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COMPLETE GUIDE ON HOW TO START BREAD BAKERY BUSINESS IN NIGERIA



BREAD is probably world's most eaten food and that Men eat bread more frequently than women is a debate for another day.
In this article, I tend to explain in a concise layman language, the essential processes involved in starting a bread bakery business in Nigeria and the regulation and capital requirements, including the potential profit and risks involved.




FEASIBILITY STUDY AND BUSINESS PLAN

The first step is to decide on the type of bakery you want to run, based on your talents, budget, and goals. Be sure you’re not making this decision in a hurry.

Do a local market research

But don’t simply take your findings at face value either. Do the necessary deep market research to figure out how national currents will affect your particular location and demographic.
Go out and make enquires in your area. But only from people who are already in the business, else, what you hear may discourage you.
Visit nearest baking houses. Try to figure out how the particular market conditions in your area will affect your business. The challenges of bakery in the local market of Abuja may slightly differ from that of Lagos market. That is where personal local market reaserch comes in. Make adequate consultations and write down your findings.

Write a business plan.

Once you know what kind of bakery you want to open, you need to create a business plan . This will force you to look at the business from every angle. It will help you define your business, set goals, find ways to generate revenue, list expenses, identify your customer base, and examine your competition.
While you might want to dismiss this idea as insignificant, you must bear in mind that the business plan is the only official document that will detail the analyses of every aspect of your business, in case you approach any institution for a grant or loan.

Source for Fund

Depending on the scale you want to start, the first place to look for start-up capital is in your savings and then family and friends. You can also source for funding for your bakery business with these public and private institutions in Nigeria.

1. The Youth Entrepreneurship Support (YES) Programme is BOI’s effort at addressing the worrisome phenomenon of youth unemployment in Nigeria by building the capacity of the youths and funding their business ideas. The YES programme is aimed at equipping young people with the requisite skills and knowledge to be self-employed by starting and managing their own businesses.

2. Elumelu Foundation Entrepreneurship Programme is the flagship entrepreneurship programme of the Tony Elumelu Foundation, founded by the entrepreneur, respected investor and philanthropist Tony O. Elumelu.

3. GroFin provides Small and Medium Enterprise (SME) finance / business loans in South Africa, Zambia, Nigeria, Ghana, Uganda, Tanzania, Kenya, Rwanda, Egypt, Iraq, Jordan, Oman, and Ivory Coast, with headquarters in Mauritius.


Train Yourself

One of my important discovery in my research about bakery business is the fact that "not all good home bakers are successful commercial bakers". Bakery business is more than just baking. You may be a good baker in your house, but the settings in the commercial scene are entirely different. And that's where qualification comes in.

The qualification is to train yourself. You may not be a professional, but learn the basics. Get a good professional coach to train you in the business. Attach yourself to a nearest baking company to grab the knowledge of the business.

Note that I emphasize on the " bakery business", and not just "bakery". Remember they are no the same . Train yourself on the bakery business , and not just in bakery.

Chose Your Location.

This is important but not critical. While location in the city and busy towns allows retailers to come in and buy without having to travel distance, you can make up to this with good marketing and supply mechanism. If your product is good, well branded, and marketed effectively, people will find you no matter where you are.
So, weigh the situation carefully and look for suitable location for your business. Property cost higher in the major cities, but its worth it sometimes.

It is also worth to note that people buy products sometimes based on the address. I personally have rejected some products because of where the factory is located. It may not be obvious but it do happens.
It is important to consider the cleanliness of the sorrounding before choosing a particular location. This will be required when you apply for certification from the National Agency for Food and Drug Administration and Control (NAFDAC).

Other factors to consider includes

i. Sufficient foot traffic

ii. Convenient car parking space

iii. Sufficient bake house space

iv. Sufficient storage space

v. Retail or wholesale dispatch space

v. Availability of labour and power.


EQUIPMENTS REQUIRED


-Company registration (R)

- Land and factory building (R)

- Logo Design and Logo Mould construction (R)

- Satchet rolls and packaging bags (D)

- Raw material supplier

- Baking Oven (R)

- Flour mixer(R)

- Slicing machine (R)

- Baking Pan(D)

- Weighing scale (R)

- Work Table (R)

- Generator(D)

- Milling machine (D)

- Delivery truck (R)

- Labour (R)

- Regulation (NAFDAC) approval (R)

- Storage center (R)

- Admin center (R)

- Production center (R).


