Types of Bakery Businesses In Nigeria
Thinking of opening a bakery business in Nigeria but you don’t know where to start or how to decide? This article will give an insight into the different types of bakeries that you can explore.
Running a bakery is a lucrative business because the demand for baked products like cakes, bread, biscuits, etc, will always be on the rise, so anyone can make millions from it.
For those who do not know the types of bakery they want to open, there are two main types, namely; retail and Wholesale.
1. Retail Bakery
Most bakeries established in Nigeria fall under retail bakeries, and this involves selling baked foods directly to their customers.
The types of bakeries under this are;
This deals on producing what is regularly consumed by adults and children everyday. You can make millions from this bakery in Nigeria because the focus is on producing biscuits, bread e.g. coconut, butter or chocolate bread.
This is for those who wish to specialise on making a particular type of baked food or for specific purposes. For example the bakery shops that only make cakes for birthday parties, weddings and other similar occasions.
Being that there is usually one event or the other every weekend in Nigeria, someone who runs a specialty bakery business can make big money.
Pastry Shops are not so common, but they are often strategically positioned in areas where there is likely to be high patronage.
Students, workers often times are on the go during the week and some might need something they can quickly grab late morning or by noon, this is where pastry shops come in handy.
Pastry shops primarily bake a variety of snacks; meat pie, egg roll, chicken pie, doughnut, sausage roll and puff puff, are some examples. With little capital, you can get a brick-and-mortar shop and set your business up.
The concept of running a bakery business from your house is fast gaining ground in the era digital transition, vast electronic transactions, online engagement and work-from-home concept.
You can start this business from the kitchen and have them delivered to people across the city after orders have been confirmed through social media, a website or phone contacts.
This is one of the cheapest bakeries one can start because you just need to get the equipments and ingredients to start with.
Ever felt the need to grab a snack and with a drink at the same spot and probably do some remote work or relax in the same place? That is the purpose a bakery cafe serves.
This type offers cakes, muffins, snacks with coffee and tea depending on customers request and there is usually a dining table where people can sit to have their meals.
This is another type of bakery business that is not so common in Nigeria. It requires selling the products from a van.
What this means is for the small business owner is that rather than doing it from a shop or a store, you would have to buy or hire a van to sell different types of baked food.
Interestingly, it is lucrative to have a bakery van because you are not stuck at a particular location. You can always drive your van to any location where you can find your target audience.
2. Wholesale Bakeries
The wholesale bakery, unlike its retail counterpart, deals in making large supplies of baked foods, and this includes companies that mass produce bread.
Such businesses mostly have large factories as they cater to a larger customer base and sell directly to retailers who in turn sell to the final consumers.
When you decide on the area you want to focus on, the next step wuld be to get the business registered with the Corporate Affairs Commission (CAC).
It gives you many benefits like getting a corporate identity so you can deal with other business on the basis of confidence and trust as most unregistered businesses find it difficult to build trust with prospective clients. It also affords you to the opportunity to access business grants to expand the business.
Many business ideas end up not going pass the planning stage because there is no money to set it up.
Like many other businesses, to start a bakery, you would need to source for your capital, it can be a loan from a bank or if one is lucky an investor could provide the seed money.
On the average, the capital needed to start a bakery business in Nigeria is between N1,000,000 to N2,000,000.
This is because it covers the following expenses;
- Purchase of bakery equipment and ingredients
- Renting of shop/space (Annually)
- Payment of utilities and generator for at least six months.
- Workers salaries (Depending on type and size)
- Fees/Charges for registering your business with CAC and getting approval from NAFDAC.
When you have gotten the capital or found a way to source for it, you move to another area. Every bakery operates with a specific set of tools and gadgets which make it possible for the goods to be produced.
Below is a list of must have equipment
Racks and baking sheets
Wood Top Work Table
Ingredients used in baking bread, cakes and other snacks are as important as the equipment you buy to get the bakery running.
See a list of the main ingredients:
According to Infoworth, a standard bakery in Nigeria produces and sells 50,000 loaves of sliced bread weekly on the average and it costs about N80.00 to produce one, that’s if the bakers are different from wholesalers.
Let’s say the baker supplies wholesalers at N130 per bread, they make N50 profit on each loaf. While they in turn sell the bread to retailers at the cost of N170 and make N50 gain on each sale they supply while the retailers sells between N200 to N220 to the final consumers.
This means that the average gain made by each party from production stage to final sale is 50 Naira. Do a simple multiplication of 50 by 50,000 to get N2,500,000 and that is the profit for the weekly production and supply.
Requirements For Starting Bakery Business In Nigeria