Thinking of opening a cupcake shop

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pureindulgence

  • #1
    Hi, I was wondering whether anyone can offer me a little bit of advice....

    I am thinking of opening a shop in Nottingham selling cupcakes and coffees/teas, there is nothing like this available at the moment, and we need a small shop, few seats, office for wedding consultations, and obviously a kitchen. We have been running our business for nearly a year selling just cupcakes, we usually do outside events, weddings, fine food markets etc, and we get an overwhelming response in Nottingham, and do really good business there, thing is I don't even know where to begin, we have been looking at suitable properties, we don't have the money to put down ourselves as such and would be looking at an outside investor.

    I would love some practical and financial advise, I have been self employed for 6 years but opening a shop is a whole different ball game!

    Many thanks in advance.
     
    L

    Lee Jones Jnr

  • #2
    I am sure that a coffee shop with a nice sideline in speciality cupcakes could sustain itself and make you a nice living doing something that you enjoy, but you are not going to find an outside investor for this I am afraid.
    If you are certain that you want to move forward with this idea then you will need to self finance. Where has the money been going from the sales you have already made? Have you turned a profit?
    If you intend to do the baking onsite you will need a decent kitchen and I would be looking for former cafe premises. You will really need to be in a area with a heavy footfall as this is not the type of business that people will travel to or walk past half a dozen other coffee shops for - at least not at first.
    You will be able to use the kitchen as a full time base to expand the existing business and continue to sell as you have been but aiming for a higher volume.
    There are plenty of ways to increase revenue as you have hinted at with the weddings etc and perhaps supplying other coffee shops and cafes too.
    You will also need to broaden your range if you intend to offer only coffee and sweeties with no 'proper' food.
     
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    S

    skyhi2

  • #4
    Hi pureindulgence

    Funnily enough there is a cupcake shop right here in Manchester ( Chorlton ) that we visit frequently.

    It has been open since 08 ish,and i believe is doing really good business.

    Have a look here http://sweettoothcupcakery.co.uk/

    They probably had the same idea as you have,looked around,found nothing existed in the area,and took the idea to fruition.

    Good luck with your venture.

    Skyhi2.
     
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    WJP

    WJP

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  • #6
    It's a good potential market, I think The Trading Post is right though, you may struggle to find outside investment as this will probably generate you a decent enough income if done well, but not the kind of returns investors are looking for. The mark up on cupcakes can be healthy, especially if you target the upper end of the market. I went to a milestone birthday party recently where they served cupcakes and they went down a storm. Good luck!
     
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    P

    pureindulgence

  • #7
    Many thanks for all those that have replied, firstly the outside investor option, we know a couple of wealthy people who might be prepared to have a part in our new venture, if thats a no go what other options do I have?

    Secondly we are making a profit, it is all going back into the business at the moment, only very recently we are starting to pay back some of the money we incurred (which came from family) when we started, the main problem we had through winter is there were not many options for where we could go to trade as events tend to dry up after Christmas, so profit was pretty low for 3/4 months, its just starting to pick up now.

    I understand location, location, location and our ideal shop is way too expensive, we are looking at a little shop at the back end of a shopping centre, sounds rubbish, but actually its got lots of high end shops there, and the rent is decent (I think anyway!)

    We have a website, and are in the process of doing online sales, my main concern is getting cakes to the other end in one piece.

    We already offer trade, and supply a couple of coffee shops, but our profit margin is quite low with trade supplies, and when its only a few bits each week here and there its not going to make us rich.

    Again, many thanks to anyone taking the time out to to reply, its really given me food for thought....I have a mortgage and a 1 year old, and we need to explore all corners before ploughing into it!
     
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    WJP

    WJP

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  • #8
    Once your core business is running along nicely, in terms of expansion have you looked at weddings, catering and private functions? It'll require a bit of additional input (as it's slightly different to what you already do) and is a highly competitive industry but can be lucrative if you get the right contacts and do what you do well...
     
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    P

    pureindulgence

  • #9
    Will Pritchard said:
    Once your core business is running along nicely, in terms of expansion have you looked at weddings, catering and private functions? It'll require a bit of additional input (as it's slightly different to what you already do) and is a highly competitive industry but can be lucrative if you get the right contacts and do what you do well...
    Click to expand...

    We do weddings yes, already got quite a few booked in this year, we spent quite a lot on advertising for weddings, birthdays etc, for very little return (maybe we chose the wrong place to advertise) we also have done a couple of corporate orders, so have explored those avenues, really the issue is not making enough money to see us through winter, when weddings and events dry up, and also not wanting to spend any more on advertising when we have had so little in return so far. We give our cards out whenever we can and rely on word of mouth, we always get positive feedback, so even though I am happy to carry on through summer doing what we already do, am concerned about when winter hits, we need a steadier income, and I was thinking a shop might be the answer, plus we are constantly getting told/asked to open a shop.
     
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    WJP

    WJP

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  • #10
    There's no reason to stop what you're already doing if you do open a shop though, sorry if I didn't make it clear what I was saying! Well the obvious one is work dos at Christmas (again a very competitive market). I've found with a lot of SMEs, and actually with weddings and so forth, it's not so much a case of advertising in the way you would normally, but knowing who to target, who you need to know and how to go about it. Drop me a PM if you've got any particular questions and I'll do my best to help.
     
