order not to be disappointed, it will be wise to have more than one vendor/supplier on ground.
So also, you have to map out good distribution network for your products and wait for people to come and buy them; you have to go out there to source for market.
The truth is that the more distribution points that you have (the more outlets you supply your vegan baked food) the more profitable and successful the business will grow. It is the practice for vegan bakeries to source for shops, malls, events, and markets to distribute their baked goods.