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Start a Cupcake Business

Cupcakes are selling like, well, hotcakes lately and cupcake bakeries are popping up everywhere. Cupcakes are enjoying a resurgence in popularity and with the right recipes and marketing, you could the next Cupcake Queen (or King).

I have recently watched two television shows about cupcakes: “DC Cupcakes” which focuses on one cupcake bakery in Washington, DC and “Cupcake Wars”, a cupcake competition show. Both shows highlight the creativity and passion involved in something as seemingly simple as making cupcakes.

Sprinkles Cupcakes in Beverly Hills is said to be the “world’s first cupcake bakery” (and founder Candace Nelson is a judge on Cupcake Wars) and has grown to 11 locations in the US. Many more entrepreneurs are following in her footsteps with their own cupcake bakeries. Even traditional bakery shops are adding or featuring cupcakes to take advantage of this trend.

Cupcakes have been around since the 19th century, and they were originally baked in cups, hence the name. The shorter baking time made them very popular in the “hearth-cooking” days as they were less likely to burn. A bake sale and birthday party staple, the cupcake is easy to eat (no dishes required) and transport.

If you love to bake, a cupcake business could be right for you. There are several business models you can choose from:

• You can open a storefront business where you bake and sell your cupcakes at the same location. While the most costly start-up, this option will likely grow faster, especially if you have a great location.
• You can bake your cupcakes at a commercial kitchen (either by renting space from someone else or by having your own commercial kitchen at home) and sell them to other bakeries or food businesses. Your profit margin will be lower of course as your customers then have to make a profit by re-selling your cupcakes.
• You can bake your cupcakes (again in a commercial kitchen) and deliver them directly to your customers. If you have a large network of friends, family and associates who already love your baking, this could be the fastest way to start your business.

In most states, food cooked to be sold to consumers has to be made in a commercial kitchen, which means that baking cupcakes from home is in most cases not a viable option as it can be against the law. Many beginning bakers find that renting commercial kitchen space is a great solution, especially when starting out. Check with restaurants, churches and cooking schools to see if you can rent space and equipment to do your baking. This can save you thousands and thousands of dollars when starting out.

In addition to a commercial cooking space and baking equipment (some, like mixers and pans may come with the facility), you will need paper cupcake baking cups and boxes of different sizes for transporting your cupcakes. You can find those things at a restaurant supply store or online wholesale company.

Of course, you can test recipes in your own kitchen and share them with family and friends. Testing recipes is a big part of a cupcake baker’s job. While you will likely start out with a selection of recipes for “standard” cupcake flavors (vanilla, chocolate, red velvet, lemon, etc.), you will also want to add seasonal flavors (like pumpkin in the fall) or special flavors to keep your customers interested. And, sometimes a customer might ask you to create a cupcake flavor just for them! By experimenting with different flavor combinations, you can always have new products to promote.

Finding business: While everybody might love cupcakes, you should focus your marketing efforts to highly likely customers. That is easier if you specialize in a particular niche. For instance, you might find that kids birthday party cupcakes are a good fit for you, so you would target them specifically. You could target baby showers or bridal shower, too. Or, you might want to promote your cupcakes to offices (for parties, gifts and for customer appreciation.)

Targeting a specific market helps you focus and makes it easier to promote. For instance, if you chose to target kids birthday parties, you could make sample cupcakes decorated in various popular birthday themes and take photos of them for your flyers, Facebook and other social media pages and website if you have one. And, you can do a web search to find potential places to drop off your flyers (for this market, after-school daycare facilities, scout groups and schools would fit.)

Sampling is a great way to introduce customers to your product. You can make full-sized or even bite-sized cupcakes to take around to potential customers.

Networking is a great way to promote any business. Once you pick a target market, look for networking opportunities in that market. For birthday parties, mommy-blogggers are a great target, as well as local Parent-Teacher type groups and party facilities (most allow cakes to be brought in from outside vendors.)

Owning a cupcake bakery can be a fun and exciting business. You can also pick fun themes for your business name, logo and promotional materials. Great-tasting cupcakes and a killer business plan could be your key to success!

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