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BAKERY BUSINESS........How to start, produce and market - No Loss if you produce to demand!

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ENTERPRISE!


Introduction:

Enterprise is Fireinthebone's platform for provoking creativity among believers, young and old to encourage them to venture into profitable business ventures. The bible says "Fear Not", walk in wisdom and have faith in God and all things shall be yours. 


We hope to motivate and strengthen believers in business and those willing to venture into business with informative and insightful research and interviews.

Bread is one food that you can find in the fridge of every Nigerian home and why not? You can do anything with your bread, toast it, eat it with egg, tea, peanut butter, the list is endless. So you can say bread has a market in Nigeria, meaning making and selling bread is good business.

Everyone eats bread and bread competes against rice and cassava (gari) as the most popular food and staple in Nigeria. It has remained a widely-accepted food item because of its convenient and ready-to-eat nature.  Bread is a common food item in many Nigerian families and the love for bread for breakfast is on the increase.  It goes with tea, ogi, Beans to mention a few.


Types of Bread
 
There are three main kinds of bread in the world:
·    those that rise highest and so have to be baked in pans,
·    those with a medium volume, like rye and French breads,and
·    those that hardly rise at all and consequently are called flatbreads.
 
Wholemeal bread
 
Wholemeal and wheatmeal breads are popular. In New Zealand wholemeal breads must have 90% or more wholemeal flour in the recipe used, and wheatmeals any level of wholemeal flour mixed with white flour.

Wholemeal bread contains higher concentrations of minerals and vitamins than white bread as it retains the bran and germ of the wheat.
It is an excellent source of dietary fibre, containing twice that of white bread and more than multigrain breads.
 
Multigrain and kibbled Bread
Mixed or multigrain breads are made from a mixture of wholemeal, white or rye flour and may contain wheatgerm, honey, gluten, non-fat milk solids, cracke  d and whole grains of wheat and other cereals such as rye, oats, corn, barley, rice millet and triticale.
 
Fruit Bread
Fruit breads use a normal bread recipe to which fruit and often sugar are added. Popular fruits used are raisins, currants, dates, orange peel and dried fruits such as apricots. Hot cross buns, eaten at Easter, and many fruit breads, also have spices added. Ingredients used to enhance appearance and flavour of breads include cinnamon, nutmeg, egg wash and sugar/water wash.

In Nigeria, there are different categories of bread that attract different kinds of consumers. It’s very important that entrepreneurs understand these categories to help them decide on the type of bread they will produce, the likely competition and the needs of the market.
 
Plain White Bread
 
At the bottom of the ladder is the basic, plain and cheap white bread. This variety is very common with  low income earners or people who just want to fill their belly and don’t care about nutritional content.
 
It comes without any labeling, branding or packaging and very little attention is paid to product taste, quality or hygiene. It’s best described as ‘bread for bread’s sake.’
 
Popularly known as ‘Agege bread’ in many parts of Lagos (Nigeria), this basic white bread is usually less than the size of a standard loaf and can be consumed in one serving by one person. Agege bread is normally unsliced and its nutritional content is the poorest in the market.
 
More than 50 percent of bread sold in Nigeria market are of this type and most consumers are drawn to it because of its very low price. As a result, most independent and small-scale bakeries producing this bread make money by selling cheap at high volumes.
 
There are usually no leading producers in this segment of the bread market and it’s commonly dominated by many small-scale and family-run bakeries.
 
Nourished White Bread
 
This type of bread usually contains ingredients like eggs, milk, fruits, etc. and generally do not contain unhealthy supplements or additives. A lot of attention is usually paid to the product’s taste, branding, packaging and overall quality.
 
This bread appeals to, and is targeted at, African middle-class households and customers who are conscious about high food standards, nutritional content, quality and taste. These customers are also willing and very happy to pay extra for this higher quality.
 
Most families also prefer nourished bread for their growing children. As a result, nourished white bread costs much higher than the plain version on the market. This segment of the market is dominated by franchise bakeries, industrial bakeries and small independent bakers.
 
Special bread
This category of bread refers to wheat (brown) bread, whole meal bread and other forms of uncommon bread in the market.
 
