The market size of the Australian bakery product manufacturing industry is estimated to reach $5.1 billion in 2028. This highlights the rapid growth and demand for baked goodies. Thus, purchasing a bakery is a lucrative venture for aspiring entrepreneurs!
However, finding the perfect bakery is not easy. You need to identify what you’re looking for and research your options thoroughly.
So, if you’re ready to make a sound investment, follow these essential steps!
Identify your goals
Understand which kind of bakery business you want to buy. You can offer specialty (gluten-free, vegan, and allergy-friendly goods) or artisanal (high-quality, handmade, or premium ingredient goods) goods.
Think about the long-term business goals. If you aim to grow the business with time, ensure there’s room for growth in production capacity and other operations.
Suppose you envision the bakery turning into a central hub for the community where they can buy more than baked goods. Then, seek bakeries with ample space for events and a strong community presence.
Alternatively, if you want to dominate a niche such as wedding and birthday cakes and pastries, choose a bakery with a good reputation within the niche.
Calculate your budget
Assess how much you want to spend on the overall investment. Have a realistic idea about your buying power.
Keep aside money for the rent, utilities, inventory, employee pay, and other necessary bills for about 6 months. Consider legal fees, due diligence, renovations, and upgrades. Subtract that from the overall amount to create a financial cushion.
Once you calculate the average value of the remainder of your funds, seek a bakery business with a similar purchase price.
If there are not enough funds, consider financing options and build a clear budget to balance all expenses.
Scope out your options
Next, start searching for bakeries on sale. Ask your friends, family, and professional networks to inform you if they get some news.
However, don’t rely on word-of-mouth recommendations alone. Otherwise, you’ll lose out on other lucrative opportunities.
So, sign up for a reliable online business listing marketplace where you can check out the best bakery business for sale categorized by location within Australia.
On a reputable platform, you’ll find all the important details for every listing, including the purchase price, location, offerings, and contact details. You can also request the revenue and net profit of the bakery on the same platform!
Conduct due diligence
If you’ve shortlisted some of the potential bakery businesses you might purchase, conduct due diligence. This is essential to ensure the establishment is a good investment and has no major red flags. Check out these important factors:
Financial Records
Ask the bakery to share all of their financial records, such as profit and loss reports, balance sheets, income statements, tax returns, and cash flow statements. These help you understand the bakery’s financial health.
Sales History
Next, seek their sales history. This helps you identify any major fluctuation or trend in sales and understand the business’s year-round performance.
Equipment Condition
Ask about the equipment in the bakery, its condition, its long lifespan, and whether it has undergone repairs earlier. This will help you assess whether you need to upgrade it.
Research the bakery’s reputation
Since you’ll purchase a previously established bakery, ensure it has a great reputation among customers. If not, there will be a low scope of profitability. For this, check these:
Online Reviews
Check their reviews and ratings on their Google, Yelp, and social media accounts.
Word-of-Mouth
Speak to locals and other businesses in the area. Ask about the bakery’s reputation to better understand it.
Consider the location
An important factor while buying a bakery business is to ensure it’s at a prime location with high foot traffic. This ensures greater business and profits. To assess this factor, check the following:
Visibility
The bakery must be located on a busy main street or popular shopping zone and not on any alley to ensure it’s completely visible.
Competition
There must not be many other bakeries selling similar goods in the area. Otherwise, it’ll be hard to attract and retain customers.
Accessibility
The shop must be easy to access, i.e., people must be able to reach by public transportation. For people driving to the shop, there must be a parking zone. It must also be wheelchair accessible.
Conclusion
Finding the perfect bakery business requires a balance of clear vision of your goals, thorough research, careful planning, and sound judgment. Besides these steps, be patient, seek expert advice, and get the best bakery ever!