How to start a bakery
- Willeke Leensma
- How to
- 12 Sept 2021
- Edited 14 Feb 2023
- 7 min
In the next 10 years, 25% of all artisanal bakers are expected to retire. According to data of the knowledge and advice centre 'Nederlands Bakkerij Centrum', the Dutch are eating more and more bread. This presents great opportunities for starting bakers. Want to know more about what is involved when starting your own bakery? We have listed the most important information for you here.
Bakers are having a hard time due to the high energy and raw material prices. Nevertheless, there are opportunities in this growth market. Consumers are willing to pay for fair, healthy, and pure products. There is increasing demand for special types of bread, such as spelt and sourdough, and gluten-free bread, cakes, and cookies. You know all about those, either from professional training or from hands-on experience. You do not need a diploma to open your own bakery.
Rising energy costs can have a major impact on bakeries. Here you can read about different schemes and allowances the Dutch government offers to support entrepreneurs.
Is entrepreneurship right for you?
There is a lot to consider when starting a bakery. You can put everything in order by writing a business plan. Writing a business plan is not mandatory, but it will help you examine whether your plans are feasible. You determine your target group, and it gives you insight into the competition. You research trends within the bakery world and determine how you will distinguish yourself.
Koen Verschoor of Koen's brood did make a business plan: "I wanted to have a business from an early age. I had so many ideas: a food truck, a delivery service, and even a mobile store with fresh produce. I worked out every plan to find out if it was feasible. Every time the step was too big to take. That is until I took the plunge and started working with this idea: baking healthy and honest bread from flour that I grind myself. I use an existing bakery so my investments are low. I did invest in a small electric delivery van. My customers have fresh bread on Sundays. This is the bull's eye. It is going very well, I now have five points of sale."
Tip: test your entrepreneurial skills with the KVK Strengths Test (in Dutch) and discover whether you are ready for entrepreneurship.
Sustainable and Healthy
Research by Bakkerswereld shows that 'healthy and sustainable' is the trend for the future (in Dutch). More and more customers are asking for plant based ingredients, and vegan bread and pastries are on the rise. The consumer also finds sustainability important. Where do the ingredients come from, and is the packaging environmentally friendly?
Verschoor researched the bakery market before getting started. He worked for years as an apprentice miller at a mill in Dordrecht. "The consumer wants conscious and honest bread without artificial additives. In my self-developed recipe, I only use sourdough, without yeast. So only natural ingredients."
Financing your business
You will need starting capital for your bakery, but how to raise those funds? Part of writing a business plan is setting up a financial plan. You research the financing options available to you. Also do this if you do not have any money to invest yourself. If you have personal capital and are planning to use it, you show that you also bear the risk. This will boost your chances with financiers/moneylenders.
You can receive funding via a bank or the microfinance loan company Qredits. For bakeries, there is also the Dutch credit union Kredietunie Bakkerij Ondernemers (KBO). A credit union is a member-owned financial cooperative – created and operated by entrepreneurs – that offers financing and coaching for amounts between €50,000 and €250,000. The KBO not only provides credit, but also offers coaching by a former entrepreneur from the baking industry.
Leasing or buying a commercial space
To open a bakery, you need a commercial space. You must meet the regulations for spaces for small and medium-sized enterprises. Special rules apply for the commercial space for a small business. The main difference is the protection of the tenant. Owners of small businesses have a right to lease the premises 5 + 5 years. Another possibility is to buy a commercial space.
Do you bake from home? Then read the article ‘Starting a catering business from home’ (in Dutch).
Zoning plan and all-in-one permit for physical aspects
Ask your municipality for the zoning plan to see if you can start a bakery at the location that you have mind. Do you plan to have indoor seating available in your bakery? Then you will probably need an operating permit as well.
Do you plan to build, renovate, or tear down the commercial space, deviating from the local zoning plan? Then you need to apply for an all-in-one permit for physical aspects. This application includes advertising on your store front and fire-safety.
Choosing a legal structure
When you start your business, you choose a legal structure that suits your business. Most bakeries have the legal structure sole proprietorship ('eenmanszaak') or commercial partnership (vof). Sole proprietorship or vof are easy to set up. The downside is that you are personally liable for your company’s debts with your private capital. So it is important that you explore the risks involved and take out an insurance for the risks that you cannot carry yourself.
Rules and regulations
Food safety (HACCP) principles and Commodities Act (Warenwet)
Baking bread and cakes means that you work with food products. Stick to the regulations set out in the Netherlands Commodities Act ('Warenwet') and detail any risks for customers in a food safety plan. Examples of risks are food spoilage and bacterial growth on food products. You can use the Hazard Analysis and Critical Control Point (HACCP), which is a food safety plan. Or use the hygiene code (in Dutch) for the bakery and patisserie industry. This code has been drawn up by the bakery industry itself. In short, you must show that you have a good food safety system.
