Any Cupcake Shop Owners On Cc?

Business By step0nmi Updated 27 Oct 2009 , 8:29pm by cutthecake

step0nmi Posted 19 Oct 2009 , 7:09pm
post #1 of 15

Hey! If you are a cupcake shop owner I would like to know if you'd be willing to share some information about your business! I am taking an Entrepreneurial Studies Certificate in college and am writing up a business plan this semester. I wrote a feasibility study last year for just a cake decorating business and it didn't seem to work out for my area icon_sad.gif I think I did some stuff wrong but I was hoping to make this business sound a bit better for my area.

I found this link about The Sweet Tooth Fairy Bake Shop and was wondering if the numbers looked correct? http://www.mainstreet.com/article/small-business/launching/starting-cupcakery-numbers

Also wondering what other types of things you sell in your shop and where you went to find out the cost of things?

Writing this business plan has given me some anxiety since my feasibility study didn't work...but trying to find out this info for this different shop seems to be a bit different and not a lot of info out there.

Any help and advice is appreciated! Thanks icon_biggrin.gif [/url]

14 replies
snarkybaker Posted 20 Oct 2009 , 2:52am
post #2 of 15

Sounds like boulderdash to me. I can't think of a space that you could a retail shop up and running to code for 50,000, and not everybody's granny is going to lend them $$ to start a business, so the 5% interest rate is pretty inconceivable as well.

And , if there were a small enough town that you could do the buildout etc. for 5o grand, then you wouldn't have enough foot traffic to sell 120 cupcakes a day, and if sells 150, she only makes about $57 a day. Sounds like a crappy way to make a living to me

step0nmi Posted 20 Oct 2009 , 3:00am
post #3 of 15

icon_lol.gif your name says it all "snarkybaker"

that link was just to show you what a break even point would be...that's not going above and beyond. that's why I was asking the other questions about what other things would be in the shop and such. I think with those things you could do a little more, but I'm not sure.

maybe it was a small town *shrug* it was in Utah...and I am in a small town too.

snarkybaker Posted 20 Oct 2009 , 3:28am
post #4 of 15

Your break even point is irrelevant unless you don't need to eat! When we wrote our business plan we started with the income we wanted to make. We settled on $10,000 a month to make sure we could retire our $250,000 loan in 5 years plus eat. To make $10,000 a month, knowing we would end up making about 20%, that meant we need to gross about $50,000 per month. We targeted 20 percent of our revenue to be from beverages, because they have very low labor cost, and so they really help maintain a strong profit margin. So that is $10,000 in coffee, tea, etc...and $40,000 in desserts.

You have a ton of research to do. I will give you a little starting math. Industry standards for costs in a bakery are:

Fixed costs: 20-25% ( include utilities and MARKETING)
perishables ( food, plus paper goods, cleaning supplies etc.) - 20-25%
Labor 30-40%
Profit - 15-20%

If you start with your desired income, and calculate an accurate loan amount, you can get the number is the middle.

step0nmi Posted 20 Oct 2009 , 3:31am
post #5 of 15
Quote:
Originally Posted by snarkybaker

Your break even point is irrelevant unless you don't need to eat! When we wrote our business plan we started with the income we wanted to make. We settled on $10,000 a month to make sure we could retire our $250,000 loan in 5 years plus eat. To make $10,000 a month, knowing we would end up making about 20%, that meant we need to gross about $50,000 per month. We targeted 20 percent of our revenue to be from beverages, because they have very low labor cost, and so they really help maintain a strong profit margin. So that is $10,000 in coffee, tea, etc...and $40,000 in desserts.

You have a ton of research to do. I will give you a little starting math. Industry standards for costs in a bakery are:

Fixed costs: 20-25% ( include utilities and MARKETING)
perishables ( food, plus paper goods, cleaning supplies etc.) - 20-25%
Labor 30-40%
Profit - 15-20%

If you start with your desired income, and calculate an accurate loan amount, you can get the number is the middle.




hmmm...these are good things to think of. This is not how my professor wanted us to do it but I could see myself figuring it out this way better. But! I do need to know my break-even point. icon_wink.gif With the break even point that's how you can go further and she wants it added in the business plan.

