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Beginner’s Guide on Starting a Bakery Business in Singapore
If you mix butter, sugar, eggs, and flour, what will you get? A cake! Of course, the exact recipe is not that easy. But, the basis of baking usually has these main ingredients. It can also begin something wonderful like starting a bakery business.
Although there is more than cakes when it comes to baking, bakeries around the globe commonly begin from making and baking pastries. Thus, cakes, muffins, cupcakes, puff pastries, bread, buns, biscuits, cookies, and crackers all belong in the baking industry.
You may also say that you can bake a fish, but that is a whole different story altogether. Baking, in that sense, is a cooking method. Of course, there are plenty of food types one can bake, but for now, let’s focus on the baking industry where pastries and bread are involved.
Anyone can bake a cake, provided you follow the given recipe to a tee. However, the joy of baking and serving people takes baking to a different level. But it takes practice and passion for making it yours truly. That’s when you decide to start a bakery business. Here is the on starting a bakery business in Singapore, which explains the industry practice, business registration, licenses, and permits.
Passion in Pastries
Believe it or not, most people have dabbled in baking. Traditionally, homemakers are the experts in home-baked cakes and other pastries or desserts. It is only a matter of being passionate in expanding that knowledge further that develops one into a full-fledged baker. But as time changes, there are more male pastry chefs around the globe than their female counterparts.
After a few years of honing their pastry kitchens of renowned hotel chains or extensive bakeries, these professionals may move on to starting a bakery business. Starting a business takes more than just passion. It takes up plenty of time and could be draining for those who want to knead, bake and serve customers. If you plan to start a bakery business here, get in touch with a guide to company registration to ensure a smooth start.
Fret not if you are not a pastry chef. You can still pursue your dream of opening up a bakery. There are plenty of professional bakery courses available in Singapore. However, even if you are going to hire professionals in this industry, it is sensible to get certified yourself. At the very least, you know what goes into the baked goods your bakers are producing.
However, it is not necessary to obtain such certification unless you intend to pursue a career in pastry. Essentially, you need to acquire knowledge or experience in food business management, specifically in baking and pastry arts. Starting a bakery business is akin to starting any food business. You will need to learn about food handling, storage, sanitation, safety, hygiene, utensils, work counter, and so much more. Furthermore, every aspect of a bakery business is strictly regulated in this island nation. Hence, it is wise to learn everything you can when it comes to food business management.
From the Oven to Your Customers
Bakeries come in retail and wholesale formats. There are several options for a bakery business in the retail bakery format you can choose to start. Ever since the pandemic hit us, many choose to get into the food and beverage industry to make ends meet. There are several options for a bakery business in the retail bakery format you can choose to start.
The most popular is the home bakery. Most of them are micro-business owners, who probably start with their tried and tested home-baked recipe. But with a good unique selling point, they can expand into other retail bakeries. Most of the home bakeries offer several product types or are specialized in one product niche.
If you wish to serve more customers, you either have a logistics partner or start a bakery food truck. That way, you could drive and park at suitable locations to serve your best-baked goods. The food choice may be limited, but you get to connect and engage with many customers face to face.
Let’s say you aspire to open a healthy bakery that uses healthy ingredients for your baked goods. Your bakery business could be a specialty bakery as it provides specific products to specific target customers. A specialty bakery could be a one-of-a-kind bakery that has its position in the market. There are many specialty bakeries out there, and most could have started as home bakeries.
Another retail bakery is the bakery café and the counter service. A bakery café usually has a place to dine in. Bakery cafes could also offer beverages to suit the baked products. A counter service, however, only offers customers to take away products.
If you are looking to go bigger, then a wholesale bakery might suit you. As a wholesale bakery, your customers would be other smaller businesses such as delis, cafes, and grocery stores. To start a wholesale business, you need to ensure you have the high volume capacity to produce baked goods such as large space and plenty of baking equipment. All these will add up to a higher startup cost. Contact us, and 3E Accounting experts will have all hands on deck.
License & Permits Matters
With the current economic situation, physical bakeries are not getting what they used to. Bakeries could also have restrictions on the number of crowds allowed in the store. Hence, baked goods can now be bought online and must adhere to contactless delivery. Thus, this has paved the way for more home bakeries to spur.
The Singapore government has made it much easier for home bakeries to operate. Under the Home Based Business Scheme, homeowners can start a bakery business right from home. By right, a home bakery business would require a food license as it produces food. The agencies overseeing this scheme are the Housing & Development Board (HDB) and Urban Redevelopment Authority (URA).
But the best news is: a home bakery does not need a license to operate. However, there are rules and guidelines home bakeries must adhere to:
- Home bakeries cannot use their HDB flat address as their business address.
- Home bakeries are not allowed to advertise their service or products to the public, i.e. put up a sign outside their home.
- They could not utilize paid advertising to promote their business. Kindly use social media platforms to promote your products.
- Home bakeries must be considerate of their neighbors. Minimize smoke, noise, or smells that could endanger lives.
- Home bakeries must not load goods via vans or trucks. Hint: no producing in bulk. Deliver goods using public transport or your car.
- Bakeries from home are not allowed to sell their products at food stalls or food fairs.
Food Safety Standards
Since home bakers are also producing ready-to-eat food items, they must follow the Singapore Food Authority food hygiene guidelines. It is to ensure that there is no food contamination before, during and after food preparation. Bakeries and food establishments, in general, are subject to an appraisal grading system that indicates the overall hygiene and cleanliness of the premises where food preparation is concerned. However, home bakeries are rather difficult to be appraised. Hence, home bakers must practice personal hygiene, kitchen hygiene, secure safe food sources, and store ingredients correctly.
Although home-based bakeries need not have a license to operate, these bakeries must be registered as a business entity or a company. Most of the time, home bakers would prefer the easiest company form. Nevertheless, should they see the possibility of expanding, they could register a more comprehensive business entity. To determine the types of companies retail bakeries or home bakeries prefer to register, engage with a Singapore company incorporation services such as 3E Accounting Singapore.
Company registration begins with registering with the Accounting and Corporate Regulatory Authority (ACRA). This is the crucial point of starting your bakery business. It would be easier to apply for a tax identification number, a GST, and social security number from then onwards. If your bakery business is a retail café, you will need a Food Shop License. To get this license, you will need to submit your bakery planning permission to the URA or HDB.
When you are renovating your bakery, you must comply with the Code of Practice of Environmental Health. In addition, a retail bakery such as a café or specialty bakery must obtain ingredients from a supplier, which is also under strict regulations. Furthermore, if you are going for Halal certification, there will be more regulations you will need to comply with. Just as important, your future employees must obtain food hygiene certification before they can be hired.
Starting a bakery business may seem tough, but bakers are proud of their tasteful crafts. Hence, a little adversity at the start will go a long way in the future of your bakery business. But it does not have to be that way. Our team of corporate service providers in Singapore will help you every step of the way.