Consumers who prefer these kinds of bread do so for lifestyle, health, taste or cultural reasons. Special bread is usually sold in specialty stores and supermarkets. They cost much more than the plain white and nourished versions and require specialized skills and experience to produce. Bakeries that produce this bread target niche markets like upper class residential areas and parts of town with a large population of foreigners.
 
The size of the Nigerian bread market is awesomely large. There are many bakeries in place right now in almost everywhere and competition is keen.  To be successful in bakery business in Nigeria therefore, you must identify your potential customers and their taste to produce.
 
Before you start a bakery in Nigeria, you should know the following:
 
CONSIDER YOUR FINANCIAL RESOURCES:
You must assess the level of your financial resources vis-a vis the requirement for establishing a bakery.  The medium and big bakeries produce the nourished big loaf bread types that the elite class go for, but the cost of a big bakery like there is very expensive.  

From the factory or whole house where they usually operate from to the equipment they use are all expensive. While the small bakeries could start from home would cost you just a little compared to the big bakery.  The small bakeries that based the common type of bread also usually sell all their daily output and you know what, they do not have left over stocks.
 
If you decide to start small and serve the lower class, you can be sure of ready market for your output because they eat more bread than the elite class anyway…because of their number. Another advantage of starting small is that you can start your bakery from the house or have a cheap bakery at a shopping mall etc.
 
Learn the trade
You need to know what baking entails, so visit bakeries both the small and large scale ones, learn about the materials needed for the production, process involved in the production, equipment, challenges and the things that can spoil your market. Meanwhile you need read up about making bread and getting money from it online.

Have a business plan

If you plan to succeed in the business, then don’t just dream about making thousands of loaves, selling them and making millions of naira, think about how to start and ensure it keeps running even when the beginning is hard.

Your business plan must have a detailed plan of how to get revenue, the expected cost of running your bakery over a period of time. Your research should indicate likey demand for the product in your location and the state of the industry.  I mean the demand and supply sides of the bread market in your state.  Because the capital outlay is huge, you need a detailed report.

Choose Your Location

When choosing a location to start your business in, consider the rent cost, taking into account the money you have in hand for the project, the availability of water; and market accessibility, the demand for your product.  You can rent a place for your bakery, or build it yourself.

Equip the Bakery

What you need for your bakery include flour mixer, baking pans, a very big oven(specially constructed for the purpose), refrigerators and display cases, manpower. Packaging matters a lot, the wrapper of your bread will attract or discourage people from buying the bread. When hiring, experience counts a lot, hire based on the size of your factory.  Make fire alarms and extinguishers available at the factory too.

SETUP COST FOR A STANDARD BAKERY

The setup cost will depend on the type and size of bakery, the investor wants to establish.  There are modern automated bread making factories as well as modern, but not fully automated bakeries.

There will be the fixed and variable costs involved.  The cost of factory and equipment are relatively fixed, while monthly running cost can vary with production and staff level.  Some of the cost can be reduced through negotiation with suppliers and other vendors.  

The following are the basic bakery Set-up Costs that you may not be able to avoid in a standard bakery.  They include:

1.    Build Your Factory - Here you need to engage the services of an expert  Your factory have to be properly planned and executed in other to meet regulatory approval.

2.    NAFDAC approval - Obtain it before production.

3.    KVA Generator - Most factories switch to Generator when they want to produce to avoid power failure disappointment and its effect.

4.    Supply Vans, Motorbikes - These are critical to your delivering the bread fresh and timely to shops, supermarket and to major terminals.

5.    Fire and smoke detector installed at the factory

6.    Borehole - clean and standard water supply to the factory

7.    Over-head Water Tanks - For water distribution

8.    Bakery Equipment:

A.    Baking Oven - Depending on your plan, there are the industrial baking oven, which is the favourite of master bakers.
B.    There is the standard bakery Oven - Good also

C.    Dough Mixer - Used to mix the flour with other ingredients to smoothness. There is the electronic and local mixers.

D.    Slicing Machine - Needed if you are going to bake nourishing standard loaf.  The local bread producers do not need it.

