 Do you want to start a home-based bakery business? If you do, make sure you guys watch this video because I'm going to be sharing with you how you can easily create a home bakery business plan. So make sure you guys keep watching. Hello friends, my name is Wilson, your friend in helping you build a thriving, small business and a profitable food business. If you enjoy this type of video, make sure you guys smash that like button so we know to create more of this type for you. More business plans for you, plans for you to make more money. Make sure you guys go ahead and smash that like button. So before we dive right into the how we do it, we must understand why it's so important for you to have a business plan. The first reason is so then that way you can attract the right team, find the right partners to join you and join forces. Now, if you're a one-man shop, completely fine, but as you continue to grow this business, as you continue to want to expand, as you continue to want to actually, you know what, have someone on your team to work on this business with you, then you must have a clear business plan. Why is that the case? It is because you need to show your partners, potential partners what you're up to, show them your vision, show them what you have plans and show them this is the way you do things. So you can actually, you know what, attract the right people with the right values who believe in your mission, believe in what you're trying to do to join forces with you. And this is one of the key things that a lot of people miss. They get into partnerships because it's their friend, because it's their spouse, because it's their family member. And oftentimes it turns into a very sour relationship. And it's no one's fault aside from the person that proposed the partnership. And the reason is because you, as the person that is the sole driver of the business, you must identify your values, what you believe in. So then that way you can see whoever you bring on board, whether their values align with yours, whether they actually understand your vision, whether they are in bought in to what you're trying to create. And only then do you want to bring them on board. Only then will they have a good partnership. So definitely do not skip this step. And the second reason is because this provides tremendous amount of clarity in your business as you are the cook, the baker, the logistics, the person buying everything, the inventory manager, you're basically everything. And when you're building your business like that, it's so easy to get lost in working in your business and forgetting the key components of your business, whether it's marketing, whether it's finance, whether it is going towards building towards your dreams. And if you do not have a business plan, you don't have that clarity because you're working in the business. This business plan allows you, and this is a roadmap for you to follow every so often. Allows this to become your North Star, which guides you out of any troubles for you. And the third reason is that if you're looking to raise funds, whether it's raising funds from friends and family, whether it's angel investors, whether it's the bank, you must have a clear business plan. Why is that the case? Because there's only one thing that these people are looking for, that one thing is whether you have the ability to make back their investment and more. And how can you, and how can they be sure that you can make back the money? It is by them seeing that you have considered all parts of the business, from the marketing, to who you're targeting, to why you exist, to the SWOT analysis, all these good things. They must be able to see that you are fully aware of all parts of your business. And when they see that, they have much more confidence to give you a check for you to build your business. So if you're looking into raising funds, make sure you guys keep watching and take notes. And by the way, just because your home baker does not mean you don't need this, moving forward as you continue to develop, as you gain traction, as you move into commercial kitchens, this is also gonna be super handy for you. So definitely the time to build your business plan is right now, right away. By the way, guys, disclaimer for you, I'm only covering the essential parts of writing a business plan. This is not like the full version of what you need to create, but this should inspire you to actually ask the right questions. Now, let's dive right in. The first component you need is your why. Why are you creating this brand? There are so many bakeries out there. I can go to a grocery market. I can go to any convenience store. I would be able to get bread. I could be able to get bakery, but why you? What is the problem you're trying to solve? Because I always say this. Business is a solution to someone's problem. So what is that problem you're trying to solve? Not only is it important to identify the problem, but you must identify a clear vision of what you're trying to create. I'll give you an example. One of my students, Makayla, she created her own donut store called Frankie D's Donuts and it's the most popular donut shop in her town. Not only do they have one of the best donuts, which is beautiful, delicious and fun, but the reason why they're so, so popular and have such a great community is because of her why. She wanted to create a positive environment for people to come in and feel safe to talk about mental health. And that's the reason why she's able to have such a close knitted community who not only loves their product, but loves their mission, loves her why. Second point for your business plan is your team. You must identify the background of your entire team that's working on the project. Now, you do not need to have some crazy culinary school experience, nor do you need to have post-secondary education. That's not the point of this bio section. The whole point of this bio section is for you to identify what makes you that much more likely to succeed than someone else. That's what we wanna put into this point. Now, for instance, Makayla, before she started Frankie D's Donuts, she has zero bakery experience. She has zero culinary experience. However, she does have an online coaching business. And for her, what she can write is her ability to understand the root cause of problems. Understanding how people's whys would really motivate them to go through any types of hurdles. Understand how to actually create a community by understanding human psychology. By her