Pray, Plan, and Insure (Episode 2): The Bakery Startup Journey

In our first episode of Pray, Plan, and Insure, we explored the importance of combining faith, strategic planning, and risk management to build a solid foundation for success. Since then, I’ve had the opportunity to reflect on real-life business experiences that further reinforce these principles.

Now, let’s take a practical journey into the world of a small business owner, Shade, who turned her passion for baking into a thriving business. Through her story, we will discover that starting a business requires more than just passion, it demands careful goal setting, smart budgeting, financial discipline, and risk management. Let’s follow the journey of Shade, as she turns her dream into a successful bakery business.

1. Setting Clear Goals: From Passion to Business

Shade had always loved baking. What started as a hobby by making cakes for family and friends, soon gained attention. Orders began to roll in, and she realized she could turn her passion into a full-time business.

However, instead of rushing into the business out of excitement from overwhelming purchase orders, she followed a structured approach:

✅ She defined her vision – She wanted to own a small bakery specializing in customised cakes and pastries.

✅ She identified her target market – Her focus was on birthday cakes, wedding cakes, and pastries for corporate events.

✅ She set financial goals – She aimed to make a profit of at least ₦1,000,000 per month within her first six months.

With clear goals in place, Shade moved on to the financial aspect ensuring she had the funds to start and sustain her bakery.

2. Creating a Budget: Knowing the Numbers

Before purchasing equipment or renting a space, Shade outlined her startup costs and expected monthly earnings.

Her Startup Budget Looked Like This:

Startup Budget for Shade’s Bakery (Not actual figures)

Startup Cost

Funding Strategy

Shade funded her startup through:

✅ Personal savings &

✅ Business loan from her Mum

Projected Monthly Revenue

Projected Monthly Expenses

Projected Net Profit Calculation

₦3,200,000 – ₦1,750,000 = ₦1,450,000

Her projected Net profit surpassed her minimum financial goal of ₦1,000,000 profit by ₦450,000.    

The numbers looked good to her and she launched out.

3. Tracking Finances: Comparing Budget vs. Reality

Once Shade launched her bakery, she needed to track her actual earnings and expenses to see if she was on target. This is different from budgeting because it records real transactions rather than estimates.

Step 1: Keeping Daily Sales & Expense Records

Shade maintained a simple log where she wrote down:

• Daily Sales (e.g., ₦75,000 on Monday, ₦120,000 on Tuesday)
• Expenses (e.g., flour purchase ₦135,000, electricity bill ₦20,000)

At the end of the month, she compared her actual numbers with her budgeted figures:

A Simple Adaptable Income Statement (First Month)

Step 2: Adjusting the Business Strategy

While her business was profitable, it was ₦50,000 below her target profit of ₦1,000,000. This prompted her to:

✅ Increase marketing efforts to boost sales – Partnered with event planners, corporate offices, and online stores.

✅ Negotiate ingredient prices to reduce costs – Negotiated bulk purchase discounts.

✅ Monitor expenses closely to avoid unnecessary spending.

Shade was on the right path. But then, something unexpected happened 22 months into her business

4. Recognizing Risks: Even the Best Plans Can Go Wrong

Planning is essential, but no plan is foolproof. Risks, both known and unforeseen can disrupt even the most meticulous strategies.

Let me share her story:

One evening, after a busy day at the bakery, Shade locked up and went home. Hours later, she received a distress call, a fire had broken out in her kitchen. By the time the fire service arrived, most of her equipment was destroyed.

This could have been the end of her dream. But Shade had insured her business.

5. The Role of Insurance: Shade’s Saving Grace

Because she had fire insurance, her policy covered the cost of replacing her destroyed ovens, mixers, and furniture. Within weeks, she was back in business stronger than ever.

Without insurance, she would have struggled to raise funds to restart, possibly losing her investment altogether.

Key Takeaway: No matter how well you plan, unexpected events can happen. Insurance ensures that your business survives setbacks rather than collapsing under them.

6. Insurance Products Every Small Business Owner Should Consider

If you’re starting a business, here are essential insurance covers to consider:

✅ Fire & Special Perils Insurance – Covers damages from fire, lightning, and allied risks.

✅ Burglary/Theft Insurance – Protects against stolen inventory or equipment.

✅ Public Liability Insurance – Covers claims if someone is injured on your premises.

✅ Business Interruption Insurance – Compensates for lost income during unexpected disruptions.

✅ Health Insurance – Ensures you and your staff have access to quality health care without financial stress and disruptions to your business.

Final Thought: How Budgeting, Tracking, and Insurance Work Together

With proper planning, careful financial monitoring, and the right insurance policies, Shade secured her bakery’s future. A business that prays, plans, and insures will stand strong even when faced with financial surprises! Please share this story with friends and families with great business ideas but no clue on the how.

👉 What is that one step you, I mean you would take today to protect your business? Share your thoughts in the comments section.