Business Plan for Bakery Shop

We intend to create a product line that nicely satisfies national trends and demands. Customers today desire baked goods and pastries, but they also demand that food be as healthy as possible. In contrast to other bakeries, we intend to offer at least 90% of food items made from organic components, giving us a competitive edge over our competitors. Additionally, organic foods have no negative effects on consumer health.

Business Plan for Bakery Shop 1
Name of Student
Name of professor
Name of University
Name of Course
Date

Business Plan for Bakery Shop 2
Contents
Overview of Business Idea...................................................................................................................3
Market Overview.....................................................................................................................................3
Market Size and Growth....................................................................................................................4
Analysis of Market Segment............................................................................................................5
Swot Analysis......................................................................................................................................5
Strength................................................................................................................................................6
Weaknesses.........................................................................................................................................6
Opportunities.......................................................................................................................................6
Threats..................................................................................................................................................7
Importance of Current Location of the Business.......................................................................7
Other Suitable Location for the Business....................................................................................7
Legal Structure........................................................................................................................................8
Private Limited Company.................................................................................................................8
Comparison With Other Legal Structures....................................................................................8
Research And the Marketing Mix........................................................................................................9
Marketing Mix....................................................................................................................................10
Product............................................................................................................................................10
Price.................................................................................................................................................11
Place................................................................................................................................................11
Promotion.......................................................................................................................................11
Finance Section....................................................................................................................................11
Sources of Finance..........................................................................................................................11
Classification of Fixed and Variable Costs................................................................................12
Estimated Budget.............................................................................................................................12
Break-Even Pont...............................................................................................................................13
Cash Flow Statement.......................................................................................................................13

Business Plan for Bakery Shop 3
Business Plan for Bakery Shop
Overview of Business Idea
Ideal Bakery, located at 7th street, London, focuses on providing organic, healthy, and
premium foods to the local community. We have a plan to produce a product line that
fits nicely with the trends and needs nationwide. Nowadays, customers want baked
items and pastries, but they also require that food items must be healthy as possible.
Apart from other bakery businesses, we plan to present a minimum of 90 per cent of
food items from organic ingredients, which creates a competitive advantage over the
rivals in the bakery industry. Moreover, organic foods don't have any bad impact on
consumers' health. The vast majority of bakery businesses in the United Kingdom offer
chemically treated foods that increase the shelf life of junk foods that make a person
overeat, and heavy sugars content that causes diabetes and other severe damages to
our health. Therefore, we want to initiate a bakery business to provide organic foods to
our community to keep them away from health issues and heavy bills of hospitals.
Market Overview
A market overview provides a brief synopsis of the present market conditions for a
specific business. A deep analysis of the bakery industry in the United Kingdom is given
below

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Market Size and Growth
United Kingdom's bakery industry is currently worth more than 3.9 billion pounds, which
is considered one of the country's largest businesses. Up to 11 million packs of loaves
and other bakery items are sold per day. If we only take an example of bread sales, up
to 75 per cent by volume of bread are sold by large plants while instore bakeries have a
20 per cent market share. (Thierry Mayer, 2014). The current market size of bread has
been exhibited below.
Market Share of bread Production in the United Kingdom
Percentage by Value Percentage by Volume
Large Plants of Bakers 75 85
Small Store Bakeries 20 12
High Stores Bakeries 5 3
Total Share 100 100
One-third of the bread produced is consumed in the country. But, up to 20 per cent of
the total production is exported to foreign countries. Therefore, it indicates the pace in

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the bakery industry for newcomers, especially organic foods (Bakeries, 2020). The
bakery industry in the United Kingdom has much potential for growth in the future. It is
expected that exports of bread will increase up to ten per cent per year in the coming
period. (Fob, 2021).
Analysis of Market Segment
Demands of bread and bakery items have been increased in the last five years. Tough
competition between supermarkets and initiate larger bakeries have pressurized
retailers to lower prices. In this situation, we have an opportunity to produce and sell our
products to the local market. The production costs will be less due to in house baking
system.
Swot Analysis
Swot analysis is a management tool that helps management to analyze the strength,
weaknesses, opportunities, and threats.
Strength

