Most events like weddings, graduations and birthday parties cannot be any good without a cake. This makes bakery business in Kenya a lucrative venture to start. To start cake baking business in Kenya, you need to have cookery and baking skills. If you like baking cakes, this is a great business idea. This article will provide you with the details you need to start a bakery business in Kenya.
Read also: How to start a fast food business in Kenya.
Write a Business Plan
To succeed in the bakery business, start by writing a bakery business plan. Make sure to capture startup costs, business location, strengths and weaknesses, risks, sources of bakery business startup capital and marketing strategies. A business plan also outlines your projected profits.
Read more: How to write a business plan.
How Much Does it Cost to Start a Bakery in Kenya?
You need to find out how much startup capital you need and how to raise it. The cost of starting a bakery business in Kenya is between Ksh 50,000 and 100,000. This largely depends on business's size, business location, bakery equipment and bakery products to sell.
Equipment for Starting a Bakery Business
The following is a breakdown of items and equipment you need to start a bakery business in Kenya.
- Electric hand whisk - Ksh 4000
- Nozzle set - Ksh 2,000
- Baking pans - Ksh 2,500
- Dough mixers - Ksh 1,000
- Icing spatula - Ksh 500
- Bakery oven- Ksh 30,000
- Tables - Ksh 20,000
- Shelves - Ksh 10,000
- Stools - Ksh 5,000
- Wheat flour - Ksh 1,500
- Baking powder - Ksh 250
- Margarine - Ksh 2,000
- Icing sugar- Ksh 1,000
- Sugar, milk - Ksh 500
- Eggs - Ksh 350
- Baking powder - Ksh 100
- Single business permit - Ksh 5,000
- Food handling certificate - Ksh 600
- Food hygiene certificate - Ksh 300
- Fire safety certificate - Ksh 3,000
Others requirements for a bakery business include charcoal, cleaning agents, packaging materials and labels, cleaning agents.
Read also: Start maize milling business in Kenya.
Find a Suitable Bakery Business Location
Find a strategic business location with high population and where your business is visible. When looking for a business location, consider your budget, target market, safety and the competition. Also, consider the size and space of the bakery and the proximity to suppliers.
Get Bakery Business License and Permits
It is important you run a legal bakery business. If you plan to start a full-fledged bakery, you need to register your business name, at Ksh 1,000. Registering a Limited Company bakery business will cost around Ksh 30,000.
You will also need to get the following licenses and permits;
1. A Single Business Permit. You can get this license from your county government offices. Different counties charge different fees but it is around Ksh 5,000 annually.
2. A Kenya Bureau of Standards (KEBS) License. If you want to run a full-fledged bakery, you will need to get a KEBS License, which costs around Ksh 20, 000.
3. A Food Handling Medical Certificate. Those handling products in your bakery should be free from disease to prevent possible transmission. It costs Ksh 600 valid for 6 months.
4. A Fire Safety Certificate. An inspector will inspect your business premises to ensure that in case of fire outbreak, you have the equipment to fight fires. You will need to have equipment like fire extinguishers. The certificate costs Ksh 3,000 valid for a year.
5. Food Hygiene Certificate. Your bakery business premises should be clean and safe for food preparation. The cost of the certificate is Ksh 300.
Market your Bakery Business
You need to let people know about your bakery business. You can promote your business by distributing fliers, pamphlets, and brochures. Social media marketing also plays a critical role in the success of your business. Choose the method that works best for you.
Is Bakery Business Profitable in Kenya?
Yes. There is a high demand for baked products both for commercial and domestic use. With a suitable business location and proper marketing and pricing, most bakery businesses usually have profit margin of 40%. People buy cakes for birthdays and weddings at high prices, while the cost of production is low.
Types of Bakery Businesses to Start
1. Retail Bakery Shop
A retail bakery shop requires little startup capital. With a retail bakery shop, you can get both custom order customers and walk-in customers. You need to rent a store where you will be baking cakes and also selling them to customers.
Its disadvantage is that you are likely to end up with left-over baked products. Therefore, make sure to only bake cakes depending on demand.
2. Custom Cake Shop
A custom cake shop deals with custom orders only, unlike a retail bakery shop that deals with custom order customers and walk-in customers. When you make an order, you can pick it then or later. It is a convenient baking business since orders are paid for in advance - a deposit or in full.
You don't want to risk having left-over products on bad business days. A successful custom cake shop requires aggressive marketing and great branding.
3. Home-based/ Online Bakery
A home-based bakery is one that you operate from your home. It has a lower expenses and you can slowly grow it over time. Your customers can visit your home to buy or you can make deliveries to pick-up points.
It requires perfect and consistent marketing strategy. It is best to have a long term plan on how to expand the home based-bakery business.
4. Industrial Bakery
An industrial bakery require large startup capital since it produces baked good in bulk. This setup does not solely rely on walk-in customers. Clients include learning institutions, supermarkets and shops.
You can make huge profits if you reduce production costs. It is best you figure out how you will distribute your products to your customers.
Read also: How to start a daycare business in Kenya.
The success of your bakery business depends on your level of commitment. Make sure to hear and deliver customer requests and instructions on how they want their cakes baked. Customers will always explain how they want their cakes and other products prepared. Excellent customer service is critical for the success of your bakery business.