Starting a bakery business in Kenya may seem like a piece of cake for a passionate baker. However, establishing a successful baking business takes several legal and logistic actions.
So, how can you build a lucrative baking business in Kenya?
To start a bakery business in Kenya, you need between Kshs 150,000 and Kshs 800,000 to enjoy a profit margin of 10% and above. You can operate this venture from home, a food truck, a cafe, or a wholesale model like a restaurant.
In this piece, I will be covering:
- The ABCs of a bakery business
- Steps to open a bakery business in Kenya
- How to boost your bakery’s profitability
- Common bakery questions
Let’s dive in!
The ABCs of Bakery Business In Kenya
Equipping yourself with the fundamentals of baking business helps you establish a venture that meets legal and operational requirements, running your premises efficiently.
Below are the key things you should know before opening a bakery business in Kenya
Common Bakery Items
Here are the most popular bakery items
- Cakes – Tiered cakes for weddings, sheet cakes for birthdays, and carrot cakes for special events such as Mother’s Day.
- Cookies – Chocolate chip and peanut butter
- Cupcakes – Small-sized cakes made with disposable cups
- Muffins – Soft and slightly sweet, they are ideal for consumers looking for less sugary pastry
- Donuts – Apple cider and strawberry glazed
- Cinnamon Rolls – Although time- and labor-intensive, they are eye-catching and highly profitable.
- Bread – Most middle-income earners will have bread almost daily for breakfast, making it a highly profitable bakery item. The most highly demanded include banana, white, and brown breads.
- Sandwiches – Make your sandwiches using bread as wrap and deli meats with cheese for the best outcome.
Types of Bakeries
Baking businesses in Kenya come in different sizes, specializations, and models. Here are the different types of bakeries you can start in Kenya
- Retail Bakery Business
This is the most popular type of bakery business as it is more affordable and easier to run than the wholesale model. Below are the types of retail bakeries you should study before you open your business
- Specialty Bakery: This baking business is classified according to the line of specialization. Typically, you focus on niche products, for instance, wedding cakes, gluten-free products, bread, or cakes. This type of baking venture is highly successful.
- Counter Service: Also known as grab and go, the counter service features a front-of-house with no chilling spots. This bakery type works like clockwork in high-traffic areas.
- Cafe: Unlike the counter service, the cafe bakery has a dining space where they serve customers coffee and bread, pastries, or cookies.
- Food Trucks: Like fast food trucks, the bakery food trucks operate from a mobile/movable van or lorry. However, they prepare their menu in a separate kitchen before bringing the baked items on board.
2. Wholesale Bakery Business
Wholesale bakeries target commercial customers like cafes, supermarkets, restaurants, and bread shops. They produce baked items in large quantities to supply retailers. Since they don’t serve the end user, they do not need front and back spaces to function.
Which of the above bakery businesses do you find fit for you?
Bakery Equipment List And Prices In Kenya
Some of the leading equipment for the baking business include
- Dough Mixer – Kshs 70,000
- Bread Slicer – Kshs 98,400
- Counter Top with Cake Display – Kshs 179,550
- Baking Oven – Kshs 85,000 to Kshs 205,350
- Fridge – Kshs 70,000 and above
Depending on your budget and business size, you can purchase new or second-hand equipment. When purchasing new baking equipment, ensure to visit a reliable supplier and installer.
How To Start a Bakery Business In Kenya
The bakery business is an adventurous and highly lucrative industry. By the time you search for ‘how to start a bakery business in Kenya, ’ I assume you have excellent baking skills.
If not, you need to enroll in a baking course or school to equip yourself with the necessary skills, as this is the prerequisite element of your business. You can always lease baking equipment or hire bakery trucks. However, you cannot borrow skills, leaving you with only one option: to hire staff, which is costly initially.
Once you acquire exceptional baking skills, here is the process to starting your bakery business.
Step 1. Prepare a Bakery Business Plan
A customized business plan informs your business decisions and provides clear direction. With this document, you won’t consume much time or get stuck choosing a business location or listing the shop’s bakery items.
Conduct thorough market research before writing a business plan for your baking venture. This is to help you learn your target market’s needs and preferences. In addition, it will provide you with existing gaps and competition in the market, helping you prepare better.
Once you identify the critical elements of your business setup, you can craft an excellent business plan with the following:
- Your bakery’s goals
- Strategies to accomplish your business goals
- The ideal premise location
- Your competition and strategies to gain a competitive advantage
- Your marketing strategies
Having a complete document will facilitate an easy business setup process. So, ensure you create a good plan, even if it means hiring a professional business writer to guarantee your venture’s success.
Step 2. Register Your Bakery Business
Business registration and licenses inform the government of Kenya you’re operating a bakery. As a result, you can run your business smoothly without regular interruptions from county authorities.
Here are the essential legal documents you should apply
Business Name Registration
Usually, this is a simple online process you can complete on the eCitizen website. This step demands you log into your eCitizen account and select the ‘Register a Business’ option. You’ll find a series of actions that require readily available documents such as your national ID, KRA, and email address.
When starting your business journey, you can register your bakery as a sole proprietorship and later as a limited company. This is cost-effective as the latter category costs Kshs 10,650.
