Millions of Nigerians eat bread everyday regardless of tribe, religion or gender. This is why your choice to start a bakery business in Nigeria is a smart and profitable decision. Here is a complete guide to start a bakery business in Nigeria.
STEPS TO STARTING A BAKERY BUSINESS IN NIGERIA
Follow these steps to start a bakery business:
1. GET TRAINING
To start a bakery, you need to do your research. If you are a baker, you need to upgrade your knowledge and skills. However, if you are not a baker and you have no experience in the baking business, you must do your own research.
If you decide to become a professional baker, you need training in bakery and food processing. You can get training by becoming an apprentice in a bakery. This will help you understand the baking business. If you have previously been a worker in a bakery, it will be easier for you to start a bakery. Your success in this business depends on how much you know.
2. PREPARE YOUR BUSINESS PLAN
You should write a business plan for your business. If you cannot write a business plan, you can hire a writer to write a plan for you. A business plan is important for your bakery to be successful.
3. GET CAPITAL
The bakery business in Nigeria is a capital intensive business. You need sufficient capital to start a bakery in Nigeria. The more capital you invest in your bakery, the higher the profit margin.
It cost about N80.00 ($0.50) to produce standard sliced bread in Nigeria. The bakery sells at N130 to suppliers and makes N50 per bread. The suppliers sells to retailers at the cost of N170 and make N50 gain per loaf of bread they supply while the retailers sells between N200 to N220 to the final consumers. So, N50 is the average gain made by each of the parties involved at every stage from production to the final supply.
A bakery with many customers produces and sells 50,000 loaves of sliced bread weekly on average. Now multiply 50 by 50,000 and what you get is the profit for the weekly production and supply = N2, 500,000.
The cost of production is N80. Subtract the running costs to get your final profit. If N500, 000 for the running cost, then;
The cost of fueling your diesel generator for the week = N50, 000
Cost of fueling and maintaining the supply vehicle = N100, 000
Cost of labor and staffs welfare during the week = N100, 000
Damages and other miscellaneous expenses = N50, 000
Subtract all these from the N2.5 million; you will have N2.2 million left as your profit for the week. This is why this business in Nigeria is profitable.
Once you have the required capital to invest in this business, you can start your bakery. Make sure you budget 7-12 months working expenses. This will sustain your business before you start to realize profits. Remember you will have to advertise to prospective customer. Advertising costs are also important.
In terms of cake, average birthday cake goes for N25000 and wedding cake for N100000
4. REGISTER YOUR BUSINESS NAME AND GET ALL NEEDED APPROVAL
You should come up with a business name and register same. Registering your business name is very easy. Also make sure that you get all the needed approval.
5. CHOOSE A SUITABLE LOCATION
Choosing a good location is important for a bakery. If you are located in a city or town, retailers can easily visit your bakery and buy bread. Wherever your bakery is located, make sure customers can easily access your bakery. Make sure the roads leading to your bakery are good roads without potholes and other inconveniences.
If your bread is good, branded properly, and marketed effectively, people will patronize you. Look for a suitable location that will increase sales for your bakery business. You can always rent a building of your choice, which is suitable for your bakery.
Landed property cost higher in the major cities but is profitable for your business.
6. BUILD YOUR FACTORY
You should hire an expert in factory setup for your bakery. This will help you avoid making costly mistakes for your business.
6. BUY THE NECESSARY EQUIPMENT
These are necessary equipment you need to acquire to set up a bakery business:
You need a baking oven to produce bread. Buy the industrial baking oven. This is what professional bakers who make bread in commercial quantities use. It is expensive but saves time. You do not necessarily need to be a baker to start a bakery business in Nigeria. You can always hire professional bakers. Make sure the bread you produce meets NAFDAC approval requirement.
The flour mixer is the device that mixes the flour and other ingredients into pastry ready for baking. There are local mixers and there are standard electronic mixers. Go for the one that you can afford.
This is important if you intend to slice your bread. Sliced bread is the most popular and most purchased bread in the Nigerian market. Therefore, the slicing machine is compulsory if you are baking in Nigeria.
Some heavy ovens do come with baking pans but this may not be suitable for the size of the bread you want to produce. You need to buy or design baking pans according to your needs and what is in high demand in the Nigerian market. Make sure you clean your baking pans properly after use.
Seek the services of a bread wrapper supplier. Have a contract in place before production commences in your bakery business. This will ensure a steady supply of bread wrappers.
You need a standby generator, a larger size preferably. This ensures fast and consistent production in your bakery business.
Buy a supply truck to help you transport and market your bread. Use your truck to sell bread to customers.