So for a start, I think you will need the above items on ground first.


(R) = Fixed cost and required.

(D) = variable cost


The first step is to determine how to source for your production equipments. You may decide to import them depending on your budget or go for local dealers and fabricators, still depending on your size.

The next step is to purchase the basic raw materials from dealers and maintain adequate stock.
All the required raw materials for commercial bread production are locally available and include the following; flour, sugar, salt, yeast and edible or baking fat. There is need to get a good food technologist that will mix the inputs properly to achieve a unique taste.

Local baking equipments and raw materials suppliers
Here are a few equipment and raw materials dealer we were able to contact for reference:

1. Donkings Global Link.
Shop 8, Royal plaza, Ojo Alaba international market, Lagos, Nigeria.

2. Zenith Bakery Machines and Equipment Ent.
Ashipa Road By Amule Bus stop, Ashipa Ayobo, Alimosho, Lagos, Nigeria.


Disclaimer
These companies are for reference only. We are not affiliated to any of them. We are not liable for any risk or loss in course of doing business with them.


PRODUCTION AND REGULATION

After setting up your beakery, then its time to get the necessary certifications and start production. NAFDAC is the primary regulatory agency responsible for certifying bakers in Nigeria. It is necessary to emphasize that no food product should be manufactured, imported, exported, advertised, sold or distributed in Nigeria unless it has been registered in accordance with the provisions of Act Cap F33 LFN 2004. Consequently, a food product shall not be manufactured in Nigeria unless the factory is inspected and a
certificate of recognition is issued by NAFDAC. There guidelines prescribe the minimum good hygienic practice requirements for the facilities, controls to be used in the manufacture, processing and packing of products to ensure that they meet quality standards.

According to a document I obtained from the agency which is available below this article, here are the few major registration requirements for bread and Bakery Products manufacturing in Nigeria:

 Factory facilities:
There should be defined areas of adequate size to accommodate the different operations in a logical order of production flow corresponding to the sequence of the operations.
The operational areas should include;
a. Cloakroom/ Toilet facilities (which should not open directly into the production area )
b. Raw Materials Store
c. Packaging Materials Store
d. Production Room
e. Cooling area
d. Finished Products Store

 Water treatment process:
Water which is used in the production of Bread and washing of production equipment
should be portable water.

Production registration:
The Bread product should be registered with NAFDAC upon factory recognition and the following documents will be submitted for the processing of Bread registration.
- A letter requesting for production inspection addressed to the Director Food Safety and Applied Nutrition   Directorate (FSAN) submitted through the state office.
- The letter will be accompanied with the Standard Operating Procedures (SOP) for production and cleaning, Certificate of Food Handlers test for production staff, List of equipment, Company organogram, Certified copy of agreement/certificate of fumigation or record of plant in house fumigation activities, Certified copy of Company registration Certificate or Business name, payment receipt of registration fees, vetted label/primary packaging material and payment receipt of product registration fees.

As at the time of writing this article, the current cost of NAFDAC certification as communicated to us are:
Registration of bread- 31,500
Renewal Inspection - 15, 500
Bromate in Bread - 50,000

After you are done with NAFDAC, then its time to start production and join the local union of bakers in your area in order to run your business hitch free. Association of Master Bakers and Caterers of Nigeria is the umbrella body of bakers in Nigeria.

MARKETING AND DELIVERY

What’s the one ingredient every successful small business needs? Customers.
You can spend all day and night in the kitchen creating the next best cake, but if no one knows about it, it doesn’t matter. That’s why you have to set aside time and money to market your business .
Start a marketing plan. What’s a marketing plan? A marketing plan is basically a document that details the necessary steps to achieve your marketing objective. Part of this plan should talk about such items as – competition, social media, press releases, advertisements, promo, joining local and regional organizations, building a website, creating your logo, business card and look and so on.
..even advertising your new bakery here on cartergurus.com.ng. Yes, its worth it!

RISK INVOLVED IN BREAD BAKING BUSINESS.

