How To Start Bread Business In South Africa
What is Bread Business?
Bread bakery businesses are bakeries that specialize in making and selling different breads. Most offer a variety of artisanal and/or sandwich breads, which respectively account for 30.2 and 17.8 percent of bread sales in the country.
How To Start Bread Business In South Africa
1. Prepare a business plan
A business plan is not as scary as it sounds. Even if you don’t intend to source any capital from banks or investors, it is important that you organize your thoughts on paper.
A business plan doesn’t have to be complex or too elaborate, just something to keep your eyes on the big picture. The business plan will allow you to easily identify the obstacles and anything you may not have considered.
Your business plan should consider the prevailing market price for the type of bread you want to produce and how much competition there is. You also need to estimate the profit you’re likely to make in the first, second and third years.
Is it sustainable? Is it worth the time, effort and capital?
It’s usually wise to keep 8-12 months working capital to adequately support a bread bakery business.
2. You should know enough about bread
Nobody says you must be a master baker to succeed in this business; you really don’t need to. However, you need to know the basics and tricks of the trade if you want to survive in this business.
Sign up for a bread baking course and learn the basics about measurements, recipes, flavours, packaging, branding and marketing. You should not give in to the temptation of thinking it’s enough to just hire a manager and have the bakery make you money.
Ignorance in the bread bakery business is likely to open you up to financial losses and eventual failure.
3. Choose a location that’s close to your target market
The types of bread in the African market appeal to different segments of consumers. You must ensure that the type of bread you intend to produce will find a sizeable market in your area.
What kind of people live around you?
Are they high, middle or low-income earners?
Are they students, single people or households with families?
Are they predominantly young or old people?
If you live in a closely knit community like a residential estate or a university campus, it may be a great opportunity to run this business from your home kitchen. (photo credit: miraimages.photoshelter.com)
Look for newly established or developing suburbs and high traffic locations that have little competition. It’s also important to focus on areas that may not be well serviced, like industrial estates or high density office blocks where you can draw eager customers.
4. Would you need a permit or license to operate?
Depending on your country and location, you may require a permit or license from a government establishment or Consumer Health office to operate a bakery.
What are the requirements and standards for approval?
Would you need to have specific equipment like fire safety tools?
Is there a standard qualification you must obtain to be eligible for a permit?
You must know these requirements in advance and take the necessary steps to ensure you get the approval you need to open your doors to the public.
5. You need to use the right equipment
The size and quality of your equipment will depend on how much bread you intend to produce for the market and the amount of startup capital you have.
It’s very important that you don’t spend too much on equipment at the beginning of this business. Look out for any good quality, pre-owned (second hand) bakery equipment you can find at a bargain price.
The basic equipment you need to start a bakery business include: an oven, mixer, dough moulds, dough divider, fermentation chamber (proofer) and maybe a bread slicer.
Frequently Asked Questions (FAQs)
Is bread business profitable 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.
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 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.
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.
How long does bread last?
To prevent mold, it should be kept sealed at room temperature or colder. Room-temperature bread typically lasts 3–4 days if it’s homemade or up to 7 days if it’s store-bought. Refrigeration can increase the shelf life of both commercial and homemade bread by 3–5 days.
Can you make money selling bread?
Or you’re in need of a side hustle to replace a reduction in income over the past year. Whatever your reasons, selling your sourdough bread from home can be both profitable and enjoyable. More and more people want to enjoy home baked bread rather than store bought.
What are the most popular bakery items?
When respondents were asked what are the top bakery items they produce, cookies rank first at 89 percent, followed by cakes at 79 percent, cupcakes 73 percent, muffins/scones 68 percent, cinnamon rolls 65 percent, and bread 57 percent