how to start a bakery business plan

Bakery Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

Bakery Business Plan Home
1. Executive Summary
2. Company Overview
3. Industry Analysis
4. Customer Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
8. Management Team
9. Financial Plan

Bakery Business Plan

You’ve come to the right place to create a successful bakery business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their bakeries.

A bakery business plan is a plan to start and/or grow your bakery. Among other things, it outlines your business concept, identifies your target customers, presents your marketing strategy, and details your financial projections.

Bakery Business Plan Sample

The following information will provide a description of what to include in your own bakery business plan along with links to an example for each of the key elements below:

Executive Summary – The Executive Summary section provides a high-level overview of your plan. It should include your bakery’s mission statement, as well as information on your business offerings, your target audience, and your business goals and objectives.
Company Overview – The Company Overview section provides an in-depth look at your bakery, including information on your company’s history, legal structure, bakery location, and management team.
Industry Analysis – Also called the Market Analysis, in this section, you will provide an overview of the industry in which your bakery will operate. Through market research, you will be able to discuss market trends affecting the industry, as well as your target market’s needs and buying habits.
Customer Analysis – In this section of your bakery’s business plan, you will describe your target market and explain how you intend to reach them. You will also provide information on your customers’ needs and buying habits.
Competitive Analysis – The Competitor Analysis will provide an overview of your competition (other bakeries or local businesses that offer high-quality baked goods), including their strengths and weaknesses. It will also discuss your competitive advantage or your business’s core strength that will help you stand out amongst your competition.
Marketing Plan – In the Marketing Plan section, you will develop marketing strategies to reach your target audience, including your community events, and digital marketing campaigns. You will also discuss your pricing strategy and how you intend to position your bakery in the market.
Operations Plan – In the Operations Plan, you will provide an overview of your bakery’s day-to-day operations, including your store layout, staff, and inventory management. It also includes information on your warehousing and distribution arrangements and a list of long-term milestones or business goals.
Management Team – In this section of your bakery business plan, you will provide information on yourself as a talented baker, any other skilled bakers or business partners, and their experience and role in the company.
Financial Plan – In this section of your bakery financial plan, you will include your financial statements: profit and loss statement, balance sheet, and cash flow statement. It also includes information on how much funding you require and the use of these funds.

Next Section: Executive Summary >

Free Bakery Business Plan PDF

You can download our free bakery business plan template PDF and use it to create a well-crafted business plan. You can learn more about how to write a bakery business plan using this bakery business plan template .

Bakery Business Plan FAQs

What are the main types of bakeries.

A bakery can be retail or wholesale. A retail bakery sells baked goods (i.e., freshly baked bread, specialty items, gluten-free and vegan baked goods, and other baked goods) directly to customers, while a wholesale bakery typically sells products to other local businesses, like restaurants, grocery stores, specialty shops, and cafes.

How Do You Get Funding for Your Bakery?

Bakeries are most commonly funded with personal savings and bank loans. Credit card financing and angel investors are also popular forms of funding for bakeries. Potential investors or lenders will often want to see a well-crafted business plan before considering providing funding.

Learn More : Seeking Funding from Angel Investors vs Venture Capitalists

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How to Write a Bakery Business Plan + Sample

Bakery business owners look over their bakery business plan

Makenna Crocker

7 min. read

Updated February 7, 2024

Download Now: Free Business Plan Template →

Free Download: Sample Bakery Business Plan Template

Your friends and family have long marveled at your baking skills. Now, you’re ready to jump from passionate amateur to bakery business owner .

Making cakes and pastries in your kitchen is one thing—buying commercial-grade equipment, setting prices, and serving customers is a far greater challenge.

So, how does a new bakery owner maximize their chance of success?

By writing a business plan.

This article will guide you through crafting a bakery business plan, from describing your offerings and creating a marketing strategy to assessing your competitors and managing your finances.

Need more guidance? Download our free sample bakery business plan .

Why write a bakery business plan?

Launching a bakery requires more than perfect recipes; it’s about strategically planning for success.

