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How To Choose A Profitable Location For Your Bakery Business?

The bakery business is on the rise in India. The Indian bakery market was around USD 7.60 billion in 2020 and is further estimated to grow at a CAGR of 8.5% between 2021 and 2026 to reach a value of USD 12.39 billion by 2026. The growing potential of the bakery industry in India makes owning a bakery shop one of the most exciting and lucrative businesses in India. And not to forget, delicious!

A bakery can be a highly profitable business if done right. Find a suitable location, curate a mouth-watering menu, market it right, and voila, you have a successful bakery business! This blog will help you figure out the perfect location for your bakery business. 

On the go muffins work best for bakery business located around university area. Know more about suitable bakery location.
On-the-go muffins work best for bakery businesses located around workplaces or universities!

7 Essential Questions You Should Ask Before Picking A Location

Location in the restaurant business holds utmost importance. If you find a perfect place, you have already won half the battle. Here are some questions you should ask yourself to finalize your dream bakery location.

1. What is Your Bakery Concept?

Before opening any restaurant, you must finalize your business’s concept. The concept of your restaurant is its theme that determines your idea and style. When it comes to bakeries, your concept will determine the focus area of your business. 

Who is your target market? Do you specialize in party cakes, or are your doughnuts and croissants too tempting to miss? Answer these questions for your bakery before nailing down your location. 

2. Where Is Your Target Audience?

Once you know your audience, you need to find a location for your bakery business near your target demographic. An accessible, visible site close to your audience will give you regular footfall. For instance, a residential area would be perfect for you if you specialize in birthday cakes. If your focus is more on pocket-friendly bagels, a location with a more student population fits better.

This challenge does not usually exist for a chain bakery brand. Since they already have a hold on the market share, they attract customers wherever they go. But for new bakeries, it is important to map your target demographic before setting up a business.

3. What Is The Size Of Your Business?

Knowing the scale & the size of your bakery business is critical when looking for a location is vital. This estimate is highly based off on the business model, concept and budget. Do you plan to open a cafe bakery with table services like Theobroma or a bakery place where people pick up their orders and leave, like the iconic Albert bakery in Bangalore? 

A smaller place can give you the appearance of a cosy corner shop, while a larger area can give you more space to move around quickly and not look cramped.

4. What Is Your Budget?

The location of your business depends critically on your budget. Can you afford to start your bakery business in a high-end, posh area? Initially, it is recommended not to open your bakery outlet in a posh and expensive location as it could affect your cash flow and take longer to reach the break-even point. 

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Your budget may also depend on the real estate prices. In addition to that, there are additional property, licenses & government charges which often or not would be unavoidable. If your business is near a developing or soon-to-be-developed area, then the rent prices would be higher. However, investing in such locations might bring your profits in long run.

Keeping this fine balance is a very overwhelming task. But so is running a business!

Do you specialize in party cakes, or pocket-friendly bagels? Know which location works better for you.
Understand the demographics of the place for finalising your bakery location. It is good to start a bakery in crowded places like malls, residential areas, or preferably near a college.

5. Is It Accessible?

Any business location catering directly to customers needs to be accessible to its customers. Customers should be able to easily find your address, reach it and explain it to others. Imagine a bakery in the middle of a busy street near a corporate park (and serving pastry and coffee to go!) – it’s easily accessible and visible, providing heavy foot traffic and regular customers.

Your business should be accessible not just to your customers but also to your staff & yourself. If you & your team would have to spend long hours commuting & spend on travel expenses then that too would affect your staff performance & profit margins!

6. Who Are Your Competitors?

When you finalize a location for your bakery business, check how many other competitors are operating in the area. Before taking the final call, exercise SWOT analysis to know your strengths, weaknesses, opportunities, and threats. A location with less or no competition can work immensely in your favour if there is some demand. 

SWOT give you a clear idea of your bakery business.
SWOT give you a clear idea of your business. You can use it either at the beginning of your business or while mapping the growth

7. Is There Growth Potential?

What are your long-term goals for your bakery? Can your chosen location support it? If you wish to expand your bakery, your site needs to be able to accommodate such growth. So the flexibility of your location has to be a critical factor when you look for your dream bakery location.

8. Some Other Crucial Questions

As you choose a location for your bakery outlet, here are some other important questions you need to ask yourself about a place. 

  • Is the area safe to visit? The area surrounding your bakery should be safe for people to see. Get to know the crime rate around the area and if there are other security concerns. 
  • Is there network availability? Network availability to access high-speed internet is highly critical for any business in today’s day and age. If you wish to create a place where people can sit, work, and relax, internet availability holds even more significance. You need the internet to use your POS software and accept online payment.  
  • Can people park their vehicles easily? You get everything right, but people can’t find a parking space around your bakery and decide to leave! That would be a nightmare for your business. Your easily accessible bakery outlet should also have easily accessible parking space to succeed in the market. 

While opening a bakery outlet is challenging, we hope this blog makes it easier for you. For the steps after, you can rely on Petpooja’s POS system to ensure your restaurant functions smoother and better. It will handle all the operational hassles for your business while you create magic in those ovens! 

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Abeera Dubey
Abeera Dubey
Abeera is a freelance content writer at Petpooja.

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