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The ideal Bakery offers a wide range of organic products which are healthy for the
residents. We have a plan to develop an online system for ordering purposes. It will help
the consumers to order food by sitting in their homes. We also offer a reservation facility
where customers can reserve up to 10 seats. Ideal Bakery provides high-quality
products at minimum prices. (Christine Namugenyia, 2019).
Weaknesses
Not having a chain of shops in different cities of United Kingdom. As we are starting a
new business, we don’t have much finances to expense on advertisements. Operating
in a single location at 7th street London is a major weakness of our business. Prices will
be a little bit high due to several factors like the covid 19 pandemic, Brexit, and the
costs of organic materials are always expensive compared to treated foods. But we
hope that our business will succeed and soon be able to earn profits and sustain in the
market.
Opportunities

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The demand for organic food is increasing over time due to awareness of health
continuousness in individuals. Therefore, Ideal Bakery has an opportunity to provide
organic foods to who have concern about their health. Sugary and oily foods are
creating health issues in individuals like blood pressure, heart attack, and depression,
causing so much stress on individuals.
Threats
The economic recession due to the covid 19 and Brexit have created pressures on
economies and led to consumers' reduced purchasing power. The limited amount of
money will lead to low purchasing power. The expansion of super chains in the market
has pressured the bakery sector or small businesses to lower prices and higher
competition which is dangerous for new entry in the market. (Teoli, et al., 2019).
Importance of Current Location of the Business
We have selected 7th street, London, which is a famous location for food items,
especially organic foods. Health-conscious people always prefer to shop for organically
baked food items. If we succeed in this area, we plan to expand our bakery business in
other areas as well.
Other Suitable Location for the Business

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A second location that we had considered was Wembley. It was also a suitable option,
the main reason behind the rejection of this location was higher rents and the least
number of available shops. Apart from its convenient location, there were lower chances
of getting potential customers like in 7th street, London.
Legal Structure
Private Limited Company
The legal identity of any business is necessary for continuing business operation in the
United Kingdom. The legal identity that we have selected for a bakery business is a
private limited company where a business is separate from its owners. It means that if a
business goes to litigation, the only liability of the owners will remain to their capital
contribution. The owner has not had to pay even selling their property to pay debts.
Comparison With Other Legal Structures
The other option I had deeply analyzed for the legal existing of the business is sole
proprietorship for our new company. The main reason behind rejecting this option is that
Sole proprietorship involves an unlimited liability in case of closure of the business.
Therefore, a Private Limited Company is the most suitable for Ideal Bakery. (Hardwick,
2013).

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Research And the Marketing Mix
Our primary research conducted for the bakery industry indicates the British market has
much demand for bakery items such as pastries, bread, flatbreads, cakes, snack cakes,
muffins, and cookies. Almost every age group is interested in fresh bakery items. A
trend towards improving the health of individuals through hygienic foods, joining a gym,
sports activities, and morning walks have created a sense of health continuousness that
led to increased demand for organic foods. Therefore, we are taking the initiative
towards providing organic foods to the community.
Our research on the demand for bakery items in the British market shows a continuous
incline from 2014 to 2021. It is expected that the increased demand for bakery items will
continue to grow for the next three years until 2024.
This primary research has encouraged me to develop a business plan to enter the
bakery market and start my own business. The main strategy for starting a business is

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to provide organic foods to the health conscious community and gain market share.
Secondary research conducted by the experts is that most bread is sold in the
supermarkets where the competition between the supermarkets led to lower profits.
Ideal Bakery can benefit from this opportunity and offers good quality and organic food
items, especially to the local customers.
We have decided to offer fresh forms of pastries, bread, flatbreads, cakes, cookies,
snack cakes, and muffins. Consequent food item demands will help us determine each
class of food items on the provided list. (Londhe, 2014).
Marketing Mix
Product
We offer high-quality and organic food items to the local community. Our products are
made up of local ingredients, which cost less, and benefit is passed to the consumers at
low prices.
Price
The price charged to final consumers for our wide range of food items is relatively lower
than the competitors in the market. The price is the main factor that can influence the
buying pattern of the consumer.

