How to Run a Bakery Successfully in 2025 (12Tips)

Running a bakery business in 2025 is tough. High overhead costs—like pricey equipment, rising staff wages, and premium locations—make it hard to turn a profit, especially with perishable inventory that often leads to waste. Many bakeries struggle to survive for three years, relying on trends and efficient management to stay afloat.

The best bakery POS system or inventory software can help track stock, cut spoilage, and streamline orders. To boost profitability and stand out, focus on innovative strategies like customer rewards programs and the right point of sale system. Here are 12 quick tips to run a successful bakery.

12 Tips for Running a Bakery

Running a successful bakery in 2025 requires a blend of timeless business acumen, modern technology, and adaptability to evolving consumer preferences. Below are 12 highly relevant, up-to-date tips for thriving as a bakery owner.

1. Nail Your Signature Offerings

Focus on creating a few standout products that define your brand. Whether it’s a unique sourdough, vegan cupcakes, or gluten-free pastries, having signature items builds customer loyalty and sets you apart.

• Perfect the Recipe: Refine your core recipes to ensure consistency. Use high-quality, locally sourced ingredients where possible to appeal to conscious consumers.
• Tell a Story: Share the inspiration behind your signature items on social media or packaging. For example, a family recipe or a locally inspired flavor can create an emotional connection with customers.
• Stay Flexible: Be ready to tweak recipes based on feedback or dietary trends, like low-sugar or keto options, which will be in high demand in 2025.

2. Embrace Digital Ordering

Online ordering is no longer optional—it’s a must. Customers expect seamless ways to order, pay, and pick up or deliver baked goods.

• User-Friendly Platforms: Invest in a robust online ordering system integrated into your website or apps like Shopify or Square. Ensure it’s mobile-optimized, as 70% of online orders come via smartphones in 2025.
• Delivery Partnerships: Partner with services like DoorDash or Uber Eats for delivery, but negotiate fees to protect margins. Alternatively, offer in-house delivery for local customers to build loyalty.
• Pre-Orders for Efficiency: Encourage pre-orders for high-demand items like holiday cakes or custom orders to manage inventory and reduce waste.

3. Leverage Social Media Marketing

Social media is your bakery’s billboard. Platforms like Instagram and TikTok are critical for showcasing your products and engaging customers.

• Visual Appeal: Post high-quality photos and short videos of your baking process, finished products, or customer reactions. Reels showing “behind-the-scenes” dough kneading or cake decorating are trending in 2025.
• Engage Actively: Respond to comments and DMs promptly. Run polls or contests (e.g., “Name our new cupcake flavor!”) to boost engagement.
• Influencer Collaborations: Partner with local food influencers or micro-influencers for authentic promotion. A single viral post can drive significant foot traffic.

4. Prioritize Sustainability

Eco-conscious practices resonate with modern consumers, especially younger demographics. Sustainable bakeries are seeing increased loyalty in 2025.

• Eco-Friendly Packaging: Use compostable or recyclable packaging. Highlight this on your website and in-store signage to attract environmentally aware customers.
• Reduce Food Waste: Donate unsold goods to local charities or use apps like Too Good To Go to sell surplus at a discount.
• Source Responsibly: Partner with suppliers offering organic or fair-trade ingredients. Transparency about sourcing builds trust.

5. Optimize Your Menu for Trends

Stay ahead by incorporating trending flavors and dietary preferences into your menu.

• Plant-Based Options: Vegan and plant-based baked goods are mainstream in 2025. Offer dairy-free croissants or eggless cakes using alternatives like oat milk or aquafaba.
• Global Flavors: Experiment with international inspirations like matcha, ube, or cardamom-infused pastries, which are gaining traction.
• Health-Conscious Choices: Include low-sugar, gluten-free, or high-protein options to cater to health-focused customers without sacrificing taste.

6. Streamline Operations with Tech

Technology can boost efficiency and profitability in your bakery.

• POS Systems: Use modern point of sale systems like KORONA POS, Toast, or Lavu POS to track sales, manage inventory, and analyze customer preferences in real time.
• Automation Tools: Invest in automated dough dividers or portioning machines for consistency and to save labor costs.
• Inventory Management Software: Tools like KORONA POS or BlueCart help track ingredient usage, reducing overstock and waste.

7. Build a Loyal Customer Base

Loyalty programs and personalized experiences keep customers coming back.

• Reward Programs: Offer a digital loyalty program where customers earn points per purchase, which can be redeemable for free items. Apps like Punchh integrate seamlessly with POS systems.
• Personalization: Use customer data to offer tailored promotions, like birthday discounts or recommendations based on past orders.
• Community Engagement: Host baking classes or pop-up events to create a sense of community and strengthen customer ties.

