How Profitable is Bakery Business in Nigeria? This is a bakery business feasibility study for those who will want to venture into this business.


The bakery industry is a huge market across the world. Food is life after all and in a country with over 140 million people, food is a great expression of our life and culture.
How profitable is Bakery business is an exciting topic to explore when you count the amount of bread Nigerians consume daily. Some people say that having a Bakery business is equal to printing money in your house.
That claim is an exaggeration, therefore this article will give you bare facts and leave you to judge whether it is a profitable business or not.
You will learn how to start your own Bakery business, discover why selling on credit and return of unsold stock by wholesalers could cost you the business, and why being able to give the market the exact flavors and varieties at fair prices, would make your bread a consumer’s delight.


Does the Market for Bakery Product Exist?

Bakery products such as, Bread, is a highly nutritious food eaten in one form or another by nearly every person on this planet. It is a good source of vitamins, protein, and carbohydrates.
Bread is a necessary part of human diets for over one hundred years in all parts of the world. Because of this important truth and over a century history of bread in our daily food, it has a huge market.
Nigeria has large populations with purchasing power who eat bread with local foods such as pap, bean cakes, porridge beans, etc.

Considering these facts, investing in a modern bread making factory could be a good business venture.
There is always a demand for food and
catering services everywhere. People need catering at their weddings, parties , corporate events and so on. And if you are an amazing cook or you have an amazing team who can cook, then it is time to put skills to good use and launch a catering business. However here are a few things you must tick off the list before you launch your business.


Locate Mentors Before you Start bakery Business

Mentors can easily tackle the question, how profitable is bakery business if you are willing to get one to guide you.
For every business, you have people who have been in it for a long time. Find these people and get adequate information about the business from them.
They will tell you the equipment to buy, where to buy them, the types of bread to sell, how to get a bakery license, marketing tactic to sell your bread, where to hire good staff, etc.


Having a bakery is a hugely profitable business venture.

With the love Nigerians have or baked goods ranging from the very popular Agege bread, to chin-chin, meat pie, cakes, small chops and so on. There is a huge market to be tapped into. Demographic actors favor this business highly because age, religion, gender or location is no barrier to the consumption of baked goods.
As long as you can develop creative market strategies, you can smile to the bank, banking at least a million naira every month.
Nigerian has a huge population ; a profit margin of 10 Naira on every product sold to 1,000,000 people every month gives a total of 10,000,000 every month. This sounds pretty easy right? This might not be a one day journey for the owner of a bakery, but it is an achievable estimate, given the right strategies and attitude to marketing.

Please note that your products have to be of good quality, finger licking deliciousness and well packaged with top notch hygienic considerations. You want to sell a crowd pleasing product in order to pull funds from the crowd. Making it affordable and available is also a plus that will drive in increase in sales.
Do you have an existing bakery or are you intending to start a bakery and you are looking for ways to make it more profitable?



Market Survey.

Do a market survey to find out the demand in the market that present Bakeries are unable to meet. The survey could also find out whether those bakeries serve their customers well, the size, quality and flavor of bread buyers prefer.
Use this market survey to produce a feasibility report to discover whether the business idea is worth doing.


Source for Start-up Capital


The opportunity you have discovered in the market (i.e. the recognized demand the market is unable to meet), will affect the amount of start-up capital you need to start the business.
Secondly, the size of the business, site, class of staff, equipment, and measure of raw materials you would need, will give you an idea of the amount you need to open the business.


Get a Business Plan

You can verify how profitable is Bakery business by writing a detailed business plan as you prepare to open a Bakery.
Get and use the feedback you got from market survey and the feasibility report, to write a business plan that will enable you serve a hungry part of the market that want your product.
The business plan will analyze the amount of start-up capital you need, the source of capital – whether to use loan, your savings, a mix of both or collect funds from family and friends.
The business plan will have a marketing plan, the number of staff you need, cash flow, break even and sensitivity analysis, and the kind of equipment you need, etc. That is how important a business plan is, so never start a business without one.


Bakery Equipment

You ask yourself how profitable Bakery business is, as you consider the cost of equipment and other materials you may need to start the business.
Buying the right equipment is very important. The size of bakery, the opportunity you want to take, site and the startup capital, will help you choose the equipment to buy.
The list of equipment is as follows: mixers, foreign electric baking oven or local wood heated oven, large tables, refrigerators or water chillers, dough divider, dough molder, bread slicer, bread pans, water proof wrapping sheets with your label on them, display shelves for storing freshly baked bread and a van for distribution.
After the installations of the machines, make sure you keep services of skilled technicians for maintenance of the machines.


Primary Baking Materials

The key materials needed for baking are flour, yeast or baking soda, butter, sugar, water, flavors, etc

Get Government and Regulatory Approvals

Make sure you get necessary government approvals. To be on the right side of the law, pay the fees and meet all regulatory requirements for setting up food business in the country.
For example, get a license to run a bakery from government authorities. Join the local chapter of the Association of Nigerian Bakers, to guide and give you advice on rules and regulations to obey.


Get a Good Location

Get a good place that is near the buyers you wish to serve. Without a good place sales will be difficult. If wholesalers, retailers and public are unable to reach you easily, that will cause the business to fail.
You may put it in the busiest place in your community, close to a busy major road, near a market or even near a school. It depends on the part of the market you wish to target. Without enough demand, there would be no business so get a place with enough traffic.


Hire the Best Staff


How profitable is bakery business without good staff?
The simple answer is that your staff is the most important thing after the business plan. Therefore, make sure you hire those working in the industry with basic experience.
Appoint experienced staff to work as baker, flour mixer and molder. Others are oven operators, carriers, Bread pan openers and cleaners, etc.
These jobs are essential for making excellent bread that will not only surpass set standards, but also compete favorably with other products in the market.
After making the bread, you would have to sell them. Hiring marketing staff with vital knowledge of bread distribution is the key to sale.

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