If you love to bake, the concept of launching a bakery business might be one that is quite enticing. During the COVID-19 lockdown, many novice bakers found a new interest for baking. However, to decide whether it is the ideal route for you, it is important to understand all the facets of starting a bakery and operating it.
While the enthusiasm in home baking among home bakers is rising day-by-day, baking, and creative cake decoration have built a place for themselves in the field of patisserie and cake art, opening up tremendous market opportunities for bakers. It also inspired many home bakers to become successful entrepreneurs.
How to Set Up Your Bakery in Dubai?
Like setting up any other business, the first step is planning. This planning includes deciding on your business name, your niche, the types of item you are going to sell and how to sell them and deciding on your business structure and location. The next step is to finalize the investment and the average profit return for each month. We have simplified and compiled the steps needed to be followed when opening a bakery in Dubai. These steps are:
Step 1 – Creating a Business Plan
When designing a business plan for a bakery that would uniquely influence the sustainability of your operation, there are many factors to remember. For example, the kinds of goods prepared, the accessibility of the service region, and the management team’s experience will all play a major role. A bakery that specializes in wedding catering is entirely different from a commercial one that services distributors in the nearby areas. Investors will want to consider your bakery’s distinctive characteristics and how it relates to those that currently operate in the area.
Step 2 – Deciding the Business Model and Structure
The business model aspect of a business plan for a bakery is very simple: making baked goods. A bakery business model has several variants that rely on a specific niche and target audiences. Based on the role the investor may have in the company, the experience of the management team is likely to play a crucial role in influencing this approach. For eg, owners who have experience in the catering or event planning space are likely to gain big event customers readily. A smaller bakery that wishes to service a residential neighbourhood, on the other hand, would be drastically different, but ultimately similarly profitable.
The business structure of a bakery can be implemented as a sole establishment in which the ex-pat or foreign national can be the 100 % owner of the company and UAE National can be the local sponsor or agent. The second option is that you can open your bakery as a civil company where there can be 2 or more ex-pat or foreign national partners and the UAE National can be the local sponsor. The third choice is that you can establish your bakery as a limited liability company where the UAE national has 51 % of the shares and the ex-pat has 49 % of shares. Each business structure has its own benefits; it is for you to determine which structure is suitable for your business.
Step 3 – Discover Your Niche
When opening a bakery business, you will need to assess your expertise, budget, and objectives. Extra perspectives can be generated by researching the local Dubai market. You can easily limit your competition when relying on a niche audience. You may notice that bakeries that produce cupcakes, birthday, or wedding cakes are in high demand. You will charge a premium fee to have your brand stand out if your item is of higher quality.
Additionally, if you adhere to a high-volume business model by producing items like naan, pita bread, and other types of food common in the local market, you can discover that margins are small. With too many existing local players who manufacture these things on an industrial scale, the intensified rivalry makes it terribly challenging to stick out.
Step 4 – Finalize Your Business Name and Location
It is important for you to choose a brand name for your bakery after choosing your niche product to make people aware of your business. Think of a name that is exclusive and appealing to your bakery. Choosing the company name is a step that takes on more meaning here in Dubai and the UAE. That’s because, as well as the need for a catchy name that captures the spirit of your business, you will also need to adhere to the clearly defined naming conventions of the UAE. No blasphemous or insulting words, references to well-known organisation’s or other abbreviations of your name must be used in the UAE business names, while your full name is appropriate.
The site of your bakery business, like with most businesses, plays a vital role in your venture’s success. You have the choice to select from a whole variety of facilities situated in suburban neighbourhoods, industrial districts, and shopping plazas with the massive expansion in commercial property across Dubai.
An increasingly common alternative in terms of service offerings is to offer the products via delivery services through a website. You can have a walk-up counter whether you are in a commercial area or shopping centre where individuals are often on the move. If you’re in a suburban area, a growing trend in the local bakery scene is room, where you can both sit down and dine. A location on a scenic sidewalk to order and eat some pastry will help you set yourself apart from the competitors.
Getting Your Bakery License in Dubai
To operate a bakery business smoothly in Dubai, you would require a local license. The most significant factor is that bakeries are subject to the additional need to conform to the local “Food Code.” The Food Code is an effort by the Dubai Municipality’s Department of Food Control to ensure food protection from food processing to consumption. It is an effort to implement safety requirements, equivalent to laws applicable in other developing countries, in the local bakery industry.
Here are some of the bakery specifications you would need to supply the Dubai Municipality with:
- Interior design layout of the premises
- Highlight all entry and exit points
- Space for processing food
- Space for storing food
- Windows and ventilation system
- Location of food equipment that will be used to process the food
- Dishwashers and other supportive equipment
- Area of ‘Kitchen’ to be Min. 250sqft or 40% of total whichever is bigger
- Wall, Floor and Ceiling to be washable, nonabsorbent, fireproof, light-coloured, smooth non-toxic, no cracks. Floor properly sloped for drainage junction
- Washing facilities double sink with hot/cold water
The specifications are subject to change; hence, we advise you to search for the current list with a business consultant or the municipality to ensure conformity and effective implementation.
How Can Riz and Mona Consultancy Help You in Starting Your Bakery?
Riz and Mona Consultancy is led by a team of experts in the field, and specialized business set up consultants with years of experience in the UAE for establishing a range of business setups. In order to get your bakery license, our team will deal directly with the government authorities and relevant regulatory bodies on your behalf, in terms of filing applications, typing, completing documents submission, making transactions and preparing the files.
Riz and Mona Consultancy will assist you in fulfilling your journey, and be your trustworthy business consulting partner if you are thinking of setting up your bakery business in Dubai.