You must register with the Netherlands Food and Consumer Product Safety Authority (NVWA, in Dutch). This is laid down in European legislation.
You must have allergy information available at your shop for any non-prepackaged food products. Inform your customers on the allergens present in your product. You can display this information online or on paper. There are requirements for the information on prepackaged food products.
Industry-wide pension scheme
Participation in the industry-wide bakers’ pension scheme (in Dutch) is mandatory for anyone working in a bakery. This applies to your personnel. It does not apply to you, the owner.
Trading Hours Act
According to the Netherlands Trading Hours , the opening hours of your bakery are Monday to Saturday between 06:00 and 22:00 hrs. If you want to deviate from these opening hours you need permission from your municipality. The municipality also determines the number of Sundays (if any) your shop is allowed to open. It is up to you whether you wish to make use of the opportunity to open your shop on a Sunday. It is not mandatory.
The bread has to be baked and you also need someone to run the store. Running a bakery is generally not something you do alone. You can take on permanent or temporary personnel to support you. There are many jobs in the baking industry and personnel is hard to find. (Research by the online platform 'Bakkerswereld'.)
You also have to comply with the Working Conditions Act (Arbowet) and make a risk inventory. The latter is a list of hazards in your company regarding the safety, health, and well-being of personnel. You can find everything you need to know about hiring staff in the step-by-step plan employing staff.
Food products fall under the low VAT rate. You charge 9% VAT for your bread and cakes to your customer.
As a baker you work long hours. Not only do you prepare and sell bread and cakes, but you also have to keep proper financial records. For a bakery this is generally complex. You are dealing with buying, selling, and personnel. You can do the accounting yourself or you can hire a bookkeeper or accountant. They optimise your book-keeping, give advice, and have information about various tax advantages that may apply to you.
Quality mark POS system
Your customers will usually pay cash or by debit card. Paying by debit card is safe and quick, especially now many customers use contactless payment. For payments by debit card and contactless payments you need a (portable) card machine. Use a cash register that meets the Quality Mark Reliable POS systems (in Dutch).
The quality mark was developed by cash register system suppliers. A cash register, or Point-Of-Sale (POS) system, with this quality mark gives reliable information, because it is not possible to make any undesirable changes. According to the Dutch Tax and Customs
Administration, monitoring these systems takes less time than monitoring a POS system that does not have the quality mark. It is up to you to decide on a cash register system.
There are several industry organisations or associations in the bakery industry. They know a lot about the industry and of the latest trends and developments. 2 well-known baking industry organisations are:
- The Netherlands Bakery and Patisserie Entrepreneurs Association ('Nederlandse Banket en Broodbak Ondernemersvereniging', NBOV)
The NBOV (in Dutch) supports entrepreneurs in the artisanal patisserie and bakery business with a focus on entrepreneurship, employer ship, and professionalism. They organise meetings for starting entrepreneurs.
- Nederlands Bakkerij Centrum (NBC)
The NBC (in Dutch) is a knowledge and advice centre for entrepreneurs in the baking industry.
Industry organisations will charge a membership fee. You are not obliged to become a member of an industry organisation.
Taking over a bakery
In the next 10 years, approximately 500 bakers will retire. So, there is your chance. The 'Stichting Bedrijfsopvolging Bakkerij' (Foundation for Bakery Business Succession) has started a campaign (in Dutch). Taking over a bakery comes with advantages, such as name recognition and an established customer base. It is also often much easier to get financing for an existing business.
Starting as a franchise entrepreneur
Another option is franchising. As a franchise entrepreneur, you start your business under the name of an existing concept, but you remain independent. There are various franchise concepts for the baking industry. You can find most franchise concepts in the Netherlands National Franchise Guide.
Franchising has advantages as well as disadvantages. One advantage is that you profit from the name recognition of the concept. On the other hand, you will have less say in the choice of suppliers and have no say in the range of products.
Online sales is booming. Online sales are not high in the baking industry, but expectations are that bakers will also increase their online presence. An online shop is more convenient for your customers and enhances their purchasing experience. It can also free up time for other things. For example, your customers can order a cake customised to their own wishes online. No need for a salesperson. You can also add other social media, such as Facebook and Instagram, to promote special offers and new products.
Under the Dutch Climate Agreement, bakers who own a commercial space, gas-fired ovens, or a delivery van will be faced with natural gas-free entrepreneurship, energy-saving measures, and zero emission zones in city centres. It is important to research what changes for bakers, what you can do yourself, and which subsidies there are.