Finance brokers can help bakeries & bakers rise
As another Great British Bake Off final is upon us, the taste for bakeries and the art of baked goods does not seem to be slowing down any time soon when the UK Bakery market is worth £3.6 billion, being one of the largest markets in the food industry, equating to almost 11 million loaves and packs sold daily (source Federation of Bakers Ltd).
In the UK baking industry, there are three main sectors: large plant bakeries, in-store bakeries and craft bakers.
These baking companies produce around 85% of bread sold in the UK. Their market share of UK bread production by value and volume is 75%.
In-store bakeries within supermarkets produce around 12%. Their market share of UK bread production by value and volume is 20%.
Craft bakers on the high street and in retail produce the remaining 3% in the industry. Their market share of UK bread production by value and volume is 5%.
The majority of bread sold in the UK is produced here due to the short shelf life with the three main manufacturers being Allied Bakeries, Hovis and Warburtons (this one being local to us in Bolton) which all account for nearly three quarters of the wrapped sliced bread sold.
As mentioned, shows like The Great British Bake Off have produced a surge in bakeries, cake makers and decorators by 20% in 2017, as the show has inspired a wave of creative entrepreneurial bakers.
From 2013 to 2017, the South East (home to two winners of The Great British Bake Off) proved particularly popular with bakers with a trend in the number of male-run baking businesses showing a 75% increase in 2015-2017.
Out of the UK’s largest cities from 2012 to 2016, The North appeared to have the sweetest tooth for growing independent bakeries as Liverpool, Manchester and Bradford ranked the highest.
Growth in independent bakeries in the UK’s largest cities (2012-2016)
(Source Simply Business).
It’s in the South East again, however, that saw the highest growth in artisan bakeries across the UK during 2012-2017. This shows an overall shift in consumer attitudes and behaviours as many are now favouring independent small businesses over larger chains, meaning there is more demand for artisan produce.
People are attracted more to individual creative produce using traditional and unique craftsmanship over mass-production. This is especially fitting to a trend of healthy eating and consumers being more curious and mindful of where their food comes from and what it contains.
Artisan bread is on the rise with bread makers who are highly trained to mix, ferment, shape and bake hand-crafted breads, incorporating the science of the chemical reactions of ingredients and utility of them to create optimum conditions for bread development. Artisan bread making doesn’t just stop at traditional baked loaves but can cross cultures with the likes of Danish artisan bread, like an independent Danish bakery.
Take a look at Charles Bread Ltd in Hackney, City of London, specalising in Danish baking.
Our recently completed bakery deal
BUSINESS PURCHASED: Bakery
PURCHASE PRICE: £450, 000
CLIENT CASH AVAILABLE: £60, 000
BORROWING: £390, 000
TERM: 25 years
One client of ours has taken an opportunity, rolling into the baking industry by purchasing a bakery for themselves.
They completed the purchase of their dream bakery with the help of Hilton Smythe Finance after having worked in the food industry for the last 9 years and having a real passion for food and bakery. Our client had the desire to own and run his own bakery and approached Hilton Smythe Finance after seeing a long-established bakery for sale near to his home.
The business had been operated by the previous owners for 30 years, and after a happy career, they were looking to sell up and enjoy a well-earned retirement. Although he had no previous#01204282082 experience of running a bakery, he knew the bakery well and completed relevant courses and obtained Certificates for Advanced Bread Baking and Creating a Successful Micro Bakery. The purchase price was £450, 000 and although the client only had £60,000 cash contribution, we managed to obtain approval for £390, 000 from a high street lender on excellent rates and over a 25-year term.
The key to arranging finance for this client was not only looking at the numbers, but fully getting to know the client and understanding their business plans and objectives, and then presenting these strengths to the lender which they fully bought into.
Owning a BakeryWith the cake industry now booming, this could be your time to start a new venture. The UK bakery market as it stands is in a very healthy place with a worth of £3.5 billion. With the help of hit TV show the Great British Bake Off, the nation has gone cake mad. The demand for baked goods and sweet treats has increased significantly and it seems this demand isn’t about to slow down.
When purchasing any business, it is always important to assess the risks, this doesn’t excuse bakeries. However, we help buyers understand the risk factors and help them to lower those as much as possible. We have specialist industry advisors on hand to guide you through the process of buying your bakery.
A bakery allows owners to be experimental and show their creative sides. Nothing adds character to a business more than the personal touches. We believe that industries like these do well because they allow those who work there to create fun and unique treats that are not only tasty to eat but also are pleasing on the eye.
In the era of social media, where individuals like to take pictures of their delicious food and share them with the world. Being a baker gives you that chance to be the artist you were born to be and create treats people will be eager to share online. Alongside this is scope to create impressive, creative and engaging social media profiles, especially with the likes of Instagram- a very visual platform perfect for bakeries and food art. The key to this is knowing your hashtags, networking online, posting your goods frequently and setting up your business as a location so people can check into your business on these applications- having customers help your marketing.
Funding a Bakery
When it comes to buying a new bakery, you need to understand the financial implications. Here at Hilton Smythe Finance, we offer full, transparent advice on any financial concerns you might have.
Hilton Smythe Finance will help you find the best lenders to suit your needs and goals. We have access to various lenders and can source the best finance deals. So if money is your concern about making that leap into owning your own bakery, then let us help you out and guide you in the right direction without the pressure of making a definite decision.
We cover many services from commercial mortgages to business loans to management buyout. In order to fund your bakery, you may need help with a start-up loan if you are starting from scratch or if a bakery has caught your eye (link to bakeries for sale on HS.com), we can help with the purchase. Depending on the premise, the type of funding can vary, and we will look at all the options and analyse which may be best and give you the most efficient options, making sure you come to a confident decision and secure investment.
Finding a Bakery
Looking for a Bakery for sale? Is buying a Bakery low risk? Take the first steps today to becoming a business owner. Our Hilton Smythe Group cover finance as well as buying and selling businesses as we provide a full search engine to help you find the perfect bakery for you to work in and perfect your craft. Hilton Smythe Business Sales is one of the UK’s top business brokers and can help with finding your dream bakery in a perfect location.
When it comes to buying a new bakery you will need honest, friendly advice every step of the way and the team at Hilton Smythe Business Sales can guarantee this is what you will get when choosing to make a purchase through us. We understand how daunting it can be, especially if this is your first business. We want to be there every step of the way to help you find your dream bakery.
Hilton Smythe Finance acted as my broker whilst I was trying to obtain a business loan. They maintained a calm approach, even when difficulties arose, which put me at ease. I always felt they listened to my concerns. They are extremely experienced; I felt they knew exactly what they were doing at all times.
Overall, I felt that they offered an outstanding service. I would definitely use their services again.
Business Loan Client