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Writing a business plan?

If you’re starting a bakery or working on a business plan for one, you’re probably wondering how to create a strong bakery financial plan.

Whether you need funding or want a business partner, a solid financial plan is essential to show the potential of your bakery. You simply cannot afford to be negligent with this aspect of your business plan.

All of these require you to work on endless and tiring Excel sheets. However, only if you plan to do everything traditionally.

Need help writing the financial aspect of a business plan? Well, let us help you out.

What is a bakery Financial Plan?

A bakery’s financial plan reflects the current monetary position of a business and outlines its long-term financial goals, objectives, and strategies to achieve the desired outcomes.

It is the last but the most important part of a business plan that can convince investors to invest in your business.

A financial plan consists of key financial reports like income statement, break-even analysis, balance sheet, and investment plan. These reports help investors assess the revenue potential, risks, and rewards that a particular bakery can bring.

Instead of paragraphs, the financial section of a business plan is presented best with figures, diagrams, graphs, and charts.

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How to Prepare a Bakery Financial Plan?

Creating a financial plan can feel overwhelming. However, this step-by-step procedure can help you prepare a financial document for the bakery by making sure you have every detail.

1. Identify Your Funding Requirements

To open your bakery, you will need finances, right? So, the first step for opening your bakery is estimating the bakery startup costs.

Your bakery startup costs should include all initial investments, like lease deposits, equipment purchases, renovation expenses, licensing fees, inventory, etc.

Apart from that, ongoing operational expenses, along with forecasted operational expenses for certain months. Also, don’t foresee any emergency funds needed in the future.

2. Determine Your Funding Strategy

Not everyone has a pile of money ready to start a business. Sometimes, people have to ask for help from potential lenders to get the money they need to start their bakery.

Here are a few funding sources you can consider for your bakery:

  • Lendings from friends and family
  • Bank loans
  • SBA loans
  • Angel Investors
  • Real Estate loans

Before you seek credit from banks and investors, evaluate different funding sources, their costs, and benefits to pick the most desirable ones.

3. Select a Business & Financial Planning Software

Selecting financial software is a smart choice when creating a financial plan for several reasons. Firstly, financial software automates many tasks, saving time and reducing the risk of errors in calculations and data entry.

Additionally, financial software often comes with built-in features and templates specifically designed for creating comprehensive financial plans. These tools help users navigate complex financial concepts and ensure that all essential components of the plan are included.

Overall, selecting financial software simplifies the process of creating a financial plan, improves accuracy and efficiency, and empowers businesses to make sound financial decisions that drive success and sustainability.

Too many options to confuse you? Consider a tool that is easy to use, offers a range of functions, and allows seamless integration of Excel data.


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Enter your Financial Assumptions, and we’ll calculate your monthly/quarterly and yearly financial projections.

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4. Pre-Assumptions & Market Analysis

To build a foundation for your financial projections, you need to go through various aspects of your business, some of them are:

Sales forecast

It is essential to estimate the future sales volume of your business. It includes market trends, understanding customer preferences, and considering seasonal fluctuations. By forecasting sales, you can get a rough idea about your revenue stream and production levels.

Pricing strategy

Analyze all the factors like your product line, customer preferences, spending habits, and the competition in your local area before deciding on the ideal price for all the products of your bakery business.

Remember, your pricing strategy will define a lot about your bakery in the market. So, it should reflect the value your business offers to the customers.

Overhead budget

These are the day-to-day expenses that keep your bakery running smoothly. To project these accurately, gather precise estimates from your suppliers and account for various costs like payroll, rent, administrative bakery monthly expenses, and more. An accurate overhead estimate ensures your bakery’s budget is on point.

5. Prepare Financial Projections

After looking at your financial projections, investors or readers will come to a decision. Because having a look at the key financial reports, they can understand the stability of your bakery business.

