By Ric Pinca
Why not a bakery business?
Planning to put up a business? Why not a bakery business?
Baking is a good business. It is profitable if managed properly and it is not difficult start one as there are a lot of technical support available from flour millers and ingredients dealers.
Bread, being a favorite breakfast and merienda fare is a sure seller. Pandesal, ensaymada, monay and other local favorites are not only delicious items, they are also easy to prepare. And so long as you exercise good business practices and maintain the quality of your products, the bakery business is sure to give you a good return.
Like all business ventures, however, a bakery business requires that you prepare well for it. Here are a few basic steps to guide you should you decide to “dough it” so to speak.
1. Learn how to bake. Successful bakery owners know how to bake. Commercial baking or baking for business is different from home baking. It is not right to presume that since you can bake a good chiffon or pound cake at home ( using a teaspoon of this and a cup-full of that ingredient) then you can produce the same good results once you bake for say a hundred people. In commercial baking, ingredients are measured in percentage compared to the weight of flour. This way, your product will taste exactly the same whether you produce 50 or 100 or more loaves of bread or a thousand pieces of cupcakes.
Consistency in product taste and quality is what people look for in breads and cakes . And you can only consistently produce the same quality bread and cake products if you can be consistent with your product formulation. This in turn depends on your knowledge of baking.
The flour mills usually have baking schools or technical centers that offer baking courses as part of their marketing efforts. Pilmico Foods Corporation has a baking school in BF Homes, Paranaque. Liberty Flour Mills has its Maya Kitchen in Makati City. General Milling Corporation has a baking school in Cebu City. All these mills also have technical services staff that go around and help sort out baking issues at the bakeries.
2. Get your business permits and licenses. If you live in a subdivision and would like to put up your bakery there, you must have a permit from the Homeowners’ association. They normally do not charge for this. Take this Homeowner’s permit to the Barangay office which will endorse you to the City Hall which will in turn issue you a business permit. You should also have a license from the Food and Drug Administration (FDA) as a “food manufacturer” and from the Department of Trade and Industry (DTI) a “sole proprietorship” license. While these may look tedious, it’s quite easy to get these permits and licenses. A few days is all you need to secure these.
3. Choose a good location. Look for a place where there is plenty of pedestrian traffic, meaning, your choice of location has a lot of people who are all potential customers. Look for places near a market, church or school, bus or jeepney or even tricycle stations. Wherever people congregate, there is business. And that is where you should put up your bakery.
4. Bake only products that sell. French breads and whole wheat breads are a must for the rich and health and fitness buffs. But your jeepney driver or your everyday Juan de la Cruz prefers pandesal hot from the oven. Baguettes and croquets may sell if your shop is in a shopping mall. But if your bakery is in Tondo, or Pandacan or any neighborhood corner in San Andres, the best sellers would be pandesal, monay, ensaymada. As a prospective bakery owner, you must know your market and produce products that this market desires. Remember, you are in the bakery business and you bake bread to sell it. Therefore avoid baking products that will just stay in your shelf. Bake products that will fly off your shelf as fast as possible.
5. Begin small, but dream big. It is best to start small and then grow the business gradually. By starting your bakery in a modest way, you get to control your losses should you commit mistakes, which is common for aspiring business persons. Begin with second hand equipment from bakeries that have expanded and need to unload their smaller capacity oven for example. Buy locally made equipment so that technical service would be readily available should the equipment break down. Locally-made ovens and mixers are simple but are tough and tested. Imported equipment may look good and modern but are expensive and parts are not readily available. DCM is a well-known local oven and mixer manufacturer and they produce good, tough ovens, mixers and kneaders. I should know. I have a 24 year old DCM oven and it still works while my second hand spiral mixer also made by DCM works just fine.
6. Know your costs and control your expenses. The cost of bakery ingredients fluctuates due to demand and competition. It is thus essential that you have knowledge of the cost of your ingredients as they change since this will affect the cost of your products. Use locally produced flour as these are fresher and consistent in quality. Local mills also provide bakery technicians who can trouble shoot and help you improve your products. Imported flour is cheaper but they are not as good as the local produce. Here are some numbers to consider: Depending on your formulation and your baking efficiency, a 25 kg bag of local flour may produce about 1,800 pcs of pandesal weighing 25 grams each. The same flour may produce 100 loaves of bread weighing 450 grams each.
At P2.50 per pan de sal, a sack of flour will give you gross sales of P4,500 per bag. Your 100 loaves of bread if sold at P36.50 each would gross P3,650 per bag of flour. From these gross sales, you will have to deduct the cost of your ingredients, space rental, packaging,power and utilities, and salaries to get your net income. And don’t forget your taxes because the Bureau of Internal Revenue (BIR) will run after you.