There is always the risk.
The reward is in the risk.
“The biggest risk is not taking any risk.” 
– Mark Zuckerberg, chairman, CEO, and co-founder of Facebook

If ROI is that obvious and certain, the idea probably isn’t that risky (or transformational) in the first place.
If you are really serious of starting your own bread bakery business. it is proper for you to note the following risks:

1. Spoilage :
The bakery market is highly competative especially in the urban areas. According to our local reaserch  in Lagos, most bakers offers to change spoilt bread for retailers if it developed mold while the retailers are selling them. This is probably a major big setback for some new bakery startup. Some retailers are so careless and ineffective in sells that they keep those bread unsold for long time, only to return it when it develops mold.
When this happens, the baker bears the cost and if this happens occasionally, the baker is sadly out of business.

2. Price Fluctuations:
Prices of baking raw materials is always fluctuating especially baking flour which can rise unannounced . When this happens, you buy flour at higher cost and still sell your bread the same price you used to sell.
Because bread is a very sensitive commodity, you can’t increase the price arbitrary.

3. Fire Outbreak:
Moment of carelessness by your workers could get you out of business. Fire is arguably the most rampant disaster in a bakery.
Solution may be to install a smoke detector at the sensitive locations in your bakery.
This is one of the major risks every baker must be aware of because of the potential danger it carries. But it’s a risk that could be avoided if you take proper precaution.

4. Theft:
The fact that you are producing in a large quantity is why you must not overlook theft as a risk. Those few loaves missing everyday can affect your profit on the long run.
This may be as result of mischievous staffs or unrestricted access into the bakery house.
Having a small security post at your entrance to monitor incoming and outgoing persons may be a solution. You can also consider installing a security surveillance systems such as CCTV cameras in your premises, depending on your budget.

CONCLUSION

It’s not easy taking on a new business venture, especially one that relies so much on the taste of the customers.
However, with the right quality control, packaging, and marketing, success is inevitable in the bread bakery business.
I do believe that this article has actually accomplished the required task of telling you what it takes to start your own baking business in Nigeria and succeed.

If it helped, why not share it now!

Files:
Click here to download the NAFDAC bread registration guidelines

You might also like:
Complete guide on how to start profitable fish farming business in Nigeria.


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14 comments

  1. I want to try kind of bakery business in Nigeria. I need bakery equipment, and have nice place to start. I new to this business, can you give me some advice? Can i buy used equipment? There are a lot of used machines on online marketplaces, i want to buy here https://jiji.ng/23-bakery-equipments i find some in “new” condition and low price. But is it worth buy used machines?

    ReplyDelete
    Replies
    1. Like I said in the article
      It all depends on your budget. Buying new eqiupments for your bakery could have been a better option.
      But you can still buy used equipment if you cannot afford the new ones, as far as they can serve the same purpose.

      Delete
  2. Anonymous21:36

    Can you help with some.manufacturer one can contact to buy bakery equipments like oven not raw materials.
    Thanks.

    ReplyDelete
    Replies
    1. I did a research in the course of writing this article and found this supplier who based in Lagos.

      Donkings Global Link.
      Shop 8, Royal plaza, Ojo Alaba international market, Lagos, Nigeria.

      Thou I called them to verify their contact. I dont run business with them. You can visit them for your equipments
      Thanks.

      Delete
  3. Hi Samuel,

    Great Article! Please I would like you to give me some insights on the type f standard operating procedures (SOP) needed to run a bakery in Nigeria.
    Thanks

    ReplyDelete
  4. Anonymous11:35

    Hi Samuel,

    Great Article. Please I would like some more insights on the kind of standard operating procedures needed to run a bakery in Nigeria. Hoping to hear from you.
    Thanks

    ReplyDelete
  5. Great article. Pls wats ur take on starting a bakery on small scale.? I mean, home based bakery and supplying to shops around. Do you think dz standard of procedures, registration are necessary for such small business?

    ReplyDelete
  6. Hi good day Samuel chukwu wow what a wonderful job u Re doing here I'm Kingsley chukwuebuka CEO donkings global links but, the company name have change to (donkings global food limited) our new office now located at shop 8 PIL plaza opposite unity plaza after access bank alaba international market ojo Lagos our website www.donkingsglobal.com contact 08035758627

    ReplyDelete
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