Cost of Starting a bakery in Nigeria

COST OF STARTING A BAKERY IN NIGERIA – A bakery is the home of production to all food made with flour such as bread, cakes, pastries, cookies and many more.

Bread however is the most consumed because it is the cheapest food to get when hungry. This makes bakery a profitable business. Lagos state consumes over ten million loaves of bread daily while Cross River consumes about six million.

Initially, one could start up a bakery with about five hundred thousand naira (N500,000) or a little more but with the recent hike in cost of goods and services due to recession; it is difficult to give an accurate estimate of what the cost will be.

If you are passionate about baking and consumed with the zeal to expand your horizon by setting up your own bakery, here is a brief guide on formalities and everything else you will need to know. It involves quite a lot but you can start from somewhere.

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DECIDE ON THE KIND OF BAKERY YOU WANT: the kind of bakery you will run will be dependent on your skills, your resources, time, goals and budgets.

You may decide to run an online bakery which doesn’t need a store, you only need to work from your home then put up good pictures of your work on your website where customers can place orders. Many Nigerians run online bakeries by websites and instagram pages.

You can run a counter service bakery which involves getting a commercial store where customers come and buy from the counter. It is the commonest form of bakery in Nigeria, example of a good, old and running counter service bakery that has consistently delivered quality flour foods is the high quality bakery in calabar, cross river state.

You can also choose to run a speciality service if you specialize in a certain kind of service like wedding cakes, bread and snacks for diabetic patients and for fit family. You get to choose whether to operate from your home or rent a shop. There are very many specialty shops in Nigeria; some are online while most of them operate in stores.

HAVE A DETAILED BUSINESS PLAN: A bakery, like any other business requires planning. You have to come up with a detailed plan that defines your business goals, source of funding, expenses, your competition and customer base.

See the: 7 tips to set goals for your business plan

Generate your capital either from potential investors, friends and family, loans from banks or your private savings then begin the acquisition of relevant equipment you will need. Like refrigerators, ovens, slicing machines, bread wrapper, mixers, utensils, pans, a supply van and a generating plant for power. Calculate your costs and figure out how to breakeven.

REGISTER YOUR BAKERY: Make your bakery legal by registering it with appropriate authorities like the association of Nigerian bakers. Get a lawyer to do the necessary paper work for your license and obtain NAFDAC approval to ensure that your products are safe for consumption.

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HIRE LABOUR: You will need to hire labour irrespective of the type of bakery you are going to run. There is no possibility of running your bakery which is a small establishment alone, hire qualified, trust worthy and experienced staff to enable an start easy. Formulate guiding principles that promote work ethics if you really want to succeed.

FIND AND RETAIN CUSTOMERS: In order to find a market for your products, you must study your competitors. Find out the kind of services they render and work at setting yourself apart. Do you have special recipes? Use them; work hard at making your bakery different and a delight for potential customers.
Be prepared to market your product by all means.

Be ready to go an extra mile to make your services known to all and sundry. Social media and the internet in recent times has been an effective market place for young, thriving and experienced businesses, make good use of it. Create a website and make it available on the internet, this will make your products available to unlimited numbers of people who are likely to patronise you.

As the customers begin to troop in, you have to give each customer a memorable and beautiful experience, only satisfied and happy customers are likely to become repeat customers. Ensure that your staffs are polite, hospitable and courteous. Engage your customers politely and warmly to create a friendly atmosphere and ignite a sense of belonging.

With all the above properly and carefully set up, your bakery is set and with the high demand of bread, you can supply an average of fifty thousand loaves weekly. This will fetch you good profits after deducting total costs of production.

CHALLENGES OF RUNNING A BAKERY

THEFT: you are likely to be faced with theft because you will be producing in large quantities, it might go unnoticed that a few loaves are missing on a daily basis and this will affect your profits. The theft maybe carried out by your staff or by other people who get into the premises. This can be checked by installation of cameras for security and making adequate provisions for other security measures.

HARRASEMENT BY GOVERNMENT OFFICIALS: In Nigeria, government officials in the course of carrying out their duties tend to harass entrepreneurs. It may come in form of police harassing your supply van on its way to supply or by environmental health officers who come to inspect the premises of your bakery, their demands for bribe is alarming. This can be controlled by ensuring that all safety and health standards are maintained.

FLUCTUATION OF PRICES AND SPOILAGE: Constant fluctuation of prices in goods like flour and other ingredients used for baking may minimise your profits. If your production costs are too high, you may end up with little or no profits.

When you suffer spoilage or in cases where bread and other snacks get burnt, your input will be way higher than your output and this signifies a loss. The only way to put these in check is to ensure vigilance and discipline of staff, maintain your equipment as such that they don’t develop faults that mess up an entire batch of production.

Read Also: How Profitable is Bakery Business in Nigeria?

I will also advise that you make purchases from whole sellers in large quantities, that way you are guaranteed of a constant supply at fair prices.

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