A business plan gives you :

Clarity and direction

The plan helps you define your bakery’s identity, from your signature products to your brand ethos.

A financial foundation

A simple financial plan you update periodically gives you a major advantage, helping you manage a budget and understand how decisions affect revenues, expenses, and cash flows.

Market insights

Researching and documenting your target market and competition helps you position your bakery and stand out.

Operational strategies

The operational plan outlines how you will manage staffing, supply chain, and other logistics so your bakery runs smoothly.

Attracting investors

If you’re seeking funding , investors need to see a comprehensive plan demonstrating your bakery’s growth and profitability potential.

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How to write a business plan for a bakery

1. conduct market research.

Start by pinpointing your target market.

Not every bakery appeals to all customers. Ask yourself, who do you see coming through your doors?

It could be:

Health-conscious individuals looking for gluten-free or low-sugar options.
Professionals looking for a quick treat on their way to work.
Families looking for fresh, wholesome bread and treats to eat at home.

Consider age, income level, dietary preferences, and local demographics.

Remember, identifying your target market is more than just understanding the demographics of your customers. It’s about understanding their lifestyle, dietary habits, and what they value in a bakery.

Are you targeting health-conscious individuals, families, or specialty dessert enthusiasts? Tailoring your products and services to your chosen clientele ensures your bakery meets their unique tastes and needs.

Market research tips

When conducting market research for your bakery, consider the following:

Customer preferences

Identify the types of baked goods that are in high demand. Do customers prefer traditional treats, artisanal bread, gluten-free options, or vegan pastries?

Location analysis

Evaluate potential locations for your bakery. Consider foot traffic, visibility, parking availability, and proximity to complementary businesses.

Product differentiation

Identify what sets your bakery apart from the competition. Is it your secret family recipe, organic ingredients, or unique flavor combinations?

2. Analyze the competition

When evaluating competitors , you need to look beyond just other bakeries.

Anyone who provides baked goods is a direct competitor or alternative. You must account for patisseries, cafes, and even grocery store bakeries.

Then, focus on identifying strengths, weaknesses, and unique selling points by reviewing the following:

Product offerings and pricing: What kinds of baked goods do they offer, and at what price points? Are there items that are universally popular or notably absent from their menus?
Customer experience: How do these establishments present themselves? Is the ambiance inviting? What level of service do they provide?
Operational insights: Observe their staffing levels, speed of service, and any visible supplier partnerships.
Marketing strategies: How do they attract and retain customers? Look at their promotional activities, online engagement, and customer feedback.
Long-term trends: Have they expanded their product range or services recently? Any noticeable changes in their operation hours or customer demographics?

Visit local bakeries, patisseries, and cafes to understand their offerings, pricing, and customer experience. Identify their strengths and weaknesses, and look for opportunities to differentiate your bakery.

What unique products or services can you offer? Is there a gap in the market that you can fill?

3. Detail your operations plan

Misjudging resources needed to manage inventory, staffing, and other day-to-day requirements is one of the biggest mistakes an owner of any business can make.

A solid operational plan will keep you from blowing your budget.

The operations plan covers aspects of your business like:

Where your business will operate, as well as the characteristics of the neighborhood and factors that may lead to a competitive advantage.

Licensing needs

Track what you need to remain compliant with regulations, from a business license to food handlers permits for employees.

Operating hours

What days and times do you plan to be open? When do you expect your peak hours to be? Listing these will help you plan staffing and determine promotions to offer.

Staffing needs

It’s crucial to understand how many employees you’ll need to hire and when you will need them to work. Many bakeries make their goods before most people wake up, so you may need staff ready to work irregular hours.

4. Market your business

The market analysis should have uncovered valuable insights into who might come to your bakery.

You can use that information to develop a comprehensive marketing plan to showcase your bakery’s offerings, build brand awareness, and attract a loyal customer base.