8. Train Your Staff Well

Your team is the face of your bakery. Well-trained, motivated staff enhance the customer experience.

• Customer Service Training: Teach staff to be friendly, knowledgeable, and quickly resolve issues. Role-play common scenarios to build confidence.
• Upskilling: Offer training on new techniques, like plant-based baking or latte art, to keep staff versatile and engaged.
• Retention Strategies: Provide competitive wages and benefits to reduce turnover, as labor shortages remain a challenge in 2025.

9. Monitor Your Finances Closely

Profitability hinges on tight financial management.

• Track Costs Daily: Use software like QuickBooks to monitor ingredient costs, labor, and overhead. Aim for a food cost ratio of 25-35%.
• Price Strategically: Regularly review menu prices to reflect ingredient cost fluctuations while staying competitive.
• Diversify Revenue: Offer catering services, subscription boxes, or wholesale to local cafes to boost income streams.

10. Experiment with Limited-Time Offers

Limited-time offerings (LTOs) create urgency and keep your menu fresh.

• Seasonal Specials: Tie LTOs to holidays or seasons, like pumpkin spice scones in fall or heart-shaped cookies for Valentine’s Day.
• Test New Ideas: Use LTOs to trial new flavors or products before adding them permanently. Customer feedback can guide decisions.
• Promote Heavily: Announce LTOs via email blasts, social media, and in-store signage to maximize buzz.

11. Adopt AI for Insights

Artificial intelligence is transforming small businesses in 2025, and bakeries are no exception.

• Demand Forecasting: Use AI tools to predict busy periods or popular items based on historical sales data, helping you optimize staffing and inventory.
• Customer Insights: AI-powered CRM systems can analyze customer preferences to tailor marketing campaigns.
• Chatbots for Service: Implement AI chatbots on your website to handle simple inquiries or take orders, freeing up staff time.

12. Focus on Hygiene and Safety

Post-pandemic, customers prioritize cleanliness and safety.

• Visible Protocols: Display sanitization practices, like regular counter cleaning or staff glove use, to reassure customers.
• Contactless Options: Offer contactless payment and pickup options to minimize physical interactions.
• Compliance: Stay updated on local health regulations and train staff to follow them rigorously to avoid fines or reputational damage.

These tips combine traditional bakery wisdom with cutting-edge trends like AI adoption, sustainability, and digital engagement. By implementing them, you can build a thriving, customer-loved bakery in 2025 and beyond. Let me know if you’d like a deeper dive into any specific tip!

Common Mistakes Bakery Owners Make (and How to Avoid Them)

1. Underestimating Startup Costs

Many new bakery owners miscalculate the capital needed to launch and sustain operations, leading to cash flow crises within the first year. Equipment like commercial ovens, mixers, and refrigeration units can cost $50,000-$100,000, while leases, permits, and initial inventory add up quickly.
How to Avoid It:

• Create a Detailed Budget: Use tools like QuickBooks or Excel to map out all expenses, including hidden costs like utility deposits, licensing fees, and insurance. Factor in at least 6 months of operating capital to cover slow initial sales.
• Research Equipment Options: To reduce upfront costs, consider leasing equipment or buying used, high-quality units from reputable suppliers.
• Plan for Contingencies: Set aside 10-15% of your budget for unexpected expenses, such as equipment repairs or opening delays.

2. Overcomplicating the Menu

Offering too many items—say, 50 types of bread and pastries—stretches resources, confuses customers, and increases waste. A 2025 industry report notes that streamlined menus with 10-15 core items improve efficiency and customer satisfaction.
How to Avoid It:

• Focus on Quality Over Quantity: Curate a concise menu of high-margin, signature items that reflect your brand, like a unique sourdough or vegan cupcake.
• Test and Refine: Use limited-time offers (LTOs) to test new products before making permanent menu additions. Track sales data to identify top performers.
• Simplify Production: Design recipes with overlapping ingredients to reduce inventory complexity and waste. For example, use one dough base for multiple bread types.

3. Ignoring Ingredient Cost Fluctuations

Failing to monitor ingredient price changes, like flour or butter spikes (e.g., butter prices rose 20% in 2024 due to supply chain issues), can erode profit margins.
How to Avoid It:

• Track Costs Weekly: Use inventory management software like MarketMan to monitor ingredient prices and adjust recipes or menu prices accordingly.
• Negotiate with Suppliers: Build relationships with multiple suppliers to secure bulk discounts or lock in prices for staples like flour and sugar.
• Offer Substitutes: Develop recipes with flexible ingredients (e.g., margarine for butter) to maintain quality during price surges without passing costs to customers.

