How to Setup Home-Based Bakery Business in India

Narendra Kumar

15 Jan, 2021

How to Setup Home-Based Bakery Business in India?

There are many who wish to take their passion for baking for family, friends and own sweet tooth a step ahead and make it a source of earnings. They might have all the required equipment, baking skills and may even have the capital required to start the small business, but lack the knowledge of registrations and other procedures associated with the business which are essential to be followed to avoid any legal hassles in the future. The growth of home-based bakeries has been high due to various factors. From home-based bakery business, one can expect uncompromising quality and freshness of the product.

Every order since is made only after the order is placed ensures the customers that their order shall be exactly what they placed. Affordability is another aspect which makes a home- based bakery business achieve an edge over the commercial bakeries. Thus the customer base of these home-based bakery businesses has been increasing at a fast pace.

What is the basic procedure that one needs to be aware of when trying to establish a home-based bakery?

1. After exhaustive research of the market you are aiming for, an idea should be developed that shall add an oomph factor to your business. With so many bakeries which already have a stronghold in the market, your idea must be one that can carve its way to the customers.
2. Once the idea is developed, the capital requirement and the capital available must be assessed. Though for home-based bakery business, capital requirement is low and can be adjusted with personal savings or by a loan from friends and/or family. The primary portion of capital shall be for the equipment, raw materials, helpers (if any), marketing and advertising, and delivery of finished product.
3. Once this part is over, one has to make an important decision of the business structure i.e. in what manner will the business be registered. Popularly, the home bakeries are initially opened as sole proprietorship or partnership but the options are not limited to these. One may register the business as a Company, Limited Liability Partnership (LLP), or One-Person Company (OPC). A consultant may be approached
4. Another mandatory registration required for a food-based business is the FSSAI registration/license.
   -For various kinds of the food business, The Food Safety and Security Authority of India^[1] has prescribed three categories- Basic Registration, State License, and Central License. In the initial stage of business, the most preferred one is the Basic FSSAI registration. You may consult a professional who shall guide you in the procedure of obtaining the procedures, documents required and the departmental fee for the FSSAI registration. The FSSAI basic registration may be obtained for a period of minimum 1 year up to 5 years.
   -As the business grows, one might consider the state license.
5. A home bakery may apply for a Trademark Registration. It shall predict the unique name and identify of the bakery and shall be beneficial in the long run.
6. The home-based bakery may apply for GST registration. It is mandatory only for the businesses which have the turnover of more than 20 lakhs. One may voluntarily apply and get GST registered to avail various benefits that come with GST registration.

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