How to set up bakery with just N150,000 in Nigeria

Is setting up a business one of your priorities this year? Is your salary not enough to cater for your family responsibilities and you are looking for an additional means of income? Have you been unemployed for a while and looking for business ideas that are lucrative? Are you approaching retirement age and have not decided on a business that will generate steady streams of income for you?

If your responses to these questions are yes, then you can consider investing in a bakery with a minimum of N150, 000.

A report on the prospects of bakery by Euromonitor notes that there is projected growth in retail sales of baked goods, expected to be strong at an annual rate of three per cent.

According to the report, the increasing population, the rising disposable incomes and the growing desire for convenience and variety among Nigerian consumers are factors that will drive the growth.

As a result, it suggests that new products, improvements in distribution, price promotions and other marketing activities will also help to sustain robust demand for baked goods.

Moreover, sales of packaged and industrial products are expected to grow faster than those of unpackaged/artisanal products in all major baked goods categories over the forecast period, the report observes.

In order to achieve your dreams of owning a low-cost bakery, here are some useful guidelines to follow.

Get trained

Basically, bread making does not require any form of qualification but requisite knowledge and skills in baking a variety of bread are needed.

The Managing Director, Flygapp Bakery School, Mr. Olumide Sanda, says that it is possible to start a bakery from home and make enough money for a bread shop.

He says, “The starting point is knowledge. You need to know how to bake varieties of bread. The business of bread making is still open for new entrants as there are more opportunities to be explored in bread business. So many have doubted the possibilities of starting a bakery with one hundred thousand or a little more at home, some have gone further to analyse it and concluded that this system is not workable.

“There are different types of bread that can be made at home so you have several options to choose from. Recipes like sweet wheat bread, chelsea buns, coconut, fruit bread, sardine bread, croissant and others are good recipes for a small scale bread business.”

Learn the processes

Explaining the baking process he says, “The process of bread making has become simpler and easier depending on the recipe you have. The normal bread process is that after scaling and putting the ingredients together you will knead with your hand or spiral mixer, after which you will shape to the required sizes and put into pans.”

“You will then give about one hour or less to rise depending on the size of the bread while you pre-heat your oven to 200 degrees and then you bake between 16 and 30 minutes depending on the type of bread recipe as well as the size of the bread. A good bread should have a workable recipe. This process can be usable and sustainable even when you have large quantity of bread to produce.

Purchase bakery equipment

Most bakers start small from the confines of their homes. Sanda says that some basic equipment are required for start-ups.

The N150, 000 capital for a home-based bakery will exclude mixing machines, as such Sanda says the process of mixing the dough can be done manually because a spiral mixer will cost an additional N150, 000.

He lists a gas-fired oven which cost N70, 000; an electronic and manual weighing scale of N10,000 coupled with baking pans and trays valued at N15, 000, as some of the indispensable equipment a baker can start with.

In addition, to the above, he says two stainless bowls costing N4000; a bakers table for kneading dough valued at N6500; a N2000 rolling pin and bread shelves costing N5000 are to be purchased.

“I am not saying you cannot start big but you can start small and gradually grow and possibly attract financing for expansion,” he adds.

Get ingredients for the first set of loaves

Presently, Sanda says a bag of good quality flour cost N6500; while a bag of sugar that will be adequate for the production of about 10 bags of flour cost N8500.

He adds that baking fat to make six bags of flour depending on the recipe sells for N6000 while N100 salt to produce one bag of flour and packaging material costing N10, 000 are also required.

Market your products yourself

Marketing a new business or product can be time consuming, and costly for an entrepreneur that is working with a small budget.

As such, experts advise that every business owner should learn how to market their products and services to save cost. But as the business expands, the marketing aspect can be outsourced to professionals.

Sanda says, “Remember every marketing must be handled with a lot of creativity, this means you need to develop sales strategies for yourself. In conclusion, please note that as in all businesses you need passion, discipline and a strong determination to make good profits in bakery/bread business and grow especially when you are starting small.”