LaBellaFlor Posted 20 Oct 2009 , 4:52am
post #6 of 15

Have you ever noticed that people who teach business tend to not know how to actually set-up & run a business? Kind of like the Spanish teacher that speaks Spanish that no Latino person understands.

step0nmi Posted 20 Oct 2009 , 4:55am
post #7 of 15

LaBellaFlor...that may be correct but this professor was involved in a family owned business for a very long time. so, not in this case.

LaBellaFlor Posted 20 Oct 2009 , 4:57am
post #8 of 15

That is great to hear, that way you'll get a lot of great hands on knowledge. I had a few friends who took business courses in college and for them, the lessons never converted to a real life business. Nothing personal.

step0nmi Posted 20 Oct 2009 , 5:09am
post #9 of 15

No worries! I've learned a lot in these course (I'm on my third of four) this course has been proving more difficult because it's the actual business plan and I am trying to go in this direction rather than doing a full cake shop. Too stressful for me icon_razz.gif I'm looking for some other ideas.

I know it's hard to share information but this is only for information and to stir ideas in my head and not to "steal ideas"

LaBellaFlor Posted 20 Oct 2009 , 5:16am
post #10 of 15

icon_lol.gif I totally hear you on the full bakery. It used to be a dream of mine, but I think I'm getting to old and just won't have the time with 7 kids and three of them being 3, 2, and 11 months! Now, there are 2 cupcakes shop, one that sells cupcakes in a brand new shopping center for $2.85 a cupcake, but their cupcakes and frostings are cake mixed and shortening based. The other cupcake shop is in an older shopping center, makes everything from scratch, has all these fillings and sells her cupcakes for $2.95. Being a scratch baker, I know she spends more on her ingredients, but I don't know how they have such a close price range and how it effects them. I can say the scratch baker is sold out before the end of the business day. I hope that helps.

step0nmi Posted 20 Oct 2009 , 5:19am
post #11 of 15
Quote:
Originally Posted by LaBellaFlor

icon_lol.gif I totally hear you on the full bakery. It used to be a dream of mine, but I think I'm getting to old and just won't have the time with 7 kids and three of them being 3, 2, and 11 months! Now, there are 2 cupcakes shop, one that sells cupcakes in a brand new shopping center for $2.85 a cupcake, but their cupcakes and frostings are cake mixed and shortening based. The other cupcake shop is in an older shopping center, makes everything from scratch, has all these fillings and sells her cupcakes for $2.95. Being a scratch baker, I know she spends more on her ingredients, but I don't know how they have such a close price range and how it effects them. I can say the scratch baker is sold out before the end of the business day. I hope that helps.




OOoo! that is a big help! I wonder how they do it too! that doesn't make any sense. The place that I went to in Chicago they had a filling and ganache on the top of their large cucpake and it was $3.50.

Where are you?

minicuppie Posted 20 Oct 2009 , 10:40am
post #12 of 15

I was in Austin this past weekend and almost everywhere you looked there would be tiny airstream trailers selling cupcakes. They all had a huge pink iced cupcake with sprinkles on top of the trailer. Hugely visable. The lines were always long....I know, I know...Austin's culture supports "different", outside the box businesses. (like the guy that delivers warm cookies and pints of Blue bell ice cream...LOVE that one). I am off topic but just wanted to share this counterculture of cupcake mayhem.

LaBellaFlor Posted 20 Oct 2009 , 1:15pm
post #13 of 15

I'm in Virginia. The other thing is the scratck baker's cupcakes are twice the size as the bakery that does their cupcakes from a base mix. I really don't know her profit margin, I've never discussed that with her. I think she could EASILY raise her prices and I think she should. She uses real fruit and aslo uses ganache. She also makes IMBC. The other place stays busy too, but there is just no comparison.

cylstrial Posted 20 Oct 2009 , 2:41pm
post #14 of 15
Quote:
Originally Posted by LaBellaFlor

I'm in Virginia. The other thing is the scratck baker's cupcakes are twice the size as the bakery that does their cupcakes from a base mix. I really don't know her profit margin, I've never discussed that with her. I think she could EASILY raise her prices and I think she should. She uses real fruit and aslo uses ganache. She also makes IMBC. The other place stays busy too, but there is just no comparison.




Wow! She really needs to raise her prices!

cutthecake Posted 27 Oct 2009 , 8:29pm
post #15 of 15

I passed a cupcake shop that also sold ice cream. Sounds like a good combination to me. Coffee, tea, hot chocolate and cold drinks are obvious offerings, too.

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