3 answers
Brittany
Student
New York, New York
2
Questions
Updated
1174 views
What would be the steps to opening an online bakery business?
How did you get started?
What do you sell?
How do you ship things?
#bakery #onlinebusiness #selfemployment #business #startup #online-startup #business-management #culinary #finance #entrepreneur
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3 answers
Stacy Morrison
Consultant
2
Answers
Austin, Texas
Updated
Stacy’s Answer
Hi Brittany,
My brother started an online bakery business several years ago so I'm going to share a few points from my conversations with him. He started baking in his own kitchen and spent quite a while perfecting the ingredient list, brands and quantities. He specializes in gluten free. Next he did some trials on new products around the holiday season to see if they should be added full time to his menu or only seasonal. Some of the challenges he encountered were: 1) he sold online but also through local coffee shops. Some of these shops wanted special wrapping, special sizes, or were unwilling to pay the minimum cost of a homemade (non-mass produced) item. He had to provide excellent customer service to those shops, checking in regularly and replacing 1-2 day old items with fresh items (these were a loss of revenue for him). The biggest problem to solve is distribution. Most distributors in the food industry won't take you on if you can't commit to certain level of sales. But you also can't commit to a certain level of sales without knowing the reach of the distributor in a certain market. It's a very frustrating path but my brother did work through it and is now in several grocery store chains. If you specialize "something" about your product - either an ingredient or a client-type, your chances improve. If you plan on delivering chocolate chip cookies (or something very common), you have an enormous amount of competition and stores will demand a lower price from you - which means less profit for you to live on and for your business to grow.
Determine your product's unique value - make sure there are few or no competitors (find a niche)
Detemine if you are going to be a "healthy" bakery or not (i.e. non-GMO, organic ingredients, etc), the cost difference is significant
Put a lot of thought into a distribution plan, talk to distributots beforehand if possible
My brother started an online bakery business several years ago so I'm going to share a few points from my conversations with him. He started baking in his own kitchen and spent quite a while perfecting the ingredient list, brands and quantities. He specializes in gluten free. Next he did some trials on new products around the holiday season to see if they should be added full time to his menu or only seasonal. Some of the challenges he encountered were: 1) he sold online but also through local coffee shops. Some of these shops wanted special wrapping, special sizes, or were unwilling to pay the minimum cost of a homemade (non-mass produced) item. He had to provide excellent customer service to those shops, checking in regularly and replacing 1-2 day old items with fresh items (these were a loss of revenue for him). The biggest problem to solve is distribution. Most distributors in the food industry won't take you on if you can't commit to certain level of sales. But you also can't commit to a certain level of sales without knowing the reach of the distributor in a certain market. It's a very frustrating path but my brother did work through it and is now in several grocery store chains. If you specialize "something" about your product - either an ingredient or a client-type, your chances improve. If you plan on delivering chocolate chip cookies (or something very common), you have an enormous amount of competition and stores will demand a lower price from you - which means less profit for you to live on and for your business to grow.
Stacy recommends the following next steps:
Sachin Hegde
125
Answers
San Jose, California
Updated
Sachin’s Answer
Hi Brittany,
Thanks for the question.Here is a webpage with a lot of good information on how to go about opening an online bakery business:
https://smallbusiness.chron.com/build-online-baking-business-19125.html
Hope this helps and good luck!
Troy Marcyes
Program Manager
4
Answers
San Jose, California
Updated
Troy’s Answer
There are a lot of concepts to think about when starting an online bakery business. Obviously, it makes sense to determine is there a need for it and who your target audience is. Determining who your competition is would also be a key component to uncover prior to the start of your business. I think starting with a great website is a key factor to separate yourself from the competition and build an online presence. From there, it makes sense to integrate social channels and start populating those with images and videos to show your product/service. Those are just a start!
From there, I would look into having the right accounting tool like QuickBooks to make sure you are tracking expenses, receipts, cost of goods, etc. You can also connect with a local SCORE or Small Business Development Center (SBDC) to get additional assistance to start your business.
https://americassbdc.org/
https://quickbooks.intuit.com/
From there, I would look into having the right accounting tool like QuickBooks to make sure you are tracking expenses, receipts, cost of goods, etc. You can also connect with a local SCORE or Small Business Development Center (SBDC) to get additional assistance to start your business.
Troy recommends the following next steps: