Are Bakeries Profitable? Guide To Building A Successful Bakery Business

If you’re contemplating starting a bakery, you must be wondering if bakeries are profitable ventures.

Being a boss comes with a sense of achievement and satisfaction, but no one wants to build a business where losses are the order of the day.

Yes, bakeries are profitable, but like every other business, there are several underlying factors for success. Running a bakery requires patience, doggedness, attention to detail, and, most importantly, passion.

There is no holy grail for making a profit in the bakery business, but there are strategies that can guide you for growth, expansion, and profitability in the business.

This article explores 9 strategies that can help you become profitable as a bakery owner.

What does a bakery business entail?

Starting a bakery is capital-intensive. You will need to purchase basic equipment like mixers, an oven, cylinders, storage utensils, a space to set up your bakery, etc.

Because of the cost of getting these items, you may not earn a lot of profit in months or years, depending on your growth.

Additionally, the market may be large, but many well-known and established competitors already have a large share of the market. Therefore, you need strategies that will set you apart from others.

Moreover, the demand for bakery products is unstable. Some days may be rewarded with so many orders and huge turnover. On other days, sales may be poor, and you may have losses.

Whatever the case, the unpredictability of the market is something you must be ready to deal with.

The bakery business isn’t a get-rich-quick industry. It requires more hard work, concrete planning, and strategic positioning. However, a basic recipe for success is quality food, good service, and great people.

Strategies for building a profitable bakery

The strategies highlighted in this section are not magic wands for a profitable bakery, but you will witness growth and advancement in your business if you apply them circumspectly.

Below are the strategies to implement for a profitable bakery:

1. Get a location with quality traffic and affordable rent

The first key to making profits in the bakery business is to find an urban location with medium to high population density. It should be easily accessible for people on foot and cars to drive through and order on the go.

Also, you should consider proximity to offices, tourist centers, hotels, etc. This way you can get a reasonable amount of traffic from workers, tourists, lodgers, etc., who will need bread or pastries.

In addition, have a budget for rent and do not go overboard by spending more than is required. Although you want a good location, remember that you need money to run the business.

Your best catch is to get as many options as possible and settle for the location that ticks both boxes.

2. Invest in décor, ambiance, and experience

While planning to start your bakery business, you should seek ways to stand out. An innovative way to do this is to invest in interior and exterior décor.

Your décor should tell a story and stand out from any other bakery such that people can easily identify your brand anywhere.

More so, you want people to leave your restaurant with a unique experience that will make them come back for more. The best food might not taste so great while staring at the concrete wall.

Even though you may not be able to set up your bakery high up a cliff, you can spice up your bakery with stunning views, music, and great service.

Whatever interesting idea you can think of or model from others could be the turning point that would help you have a ton of patronage regularly.

3. Offer a broad range of baked products

Variety is the spice of life, and you should apply this to your bakery offerings. One thing that can help you while starting is to offer a variety of baked goods.

From bread rolls, bagels, and buns, to cookies, cakes, cheesecakes, and pies, to muffins, pizza, snack cakes, doughnuts, and the like, etc., there’s a lot you can offer.

This is not to say that you should start with all the types of baked goods available but it will help to have variety. You can subsequently streamline your offerings based on those that sell fast and those that do not.

4. Build signature menus

Asides from offering a variety of products, one other way to boost your brand perception is to build special menus that customers cannot get anywhere else.

This is how big brands like Coca-Cola, and KFC scaled their business and won a large share of the market.

Of course, as a baker, you should enjoy experimenting with new recipes. People love innovation so giving them something more than the ordinary will get them coming back for more.  

5. Keep an eye on your competition

There is no friendship between competitors in business. Everyone is out for the same market, and the goal of each brand is to own the larger share.

One way to stay ahead of competitors is to stay up-to-date with their strategies and try to outsmart them.

For instance, if you notice that bakeries are rolling out promotions, this is the time to offer something even more exciting so you don’t lose your customers to them. The goal is to keep your bakery relevant and competitive.

6.  Understand market trends

The bakery business is unpredictable, and turnover may change based on season, time of the day, or occasion.

Your best bet as a bakery owner is to understand what time of the day the bakery records its highest patronage and how much sales you make during holidays or during seasons like summer or winter.

Understanding these trends is what helps thriving and profitable bakeries withstand certain inevitable challenges.

7. Expand your services

There are many other services that people need apart from dine-in or take-out. People love convenience, and they would not mind paying more for it. Therefore, you should look into offering delivery orders to locations within your reach.

The good thing is you don’t necessarily have to own a delivery van or bike. You can partner with any of the several food delivery services.

Examples include Doordash, Postmates, etc. They specialize in helping restaurants expand their reach to customers who may be far away or those who prefer to get their orders conveniently.

Additionally, people need cakes and pastries for events like weddings, business meetings, and luncheons. You can include these packages in your offering.

8. Maximize your revenue by segmenting the price

As a bakery, you can maximize your revenue by offering food items to customers at different prices based on certain conditions. One good idea is to set up happy hours where customers can enjoy discounts on baked goods.

Similarly, you could sell some food items for their usual rate during peak hours and sell for less during non-peak hours. In essence, find a way to sell more, reduce wastage, and increase revenue.

9. Invest in marketing

Food brands are known for advertorials on television and in newspapers. This is a way to keep your brand in people’s eyes and minds.

If media ads are an expensive option for you, adopt social media to stay relevant, engage with customers and gain their trust.

Also, creating a website or a Google business page can help you get leads that can become customers. Tourists may go on Google to search for bakeries around them. With these tools, they can find and patronize you.


How do bakeries make profits?

Bakeries sell their baked food items to customers to earn money. Bakeries owners also implement working strategies to run a profitable business.

How much does a bakery owner make annually?

Bakery owners make between $17,000 to $242,500 annually.

How much do bakers make?

The average salary for bakers is $15.76 per hour.


Bakeries are profitable but you need to put several factors into consideration. It requires planning, patience, passion, innovativeness, etc to make a profit.

But the first thing is to do your feasibility study. Don’t just set up a bakery because you are excited about it. Make sure to look for a good location with good traffic.

Also, study the location to see if it is not swamped with many bakeries already and if the rent is within your budget.

Don’t forget to create a visionary business plan. Also, make use of other aforementioned strategies. Continually seek improvement, and soon you’ll be running a chain of profitable bakeries.

I hope this article helped. Thanks for reading.

Read more insightful articles like this on Millenora.