How to Start a Bakery Business in the UK [2025 Guide]

Intoxicated by the smell of freshly baked pain-au-chocolat? Dreaming of owning a bakery? You’re not alone. Few things are more satisfying than the smell of fresh sourdough, buttery croissants, or trays of warm pastries. But while the idea is mouth-watering, the reality of starting a bakery involves more than flour and sugar.

The good news? Once you know the steps (and the common pitfalls to avoid), turning your passion into a profitable business becomes far simpler.

In this guide, we’ll break down everything you need to start a bakery in 2025 - from choosing your business model and navigating legal requirements to building your brand and keeping up with food trends.

1. Decide what kind of bakery you want to run

The UK food scene is crowded - with bakeries, cafes, food trucks, restaurants, and even ghost kitchens, it’s more important than ever to zero in on your business model from the get-go. Defining your model early will shape your costs, marketing, and growth potential.

✨ Tip: Your bakery type determines everything else - from the equipment you’ll need to the licenses you must hold. Pick with your long-term growth in mind.

2. Write a business plan

Even the simplest bakery needs a plan. Your business plan helps avoid costly surprises and gives you a clear growth path. You might think that a simple bakery comes down to just making the bakes and then selling them, and that’s it.

But this isn’t the case, and planning in advance can save you a lot of unforeseen problems. Outline important information that will help you organise your business, as well as anything important to your dream vision of the place.

• Define your bakery type and who your target customers are
• Estimate how much it will cost to start up
• Try to calculate the ongoing expenses of running your bakery business
• Outline your pricing strategy
• Create a marketing plan
• Plan for growth and note any products you’ll eventually add or locations you’d like to expand to if you decide to scale up

💡 Good to know: Investors, councils, and even landlords will often ask to see your plan before granting permits or loans.

3. Choose your location and get your equipment

Where you set up shop will shape almost everything about your bakery. The kind of customers you’ll have, the costs you’ll have to juggle, and even the marketing strategy of your business all depend on your decision. Luckily, in 2025, there are more than enough options for you.

• High-street bakery - If you want a strong local presence and a lot of traffic, this might be the option for you. However, be cautious - a high-street bakery often comes with higher costs for rent, marketing, and design.
• Industrial unit - If you want to do wholesale, an industrial unit is perfect. No need to worry about displays, pricey rent, or seating. In exchange, you’ll need space for mixers, ovens, and bulk ingredients.
• Home kitchen - This is the most affordable and straightforward way to begin. Baking from home allows you to test your recipes, keep the costs low, and all the while build a customer base. However, it can become too small very quickly, and will limit your ability to expand your business.
• Online bakery - You might find the prospect of an online bakery a little bit odd. However, in 2025, starting an online business for your bakery might be the best option. With TikTok, Instagram, and delivery apps, online bakeries are thriving. An online model allows you to sell directly, ship to customers, and experiment with innovative ideas like subscription boxes. If you master online marketing and take time to find reliable delivery partners, running an online bakery can be immensely successful.

Get your equipment

Once you've chosen your location and taken a look at the kitchen, it’s time to note what you’ll need. Bakeries require a lot of specialist equipment, and your shopping list will depend on what you’re making, but the basics are usually all the same.

Regardless of setup, most bakeries need:

• Commercial ovens and mixers
• Proofers
• Fridges and freezers
• Worktables and shelving

Start lean - consider second-hand or refurbished equipment to cut upfront costs.

4. Get the legal stuff sorted

Running a bakery means dealing with food regulations, health and safety laws, and business compliance. All of this might be a bit overwhelming at first to a new business owner, so let’s break down the legal parts of how to start a bakery business:

Registering your business

The first step is to register your company. To do this, you need to decide whether you’ll do business as a sole trader or a limited company. If you want to start small, registering as a sole trader will suffice, but if you require additional protection, a limited company may be a better option.

💡Pro-tip: If you want to avoid the hassle of bureaucracy, you can register your business online with ANNA instantly, from the comfort of your home.

Food business registration

Next up: your bakery must be registered as a food business with your local council. This applies to any type of bakery - no matter if you’re whipping up sourdough in your home kitchen or opening a bakery cafe. You’ll need to register at least 28 days before opening in order for the relevant authorities to carry out food safety checks.

Food hygiene training

You might make amazing pastries, but customers in 2025 especially value a spotless kitchen. At a minimum, you and anyone working in your kitchen should complete a Level 2 food safety and hygiene certificate. Even though it’s not mandatory by law, it’s the usual way to prove compliance with food training regulations. This certificate is affordable, can be done online, and shows that you take safety seriously.

Food & allergens labelling

Since Natasha’s law came into effect, allergen labelling isn’t just a courtesy to your customers- it’s a legal requirement. Every item that’s pre-packed for direct sale, such as takeaway sandwiches, cakes, or brownie boxes, must list ingredients and highlight allergens clearly. In 2025, customers expect full transparency, so accurate labelling is also a great way to boost trust and loyalty.

