Bakery business in Nigeria is one of the oldest businesses in the country, but till today, bakers still generate a substantial amount of money on a daily basis.
An average Nigerian you can’t go a week without consuming bread! That’s why the business is very profitable – the demand for bakery products is very high, and so it will be as the population keeps increasing every day.
From baking loaves of bread to pastries and even cakes, there are lots of bakery businesses you can venture into in Nigeria. However, you need to understand how the business works and acquire good knowledge about baking.
The cool thing about this business is that you can start small and scale, also if you have a bigger capital, you can start big and make millions of naira in months.
So if you’re looking to start, this post contains everything you need from the cost of starting, equipment needed, the profitability, and even challenges you may face along the line. We’ll show you exactly how to start a bakery business in Nigeria.
Without further ado, let’s get started!
What is a Bakery Business
Bakery business involves the production and sales of all kinds of baked products including bread, cake, pastry, and so on to wholesalers, retailers, and sometimes final consumers.
Bakery Business in Nigeria
Bakery business in Nigeria can be started easily, although not only passion is required. You need a set of baking skills and management skills, and also be able to put in the time and work required.
In Nigeria, bread is mainly what bakeries are known to produce, and only the sales of bread make bakeries more money than other baked items. This is because Nigerians consume bread just like rice.
This made the business very profitable as it is a source of daily income. However, unlike other daily income businesses, you need a reasonable amount of money to start a bakery business in Nigeria.
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How Much Do You Need to Start a Bakery Business in Nigeria
While looking to start any business, what will first come to your mind is the capital required, and that leads to the question – what is the cost of starting a bakery business in Nigeria?
The cost of starting a bakery business in Nigeria often depends on whether you want to start small and grow, or you want to start on a larger scale, and also the type of bakery business you want to start.
Bread bakery business in Nigeria is capital intensive and to start, you’ll need about 1 million naira and above as a startup fund. This money will cover the cost of equipment and materials, as well as staff salary, and some registration fee.
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How Profitable is Bakery Business in Nigeria
While this business may be capital intensive, is bakery business profitable in Nigeria?
Yes, the bakery business is very profitable in Nigeria, although the profitability of your bakery depends on the types of products baked. For example, if you deal with the baking of bread alone, you’ll need to sell hundreds of dozens to make a substantial amount of money. However, dealing with the baking of cakes you could double your investment, as cakes are usually baked for occasions, which means it is more of a contract than a business.
With bread bakeries being the most popular in Nigeria, due to high demand, bakeries make hundreds of dozens of sales daily, which means a lot of profit, but also a lot of work.
For instance, if a bag of flour costs 12,000 Naira, and 18 dozen of bread is baked per bag, including ingredients, let’s say the cost of production of 18 dozen of bread is 15,000 Naira. If a dozen is sold for 1,200 Naira, 18 dozen will be around 21,000, and your profit will be somewhere around 6,000 Naira per bag.
That is a realistic profit margin to expect per bag of bread in Nigeria is between 20% to 50%.
How to Start a Bakery Business in Nigeria
1. Start with Market Research
The first step in starting a bakery business in Nigeria is to carry out thorough market research. Here, you have to find out the best bakery business to start as there are many.
You also have to do some findings on the best way to start, find out how much every equipment and material needed for baking costs, and also research how to get the best training. More so, you’ll want to know about the law guiding bakeries in Nigeria, the associations you must join, and the licenses required to get started.
To achieve all these, the best thing to do is meet a baker or bakery owner in your area, build a business relationship and do your research. Don’t forget to let them know that you’ll be back for continuous guidance.
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2. Decide the Type of Bakery to Open
During your market research phase, you must have found out the types of bakery business you can start in Nigeria. Now is the time to decide on the best one for you.
Your decisions should be based on the startup cost, profitability, and how easy will the business be based on your personality/lifestyle. Check out some niches in the bakery business below.
— Traditional Bakery: This involves the baking of mainly loaves of bread. It is the most popular bakery type in Nigeria.
