How much does it cost to start a bakery business in Kenya?
The cost of starting a bakery business is Sh.100,00-Sh.250,000 on average. Starting a bakery business from home costs Sh.50,000-Sh.100,000 on average. The costs vary depending on the scale of your business, as we will show you.
Starting a large-scale bakery business costs more than a small-scale bakery. A large-scale bakery business will need more capital. The products will be distributed to many customers in different locations. To do this, a bakery needs high-quality equipment, more labor force, various means of transport, and expensive marketing. We will show you how a small-scale bakery business can be done from home.
The cost of starting a bakery business will depend on the scale you plan on producing. When making a business plan for starting a bakery business, you need basic requirements to kickstart your establishment. Below is a detailed explanation of the requirements for starting a bakery business.
Basic Requirements For Starting A Bakery Business In Kenya
1. Legal requirements
- A single business permit: A single business permit costs Sh.10,000-Sh.15,000 manually on average. The costs vary from one county to another.
- Company registration fee: On average, registering a bakery business costs Sh.21,000-Sh.25,000. A bakery business falls under a retail company.
2. Equipment
When starting a bakery business, you will need the necessary equipment for making bakery products. We have made a table of bakery equipment and costs.
Bakery Equipment and Costs in Kenya
| Equipment | Cost |
| Oven | Sh.20,000-Sh.300,000 |
| Dough mixer | Sh.15,000-Sh.180,000 |
| Dough sheeter | Sh.100,000-Sh.800,000 |
| Dough proofer | Sh.40,000-Sh.200,000 |
| Baking utensils (Spatulas, bowls, whisks, rolling pins) | Sh.25,000-Sh.100,000 |
| Storage cabinet | Sh.5,000-Sh.150,000 |
3. Room/Space
The cost of renting a room for business is Sh.20,000-Sh.200,000 on average. The rental costs in urban centers are high due to the high cost of living. The cost of renting a room in urban centers is Sh.50,000-Sh.200,000 on average. On average, renting a room in small towns is Sh.20,000-Sh.50,000.
You should consider the following factors when renting a room for starting your bakery business:
- Amount of room space. A bakery business needs a big space to operate. Ensure the room you rent has enough space for baking equipment, storage, and display.
- Business proximity to a major town. Renting closer to an urban or inside an urban center will cost more. When working with a minimum budget, you should rent outside urban centers, preferably in small towns. Renting in urban centers is the best option if you have enough capital. Traffic is high in cities, and the flow of money is consistent.
- Business proximity to a supply of ingredients. When renting a room for your bakery business, get a room close to an ingredients supplier. This will save you transportation costs and time. The closer you are to a supplier, the faster and cheaper you will get your ingredients.
4. Labor Force
When starting a bakery business, you need cooks to run your business. The salary cost of a professional baker is Sh.30,000-Sh.100,000 per month on average. The number of cooks you hire depends on the scale of your bakery business. The larger your bakery business, the more cooks you will need.
Aside from cooks, you will need janitors to maintain the cleanliness of your establishment. Hygiene should be maintained consistently to avoid being shut down by health inspectors.
5. Means of transport
A bakery business needs transportation means for a couple of reasons. Ingredients are transported from the supplier to your business. Your products also need to be distributed to customers. The scale of your business will determine what means you will use. In a large-scale bakery business, you should use lorries and pick-ups. You should opt for motorcycles or bicycles when operating a small-scale bakery business.
Cost Of Basic Ingredients Used In A Bakery Business
A bakery business needs to stock up on a number of ingredients to start selling. Below is a table of all the basic ingredients you need to start your bakery business and their costs.
Basic Bakery Ingredients and Costs in Kenya
| Ingredients | Cost (Per Kg) |
| Baking flour | Sh.100-Sh.150 |
| Baking powder | Sh.200-Sh.250 |
| Salt | Sh.32-Sh.40 |
| Sugar | Sh.150-Sh.170 |
| Butter | Sh.500-Sh.1500 |
Factors To Consider When Starting A Bakery Business
1. Demand
When starting a bakery business, ensure that the supply of bakery products is lower than the demand. A high demand for baked goods will be a good place to start your business plan. You will be sure of a successful business venture when you are sure people are lacking.
2. Fuel
Ovens are powered by electricity and liquefied petroleum gas. When making a business plan, include the fuel cost for running your oven. The oven always runs in a bakery business, especially when your establishment gains notable success. To avoid future fuel problems, plan how you will acquire fuel. When deciding on opening hours for your business, remember how much fuel you can afford.
3. Branding
When starting a bakery business, consider a unique name to brand your products. The name you pick should differentiate you from the other bakery businesses. Style your brand to attract more people to your baked goods.
4. Marketing strategy
You should make a clear marketing strategy that will work for baked goods. There are plenty of ways to market your brand. You can advertise your products on Tv or social media. Another way is in newspapers and magazines. What is the target market for your product? Think carefully about this before you choose a means of marketing your bakery business.
5. Product specialization
The choice of a specific product to venture in is really important. There are different types of baked products. Specializing in one type of product you are well-versed in is better than making a couple of products. This will be easier to manage, especially for small bakery businesses. Marketing is also easier with one type of product.
6. Scale of production
How big do you want your bakery business to be? When planning for a large-scale bakery business, make a budget plan that fits your ambitions. In transportation, you will need a number of tracks to distribute a large number of products. Your means of marketing will also have to reach large masses. In addition to that, you will require a large space or multiple spaces to bake your product.
When making a business plan for a small bakery business, ensure you minimize a lot to avoid losses. You should have affordable means of distribution. You should rent an affordable space and buy affordable equipment. Your means of marketing should be to target your immediate surroundings.
FAQS About Bakery Business In Kenya
Yes. A small bakery is profitable when it uses economic means to bake, market, and distribute its baked goods.
-Make a business plan.
– Get a business permit.
– Acquire basic equipment.
– Acquire ingredients.
– Brand and market your baked goods.
– Distribute your baked products.
The basic equipment for starting a bakery are:
– Oven.
– Storage cabinet.
– Baking appliances (Bowls, whisks, rolling pins)
A single business permit is Sh.10,000-Sh.15,000 annually on average. The average cost of registering your business as a retail company is Sh.21,000-Sh.25,000.
The cost of setting up a cake business in Kenya is Sh.50,000-Sh.200,000. This includes the cost of ingredients, equipment, labor, distribution, and marketing.
3-6 months on average. This varies from person to person. You can learn the skill from college. You can also perfect your skill by learning from someone close to you that has already perfected the skill.
Acquire a business permit, then partner with bakery businesses to deliver bakery products to you. You will earn money from commissions. An alternative way is buying bakery products at wholesale prices and hawking these products in high-traffic areas. With this option, you don’t need any permit.