How To Start Bakery Business In South Africa
What is Bakery?
A bakery is an establishment that produces and sells flour-based food baked in an oven such as bread, cookies, cakes, donuts, pastries, and pies. Some retail bakeries are also categorized as cafés, serving coffee and tea to customers who wish to consume the baked goods on the premises.
How To Start Bakery Business In South Africa
1. Company registrations
You will need to register your bakery business, registering a business in South Africa costs R125 but you might need to trademark your logo, which might set you back around R3 000.
It is highly advisable to register it as a private company, you will get other options in forms of ownership like sole proprietor or partnership. Registering it as a private company protects your personal assets in case your client decides to sue you because of food poisoning.
2. Branding and uniform
You will need to invest into branding your bakery, this is not that expensive. You will need to get a logo, a logo costs anywhere from R150 to R1 500 in South Africa. We recommend you get a logo that costs at least above R500. You will also need to have a uniform for your staff, it is of utmost importance that it be branded.
3. Operating premises
Operating premises will be one of your biggest operating expenses. The amount you will pay for leasing a building will be highly influenced by the location. You can expect to pay more if you are renting a space in Johannesburg as compared to renting a space in Matatiele.
4. Insurance
Any business with tangible assets needs to have insurance. You will buy equipment for your business, what if something happens to it? People can break in and steal your equipment or it can be damaged by natural disasters. Insurance for a bakery should cost anywhere from R600 per month in South Africa.
5. Renovations
You will have to remodel whichever building that you lease to fit the setting of a bakery. This will cost you a lot, you might find that the previous tenant was a furniture shop. You will have to spend money on plumbing, air conditioning, adding tables and everything necessary to make the room feel more like a bakery store.
Renovations will probably be one of your highest costs when starting a bakery business.
6. Equipment
Equipment might set you back around R40 000, unless you buy used equipment, which can be just as effective; while saving you a lot of money. Bakery equipment can include bread pans, cake mixers, a dough divider, a dough moulder and other equipment. This equipment will depend on what your bakery specializes on.
7. Security
Any shop with a commercial space needs to have security, you need security to protect your assets in case of theft, robbery or burglary. Security systems may include an alarm system and armed response services, cameras and a safe to store your money.
8. Utilities
These are the day to day things you need to run your business, including things like electricity, stationery and other small costs. It’s good to budget for 3 months’ in expenses for utilities.
9. Wages and salaries
You will need a few people to help up with running your business so that it becomes efficient. These people can include a baker, and a person that is responsible for cleaning the premises and keeping them clean.
10. Building and hosting a website
A website helps your business become more visible online, it makes it easier for people to find your business through Google and other search engines. You will pay anywhere between R1 200 to R3 500 for a good standard website in South Africa from reputable web designers.
11. Grand opening marketing
You will need to spend some money to advertise your opening day. A grand opening helps get in a lot of customers and those customers might be loyal to you and your business. It is to help spread the word and quick awareness about your bakery shop in a short amount of time.
Just opening the bakery shop and waiting will take longer to get people to notice your bakery.
Health requirements
Your bakery will need a health certificate before selling food to the public. Things like sinks and tables, ventilation and lighting, storage facilities, clothing and equipment will all have to be in a good condition.
Frequently Asked Questions (FAQs)
What qualifications do I need to run my own bakery?
You don’t need any formal qualifications to own and run a bakery, but that doesn’t mean it’s not a good idea to learn a few basic skills and get a bit of experience first.
How much does it cost to open a bakery in South Africa?
The average startup cost to open a bakery is between R150685.99 and R753429.95 This is lower than the average cost of opening a restaurant, largely due to the reduced need for employees, seating, and inventory for most bakery businesses.
Do you need a license to sell food in South Africa?
If you are a hawker selling food and meals, which you take from place to place or sell from a vehicle, you need to have a licence. You will need to apply for a licence from the City’s Trade Licence Department. In addition, you will need to pay a once-off application fee.
Is bakery a profitable business in South Africa?
A bakery is a profitable business to start in South Africa. The majority of South Africans have bread, and various types of baked goods as part of their daily meals. Also, there has been a rise in the sales of cakes, pies and various pastry products.
Do you need a license to sell baked goods from home in South Africa?
To legally sell any foodstuff in South Africa, except unprocessed agricultural products, you must apply for a Certificate of Acceptability from the local authority, which would typically be your municipality. This certificate must be in place before you start trading.
Is a bakery a good business?
No doubt, bakery or baking is a lucrative business. Bakery products like bread, biscuits, and cakes are always in demand hence a person who starts this business will never be at loss. Moreover you profit will be more if you provide (bake) more products in your bakery.
How much does it cost to make a loaf of bread in South Africa?
If you’re wondering how much it costs to make a loaf of bread in South Africa, you should expect to pay R15.51. This is for making bread at home and doing the work yourself. If you have a baker make the bread, the price jumps to R17
Is it hard to open a bakery?
Baking is a creative outlet for many, but running a bakery requires a hard skill set too. If you can take on the responsibility of directing and managing the business end, you’ll creative side can start dreaming up any number of baked goods to sell. Starting a bakery business is possible.
How much money do I need to open a small restaurant in South Africa?
Restaurant is a business establishment where meals or refreshments may be purchased. The estimated cost can be somewhere from R4 million – R6 million, depending on the type of restaurant and other factors.
Can I bake cakes at home and sell them?
Can I Sell Cakes from My Own Home? In short, yes you can. However, if you decide to do this as a business, you will need to meet certain requirements as ultimately the public – your customers – need to be kept safe from any potential harm.
Why do bakeries fail?
Marketing is one of the most common reasons your small bakery business will fail. You can have the best products in the world, but if people don’t know you exist, they will not find you. It is not an “if you build it, they will come situation”.