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Place
The place selected for opening Ideal Bakery is very famous in London city. The majority
of the consumers are resent in this locality (Jain, 2013).
Promotion
Promotion is vital for any business to exist in the market and continue business
operations. We have a plan to promote our products through digital marketing,
advertisements in the local newspapers, and develop a website for an online ordering
system.
Finance Section
Sources of Finance
I have a sufficient amount that I have collected from my earnings and selling of my
house present in the north area of London city. The sum of the total amount is nearly
equal to 27000 pounds. It is expected that a minimum of 6000 pounds will be required
that can be requested to the local bank for this amount. I prefer to spend my collection
of money instead of getting a loan from the bank.

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Classification of Fixed and Variable Costs
Fixed costs are those costs that are incurred once whether products are made or not. In
contrast, variable costs are those costs that can be accumulated as each new product is
produced. In this scenario, rent of shop, values of machines, and furniture and fixtures
fixed costs as it happens once in a period. According to our research, 5000 pounds will
be paid to the shop owners, 7000 pounds for buying machinery. Ten thousand pounds
will be paid for purchase materials from the market, and 5000 pounds for hiring
employees. The remaining 3000 will be paid for miscellaneous expenses.
Estimated Budget
The estimated budget for the costs of production is nearly 15000 pounds, including
salaries paid to employees and materials costs as an initial step for the new bakery
store. Afterwards, it is expected that prices will incur to 5000 pounds per month for
baking food items through in-house facilities. If the budget sales are achieved at the
level of 12000 pounds per month, then a profit of 7000 pounds can be performed
monthly.
Break-Even Point
A breakeven point is when a total of all costs, including fixed and variable expenses,
becomes equal to total revenues. In this scenario, a fixed cost of 5000 pounds rent is
paid to the shop owners, and the expected variable costs of 5000 are equal to 10000

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pounds. If the bakery generates revenue of 10000 pounds per month, then it reaches a
breakeven point. It means no profit, no loss.
Cash Flow Statement
Cash Flow Statement for the year ended 30 September 2021
Details of Expenses Pounds
Expected revenues
Direct costs
Fixed costs
Total costs
Gross Profits
12000
5000
5000
(10000)
2000

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References
Bakeries, F. o., 2020. About the bread industry. [Online]
Available at: https://www.fob.uk.com/about-the-bread-industry/
[Accessed 10 10 2021].
Christine Namugenyia, S. L. N. a. T. R., 2019. Design of a SWOT Analysis Model and
its Evaluation in Diverse Digital Business Ecosystem Contexts. 23rd International
Conference on Knowledge-Based and Intelligent Information & Engineering, p. 10.
Fob, 2021. Annual Report, London: fob.
Hardwick, E., 2013. Recent Developments Regarding Entity Classification for UK Tax
Purposes: Is a Delaware LLC" Tax-Transparent"?. Journal of Taxation of Investments.
Jain, M. K., 2013. An Analysis of Marketing Mix: 7Ps or More. Asian Journal of
Multidisciplinary Studies, p. 6.
Londhe, D. B., 2014. Marketing Mix for Next Generation Marketing☆. Procedia
Economics and Finance, p. 6.
Teoli, D., Sanvictores, T. & An., J., 2019. SWOT Analysis. PMC.
Thierry Mayer, M. J. M. a. G. I. P. O., 2014. Market Size, Competition, and the Product
Mix of Exporters. AMERICAN ECONOMIC REVIEW, 104(2), p. 42.