Food Hygiene Certificate
Bakeries are sensitive spaces where, if not careful, customers can get ill from poor food handling. As a result, an officer must inspect your bakery business before issuing you a food hygiene certificate to prove you match the necessary standards.
Fire Safety Certificate
The authorities demand that you apply for a fire safety certificate since your business uses electricity. Hence, you must equip your baking business with fire safety equipment to qualify for this document.
Food Handling Certificate
Unlike food safety certificates, this document inspects the people handling food items during baking. It is usually renewable every six months.
Step 3. Choose a Good Business Location
Do you plan to operate a bakery cafe or food truck?
Depending on your preferences, you should choose a location with high traffic, affordable rent, and efficient utilities. This will help you minimize costs while operating your bakery business smoothly.
As a retailer, you can establish your premises next to a residential area or offices. This will attract a lot of customers who need breakfast snacks and meeting points with coffee.
Other things you must examine before establishing your bakery in a specific location include its accessibility, visibility, and security.
Step 4. Purchase the Necessary Equipment
Baking entails precise processes that require the use of appliances such as a hand mixer, oven, and fridge. Depending on the size of your bakery business, you’ll need Kshs 50,000 and above for these appliances.
You’ll also need shaping and decorating utensils such as measuring cups, icing spatulas, and baking pans. If you’re running a cafe or restaurant, you must acquire utensils for your customers.
Complete this step by purchasing the necessary baking ingredients, such as
- Wheat flour
- Baking powder
- Icing sugar
Step 5. Hire Top Talent
Recruiting and training staff is costly and will affect your business’s profitability. As a result, you should recruit employees with excellent baking skills to cut unnecessary costs.
You can incorporate a test for your candidates during the recruiting process to identify the best bakers. This will give you an advantage instead of discovering they cannot perform simple tasks after hiring them.
Step 6. Host a Grand Launch Event
Now that you’ve fully set up your bakery business, you must inform people you are open. This step can be challenging as it gives people a taste of your items and markets your brand. First-time bakery owners don’t know how to implement it effectively.
Fortunately, you can involve the right parties and apply suitable marketing strategies to appeal to a more extensive client base during the launch. Start by contacting a local media house to cover your launch event.
Coordinate your staff to create exquisite and delicious baking items. Then, ensure you invite the right individuals at the right time. In addition, remember to indicate discounts or offers people will enjoy when attending the launch.
Having a challenge completing any of these steps? Contact a business coach to help you plan and implement it.
Tips To Boost Your Bakery’s Profitability
Implementing expert tips on your baking business in Kenya helps you boost its profitability and long-term success. Here are a few ways you can enhance your returns
Tip 1. Create a Good Marketing Plan
Going into any business without a marketing plan leads to low returns or worse failure and closure. As a result, you should develop an effective marketing strategy for your baking venture to ensure you increase your reach and sales.
One simple way to accomplish this is by setting up social media accounts where your target audience chills. These platforms will help you provide customer service and engage your customers.
You should also set up a website hosting all your bakery items and prices. Reason? It’s easy for clients to order things on your site, especially if they’re from a different city and need bulk pastry.
Don’t feel limited to these plans; you can create a unique strategy that fits your target market’s needs and preferences.
Tip 2. Make Bulk Purchases
Purchasing ingredients in small quantities means paying higher prices, increasing your production cost and, ultimately, the product’s prices. This can easily send away clients to look for alternative, cheaper bakery-cafes.
Fortunately, purchasing your ingredients in bulk allows you to enjoy more affordable prices, lowering your production cost. As a result, you can offer your items at friendlier prices, appealing to more individuals.
Another advantage of bulk purchases is having enough ingredients to run your business longer. You also avoid running short of essential raw materials for your business.
Tip 3. Have Consistent Recipes
Customers are so specific about what they want, whether it’s your banana bread or chocolate cookies. Once you create a product, you must maintain its taste, texture, and appearance. This will make you a reliable source for that product, giving you a competitive advantage.
A good example is Broadway’s bread, which has maintained its taste and texture for a long time, considering the company was founded in 1958. The consistent recipe makes it a highly sought-after breakfast accompaniment.
You can win in your new bakery business using the same strategy – consistent recipes!
Frequently Asked Questions
1. What Is The Most Profitable Bakery Item?
Bread, cakes, cupcakes, and cookies are the most profitable bakery items. These products are in high demand due to their versatility as excellent breakfast accompaniments and snacks. And suppose you’re running a bakery cafe, coffee can help you boost your sales.
2. Are Bakery Businesses Profitable?
Bakeries earn an average profit of between 5% and 15%. Nevertheless, returns from one business to another depending on the following factors:
- Bakery’s location
- Bakery’s size
- Product range
- Marketing strategy
- The items’ quality
Ready To Open a Bakery Business In Kenya?
To establish a thriving bakery business, you must conduct thorough market research, develop a fitting business plan, secure a strategic location, and get all the required legal documents. You will also need skilled and diligent employees to help you run your bakery efficiently.
So, how can you set the right business and money goals for your venture? Visit our shop and explore the wide range of professional guides on finance today!