E.    Baking Pans - They come in sizes.

F.    Bread Wrapper - You need a brand name to drive the business.  The name is printed on a nylon visibly and is seen from afar on the wrapper.  Wrapper should be strong and water resistant. Make sure they are in the store before you commence production.


Staffing - This is one of the most sensitive aspect of your business. Human resources is the engine of the business.  They it is that will bring the dream to pass, so be diligent in their selection.

This is what your staffing may look like at the beginning.  These should be full-time staff in order to secure their loyalty and commitment.

1.    One Master Baker and One assistant
2.    Two Packers, who doubles as delivery attendants
3.    One Cleaner
4.    A Store Keeper/Accountant/Office Manager
5.    Two Drivers for delivery and marketing
6.    Office Manager/Administrative  Assistant
7.    Two Security Guards
8.    One or Two Bike Riders.


Monthly Costs - In budgeting the weekly and monthly working cost of a standard bakery, you might have to consider the following costs:

Weekly Cost:                                                       NAIRA
1.    Weekly labour cost - casual workers                    N
2.    Fuel cost for delivery vans, Motor bikes                N
3.    Diesel Cost for the week                                    N
4.    Cost of wastages                                              N
5.    Cost f Damages                                                N
X
6.   
Monthly Costs:
1.    Labour costs (full timestaff)                             NX
2.    Electricity Bills                                                NX
3.    Telephone Bills, Mobile Nos                             NX
4.    Security Bills                                                  NX
5.    Motor Van repairs and service                           NX
6.    Generator Service charge                                  NX
7.    Air conditioners service Maintenance                  NX
8.    Factory repairs (Electrical, equipment, etc)          NX
9.    Refuge collection/evacuation bill                        NX
10    Cleaning (Factory and office)                             NX
X    X

Monthly Supplies:- Bulk purchase recommended
1    Flour                                                              NX
2    Yeast                                                            NX
3    Egg                                                               NX
4    Milk                                                               NX
5    Other Spices and condiments                            NX
6    Nylon Supplies                                                NX
7    Miscl Provision                                                NX
X
                                                                         XXX

                                                                         ===

MARKETING STRATEGIES TO GROW BAKERY BUSINESS

Case Study of Nine Innovations, US:
The was a startup bakery that grew so much in one year with a lot of people showing interest in Franchise arrangement that the Chairman began to ask “What grew the business?  Is it marketing, online sales or referrals?  What is it that grew the business?'

This is a story of the nine innovations that increased sales and revenue in a start-up bakery till the business became a cash cow. These are the Nine point tonic ideas to grow your bakery business!

Industry Outlook: In recent years, the bakery industry has been changing. While commercial bakeries still account for the majority of bakery sales, the industry as a whole is moving away from mass-produced products and increasingly toward niche offerings like healthy baked goods and high-quality, artisanal products.

For small bakery businesses, this is promising. The shift from mass-produced baked goods to handcrafted specialty products provides plenty of areas where bakers can grow strategically, taking advantage of industry trends and consumer needs.

Are you looking for ways to bring in more money and attract more clients to your bakery business? Here are the Nine step strategies that will do the "magic" for you.

1. Offer nutrition information for your products:
 
As patrons are becoming more and more health conscious, it’s a smart move to consider providing nutrition information for your breads, pastries, and sweets.

According to the American Bakers Association, 61 percent of U.S. adults use nutrition labels to help manage their weight, and 38 percent say that labeling products would help them do this more effectively. 

Additionally, Nafdac in Nigeria requires that nutritional contents of every packaged food must be provided on the wrapper or packing of the product. Many consumers underestimate the calorie and fat content in foodsand attest that they would like to see more nutrition labeling at places where they eat away from the home.

How does including nutrition information impact sales?’ Its hard to say, as there hasn’t been enough large-scale initiative to include this information; at this point in time in most locations, including nutritional information is optional. However, bakery chain Panera has seen huge success in recent years after voluntarily including nutritional info for all of their products.

Scott Davis, Executive Vice President and Chief Concept Officer for Panera Bread says that since including nutritional information, the fast-casual bakery chain has “enjoyed record revenues and profits every year and seen our stock price double, making it one of the best-performing stocks in the industry.”

