BREAD BAKERY BUSINESS PLAN

This business plan is a tightly constructed, succinct consideration of all factors relevant to launching this bakery. From rent charges to competition and seasonal changes to costs per loaf, this plan hasn’t left anything out…all without being overly verbose. This exemplary plan is very focused and complete, which will help the business stay on course.

TABLE OF CONTENTS

• EXECUTIVE SUMMARY
• THE COMPANY
• PRODUCTS
• PRODUCTION
• MARKET
• MARKETING
• ORGANISATIONAL PLAN
• RISKS
• FINANCES
• APPENDIX

 

EXECUTIVE SUMMARY

Awareness of high quality baked goods is on the rise. Good bread is a rare combination of nutrition, convenience, and luxury. Today’s consumer has less time to create wholesome, handmade bread, but increasingly appreciates the nutritional and sensory benefits it provides. Good bread provides fiber and carbohydrates in a convenient, low fat form that is portable and delicious. Good bread never goes out of style.

Breadcrafter will produce and sell high quality, handmade breads to the residents and tourists of Port Hanover and Freeman County. The Company will focus on European Style; naturally leavened breads and baguettes made with high quality ingredients. Breads will be baked and sold at a storefront facility using a 4 deck, steam injected bread oven. Labor saving devices will allow the proprietor to run the entire operation with the help of two part time, seasonal employees.

Breadcrafter’s main competition includes a health food store, three pastry shops and three supermarkets in the Port Hanover area. Its advantage lies in the high quality of its products due to specialization and artisan manufacturing. The main marketing focus will be an eye catching sign, the scent of fresh bread wafting out of the storefront, and periodic printed advertisements. The company will sample its products liberally.

After establishing the operation, the company will explore the possibility of making takeout sandwiches. Delivering wholesale bread and baked goods to area restaurants and specialty retailers will also be considered.

The company is being founded by Kevin Richards, an artisan baker currently baking breads and pastries for Toothsome Foods Company in Port Hanover, Michigan. Kevin has spent the last two years building the TFC program from the ground up. His wife Renee Richars is also a bread baker, having baked for one year at the Grainery Food Co-op, Breadcrafter’s chief competitor. Together they bring a wealth of practical experience and a realistic market sense to the company.

Breadcrafter is currently seeking $70,000 in loans to get the business underway. Major costs include equipment purchases, shop rent, ingredient purchases, site modifications, and marketing, which total $61,000. Projected sales for the first three months, based on market and competition studies, will total $41,087. Total operating expenses and cost of sales will leave an average profit of $4,740 per month.

Opening day is scheduled for July 1st, 1996. While Breadcrafter has the potential for high growth, the first three years will be spent establishing company financial stability and increasing market share.

 

DESCRIPTION OF VENTURE

Breadcrafter will be created to serve the Uyo community by exploiting the need for a good bread bakery. It will offer a variety of high quality, European and American style artisan breads, baked fresh in its storefront bakery.

The company’s immediate goals are to achieve start up by July 17^th, 2021, in time to capitalize on the lucrative summer tourist season. It will start with the proprietor, Umanah, Idongesit Emmanuel, as baker and manager with the help of two part time employees. The company should gross over ₦100,000 in its first year. Long term goals include the addition of a takeout sandwich store to the storefront and wholesale bread sales within one year.

Umanah, Idongesit Emmanuel the proprietor and baker, is the creator of Breadcrafter. For four years, he has been employed at Toothsome Foods Company, a specialty foods manufacturer in Oruk Anam, Akwa Ibom State. His experience as a Production Supervisor and as a Research & Development Cook bring a sense of production realities and technical savvy to the company. As the driving force behind TFC’s current Handmade Bread program, Umanah, Idongesit Emmanuel has two years practical experience with sourdough breads

The company is in the process of securing ₦100,000 in start up financing.

 

PRODUCTS

Breadcrafter’s breads will stand out from the competition due to their uniqueness and outstanding quality. Most of the breads are European in style, including Sourdough, Miche (a traditional French whole wheat bread), and Sourdough Rye. These breads are made by the sourdough method which uses no added yeast. This method imparts a rich flavor, which can be tangy or mild, as well as a toothsome inner crumb and a crackly crust. By using this method, a skilled baker can create truly delicious breads without added fats or sugars, making many of Breadcrafter’s products 100% fat free. Sourdough breads also have an extended shelf life, remaining fresh for days without the use of preservatives. Breadcrafter will also offer specialty breads, which will be made in the sourdough way with the addition of such luxurious ingredients as Parmagian cheese with fresh ground pepper and dried Michigan cherries with roasted pecans. Spent Grain Bread, made with barley leftover from beer brewing, is another unique product that Breadcrafter will offer. Two varieties of French style baguettes will be offered fresh daily, a high demand product that is available nowhere else in the area. Breadcrafter will also produce White and Wheat Sandwich Breads with soft crust and a tender crumb for traditional American Style sandwiches. As the needs of the customer change, so will the lineup of Breadcrafter’s products. The bakery equipment is chosen with versatility in mind.

After establishing the business, Breadcrafter will research the possibility of producing sandwiches to increase revenues. This investment would require approximately ₦1500.00 for the purchase of equipment and ingredients. The company will also pursue wholesale contracts. Toothsome Foods Company has indicated interest in a contract to produce two Christmas products on a per loaf basis, Cherry Chocolate Fruitcake and Midwest Christmas Stollen. These products can help generate revenues in the slower Autumn months. The proprietor will also consider producing some of Toothsome Foods’ current lineup of Handmade Breads on a wholesale basis.

