Thursday, November 4, 2010

The Business of Cupcakes

If I blog-posted every time I thought of something to say I would never leave my keyboard. Instead I have neglected this little entity of social networking for more weeks than I intended.
It's not from lack of subject. There is always some thought spinning in my head. If not a thought, then a song, or a line from some favorite sitcom or loved movie. Wow...I better stop with such confessions or y'all think I'm crazy!

With a post long overdue, I decided to take a moment and share a few thoughts on a subject that is not only dear to me, but a subject I get asked about a lot: small business.

From the moment we opened our doors in September 2006, Juaquin and I have been asked about 'our business'. Why did we start a business? Was it always our dream to open a cupcake shop? How did we come up with this? WHY did we go into business for ourselves? You both have college and graduate degrees, why cupcakes? (okay, I'm the only one that asks myself this Q now and then. =)

I won't attempt to answer all of these questions as that would make for a very long post, but I will answer the most FAQ this past 18 months: "How is your business doing in this economy?"

To answer this question let me take you back to when we first opened The Cupcake Cottage doors.

I cannot begin to explain why I've always wanted a business. As I've told many of you, my dream business would have been a children's bookstore. However, we needed a business that would generate the income we want, and more importantly, need to live. No matter how fabulous my vision for a children's bookstore might be, there was simply no way we could compete with the likes of Borders, Barnes and Noble and (the big-daddy of 'em all) Amazon. So, we went cupcakes!

We opened our cupcake shop at a time when there were only a handful of cupcake shops in the world. Today there are hundreds of these sweet shops scattered throughout this big blue and green globe and that's exciting! =)

Now, back to the 'this economy' question. From the time we 'visioned' our shop to now, we have made sure to run our business with great care and caution. We always bake each and every cupcake from scratch and we mix our buttercream frosting fresh daily. That practice will never change!

We go out of our way NOT to advertise, though the thought is exciting. I would love nothing more than to see our cupcakes and our wonderful baking/frosting team in a glossy magazine. Such exposure is exciting, but because we do not bake in massive quantities, such advertisements could serve as more of a tease to potential customers. It's challenging enough having customers visit only to find that we've "Sold Out", so spending money to advertise does not make sense for us. We have been blessed with sprinkles of complementary 'write-ups' and we are grateful for each of them.

We do NOT get over-our-head in debt. Could we run to a bank, or gather up investors and GROW BIG, build a staff of umpteen bakers and frosters and sell thousands of cupcakes a day, as opposed to the hundreds we sell a day? Sure we could! Is that something we want to do? No it is not. We completely understand that this route is very common for businesses to grow, but we are looking to operate a successful business that 1) keeps a roof over our head 2) keeps food on our table 3) allows us to create time for our family 4) continue supporting various needs thru our personal donations 5) allows us to squirrel away a bit for our future and (God willing) retirement.

The Cupcake Cottage is baking more cupcakes now then it has since the first day we opened. We are earning enough revenue (aka: money) to meet payroll for 5 employees and keep a cushion of savings for the unexpected expenses. (and) BOY have those unexpected expenses come! read on....

So, how are we doing in this economy? We're doing what we need to be doing in spite of the past 2 (economically discouraging) years.
Since 2009 we have seen an increase in Payroll Taxes, Health Department fees which have risen 25 % in 2009 and another 25% in 2010. State required business insurance has also increased 25 % in 2009 and another 25% in 2010. Cost of all fresh ingredients continues to increase....butter, for example has increased 40+% in the past 6 months. Our adorable pink boxes have inched upwards 10-20% in less than a year. I'll spare you even more detailed 'DRAGS', but when you track the reasons for these increases (and we do!), you will find that regulations at every level (local, state and national) are behind these added costs.

If it weren't for the careful managing of our own money in and money out, we would be looking at closing our sweet cottage door. The good news is we DO take care to run our tiny little shop within a budget that offers steady and careful growth. It's not always an easy thing, but by running our business with such care we sleep well at night and we meet our short term goals while marching onward to our long term goals.

Thanks to the each and every new and returning customer that recognizes, and appreciates our carefully baked and frosted cupcakes we experience a basic economic 101 principal: Supply and Demand.

Good times or bad, cupcakes remain a timeless treat! Good times or bad, people still celebrate birthdays, graduations, babies, weddings, anniversaries, engagements, team victories and more. Good times or bad, people still need a pick-me-up for those days when there is loss, defeat, and discouraging news.
Good times or bad, our cupcakes are keeping life sweet for YOU and for us and we are incredibly grateful for it all!


Brandon Frank said...

Luckily there are no national, state or local taxes for “Rocking it out” like The Cupcake Cottage does.

Alyssa has Pink Antlers said...

Thanks so much for posting this - it is helpful and encouraging! You guys are doing a great job --