Consider the following promotional strategies for your bakery:

Establish a strong social media presence: Be visible on platforms like Instagram and Facebook to showcase your bakery’s products and engage with your audience.
Build an appealing website: Create a strong online presence through a user-friendly website with photos and promotions to build an online following.
Get out in the community: Participate in local events, sponsor community initiatives, and support local charities to create awareness and goodwill.
Collaborate with local businesses: Consider partnering with nearby coffee shops, restaurants, or event planners to expand your reach and offer joint promotions.
Offer sampling and tastings: Give potential customers a chance to try your baked goods and entice them to purchase.
Create eye-catching displays: Invest in appealing window displays and enticing signage to create a visually appealing environment that attracts customers.

5. Financials and pricing

No matter how effective your marketing campaigns are, running a successful bakery requires staying on top of your finances.

You must be realistic to develop a solid financial plan and pricing strategy .

Understand the costs of employee wages, ingredients, and supplies, and try to figure out how long you expect to operate before becoming profitable. This will be especially important if you seek a bank loan or outside investment.

Consider the following financial aspects when creating your bakery business plan:

Startup costs

Determine the initial investment required to set up your bakery, including equipment, leasehold improvements, licenses, and inventory. Factor in costs for marketing and branding efforts as well.

Ongoing expenses

Identify the recurring expenses in running your bakery, such as rent, utilities, ingredient costs, staff wages, and marketing expenses.

Regularly review these costs to ensure they align with your revenue projections.

Pricing strategy

Set your prices based on a thorough understanding of ingredient costs, overhead expenses, and the local market. Consider factors such as quality, portion sizes, and the value you provide customers.

Monitor pricing trends in the industry to remain competitive.

Sales forecasting

Develop a sales forecast based on your market research, pricing strategy, and capacity. Consider seasonal fluctuations, holidays, and events that may impact your bakery’s performance.

Continuously review and adjust your forecast based on actual results.

6. Set milestones and goals

Setting milestones and goals helps you track your progress toward key achievements.

These goals can be both short-term and long-term, covering areas like revenue targets or break-even projections , the number of customers served, menu expansions, or partnerships with grocery stores.

Consider the following tips when setting milestones and goals for your bakery:

Create “SMART” goals

Ensure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound .

For example: Instead of aiming to “increase sales,” set a specific target, such as “increase monthly sales by 15% within six months.”

Include your employees

Get your bakery staff involved in setting goals and milestones. Their input and commitment are essential to achieving your bakery’s objectives.

Evaluate regularly

Monitor your progress toward your goals and assess whether adjustments are necessary. Periodically review your financials, customer feedback, and broader market trends to stay on track.

Free sample bakery business plan template

If you’re ready to start your own bakery business, you can download our free sample bakery business plan from our library of over 550 sample business plans .

Get started today, and discover why businesses that plan grow 30% faster than those that don’t .

Makenna Crocker is the Marketing Specialist at Richardson Sports. Her work focuses on market and social trends, crafting gripping and authentic content, and enhancing marketing strategy to foster stronger B2B and B2C relationships. With a master’s degree in Advertising and Brand Responsibility from the University of Oregon, she specializes in generating a strong and responsible brand presence through content that positively influences and inspires others.

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How to Write a Bakery Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for bakery businesses who want to improve their strategy or raise funding.

A well-crafted business plan not only outlines the vision for your company but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every bakery owner should include in their business plan.

Download the Ultimate Bakery Business Plan Template

What is a Bakery Business Plan?

A bakery business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Bakery Business Plan?

A bakery business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Bakery Business Plan

The following are the key components of a successful bakery business plan:

Executive Summary

The executive summary of a bakery business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

Start with a one-line description of your bakery /
Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your bakery , you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your bakery firm, mention this.

You will also include information about your chosen bakery business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a bakery business plan. Conduct thorough market research to determine industry trends and document the size of your market.

Questions to answer include:

What part of the bakery industry are you targeting?
How big is the market?
What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a bakery’s customers may include:

Families with young children who are looking for birthday cakes or other special occasion desserts
Businesses that need to order large quantities of pastries or other baked goods for their office functions
Individual customers who want to purchase small quantities of freshly-baked goods for their personal consumption

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or bakery services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

Product/Service: Detail your product/service offerings here. Document their features and benefits.
Price: Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
Place: Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
Promotion: How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your bakery business via word-of-mouth.