A self serve beverage cooler filled with soft drinks will also help increase revenues, as will the sale of fresh brewed coffee

PRODUCTION

Production of sellable breads is projected to begin on July 17st 2021. Raw ingredients will be ordered for twice a month delivery from North Farm Co-op and Sysco Inc., at which time a two week production schedule will be drawn up by Umanah, Idongesit Emmanuel the proprietor/baker. Ingredients will be stored in a dry storage area and in a walk in cooler (already on the proposed premises). Rent of the facility will be ₦1,050 per month with utility costs running approximately ₦725/month.

Scheduling will begin with three large bakes per week (MWF) and two small bakes (T,TH). Due to the extended shelf life of sourdough breads, product can be sold for two days before staling. Each bake day the baker will bake breads in a deck oven. The oven provides intense, even heat and a controllable amount of steam injection, allowing tremendous control of crust crispness. Everything from soft white sandwich breads to thick crusted, dense savory breads to sweet baked goods can be perfectly baked in this oven. While breads are baking, the baker will begin mixing the long fermenting doughs to be baked off the next day. Labor saving equipment including a dough divider and a bread moulder makes this possible. Hot breads will begin coming out of theoven by 7:00 AM, and all baking will be finished by 10:00 AM.

The storefront will open at 9:00 AM and close at 6:00 PM Monday through Friday. Saturday hours will be 9:00 AM to 4:00 PM for sales only. Part time employees will work the counter and assist with store maintenance during peak hours while the baker is baking. A beverage cooler and coffee machine will encourage convenience sales at the register.

Breadcrafter will economize on bookkeeping costs by handling its payroll duties in house. Year end bookkeeping will be handled by a professional accountant.

MARKET

The specialty bread market is about to experience enormous growth. Throughout the country small bakeries are appearing at an increasing rate. Chain stores, such as Lords Bread Company, are experiencing tremendous growth by capitalizing on the wholesome appeal of fresh baked loaves. As people become more aware of its healthy nutritional profile, good bread becomes even more attractive.

There is currently only one source for artisan breads in Uyo, Lords Foods Company, where the proprietor learned to bake

ADVERTISING or MARKETING

Breadcrafter will run an advertisement in the CHANNELS TELEVISION & NTA News Review during opening week. Another advertisement will run Labor Day weekend. Total advertisement expenditures will run ₦200 per month. The News Review is known to do spotlight stories on new Port Hanover businesses and Breadcrafter will take advantage of this publicity.

Advertising expenditures will be kept to a minimum in the fall, winter and spring. The company will rely on community service functions, liberal sampling, and word of mouth to reach new customers.

 

ORGANISATIONAL PLAN

RISKS

Fluctuations in Prices

Price fluctuations exist for any good that is seasonal, coming in abundance during some months and becoming rare in other months. As it turns out, this is exactly the nature of many of the raw materials that are used by a bakery. They tend to experience price fluctuations from one season to the next, and also from one year to the next, with some of these price fluctuations being quite extreme.

For example, the price of wheat is known to fluctuate by up to 40 percent, from one year to the next. The same goes for vegetable oil that bakeries use. Natural gas, which is often used to bake the products, can see price fluctuations of by as much as 25 percent.

Bottom Line

These price fluctuations can have serious consequences for the bottom line of a bakery business, as profit margins become slim, and sometimes the bakeries are forced to pass some of those costs on to the consumer, to avoid going out of business.

A common way to avoid the risk of price fluctuation in our bakery business is to negotiate contracts so that we buy all of our raw materials in bulk and at fixed wholesale prices. This allows us to budget for the future and also to be able to accurately and consistently forecast on costs and profit margins for the future.

 

FINANCE

Repair And Maintenance

The estimated maintenance cost for the first month is ₦500.00. From there it gradually diminishes to ₦200 a month for the remainder of the year. After the first of the year maintenance estimates are reduced to ₦100 a month.

Insurance

A Business Owner’s Policy, covering contents, liability, and some loss of income, will cost ₦400 to ₦500 a year for Breadcrafter, as quoted by Sam Williams of Port Hanover Insurance. Worker’s Comp will run ₦2.25 for every ₦100 paid. Breadcrafter has budgeted ₦50 a month in general insurance and ₦20 a month in Worker’s Comp. Health Insurance premiums for the proprietor and his family will run ₦250 per month.

Taxes and Licenses

The company has budgeted ₦150 a month on miscellaneous taxes and licenses.

General Supplies

General supplies will consist mainly of bread bags which cost ₦.05 each for paper and ₦.03 each for plastic. Bag material, which affects the quality of the crust in storage, will be chosen by the customer. These prices have been included in the cost of sale of each loaf. Cleaning and maintenance supplies will total no more than ₦50 per month. Breadcrafter has budgeted ₦125 per month as a conservative figure.

Professional Fees

Professional fees after startup will be kept to a minimum. The proprietor will perform all the necessary filing and bookkeeping chores required except year end tax filing and calculation of depreciation. The company has budgeted ₦325 in January and

₦325 in March to cover these needs.

Miscellaneous

Breadcrafter has budgeted ₦120 per month to cover miscellaneous expenses.