Bread is one of day-day need of human, everyone enjoys the aroma and flavor of bread, especially when it is just out of the oven. In times of hunger, it is one of the easiest and least expensive foods to obtain. Given this, we can say with confidence that beginning a bread bakery business anywhere in the world will be a successful venture.
The Revenue From The Bread Bakery Industry
In Nigeria, it cost roughly N400.00 to make a normal loaf of sliced bread. The bakers make N100 from each loaf of bread they sell to suppliers for N500. While retailers sell to consumers for between N400 and N450, suppliers sell to retailers at a cost of N400 and profit N100 every loaf of bread supplied. N50 represents the average profit that each party made at each stage of the process, from manufacture to final supply.
An average standard bakery with a reliable supply chain produces and sells 50,000 loaves of sliced bread every week. Now multiply 100 by 50,000 to obtain the weekly supply and production profit, which comes to N5,000,000.
Given that the N400 has covered the cost of production. Simply take the operating expenses out to arrive at your final profit. Let’s say you pay the entire N1,000,000 for operating expenses.
- N250,000 is the cost of powering your diesel engine for the week.
- N250,000 is the price of fueling and sustaining the supply vehicle.
- N300,000 is the labor costs and employee welfare for the week.
- Damages and additional costs equal N200,000
All of them will be deducted from the N5 million, leaving you with N4 million as your take-home pay for the week. Can you now understand why the bread baking industry ranks among the most lucrative in its sector?
Difficulties Associated With The Bread Bakery Industry
You would be well to be aware of the hazards involved, which are similar to those in most human endeavors. And by being aware of these hazards, you can make an informed decision on how to entirely prevent or reduce them. It will also assist you in effectively planning your income and expenses. Some of the most common business dangers are listed here.
- Wastage
Most bakers offer to return back bread if it developed mold due to business competitiveness and efforts to entice more retailers. Some shopkeepers are so negligent and inept at making sales that they hold onto unsold bread for an extended period of time before returning it when it begins to mold.
If this occurs, you will be the one left holding the bag, and if it occurs frequently, you risk going out of business.
2. Price Variations
The cost of baking ingredients is the most erratic since the price of baking flour can alter suddenly over a period of days. When this occurs, you purchase flour at a higher price while maintaining the price at which you previously sold your bread since bread is a particularly sensitive good, you are unable to arbitrarily raise the price.
3. You might burn your bread.
Your workers’ negligence could easily burn your bread, costing you a significant amount of money.
Install smoke detectors throughout your bakery; in our case, all of the night shift workers accidentally fell asleep while baking five flour sacks; luckily, the building didn’t catch fire. Therefore, be careful not to overlook minor errors made by employees because they may come after you.
4. police retaliation
The police could stop your supply van on the road even if you didn’t do anything and request that you offer them some loaves because bread is a ready-made fast food. Although it is not required of you, if you refuse, they might try to brutalize you in many other ways.
5. Theft
External and internal theft by your employees, visitors, touts on the streets, and other people may lower your business’s profit.
How to Set Up a Bakery for Bread
Now that we’ve covered some of the key dangers associated with the bread bakery industry that you should be aware of, let’s move on to the setup procedure and the materials you’ll need.
- Get Instruction
Training in food processing and baking is required to become a good baker. Some people receive their education by joining a bakery and learning every aspect of baking firsthand. If you were fortunate enough to work in a bakery, it will be much simpler for you because you must have picked up the expertise while you were there.
- Make a business plan.
He who doesn’t plan, plans to fail, as the saying goes. A business plan is essential since it will direct you. You have the option of doing it yourself or having a pro prepare it for you.
- Finance Resource
The bread-baking industry requires a lot of capital, especially if you start out big, as I would advise. If you want to be creating high-quality bread that will draw loyal customers, you must start large or moderately. And a substantial sum of money is needed to get started.
You will be halfway there once you have the money to invest in this venture. Make sure to budget 7–12 months of operating costs because you will need that time to make progress before revenue begins to flow. You have now begun to implement your company plan.
- Select a Location
This is significant but not urgent. While being in a metropolis or a big town makes it easier for retail to walk in and purchase without having to drive far, you can compensate for this with effective marketing and supply systems. No issue where you are, people will discover you if your product is high quality, highly branded, and effectively marketed.
- Construct Your Factory
Here, you also need to get an expert’s services. For your factory to achieve NAFDAC clearance requirements, good planning and execution are essential.
The Bakery Equipment You Must Purchase
- Baking Oven
If you really can afford it, you should choose an industrial bake oven. That is what a professional baker who produces bread in bulk uses. It was expensive, but it was well worth it because it made your work much simpler.
- Flour blender
The appliance that mixes the flour and other ingredients into pastry that is ready for baking is a mixer. There are conventional electronic mixers and local mixers. Choose the option that is appropriate for the type of bakery you are opening.
- A cutting device
If you plan to slice your bread, this is crucial. In the Nigerian market, sliced bread has the highest popularity and respect. Therefore, whether you are baking in Nigeria or any place like that, a slicing machine is a need.
- Baking Dishes
Although some large heaters do come with oven pans, they might not be appropriate for the size of the dish you intend to create. You must purchase or create baking pans that meet your specifications—specifications that are compatible with what is available on the market.
- Supply of Bread Wrappers
You are a reliable source of branded bread wrappers. Before production starts, make early arrangements for this.
- Generator KVA
A very large backup generator would be necessary all the time. You cannot afford to play jokes with your production because it is delicate.
- Delivery truck
A supply truck will then assist you with your marketing. If you don’t have at most one supply vehicle, you will never be able to promote effectively.
Obtain NAFDAC License For Your Bread Baking Enterprise
It is quite regrettable that, according to specialists’ reports, no bread is now manufactured in Nigeria that meets international health standards.
Do the correct thing first, and money will follow, perhaps even beyond your expectations. Nothing should be about the money first. Why would you poison your neighbors in an effort to make quick money?
There is the problem of unhealthy and immoral competitors whose strategy is to undercut the competition on price. Because saccharine is far less expensive than sugar, these bakers do so without taking into account the health risks of saccharine, even though sugar is the more expensive ingredient.
If you reside in Nigeria, you must first get NAFDAC certification before you may make anything. Look for the proper authority to obtain your approval if you are abroad. When everything is in place, you can move forward.
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