Operations Plan

This part of your bakery business plan should include the following information:

How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years.

Examples of milestones for a bakery business include reaching $X in sales. Other milestones could include adding new products/services, opening additional locations, or increasing employee headcount.

Management Team

List your team members here, including their names and titles, as well as their expertise and experience relevant to the foodservice industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix).

This includes the following three financial statements:

Income Statement

Your income statement should include:

Revenue: how much revenue you generate.
Cost of Goods Sold: These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
Net Income (or loss): Once expenses and revenue are totaled and deducted from each other, this is the net income or loss

Sample Income Statement for a Startup Bakery

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

Assets : All of the things you own (including cash).
Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Bakery

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

Cash Flow From Operations
Cash Flow From Investments
Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup bakery business.

Sample Cash Flow Statement for a Startup Bakery

You will also want to include an appendix section which will include:

Your complete financial projections
A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and grow your bakery . It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

Creating a business plan forces you to think through all aspects of your business including marketing, finances, operations, and more. Ultimately, a well-thought-out business plan is key to a successful bakery.

Finish Your Bakery Business Plan in 1 Day!

Wish there was a faster, easier way to finish your bakery business plan?

With our Ultimate Bakery Business Plan Template you can finish your plan in just 8 hours or less!

Flour Power: How to Start a Bakery from Scratch in 11 Steps

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If you love to bake, starting your own bakery may sound like a dream come true. But what does it really take to turn your passion into a profitable business?

Before you break out the dough and sprinkles, there are several steps you need to take to ensure your bakery's success.

We'll break down how to start a bakery, from creating a business plan to obtaining permits and marketing your business.

By signing up I agree to the Terms of Use and Privacy Policy .

How to start a bakery business in 11 steps

Whether it's a small operation in a home kitchen or a large storefront with multiple employees, there’s a lot of work that goes into launching a successful bakery.

Here’s what you need to know.

1. Choose a bakery business type

One of the first decisions you’ll need to make is the type of bakery business you want to operate.

Here are some of the most common types of retail bakeries.

Counter service bakery

This type of bakery is small and efficient. Most counter-style bakeries don’t have a dining space. Instead, customers browse baked goods in the display case and order what they want from the counter.

Bakery cafe

Bakery cafes combine counter-service with a dining area where your customers can sit and enjoy their food. You can offer drinks, like tea and coffee, to pair with your baked goods.

Specialty bakery

A specialty bakery focuses on a specific type of baked goods, such as bagels, cupcakes, artisan breads or wedding cakes. While you can offer other items, most of your business will come from a specific niche.

Food truck bakeries have exploded in popularity in recent years - and for good reason. Making your bakery mobile can help you reach customers in different locations, such as fairs, festivals and corporate events.

You’ll likely need to make your baked goods at home or in a commercial kitchen before loading them in your food truck and hitting the road.

Home bakery

If you want to start small, you can cook up a bakery business at home. You can sell your baked goods directly to customers through your website, or at pop-up events and farmers' markets. You can ship your orders or arrange for local pick up and delivery.

Need to build a website? Check out our top picks

Data as of 5/3 /23 . Offers and availability may vary by location and are subject to change. *With annual billing.

2. Create a bakery business plan

Before you can start a bakery, you need to draw up a clear plan for your business.

A business plan outlines your bakery's goals, target market, products, pricing, marketing strategy and financial projections. It serves as a roadmap for your new venture. A business plan is also required if you apply for a business loan.

Here are the basic parts of a bakery business plan.

Executive summary: This section provides a brief overview of the bakery, including its name, location, products and unique selling proposition.
Market analysis: Look at your competitors' prices, products and target audience to identify gaps in the market that your bakery can fill.
Product and services: Describe the baked goods you'll offer and what sets your bakery apart from others in the area. It could be your signature cupcakes, gluten-free options or vegan treats.
Marketing and sales plan: This section details how you plan to advertise your bakery, grow your sales and reach customers.
Financial plan and projections: Determine the startup costs, including equipment, rent, ingredients and any employee wages. Then, estimate your bakery's revenue based on your pricing strategy and sales projections. This information will help you determine how much funding you'll need to start your bakery and how long it will take to break even.