identifying all three of these traits and these skills that she can actually transfer and to build Frankie D's Donuts, it allows her to position herself in a much more likely to succeed position than a lot of other people. So that's what would give the confidence to investors to invest in her and invest in Frankie D's Donuts. In addition to that, what would really beef up your resume is if you include your network and your resources. For example, you might have an uncle that owns a farm in Taiwan that gives you your ingredients for much lower cost. That is what's gonna give you an edge over me not having anyone in this field. Whereas I might know someone else in my network. I might have family members within my network that would give me an edge over you on the other hand. And for me, I need to identify these resources and identify it onto the business plan. For example, when we crafted our business plan for 720 Suites, our ice cream chain that just got bought out, I've identified each one of our team members and what they bring to the table. First of all, our partner, Tim. He is one of the biggest distributors in Western Canada for bubble tea supplies. So having him on board our team as a partner will give us all the edge we need in order for us to deal with logistics with Brian. Brian is basically a entrepreneur himself that I'm bringing on board. And he has a few successful businesses under his belt prior to this business. And allowing him and putting him as a project manager for this project allows people to feel more confident in his ability to execute accordingly. And that's how we're able to build a very solid business plan. After all guys, the whole point of this section is to let people know who you guys are and what makes you much more likely to succeed than anyone else by your execution and by your background. Third point for your business plan is your target market. You must identify your target market in order for you to understand what the problem is. Once again, business is about providing a solution to someone else's problem. We must understand this without understanding who it is that you're serving and how can we understand that person's problem? With each and every single person and for different occasions, different age and also different life cycles, they all have different types of problems. Now after we have an assumption on who it is that we're trying to target, we must profile them. Profiling them allows us to work on better marketing. We now know exactly what they want, when they want it, how they want it. We must now have this to actually do our branding guide for us to set the right prices, for us to identify what types of menu items to create because we must create things that appeal to this demographic. How do you profile? Well, we must know exactly what they're looking for. We must know how old they are, where they are in their career, where they are in their personal life right now. Are they married? Are they single? Do they have kids? What interests do they have? Do they like to go out and play sports? Do they like to go work out? Do they like to do yoga? We must identify that. Which brands do they associate themselves with? Do they associate themselves with Lululemon? Or do they associate themselves with No Frills or Walmart? We must identify that and really put this whole thing into a profile that allows us to know who it is that we're talking to. Now you might be thinking, well, you know what, how do you do this Wilson? This is a lot of assumptions that you're making for your target market. Well, yeah, that is a lot of assumptions. That's the reason why we must go out there and prove it. We must talk to our target market. We must identify and validate the assumptions that we're putting out. For 720 Suites, we have done more than 2000 surveys to identify our target market. Michelle, that's not one person that we're speaking to. We know exactly who they are, what they like, what they enjoy, where they hang out. And we know what is it that drives them to purchase because that's how detailed we are when we're identifying our target market. Now, if you do not have the ability to survey these target market in person, you can also do it online through SurveyMonkey, create a SurveyMonkey report and send it to your target market. Or if you don't know where they hang out, you know what, Facebook groups are great. Instagram is great for you to identify your target market. When your investors see that you've put in all the work, sees that you have done your research, your surveys, hundreds of them, to come up with your target market, what's gonna happen? They're gonna feel much more confident that hey, you know what? You know your stuff, you know what you're doing. Here, take my money. That's what you wanna be able to achieve. Or on the other hand, if you're not raising money, it's okay, now you know how to target your audience. So there's no lose by you identifying your target market. And if you need help with that, you should definitely attend our free masterclass in the link below. That's how, and that's where, we're gonna be able to turn your food idea into a booming food business, food that you can sell online. Super, super valuable masterclass that we've conducted just for you over an hour and a half of free content that brings you from adulation to actually selling something you're passionate about. So definitely check it out in the link below. The fourth item that you must have in your business plan is the location. Now I know that you're not building up a restaurant with physical location, it is okay. You would still need to identify your location because you need to understand what type of service offerings you must provide. What I mean by that? Well, with home-based business, there's two types of fulfillment. First up is pickup. The other is delivery. With pickup, you must understand if your location is very hard to find, whether it's accessible or not, and if it's not, then you must identify another location for pickup or simply ditch that altogether because you live on the 29th floor of a high-rise building. Then clearly, your customers are not gonna come to your building just to pick up from you. It's just not that convenient. Whereas if you live in a corner of a street with a parking lot and you can easily allow people to come in access, you know what, that might be a good pickup location. Some other alternatives I've seen some of my students do is that they partner up with restaurants or convenient stores or just business