4. Skimping on Staff Training

Undertrained staff can lead to inconsistent product quality, poor customer service, and high turnover. A 2025 bakery survey found that 60% of customer complaints stem from staff-related issues, like incorrect orders or slow service.
How to Avoid It:

• Implement Structured Training: Create a training manual covering recipes, customer service, and hygiene protocols. Use role-playing to prepare staff for busy shifts.
• Cross-Train Employees: Ensure staff can handle multiple roles (e.g., baking, cashier, barista) to maintain flexibility during peak hours or absences.
• Invest in Retention: Offer competitive wages, benefits, and regular feedback to reduce turnover, which averages 30% in small bakeries.

5. Neglecting Online Presence

In 2025, 80% of customers discover local bakeries through social media or online searches, yet many owners fail to maintain a strong digital footprint, missing out on sales.
How to Avoid It:

• Build a Professional Website: Use platforms like Wix or Shopify to create a mobile-optimized site with online ordering, menus, and contact info. Ensure it’s SEO-optimized for local searches (e.g., “bakery near me”).
• Post Consistently on Social Media: Share daily Instagram or TikTok posts featuring vibrant photos or videos of your products. Use trending hashtags like #BakeryLife or #FreshBread to boost visibility.
• Engage with Reviews: Respond promptly to Google and Yelp reviews, even negative ones, to show you value feedback and build trust.

6. Poor Inventory Management

Overstocking ingredients leads to spoilage, while understocking causes production delays. A 2025 study found that bakeries lose 5-10% of revenue due to inventory mismanagement.
How to Avoid It:

• Use Inventory Software: Tools like BlueCart or Toast’s inventory module track stock levels in real time, alerting you when supplies are low.
• Implement FIFO: Follow the “first in, first out” rule to use older ingredients first, reducing spoilage of perishable items like dairy or fruit.
• Forecast Demand: Analyze sales data to predict busy periods (e.g., weekends or holidays) and adjust inventory orders accordingly.

7. Overlooking Health and Safety Compliance

Failing to meet health regulations can result in fines, closures, or reputational damage. In 2025, customers are hyper-aware of hygiene due to lingering post-pandemic concerns.
How to Avoid It:

• Stay Updated on Regulations: Regularly check local health department guidelines and ensure compliance with food safety standards, like proper storage temperatures (e.g., 40°F for dairy).
• Train Staff on Hygiene: Conduct monthly refreshers on handwashing, glove use, and sanitization protocols. Post visible checklists in the kitchen.
• Invest in Equipment Maintenance: Schedule regular cleaning and servicing of ovens, mixers, and refrigeration to prevent contamination risks.

8. Mispricing Products

Setting prices too low erodes profits, while pricing too high alienates customers. Many owners fail to account for all costs, leading to margins as low as 5% instead of the industry target of 15-20%.
How to Avoid It:

• Calculate True Costs: Include ingredients, labor, overhead, and packaging in your pricing model. Aim for a 25-35% food cost ratio.
• Monitor Competitors: Research local bakery prices to stay competitive without undercutting yourself. Adjust prices quarterly to reflect cost changes.
• Highlight Value: Use storytelling (e.g., “handcrafted with organic flour”) on menus or signage to justify premium pricing.

9. Failing to Adapt to Dietary Trends

Ignoring the growing demand for vegan, gluten-free, or low-sugar options alienates a significant customer base. In 2025, 25% of bakery customers seek plant-based or allergen-free products.
How to Avoid It:

• Introduce Inclusive Options: Develop recipes for vegan pastries or gluten-free breads using alternatives like almond flour or oat milk. Test small batches to gauge demand.
• Label Clearly: Use menu boards and packaging to highlight diet-friendly items (e.g., “Vegan,” “Keto”) to attract niche customers.
• Stay Informed: Follow industry blogs or attend trade shows like the International Baking Industry Exposition to track emerging trends.

10. Neglecting Customer Feedback

Dismissing or failing to collect feedback can lead to missed opportunities for improvement. A 2025 survey showed that 70% of customers are more likely to return to businesses that act on their suggestions.
How to Avoid It:

• Solicit Feedback Actively: Use QR codes on receipts or tables to link to quick online surveys. Offer small incentives, like a free cookie, for participation.
• Analyze Complaints: Track recurring issues (e.g., long wait times) using CRM tools and address them systematically, such as adding staff during peak hours.
• Act on Insights: Publicly acknowledge changes made based on feedback (e.g., “You asked for more vegan options, and we delivered!”) to build loyalty.

How to Run a Bakery Without Any Experience?

