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Thinking about opening a shop, questions on competing with 'big' shops

post #1 of 6
Thread Starter 

Hi, my name is william and me and a few others have been thinking about opening a cupcake shop in our local high street. We have been planning it out for a while now and are looking to open a shop very soon.

 

I just thought I would create a quick post on here asking other cupcake shop owners whats it like competing with other 'big' chain shops that sell cupcakes like starbucks etc

 

To rent a shop in a good location would cost us around £20,000 per year and with there being a couple coffee chains which also sell cupcakes we just have some worries that we wouldnt be able to sell enough to make the rent.

 

It would be great if some people who already have shops could tell us about how they compete with the bigger chains and if it effects sales.

post #2 of 6

you would want to have a market study done to see what the traffic will bear in your area

 

and you are right you need to determine your break even point--

 

how many cupcakes you need to sell to cover the overhead so that every cupcake sold after that is 'profit'--

 

being split in how many directions???

 

not a lot of financial wiggle room in selling baked goods

 

need to have very careful advance planning--

 

best of the best to you

one baker's never ever do is the next baker's 'i swear by this'
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one baker's never ever do is the next baker's 'i swear by this'
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post #3 of 6
The best way to compete against bigger chains (or any competitor for that matter) is to have a competitive advantage: a product or service your shop offers that can't be found anywhere else. Analyzing the market and potential competitors is a key component of writing your business plan, which should give you a good idea of whether or not it's worth it to open a shop.
post #4 of 6
Anything people could share about going from a home baker to having a shop would be so helpful
post #5 of 6

I agree with K8 Memphis,

 

Do a market study and see if the location is right for you....maybe be right next door to your competitor might not be the best place to start...Location is key! Also do a business plan....and have someone review it and make sure you are being realistic!!!

 

I am in the process of doing the same process, but over in the USA and my small town has no coffee places or bakeries outside of the grocery stores.

 

Best of wishes!

"When you look at a cupcake, you've got to smile." ~ Anne Byrn

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"When you look at a cupcake, you've got to smile." ~ Anne Byrn

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post #6 of 6

I've worked in two cupcake shops.

 

Things to consider:

 

  • You must be in a location where there is alot of foot traffic, with good parking also.

 

  • People want a place to sit down and eat the cupcakes with their children, so then you need drinks and a public bathroom.

 

  • The cupcake shops I worked at needed to price their cupcakes in the $3.50 to $5.00 per cupcake to cover their costs. The average consumer didn't want to pay that pers upcake, so they lacked repeat business.

 

  • Packaging the cupcakes was expensive and time consuming folding boxes. Everyone wanted individual boxes.

 

  • Both shops needed to expand into decorated cakes to cover their costs. One of the shops just added breakfast and lunch to help with profits.

 

  • Both shops were owned and run by people with out food service backgrounds so everything they did was less efficient and more costly then needed. They should have hired experts to consult for them, or at least worked at a fast food business once or twice in their lives to understand how to get work done quickly/smartly.

 

  • You need to be smart about your menu. Too many different components makes too much work and hard to get orders together, but too few don't excite people.
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