How to Start Cookie Business From Scratch

It is hard to think of a less original idea for your own business than opening a small bakery or pastry shop.

This option of opening their own business is of interest, primarily to women. And the beginning of such a business comes from an ordinary hobby.

However, many entrepreneurs in the choice of direction for the organization of their own enterprise stop a high probability of going bankrupt in the first year of work because of the high competition in this segment. In fact, the manufacture of confectionery products is engaged in numerous small shops, cafes, and restaurants, as well as large enterprises, including bakeries. Competing with most of them with a small starting capital is simply impossible if you plan to open another bakery or pastry shop with a standard assortment.

The only way to not just stay in this market, but also to occupy its own niche – to come up with such a “specialization” of your business, which itself would become a competitive advantage.

What could be such an advantage? For example, you can limit the range of your products as much as possible. At first glance, this decision is puzzling, because most companies, on the contrary, hope to maximize their product range to please “all tastes. But small firms have a big advantage over the giants: they can afford to produce no more than ten items.

The main thing is that they are all united by one criterion. It is not enough that they are just ordinary shortbread cookies. They have to be different from what is presented on the shelves of most grocery stores and bakery stalls.

Recently, customers’ interest in confectionery products with a national flavor is increasing. In our country, there are small bakeries that produce, for example, only biscotti cookies. Biscotti has a long history and originates from Italy. In Russian, “biscotti” is translated as “cooked twice”. Biscotti, indeed, are baked in two batches. First, the dough is baked in bars and then cut into individual slices, which are re-sent to the oven. Thanks to a special cooking technique, biscotti can be stored for up to four months.

It would seem that the range of such a bakery is very limited, but in fact there are many different variations of biscotti recipes (for example, one of the varieties of biscotti is the Tuscan cantuccini). Someone adapts the recipe to the preferences of the Russian audience, and someone tries to stick as closely as possible to the original recipe of Biscotti di Prato, which, according to legend, appeared in the 13th century.

The main ingredients of this authentic delicacy are extra flour, sugar, fresh eggs, drinking water, salt, leavening agent, and vanillin (we recommend using French vanillin). These cookies contain a minimum of sugar. They are quite hard and dry, so it is advised to dip them before drinking (ideally coffee or white dessert wine, but you can also eat them with tea or milk). In addition, various ingredients are added to the dough for these Italian cookies – roasted nuts, dried fruits, spices, and chocolate.

There are eight classic flavor combinations. Each option includes one type of nut (hazelnut, almond, or walnut) and a second vegetable ingredient (ginger, kumquat, cinnamon apple heaven, prunes, raisins, cherries, or dried apricots) or chocolate. Since cookies are baked in small batches and usually to order, manufacturers offer customers the choice of the desired filling. Biscotti are made from quality and natural products and contain no harmful preservatives, dyes, or stabilizers, which is what its producers put special emphasis on.

True biscotti cannot be baked in a regular bakery or confectionery, as all steps of its preparation (and there are many) are done manually, including roasting, peeling, and chopping nuts, and even assembling the cardboard boxes for the cookies and packaging them.

As such “specialization” of their mini-bakery, you can choose any confectionery products from the cuisines of different countries. Right now the cuisine of Italy, Spain, and France is of the greatest interest. With the search for recipes and study the peculiarities of the technology of cooking cookies no problem, so dwell in more detail on the organizational aspects that you will certainly encounter when opening your own mini-bakery. Mini-bakery – a small enterprise, which is engaged exclusively in the production of bakery products.

Mini-bakeries often also act as pastry shops, producing cakes and pastries. Some restaurants and cafes have their own small bakeries, as well as super- and hypermarkets. However, they can also be independent businesses created by one or more entrepreneurs. In the latter case, mini-bakeries are often positioned as a family business and over time can develop into an entire chain. If you are going to do business in this area, you first need to register the enterprise.

The second question, which is no less relevant than the registration of your firm, is related to the choice of premises for the bakery. Already at this stage, it is necessary to decide whether you are going to sell your bakery to retail customers in its own outlet or not. If you intend to also deal with the realization of confectionery in the place of their production, then your bakery should be located in a place with high traffic, preferably near shopping and office centers. The cost of renting depends on the region.