Running a bakery without experience is challenging but doable with focus and strategy. First, educate yourself—take online baking courses or apprentice at a local bakery to learn recipes and techniques. Research the market to identify customer preferences, like vegan or gluten-free options, and start with a small, high-quality menu.

Create a detailed business plan, budgeting for equipment, permits, and 6 months of operating costs. Partner with reliable suppliers for ingredients and use inventory software to minimize waste. Build a simple website with online ordering and leverage social media for marketing, posting vibrant photos daily.

Hire or consult experienced bakers to ensure product consistency. Learn basic financial tracking using tools like QuickBooks. Stay compliant with health regulations through regular training. Finally, engage customers with loyalty programs and act on feedback to build a loyal base. Persistence and learning from mistakes are key.

How Experienced Bakery Owners Improve Their Operations?

Experienced bakery owners improve operations by leveraging data-driven production planning—tracking product-level sales by time and day to optimize batch sizes, reduce waste, and increase freshness.

They implement lean inventory systems with just-in-time ingredient sourcing to improve cash flow while minimizing spoilage. Adopt advanced POS systems or bakery inventory management software (e.g., KORONA POS, Toast) to analyze sales patterns and personalize customer offers.

Labor efficiency is refined through cross-training staff and aligning shift schedules with peak production cycles. Owners also invest in process standardization (e.g., scaling, proofing, baking) using checklists and quality control logs to ensure consistency across teams.

Equipment ROI is regularly evaluated—automating repetitive tasks like dough sheeting or packaging can free up skilled labor for high-margin products.

Additionally, seasoned owners prioritize customer feedback loops and trend analysis to adjust offerings proactively, using tools like CRM-integrated POS systems. They also experiment with subscription models for steady revenue.

Finally, they build supplier relationships strategically, negotiating bulk pricing or exclusivity deals while diversifying sources to reduce operational risk.

Bakery Operating Costs And Success Benchmarks

Operating a bakery—especially at scale—is capital- and labor-intensive, with thin margins that can vanish if costs aren’t vigilantly controlled.

Many experienced bakery owners underestimate the compounding impact of variable costs and overestimate early revenue projections.

Profitability is rarely about flashy branding or unique recipes alone—it hinges on mastering cost structure, optimizing throughput, and adhering to key performance benchmarks. Below is a detailed breakdown of bakery operating costs and success benchmarks, including critical mistakes often made and how to avoid them:

1. Cost of Goods Sold (COGS)

COGS, encompassing ingredients, packaging, and spoilage, typically accounts for 25-35% of revenue. Optimization Strategies:

• Negotiate Bulk Deals: Secure contracts with multiple suppliers to lock in prices for staples like flour and sugar.
• Minimize Waste: Use inventory software like MarketMan to track usage and implement “first in, first out” (FIFO) to reduce spoilage.
• Source Locally: Partner with local farms for organic ingredients to cut transport costs and appeal to health-conscious customers.
  Pitfall to Avoid: Failing to adjust recipes or prices during ingredient price spikes can shrink margins. Review COGS regularly and adjust menu prices quarterly.

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2. Labor Costs

Labor, including wages, benefits, and training, accounts for 30-35% of revenue, which is lower than in restaurants due to fewer front-of-house staff.

Optimization Strategies:

• Cross-Train Staff: Train employees for multiple roles (e.g., baking and cashier) to reduce staffing needs during peak hours.
• Automate Tasks: Use scheduling tools like 7shifts to optimize shifts.

3. Rent and Lease Costs

Rent varies widely by location. High-traffic areas boost sales but inflate costs.

Optimization Strategies:

• Negotiate Leases: Secure 3-5 year leases with fixed rates to avoid rent hikes.
• Choose Wisely: Opt for smaller spaces (1,000-1,500 sq ft) in secondary high-traffic areas to balance visibility and cost.
• Sublease Unused Space: Rent out excess kitchen space for catering prep to offset costs.
  Pitfall to Avoid: Overcommitting to expensive locations without sales forecasts can drain cash flow. Use foot traffic analytics before signing leases.

4. Utilities

Utilities (electricity, gas, water) account for 3-5% of revenue, driven by energy-intensive ovens and refrigeration.

Optimization Strategies:

• Invest in Efficiency: Upgrade to energy-efficient ovens and LED lighting.
• Monitor Usage: Use smart meters to track peak consumption and shift high-energy tasks to off-peak hours.
• Negotiate Rates: Compare utility providers annually for better rates.
  Pitfall to Avoid: Ignoring energy audits can lead to bloated bills. Schedule annual audits to identify savings.