If you are still on the fence, consider having nutrition information available on request, or for viewing through ’your business app, rather than displayed on your menu in full view.

2. Have healthier options available - Unique Varieties:

In a similar vein, consumers are becoming more and more interested in the availability of healthier options. In adults ages 25 to 34, 54 percent of those surveyed by the American Bakers Association said they reach for healthier options when baking at home, which leads industry experts to believe that consumers may be interested in healthier options from their local bakery as well.

Corner Bakery Cafe has jumped on this trend, offering an extensive list of low-calorie options. “We’re committed to offering guests a healthier selection of prepared-to-order breakfast, lunch, and dinner options year-round, so they can enjoy great-tasting yet sensible meals without missing out on taste and variety,”

This isn’t just a trend without any numbers to back it up: Plenty of chain restaurants are seeing increases in sales due to their inclusion of healthier options, and one study found a 28 percent increase in sales when foods were labeled as having healthy ingredients or properties, such as being low-sodium.

Be aware, however, that “healthy options” doesn’t just have to mean low-calorie. Consider offering a wide variety of options, such as low-carb, high protein, all natural ingredients, and so on, depending on your ’target markets preferences.  This would be a great time to do some additional market research with your customers!

3. Feature different portion sizes

As we found in the restaurant industry,offering smaller or non-standard portion sizes is a great way to bring in new customers and make more money from your existing customers.

The snacking trend is growing, and bakeries are set to play a huge role  (or should I say roll-get it?). 28 percent of cake and pie buyers say that they would be interested in individual portion sizes, and 20 percent say mini or bite-sized versions would encourage them to buy more. This provides consumers with built-in portion control, which is a growing trend.
 
Baking Business found that bite-sized desserts are a “must-have” for bakeries. Carly Fields of Tart Bakery attributes the rising popularity to more than just portion control: “I believe most people do not want to commit to one dessert, and the bite-sized desserts allow them to have fun and try more things,” she says.

4. Offer high-protein baked goods

Doughbar Doughnuts specializes in a wide variety of creatively-flavored protein doughnuts with DIY toppings.
 
Bakeries offering high-protein baked goods, or even specializing exclusively in them have become extremely popular. 26 percent of Americans say they have increased their protein intake in recent years, and 78 percent of Americans expressed interest in foods that kept them feeling fuller longer.

Consider ’Lenny and Larrys most popular product, “The Complete Cookie,” a protein-packed cookie that comes in a variety of flavors. The brand, established in 1993, has experienced a boom in popularity in recent years.

If your bakery doesn’t specialize in high-protein goods, don’t worry-this trend isn’t just for new bakeries hoping to specialize. You can easily offer a few higher protein options (like a rotating selection of a few high-protein muffins, cookies, and so on) to complement your regular offerings.

5. Focus on locally-sourced ingredients

Local ingredients are very important to consumers; in fact, local products are quickly becoming more important than organic or “all natural” products.
 
The American Bakers Association found that 62 percent of consumers try to purchase local products whenever possible, and 41 percent said that a restaurant offering locally sourced ingredients influenced their choice in which businesses to frequent.
 
For successful examples of bakeries for whom locally-sourced ingredients are their bread and butter (literally), look no further than Pacific Northwest chain Grand Central Bakery. Their purchasing philosophy emphasizes local ingredients whenever possible, and their customers appreciate that they make an effort to buy directly from local farmers.

6. Don’t do away with indulgent desserts

Displaying nutrition information, offering healthy options and high-protein desserts-this must mean consumers are moving away from more indulgent offerings, right?
 
Actually, wrong: 65 percent of consumers attest that they care more about how a dessert tastes than its nutritional content.

Not only that, the same study found that 48 percent of consumers view cakes and pies as an indulgence and are gravitating toward high-quality ingredients and well-made, delicious desserts when they want something that fits the bill. 

