The food business is one of the fastest-growing industries in the world, hence considering a bakery business is not at all a bad investment. A standard bakery requires a lot of startup costs, especially as you have to procure equipment, materials, labour, and lease. Bakery business is broad and one can specialise in a variety e.g. bread, cake and other pastries in general.
The first step to structuring your business in Nigeria is to get it registered with CAC. With as low as N20, 000 you can get your bakery business registered with CAC. Thereafter, you draft a business plan that highlights the goals and objectives of the business and how to achieve them. Similarly, it is essential you have experience in baking before venturing into the business. This is crucial and germane to the success of the business. You also need to hire staff. However, the size of your bakery will determine the number of staff to employ. Moreover, there is a need for a good marketing strategy if you want your business to be discovered by prospective clients.
Just like every business, an aspiring baker needs the following equipment; Mixers, oven, dough proofer, bake ware, refrigerator, wood top work table, proof boxes, racks and baking sheets, sinks, flour sifters, trays among others. These tools take 50 per cent of your initial capital.
According to my findings, a minimum of N2million is needed to float a moderate medium bakery, while the cost could be more depending on the location.
Profit margins are often quite small, considering the labour and utility costs of running a bakery, even as high cost of some ingredients are a major hiccup. According to the managing director/CEO of ‘Nuts About Cakes’, Nike Majekodunmi, “Everything can change in the blink of an eye. When the lockdown came, we had to close five stores and move from 30 per cent of sales being deliveries, to 80 per cent. We quickly had to employ independent delivery drivers – sort of a man-in-a-van concept – and train them. You have to be nimble and think on your feet,” she said.
Profit, according to findings, vary depending on the location, the class of clients and the customer base. However, for a standard bakery, an entrepreneur could make a monthly profit of N500, 000 to N1 million, while those in urban centres and set up in a good residential location can make as much as N2 million or more monthly. According to Darlington Omeh of Wealthresult, “If you are into bread baking business, you can make N2.2 million.”