5. Marketing and Advertising

Marketing costs, including social media, SEO, and promotions. In 2025, 80% of customers discover bakeries online.

Optimization Strategies:

• Focus on Social Media: Invest in Instagram and TikTok ads, targeting local audiences.
• Leverage SEO: Optimize your website for “bakery near me” searches to drive organic traffic.
• Track ROI: Use analytics tools like Google Analytics to measure campaign performance and cut underperforming channels.
  Pitfall to Avoid: Overspending on untargeted ads wastes budget. Test small campaigns before scaling.

6. Equipment Maintenance and Depreciation

Equipment encompasses ovens, mixers, and refrigerators. Unexpected breakdowns can halt production. Optimization Strategies:

• Schedule Preventive Maintenance: Service equipment quarterly to extend its lifespan and avoid costly repairs.
• Lease vs. Buy: Lease high-cost items like ovens to spread costs and include maintenance in contracts.
• Budget for Replacements: Allocate 1% of revenue annually for equipment upgrades.

7. Packaging Costs

Packaging, especially eco-friendly options, is also to be considered in operating costs, with 69% of bakers reporting higher costs in 2025.

Optimization Strategies:

• Buy in Bulk: Order compostable packaging in bulk to reduce unit costs.
• Align with Brand: Use packaging to reinforce brand identity (e.g., custom logos) to justify premium pricing.
• Minimize Overuse: Train staff to use appropriate packaging sizes to avoid waste.
  Pitfall to Avoid: Cheap, non-sustainable packaging can alienate eco-conscious customers. Prioritize recyclable options.

8. Insurance

Insurance (liability, property, workers’ comp) costs 1-2% of revenue, critical for protecting against lawsuits or accidents.

Optimization Strategies:

• Shop Around: Compare quotes from multiple insurers annually to secure competitive rates.
• Bundle Policies: Combine liability and property insurance for discounts.
• Mitigate Risks: Install safety features like fire suppression systems to lower premiums.
  Pitfall to Avoid: Underinsuring to save costs risks financial ruin. Ensure coverage matches business scale.

9. Miscellaneous Operating Costs

Miscellaneous expenses (permits, licenses, cleaning supplies) account for 2-5% of revenue. Regulatory compliance is critical in 2025. Optimization Strategies:

• Automate Compliance: Use software like FoodDocs to track permit renewals and health inspections.
• Bulk Purchase Supplies: Buy cleaning supplies in bulk to reduce costs.
• Outsource Admin: Use services like Bench for bookkeeping to save time and avoid errors.
  Pitfall to Avoid: Missing permit renewals can lead to $1,000-$5,000 fines. Set calendar reminders for deadlines.

Want to Simplify Bakery Management? Try KORONA POS

Managing a bakery can be complex, but KORONA POS simplifies operations by providing an all-in-one solution tailored to quick service environments. Its robust inventory management system tracks ingredients and product levels.

For bakeries with café seating, KORONA POS offers server management, table management, and graphical table layouts to optimize seating and service flow. Courses and check-splitting streamline group orders, while time tracking and cash journals simplify payroll and financial reporting.

The KORONA Menu enhances product presentation, making it easy to upsell specials. With 24/7 support and a user-friendly interface, staff training is quick.

KORONA POS is also processing agnostic, meaning it doesn’t lock your business into a specific payment processor. This gives bakery owners the freedom to choose the best and most affordable payment solution.

Additionally, KORONA offers essential tools like time tracking, cash journals, and server management to enhance employee accountability and optimize operations. Whether managing tables or coordinating different courses, KORONA POS gives bakeries the flexibility and control to grow and succeed. If you want to see KORONA POS in action, click the button below to start.

Frequently Asked Questions

Is it hard to run a bakery?

Cooking and baking are not for everyone, as they require creative skill and a lot of patience. However, someone who is passionate about baking and has a knack for creating delicious baked goods can thrive in the business. Although baking is one part of a bakery, there are different challenges behind the scenes in managing a bakery. With knowledge and smart business decisions, a bakery can be run efficiently and successfully.

What are the disadvantages of a bakery business?

A bakery faces a unique set of challenges. Most bakers must be up extremely early to start creating goods to sell for the day, as customers are ready to purchase freshly baked items during morning and lunch hours. Bakeries also strictly need to determine how much product to make, as baked goods that do not sell are perishable and, therefore, may lose revenue.

Why is a bakery a good business?

Almost every culture has its own type of sweets. Everyone loves them, especially freshly baked cookies, bread, and pastries. Cakes are also a huge part of a bakery business, as they are purchased and reserved in advance for special occasions. Most people don’t have the skill or knowledge to make delectable creations, so sharing that talent with people is rewarding.