locations that they have friends working in and actually identify a certain time slot for them to go there and pick up because it is that much more convenient. Now, next up for delivery. Depending on whether you are wanting to have delivery as a service, you might wanna include this in your proposal as well because like a lot of you guys might not be driving, then this is probably not an option you would wanna include. If you're opting into delivery for your own home-baked business, then you must identify the radius around which you're comfortable with delivering. This shows that you have put into everything into account from creating the product to logistics as well. Another option for your distribution is farmers market. Oftentimes a lot of home bakeries, they would actually rent a small booth at the farmer's market, so then that way their customers can actually come by, pick up from them, or get other additional exposure to new customers that don't know of your brand just yet. Another option for you is cafes. Oftentimes, cafe owners love independent bakeries and that independent home-based bakeries is the reason why is because they wanna have bakery items in their shop. So then that way that uplifts their average order value. Two ways for you to approach this. First, you can actually sell these items to the cafe owner, so then that way they can make a higher margin. Or on the other hand, you can rent a small space for people to come to this coffee shop to pick up their online orders. Both ways work as well. For instance, you can check out vegan donut shop called Plates. What do they do? They host regular pop-ups at different cafes, so then that way they can advise their customers to go to these locations to pick up their donuts. For example, with our ice cream shop, we chose a location that is seven minutes away from the post-secondary school called UBC. The reason why is because that's our target market. Identify your target market and position yourselves close to your target market. Next up is the sample menu. Sample menu is super important because it identifies what we want to bring to the marketplace. This is something that we must be super intentful with because this really determines whether you make money or whether you lose money. So many times as a newbie mistake that a lot of people make is that they sell food that they themselves enjoy but not what the customers are looking for. We must do the research to see what our customers are wanting, what they're willing to pay top dollars for to put those items into our menu. Once again, just because you like something, just because your family enjoys it does not mean you have a business. There are three very, very key elements when deciding and building up your menu that you must know. It's gonna make a world of a difference for you. The first one is your average order value. Basically, how much is each transaction gonna be per order? If you're selling a cookie for $3 for you to make $1,000, you're gonna have to sell 333 cookies. That's 333 different types of people. That's a lot of people you're selling to. Whereas if you decide to change up your pricing structure to sell it in a bundle and a box of eight for 20 bucks, now all you need is to sell 50 boxes for you to hit that $1,000 mark. Comparing 50 with 333, that's a big difference. The second point is complimentary items. Now what are complimentary items? Items that is a no-brainer for people that are buying your product. Same example with the box of cookies. Let's say, for example, this box of cookies is really perfect for people to buy to other people's home for milestones, for celebrations, for birthdays. Well, I can easily add an add-on item, which is probably $10 with an extra card, with ribbons, with a knife, with sparklers, with candles, all this stuff just for additional $10. Now, me as a consumer, I don't need to order these things from Amazon if I don't have it. It's an easy no-brainer for me to be like, hey, you know what, I'm bringing this box to my friend's place to celebrate their birthday. This is perfect, add an additional 10 bucks. This is a complimentary item. And the final point is the cost of goods sold. So many people fail at this point because they just don't do their math. We're gonna get a little bit more into this in a bit, but cost of goods sold of your item is crucial for you to identify the price that you're setting your menu item at. If you do not price accordingly, every product that you sell, it's gonna be at a loss. You're gonna be working for a full year without realizing that you just didn't make any money. So we must identify our cost of goods sold in order for us to put the right price on the item so that way you can actually make some money. All in all, for you to actually identify your menu, the best thing for you to do is validate it with your target market, survey them, tell them, this is what you plan on selling. Is this a good complimentary item? Is this what you would be willing to pay for my goods? This would allow you to have the best and most accurate numbers. Which again, when your partners, when your investors come and challenge you and ask you, why are you selling cookies for five bucks? Well, now you can share with them. I interviewed 50 people and they're willing to pay a range of roughly four to $6 for this product. And that's the reason why we're selling it at five. Now, they're gonna be impressed. Next up is your brand. Guys, so many people mistaking branding equals logo. Very, very not true. It goes beyond logo. It's the logo, it's the website, it's the colors. It's how you make people feel. Branding is a living thing, guys. It has to be consistent with all your channels, how you talk, how you respond to people. This is your brand in essence. You must be able to have your own character and make sure that everything is consistent. Either it's your Instagram, either it's your Yelp reviews, whether that's your website or even your menu items. This is where you get to live your brand out and bring that out to life. So identify all the pieces which your customers would have interactions with and be intentful with each and every single of these encounters. That's how you're gonna be able to give that feeling and the more aligned each of these platforms are, the more trust that you can invoke with your customers. Imagine for one thing, you go to my Instagram, it talks about one thing, you go to my website, talks about a different thing, you go on my YouTube, it's a completely different thing. This