Let’s check these key components of financial projection:

Cash flow statement

A cash flow statement provides valuable insights into whether your bakery has sufficient funds to keep operations running smoothly.

To create an accurate cash flow statement for your bakery, you need to consider several critical factors. These include your sales figures, the cost of goods sold, and the budget for overhead costs, such as rent, staff salaries, and utilities.

When crafting your cash flow statement, it’s essential to be realistic with your assumptions. Consider industry standards and the current market situation.

Income Statement

The income statement for a bakery business financial plan outlines all the money earned and spent over a specific period.

It starts with revenue, showing sales from treats like cakes and pastries. Then, it subtracts expenses, including ingredients, labor, and rent. The result is the bakery’s profit or loss.

This statement helps owners understand their bakery’s financial performance, showing if it’s making money and where costs may need adjusting.

By keeping the income statement updated regularly, bakery owners can make informed decisions to improve profitability and ensure long-term success.

Balance sheet

A balance sheet displays what it owns and to whom it owes. It has three main sections; assets, liabilities, and equity.

Assets include things like cash, equipment owned, and other inventory. Whereas liabilities are like debt, they include loans or bills to pay. Equity is the bakery owner’s investment or the equity of any investor, along with the forecasted profits.

Investors pay attention to the balance sheet because it helps them understand how your bakery’s money is organized and how much profit it’s making. Below is an example of the projected balance sheet of the bakery business for 3 years made using Upmetrics:

Break-even Analysis

For any investor or reader, the most interesting part will be to get to know when your bakery business will start generating profits.

Break-even analysis helps determine how much sales volume is essential to reach the break-even point.

It helps you understand and know how long it will take before your bakery starts generating profits.

First, identify fixed costs like rent and utilities. Then, calculate variable costs per item, like ingredients. Next, determine the selling price per item.

After that, subtract variable costs from the selling price to find the margin. Divide total fixed costs by the contribution margin per item to get the break-even point in units. This tells you the minimum number of items to sell to cover costs.

Break-even analysis guides pricing and sales decisions for bakery profitability.

6. Test Assumptions

Everything that is mentioned in the financial plan is based on predictions. So, even if you have created it practically, real-life scenarios might be different.

Thus, during this stage, you need to think about various situations where things will go well and will not.

For this, first, understand which scenario has the most impact on the profitability and sales of the bakery business. Consider performing sensitive analysis and stress testing of various scenarios for the financial plan of your bakery.

By testing assumptions through sensitivity analysis and stress testing, you can refine your financial plan, mitigate risks, and make more informed decisions to ensure the success of your bakery business.

7. Monitor & Update Your Plan

Monitoring and updating allow you to track your business’s financial performance. This way you can understand which areas need improvement and which are working as expected.

By regularly reviewing your financial plan, you can spot trends, patterns, and potential issues on a prior basis. It can help you be proactive in making decisions.

Now that you have all the information to create a solid bakery financial plan, it’s time to start making projections and doing the necessary calculations.

Keep in mind that your plan should be flexible and adaptable to changing circumstances. It is not only about the financial plan, but the whole bakery business plan should be flexible.

Download Free Bakery Financial Plan Example

Creating a financial plan from scratch can get overwhelming. After all, Excel sheets are tiring and endlessly long. Worry not. Download this free bakery financial plan example prepared using Upmetrics to help you get started.

It includes all the key components of a business’s financial projections, including the balance sheet, cash flow statement, P&L or income statement, and break-even statement, simplifying bakery financial

Start Preparing Your Bakery Financial Plan

And there you have it – we’ve covered the essentials of financial planning for your bakery.

But now it’s time to put that knowledge into action. Feeling overwhelmed by the thought of creating a financial plan? Don’t worry; we’ve got you covered.

Upmetrics’ financial planning tool is here to make the process a cakewalk. Just input your projected assumptions, and we’ll handle the rest.

So, don’t delay any longer. It’s time to get started on your financial plan now.

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About the Author


Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more


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