Insurance

Running any business comes with risks. From a customer slipping on wet tiles, to an allergic reaction - things can sometimes go wrong. Having the right insurance protects you and your business by giving you a safety net in case something goes wrong. Keep in mind that some insurance is required by law, while other types are just good practice.

• Employer’s liability insurance - This type of insurance is mandatory by law if you employ anyone, including part-time staff. If you operate without it, you could be fined 2,500 pounds, so make sure you get it on time.
• Public liability insurance - Even though it’s not legally required, having this insurance is strongly recommended. It protects you from any mishaps your customers have in your bakery, such as slipping on the tiles, tripping over chairs, etc.
• Product liability insurance - If a customer claims they were harmed by your baked goods, this insurance covers legal and compensation costs.

⚠️ Note: In 2025, food safety inspections and allergen compliance are major focus areas. Cutting corners here is a fast way to fines or closure.

5. Build your brand

A bakery isn’t just about bread - it’s about experience. Customers often choose the place that feels right. That’s exactly what your customers want to feel, too. A strong brand makes you memorable, and it’s often the reason customers choose you, and not the other bakery down the road.

• Name - Your bakery name should first and foremost reflect your baking style and your personality. But there’s also a practical side to a good baking business name. Pick something that’s easily recognisable and sticks in people’s heads. Also, make sure it’s spelt easily so people can find you online.
• Design - The colours, fonts, packaging, menus, and even the uniforms you wear should all tell the same story. Customers love consistency, and making sure your bakery design is cohesive increases the chances of people recognising your brand.
• Storytelling - People naturally associate bakeries with warmth, homeyness, and tradition. This is why storytelling is very important for a bakery’s brand - people love to hear a success story. Share your journey on your website, social media, or even on your menu boards. Customers don’t just buy your baked goods - they buy into your story.

6. Handle your marketing

Even the best bread won’t sell itself - in 2025, the UK bakery scene is buzzing with options, so smart marketing is essential. Make sure you check these boxes:

📱 Social media – Instagram and TikTok are your new best friends, especially if you’re marketing on a budget. Share mouth-watering photos of croissants, videos of dough rising, or behind-the-scenes clips of your baking process. And remember, with social media, consistency is key. Even a few posts a week will keep your audience engaged.

🎪 Local events and markets – Markets, fairs, or pop-up stalls are not just for sales. They’re excellent for word-of-mouth marketing. Let people taste your products, hand out your cards, and reach new customers.

🚀 Delivery apps – Uber Eats, Deliveroo, Just Eat, or local delivery apps can significantly boost sales, especially if foot traffic is slow. Make sure your packaging protects your baked goods and keeps them looking fresh when they arrive.

🎁 Loyalty schemes – Encourage repeat customers with punch cards, digital rewards, or special discounts for regulars. Loyalty programs make customers feel valued and part of your bakery family, all while increasing your profits.

How to start a bakery business that’s trendy in 2025

Checking what’s in trend currently is a huge part of learning how to start a bakery business. If you want your bakery to stay ahead of the times, you’ll need to check out the trends for 2025.

High-Protein & Functional Baked Goods

People want their treats to do more - more protein, more fibre, more nutrition, while still tasting good. This means protein-enriched breads, cakes, bars, etc.

Example: Build & Bake - A bakery specialising in high-protein, low-calorie sweet treats.

Gluten-Free

Gluten-free is no longer niche. Whether for medical reasons (coeliac disease or intolerance) or as lifestyle/health choices, there’s a rising demand for gluten-free options.

Example: Sponge, a Norfolk bakery, has developed a certified Coeliac UK gluten-free line of cakes and brownies, working carefully to avoid cross-contamination.

Vegan & Plant-Based Baking

Vegan eating has continued to grow, not just for ethical reasons, but because people appreciate alternative ingredients. Vegan pastries, dairy-free sweets, and plant-based bakery offerings are especially popular.
Example: A family-run bakery from Ashton under Lyne, Candy’s, has a vegan line of their signature handmade cupcakes.

Start your baking business with ANNA, hassle-free

Baking is fun. Paperwork isn’t. That’s where ANNA comes in:

• Business registration - register your company instantly online.
• Instant business account - open an account in minutes.
• Invoicing & payments - stylish invoices, instant payment links.
• Automatic accounting - ANNA+Taxes organises expenses categorised, keeps your books updated without the stress
• Tax reminders - never miss VAT or PAYE deadlines.
• Expert support - compliance and finance help, 24/7 - 355 days

With ANNA handling the paperwork, you can focus on what you love doing: baking the breads, cakes, and pastries your customers will love.