However, there is another option of work, which chooses those who do not have a large enough start-up capital. In this case, finished products are sold either exclusively wholesale (stores, cafes, and restaurants), or delivered to private customers to order (customers are via the Internet and standard means of advertising). Then there is no need for a large area and you can rent a smaller room, where the bakery itself will be located.

Even if you do not plan to work in the early days in such volumes, experts still advise not to save on equipment. When your business will “unwind” and the number of orders will increase significantly, replacement of equipment will require a lot of money. Therefore, it is better to acquire sufficient capacity equipment at the beginning of work.

Some entrepreneurs do not start with a bakery, and with the so-called partial production cycle. In fact, they buy semi-finished products and are engaged exclusively in baking, decorating packaging, and sales of finished products. In this case, you can get by with one oven and a freezer for storing frozen dough. However, this option is not suitable if you do not want to be limited to a standard range of confectionery products.

When combining production with a retail outlet, there will be an additional item of expenditure on trade equipment, which includes a showcase, cash register, safe for storing money, and documentation.

To open your own bakery will require a number of permits. This list includes a sanitary and epidemiological certificate for production, a sanitary and epidemiological certificate for the products, a certificate of conformity, the conclusion of the fire inspection of compliance with fire safety requirements.

Once the room has been found, your company is officially registered and all necessary documents are obtained, you need to look for staff. To work at the bakery will need a technologist and bakers, and in the sales area (if any) – salesmen. At medium production volumes will need 3-4 bakers for one eight-hour shift.

However, in the early stages, if you do not plan from the very beginning to produce several hundred kilograms of cookies a day, all these functions can be taken care of. But even in this case, you will need at least a couple of assistants and couriers who will deliver orders around town. Someone will also have to deal with advertising, the search for wholesalers, purchasing raw materials, solving organizational issues, taking orders by phone and on the Internet … So, most likely, without an assistant (even a member of your family) can not do. In addition, you will need the services of an accountant, but you do not have to take him on a full-time basis. You can turn to a specialist who works on outsourcing.

The exact list of raw materials needed for the production of cookies, and their consumption depends on the recipes you use. In any case, you will need premium flour, yeast, salt, sugar, fresh eggs, vanillin, leavening agents, food additives, butter, dried fruit, nuts, etc.

The biggest challenge will probably be finding suppliers of flour. On its quality directly affects the quality of the finished product. On the other hand, its purchase price should not be the highest, otherwise, it will increase the cost of your confectionery products. It makes no sense for small enterprises to buy flour directly from flour mills since the latter sells it in large batches.

It should not be forgotten that flour storage requires special conditions both in terms of humidity and temperature in the room. For these reasons, mini-bakeries buy raw materials from intermediary companies in small batches, seeking the most favorable conditions for cooperation.

One of the last, but not least important items of expenditure when starting his own business – advertising and promotion. Well-proven themselves such ways to declare themselves and their product, as distribution of leaflets (as through promoters, and the mailboxes in apartment buildings). More expensive ways of advertising in this case do not work so effectively. Experts advise actively using methods of promotion on the Internet.

So, to organize your own bakery you will need to rent space and repair it if necessary, purchase equipment and furniture, to purchase raw materials. Do not forget to take into account in calculating the utility costs, employees’ salaries (even if it’s just an accountant coming in), advertising costs, promotion and support groups in social networks, advertising on forums and regional sites.

If your product is unique and positioned in the above-average price segment, you will have to spend money on its packaging. Standard packaging in plastic bags will not do. Packaging should be beautiful, environmentally friendly (preferably made of thin cardboard), and compact.

The enterprise, which produces and sells a standard bakery (buns, puffs, cheesecakes, etc.), has a high-profit margin, which can reach 50-60%. A small bakery with a narrow specialization has a profit margin of no more than 20%. Therefore, in the first case, you will be harder to enter the market and cope with the high competition, but with the right set of circumstances payback period will be much less (about a year and a half), and the profit is greater. In the second case, do not expect to reach the level of self-repayment earlier than 2.5-3 years.

Also take into account the seasonality factor. Cookies, like other pastries, best sell in the fall and winter. In summer there is a marked decline in sales. Therefore, it is recommended to plan the launch of production in September-October.