For easier financial reporting, try accounting software

Data as of 5/3/23. Offers and availability may vary by location and are subject to change. *Only available for businesses with an annual revenue beneath $50K USD **Current offer: 50% off for 3 mos. or 30-day free trial †Current offer: 50% off for three months or 30-day free trial ‡Current offer: 75% off for 3 mos. Available for new customers only

3. Pick a business entity

Next, you’ll need to choose a legal structure for your bakery business. There are several options, and some are more complicated than others.

Sole proprietorship: This is the simplest and most common structure for small businesses. It makes you the sole owner of your bakery, and gives you complete control over business decisions. However, it also means that you are personally liable for the business' debts and legal issues.
Partnership: A partnership is owned by two or more people, and each partner is responsible for the business' debts and liabilities.
Limited liability corporation: An LLC is a hybrid entity that combines the liability protection of a corporation with the tax benefits of a partnership.
Corporation: A corporation is a separate legal entity that is owned by shareholders, and it provides the most liability protection for owners. It also comes with more paperwork and fees.

The type of business entity you choose will impact your taxes and legal responsibilities — so it’s a big decision. If you’re not sure which entity to choose, consult with a business attorney or financial advisor.

4. Choose a location

Picking the right location for your business is essential.

If you’re opting for a retail bakery with a storefront, your location should be easily accessible and have adequate parking.

The cost of rent, utilities and property taxes must also be considered when choosing a location. A high-end boutique space in downtown might attract more foot traffic, but it will come with higher overhead costs.

To save money on equipment, look for a location that was recently occupied by another bakery. They may have the large ovens, refrigerators or freezers you need to run your new business.

Enlisting the help of an experienced commercial real estate agent who’s familiar with the community can make your search for a brick-and-mortar location much easier.

Starting a home bakery business is another option. Home bakeries can be a cost-effective way to test the market before expanding to a commercial location.

There are state laws governing home-based food businesses, so it’s important to research and comply with any regulations in your area.

Finally, if you’re opting for a food truck bakery business, look at car dealerships that sell food trucks. You can also check places like Craigslist and Facebook Marketplace to find deals on used food trucks.

5. Secure appropriate permits and licensing

Each state requires its own permits and licensing to operate a food business. You’ll need to research the rules and regulations in your specific state, county and city to ensure you're in compliance.

Google “retail kitchen laws for (name of state)” to find regulations for your area. Then outline all the paperwork you’ll need to complete, making note of deadlines and fees.

Get this process started early. It can take weeks or even months to get all the paperwork processed.

Some common permits and licenses you may need include:

Food handler’s license
Catering license
Health and safety inspection
Sales license
Zoning permits

To get your licenses and permits, you’ll need to fill out applications and provide documentation, such as proof of insurance, a business plan, or a lease or rental agreement for your bakery space.

You may also need to pass inspections from the health department and the fire department.

6. Prepare for taxes

As a business owner, you’ll need to pay a host of new taxes, including federal taxes, sales taxes and payroll taxes .

Consulting with an accountant is a smart move. A tax professional can advise you on how to structure your business to minimize your tax bill, as well as help you prepare and file your tax returns.

Make sure to keep accurate records of your income and expenses, as well as any tax payments you make. You’ll need this documentation if you get audited or fail to pay your taxes on time.

You’ll also need an employer identification number (EIN) , a unique identifier assigned by the Internal Revenue Service. It’s required for all types of business entities, except for sole proprietorships that don't have employees.

To obtain an EIN, you must apply online through the IRS website . It’s free to apply and the EIN is usually issued immediately.

Best small business tax software

Data as of 1/11/23. Offers and availability may vary by location and are subject to change.

Pro tip: Taxes can be complicated. Here’s everything you need to know about how to file small business taxes .

7. Open a business account

You may be required by law to open a separate business bank account for tax purposes, depending on which state you live in. Many banks and credit unions offer business checking and savings accounts .