— Pastry Bakery: This specializes in the baking of small chops such as puff puff, doughnuts, chinchin, etc.
— Specialty Bakery: It involves the baking of a particular type of baked food. Although it mainly deals with the baking of cake in Nigeria.
— Home Bakery: With this, you can start the production of any type of baked food right from your kitchen and sell them online, or deliver it to an event.
3. Get Some Training
After knowing the type of bakery business you want to start, the next thing is to get some training.
Unlike you’re a baker you won’t need a lot of training, but for business purposes, you’ll need to acquire more knowledge about baking. This is because baking for yourself, family, or friends is different from baking for sale.
You can get trained by visiting a bakery and asking the owner to employ you as a trainee rather than a worker. This way, you’ll learn more about the business entirely, not only the baking skill.
There are also some personal trainers whom you can book to learn from. You can also enroll in a catering school to learn how to bake as a beginner, although this takes time.
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4. Come Up with a Simple Business Plan
Whether you want to start small or big, regardless of the type of bakery business you want to start, it is ideal to draft a business plan that will serve as a road map toward your success.
In your business plan, you need to outline your objectives, and also your targets in terms of growth and finance both short-term and long-term. Map out your overall strategy including marketing, and team management. Doing this will help your business be more composed.
5. Get Your Business Registered
Unlike other businesses that can be started without any registration whatsoever, you must register your business to start baking and selling baked food in Nigeria.
The registration starts with AMBB and NAFDAC. All companies that deal with the production of consumable items must register with the NAFDAC to ensure the quality and safety of the products for consumption.
You also need to register your business with the CAC, and also join some local, or state associations of bakery owners to acquire all the licenses and certifications required to run your business without disturbance.
6. Find a Space for Your Bakery Business
You need a space for your business. This place is where your oven will be mounted and all baking and production processes will be carried out. You can rent a warehouse, or build a bakery from scratch if you have more capital.
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7. Get all the Necessary Equipment
After getting a space ready for your business, the next thing is to purchase all the required materials and equipment to get started with the production of any type of baked food.
Getting equipment costs a lot of money, and you must do some research on the best types and the ones to buy. Some of the equipment and materials needed include.
- Dough proofer
- Wood Top Work Table
- Proof boxes
- Racks and baking sheets
- Flour Sifters
- Baking Ingredients
Keep in mind that the materials needed are based on the type of bakery business you want to start. It is recommended you visit your trainer, get some clues and possibly go and purchase them together.
8. Employ Workers
Unless you want to start a home bakery or bake small chops on a small scale, you won’t need to employ workers. If you visit any traditional bakery, you’ll find out there are at least five workers that are responsible for different tasks respectively.
You need to employ workers and not just ordinary ones, but bakers. This will help improve the efficiency of your business, as you’ll have time to focus on some important parts of the business operation including marketing and sales.
In addition, you may want to hire some personnel to handle some menial jobs in the bakery including dishwashing, and product packaging.
9. Start Production
After getting all the materials and ingredients needed, as well as employing staff, the next thing is to start production.
This is one of the most critical parts of the business. You will want to pay close attention and take note of the production process to ensure the best products.
Keep in mind that your production environment must be clean, and the packaging of your products must be hygienic. Also, keep track of daily production to ensure good management and quickly note if there’s a need for adjustment.
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10. Market Your Products
After production, the next and final step in starting a bakery business in Nigeria is marketing. You must make marketing your top priority, after all, the reason for production is to drive sales.
From going out there and advertising your business and its products to wholesalers and retailers one by one, to engaging in paid adverts both online and offline there are many ways to market your bakery business in Nigeria.
As a beginner, a word-of-mouth advertisement strategy works well, as you’ll be meeting potential customers in person and convincing them to patronize your business. You can also encourage friends, family, neighbours, and most importantly current customers to help market your products to reach a wider audience.
Bakery business in Nigeria is a very profitable one to start as there is a lot of money to be made since it is a business that is operated day in and day out. With this post about how to start a small bakery in Nigeria, as well as on a larger scale, I believe that I have provided you with all the knowledge needed to get started!