“We’ve been mindful that while people are concerned about nutrition and health, when they want to treat themselves, they don’t want to compromise on taste and texture,”

What does this mean for your business? Don’t think the emphasis on healthy eating means consumers are disinterested in rich desserts. That being said, focus on making these indulgences “worth it” by making sure your ingredients are high quality and your desserts taste fantastic.

7. Let nostalgia inform your offerings
From Pop-Tarts to Oreos, bakeries are remaking everyone’s favorite childhood desserts and bakery items. They are huge crowd-pleasers, and bring in plenty of business: For example, Kansas City’s Heirloom Bakery & Hearth makes a toaster pastry so popular that they sell out by 9am.

Similarly, Berkeley-based Stateside Bakery was born from this very inspiration, offering, in their words, “nostalgia for the classically American desserts of our childhood-desserts that could only be found stateside, like Twinkies and Oreos.”

Kitschy and cute, offering reinterpretations of childhood classics is a great way to give old standbys your own personal spin, and attract both new and returning customers.

8. Offer allergen-free products
While sales of gluten-free products may have slowed, research shows that allergen-free baked goods are still in demand.
 
In general, sales of allergen-free products have risen steadily and continue to rise. Moreover, food allergies are on the rise as well,which means more and more people will be searching for allergen-free products.

While larger cities like NYC are often packed with allergen-free options, your own community may not have as many available, which leaves room for your bakery to grow.

Start by assessing what is missing in your local community. Is there a lack of offerings for those who are allergic to nuts, eggs, dairy, and so on? Check out your competition and see what holes you can fill, or speak with your customers and find out what allergies they or their family members are dealing with.

9. Pay attention to packaging

French bakery Laduree is known for its beautiful packaging.
 
Artisanal packaging is trending, and it’s a great way to make your products stand out from the crowd. Not only will unique packaging make your products memorable, but packaging has been found to be one of the most important aspects when it comes to a customer’s decision to buy a product.

Having beautiful packaging adds an authentic human touch that consumers love, as it sets handmade, local products apart from mass-produced generic offerings.
MARKETING STRATEGIES

With stiff competition, there is need for an organized marketing plan, even before production begin. Identify bread distributors that can market and deliver your bread. Consider the use of delivery vans and Motorbike to deliver your bread.  Consider locations of high human traffic, major terminals and other places where you should drop your bread daily.



Marketing Secrets:


Shop owners, retail traders, major terminals and local hawkers of bread prefer that freshly baked bread are supplied to them as early as 5.00am in the morning.

Especially in Lagos where life start as early as 4.00am, you must have packaged your loafs for distribution before 5am to be delivered to distributors. If you deliver your bread late in Lagos, you will loose patronage to bakers who deliver early. In Abuja, this may not be a very serious matter!

It is in your interest to register with the Association of Master Bakers around you and obtain Nafdac registration before you start producing bread.

Finally, know that profit may not come immediately, but between 5-12 months your bakery should have it’s footing well established for profitability. At the same time, it is not a business where you make loss.  


But, because of huge initial investment, and inefficiencies of a beginner, your profit may be small. It will certainly grow when you continue and maintain quality production.

7.Success Factors - What will make you succeed in the business are;

a)    Quality and texture of your loaf.


b)    Fair price for your bread - If your production and packaging are high, charge the same price for bread of your contemporary, otherwise enter the market with lower price and raise your price to the price of competitors when you are established.  


If your standards is well above industry, then you can enter a niche market with a higher-than-average price.  Make sure your quality is above average before you can lead in price.

c)    Maintain a consistent high quality loaf without compromise.


d)    Keeping up with trends in the bread industry in terms of packaging, varieties and flavor. 


e)    Buy your materials direct from manufacturers or importers to obtain discounts

8.Know your Customers: You can make wheat bread as people are going healthy these days, but that will depend on your environment and the people you plan to serve.  People living in Maitama may appreciate wheat bread sweetened with honey, while  people living in Gwagwa Karimo, Zuba and Nyanya might not.  



Beloved, Jesus is coming back soon.  "Where will you spend eternity - In heaven or hell? This is the time to work-out your salvation.  Now is the acceptable time!


Repent and give your heart to Jesus. He will give you a new life, victory and eternal life.  Will you accept Him today?


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