alignment creates doubt. Doubt is not why I would ever buy anything from you. That's the reason why. Having consistency, adding onto the elements, adding onto the logo is what branding is truly about. As an example, my friend over at Big Stick Willys, they cater to this fun, meme, hilarious, humorous culture. So everything on his site really caters to that. And that's why they're targeting a very specific clientele and they do such a great job with it. The whole point of this whole section is to be able to bring your vision, bring it into reality, let people see it, visually seeing your vision is what you're trying to do and that this bleeds into everything that you do, from how you name your items to how you actually do your graphics to the colors you use and to the language that you use, bleeds into everything that you do and you must be intentful with every single interaction. Next up is the SWOT analysis, which stands for strength, weakness, opportunity and threats, guys. Strength, what is it that makes you special and what makes you have an advantage over your competitors? Whether it's the ingredient you use or your suppliers or your food costs, whatever it is, identify that strength. Weakness, what is your weakness over your competitors? Whether it's distribution, whether it's brand name, you must identify that. What are some of the opportunity in this space that gets you super excited? Whether it's you seeing the opportunity and the trend in vegan and you creating this vegan donut that is exceptionally delicious. That becomes an opportunity for you because of the growing marketplace. And finally, threat. What are things that will kill your business? Whether it's licensing, whether it's a saturation in your competitors, identify your threat. This is a SWOT analysis, which you can actually fill in and by you identifying the SWOT analysis, this gives you the overview of your whole business. Next up is the marketing aspect, the fun stuff by you identifying your market plan of how you plan on going to market, whether it's influencer marketing, whether it's IG marketing, whether it's TikTok marketing. This allows me to understand as an investor how you plan on gaining traction for your business. Now, if you identify that, you know what? First off, we're gonna spend $5,000 on Facebook ads. You know what? That's gonna raise a lot of red flags in my eyes because me as being a digital marketer, I understand that running ads before you figure out your product demand, you know what? That's a red flag because at the end of the day, it's just not gonna work. Average order value is not high enough, things are not adding up. Whereas, if you're sharing with me that, you're gonna be focusing on Instagram and TikTok content by creating organic reach, by creating great content consistently on a daily basis, then you know what? It sounds right for me because I understand the power of TikTok, the power of Instagram, the power that you can actually blow up with very little money. And this is what would give me a lot of confidence that you will be successful. Now speaking about Instagram and TikTok and all the online platforms, if you're interested in learning how to turn your food idea into a booming business, selling food online, then definitely you must attend this free masterclass over an hour and a half long of free content specifically for you. Check it out in the link below. And finally guys, your numbers, the financials. You must identify all your finances because this allows your investors to know that you've got your base covered. So with your financials, what is some of the things that you need to include? Well, the projections. So projections on basically how you're gonna get the money back. The burn rate, how long can you go with your business with the current cash flow that you have? The cash flow analysis. What is your monthly expenses? How long can you go without any orders coming in before you cannot sustain anymore? And these are just some examples of financials that you must know. Along with that, you must have a cost and benefit analysis. So in that way, you can figure out whether what you're selling is actually gonna be profitable for you. Now you might be thinking, listen, that's a lot of numbers and that's a lot of guessing. Well, there are certain ways for you to actually get closer and more accurate with these numbers. For example, with 720 Suites, what we did before we rented that location, we went to that location and sat outside for three different days. Weekday, weekday night and on the weekends to actually see how many people are walking by on an hourly basis, how the traffic is like, how many people are going to the competitor's ice cream shop. By us doing that, now we have a much more accurate projection on the traffic. What are people ordering? When people coming out, what are they holding in their hands? We log down everything. This allows us to have a much more accurate account of the numbers, which allowed us to do our own projection and that's how we're able to actually sell it to our investors. For you, do the same thing. Along with financials, we also wanna identify the setup costs. How much are you accounting for your machinery, to the renovation, to rent, to cash flow, all this good stuff. So then that way, when you are building this out, there's not gonna be much surprises coming out running at you. All in all, doing this financial aspect, it shows your investors or yourself or your partners how you plan on using the money that you are raising. How you plan on using the money that you are borrowing and how you are gonna be able to put this whole plan together and return the money back to investors. This gives me a lot more confidence knowing the fact that you actually have a plan. This is a thorough plan. This is something that, you know what, I can stand behind. That's the importance of having a thorough business plan. So there you go friends, the home bakery business plan for you. Now, if you have any more questions or if you just wanna have more thorough training, then definitely check out the free masterclass in the link below. I've said it multiple times, this is a very well crafted masterclass specifically made to show you how you can actually bring a food idea into something that's tangible, into something that you can actually be proud of. Definitely, I'll see you guys in the link below. Otherwise, I hope you enjoyed this video. If you guys do, make sure you guys hit that thumbs up and I'll see you guys in the next video.