Separating your personal and business finances also makes it easier to track where your money is going.

You may want to consider opening a small business credit card , too. A business credit card can help you separate your personal and business expenses while also earning cash back and rewards.

Top banks for small businesses

Data effective 4/20/23. At publishing time, rates, fees, and requirements are current but are subject to change. Offers may not be available in all areas.

Pro tip: Need to pay for start-up costs? Here are the best high-limit business credit cards .

8. Secure business funding

It can cost anywhere from $10,000 to $50,000 to start a bakery, according to Entrepreneur .

That’s a lot of money. New business owners will likely need to secure some funding from outside sources to get up and running.

Here are a few ways to fund your small business. Keep in mind that a lending marketplace or fintech company, like Nav , may offer a few of these options.

Business line of credit

A business line of credit works similarly to a credit card, where the borrower is approved for a maximum amount of credit that they can draw upon as needed.

Interest rates for business lines of credit are typically higher than those for commercial loans, but they can be a good option for businesses that need quick access to cash.

Pro tip: Want to explore your options? Here are the best business lines of credit for small businesses.

Small business microloans

The Small Business Administration (SBA) offers microloans worth up to $50,000 to help small businesses start and expand. These loans are offered through intermediary lenders . They generally require some kind of collateral and cannot be used to pay existing debts or to purchase real estate.

Traditional commercial loans

These loans — which are available at banks and other financial institutions — typically have strict eligibility requirements. The approval process can be lengthy and time-consuming. Commercial loans often require collateral, such as a home or car. You also usually need a high credit score and a history of successful business operations to get approved.

Crowdfunding

Crowdfunding platforms like Kickstarter let you showcase your business idea and solicit donations from people who are interested in supporting your venture. You can’t rely on crowdfunding sites for on-going expenses, but it’s one way to raise startup capital.

Once you've got your finances in order, you can start purchasing equipment and marketing your bakery.

Pro tip: About 75% of small businesses get turned down for loans by big banks. Here’s a list of the best alternative business loans from online lenders.

9. Develop your menu

Figuring out what to sell, how to price things and arranging everything on a page is no small task.

First, write down all your ideas and potential baked goods before organizing them into groups based on ingredients and equipment.

Identify your signature items. What do you want to be known for? Spotlight these baked goods on your menu.
Research trends. Research current trends in baking (anything from organic dog treats to unicorn cakes) and incorporate a few into your menu.
Price your items. Consider the cost of ingredients, labor and overhead when pricing your items. A standard rule of thumb for pricing is to triple your expenses for the item, then adjust for market pricing.

Before you open, call local vendors to price their products and order supplies. This will help you determine how much to charge for your treats.

10. Purchase bakery equipment and supplies

To turn a baking hobby into a baking business, you’ll need to invest in some industrial equipment and supplies.

This can include ovens, mixers, baking sheets, refrigerators, display cases, and more.

You can purchase new or used bakery equipment, depending on your budget. If money is tight, you might consider leasing your equipment. This gives you access to the equipment you need for a set period of time, though you won’t own it once the lease expires.

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11. Create your bakery’s branding and marketing strategy

Now is the time for your passion to shine. What makes your bakery unique?

You probably already have a name picked out for your bakery. But your brand identity should also include a logo, color scheme, typography and packaging that communicates your bakery’s personality.

If you haven’t done so, you’ll need to create a website and social media accounts for your business. After all, social media marketing is a free and effective way to attract new customers.

It’s best to pick a social media platform that you’re already familiar with when starting out, preferably one where you have a following.

Posting high-quality pictures of your treats is sure to attract attention. (If you need to brush up on your photography skills, there are lots of online videos on how to take professional-looking food photos.)

Make sure to keep your branding and messaging consistent across all marketing channels, including the bakery’s website, social media channels and signage.

Starting a bakery isn’t easy. But if you’ve made it this far — congratulations! With the right plan in place, you’ll be raking in the dough in no time.

Rachel Christian is a Certified Educator in Personal Finance and a senior writer at The Penny Hoarder. She focuses on retirement, small businesses, investing and taxes.

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