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    Green_Jelly

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    Apr 28, 2010
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  • #11
    Hi pureindulgence

    I think it is a great idea and there are lots of ways you can expand - cupcakes are very in vogue at the moment.

    Have you thought about considering a pop up shop to test the water? There are also ways in which you could diversify including offering cupcake cooking classes and parties. Have you considered also supplying hotels and high-end restaurants? Yoiu could even work with people like this to offer events etc to showcase what you do (potentially still a good idea when you are trading).

    Just a few ideas - hope they help.

    Don't forget to think carefully about how you will market the products - there are lots of ways you can do this too :)

    Good luck with it all

    Shari
     
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    G

    gogojonny

  • #14
    crossdaz said:
    People have been buying cupcakes from around the late '50's. In fact, as long as people have been buying hamburgers and fried chicken. :)
    Click to expand...

    People will always buy cupcakes - the cheap ones from Tesco. They will soon stop spending money on personalised cupcakes for wedding, business etc.

    People buy things they can't make themselves. More people are learning how to make cupcakes and are doing them themselves. Plus there has been an explosion of cupckae business. People will soon tire and the fad will die out.
     
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    P

    pureindulgence

  • #15
    Green_Jelly said:
    Hi pureindulgence

    I think it is a great idea and there are lots of ways you can expand - cupcakes are very in vogue at the moment.

    Have you thought about considering a pop up shop to test the water? There are also ways in which you could diversify including offering cupcake cooking classes and parties. Have you considered also supplying hotels and high-end restaurants? Yoiu could even work with people like this to offer events etc to showcase what you do (potentially still a good idea when you are trading).

    Just a few ideas - hope they help.

    Don't forget to think carefully about how you will market the products - there are lots of ways you can do this too :)

    Good luck with it all

    Shari
    Click to expand...

    Thanks for your reply......What's a pop up shop?
     
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    P

    pureindulgence

  • #16
    gogojonny said:
    People will always buy cupcakes - the cheap ones from Tesco. They will soon stop spending money on personalised cupcakes for wedding, business etc.

    People buy things they can't make themselves. More people are learning how to make cupcakes and are doing them themselves. Plus there has been an explosion of cupckae business. People will soon tire and the fad will die out.
    Click to expand...

    This is also something that concerns me, we do however, have been telling us that their cupcakes never look like ours, and we are also thinking about classes, tools, gadgets to help people.
     
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    Green_Jelly

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  • #17
    Hi

    A pop up shop is where you can rent a space for a limited time - maybe 2 weeks, a month etc - it is potentially a good way to test an idea. Admittedly you would probably not have the kitchen space etc but may be a good option for research - try popupspace . com or maybe ask the agents of shops which have been empty for a while if they would consider the idea (it could lead to a let for them after all).

    Hope this helps

    Shari
     
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    B

    Billmccallum

  • #20
    pureindulgence said:
    Hi, I was wondering whether anyone can offer me a little bit of advice....

    I am thinking of opening a shop in Nottingham selling cupcakes and coffees/teas, there is nothing like this available at the moment, and we need a small shop, few seats, office for wedding consultations, and obviously a kitchen. We have been running our business for nearly a year selling just cupcakes, we usually do outside events, weddings, fine food markets etc, and we get an overwhelming response in Nottingham, and do really good business there, thing is I don't even know where to begin, we have been looking at suitable properties, we don't have the money to put down ourselves as such and would be looking at an outside investor.

    I would love some practical and financial advise, I have been self employed for 6 years but opening a shop is a whole different ball game!

    Many thanks in advance.
    Click to expand...

    for information on premises try here http://www.egpropertylink.com/EGPLPROPERTY12579651.htm

    As for investment, you need to have a fairly well produced business plan that demonstrates how you plan to give a return on investment.

    Friends with lots of money is probably your only solution.
     
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    WJP

    WJP

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  • #21
    I can't accept the idea that people don't buy things they could make themselves. To take one example, which is even easier to make then cupcakes - major supermarkets stock pre-mixed pancake batter! Does it sell? Yes. Does it sell well? Yes. If you take a walk along any high street you'll see countless products that, if you had a few minutes, you could make yourself. Whether you think of it as a good or a bad thing, our consumer culture means that people will buy them happily.

    OP, a pop up shop is a good idea. Even better, in my opinion (although not knowing your exact location I'm not sure how applicable it would be) would be to angle for some kind of concession in a high end department store, say, with a clear break clause in the contract should the popularity of cupcakes prove to be shortlived.
     
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    P

    pureindulgence

  • #24
    I am going to do some research into a pop up shop, will still need to be kitted out with fittings and signage.....

    As for online sales....seems to be a quicker solution however we did sent some in the post to a friend, when she got them they were slightly damaged, so its put me off going down that route, I want people to have perfect cupcakes at the other end! Anyone got any ideas on this?

    Concession in a department store is another good idea, although where to start with that one I dont know, in one of the shopping centres in Nottingham they have almost stalls in the walkways, selling jewellery, sweet corn (random!) pastries etc, that would be ideal however my partner knows someone who did this and said they wasted a load of money on it and the rents were high.

    Ive got so many ideas and information, I don't know where to begin!
     
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    P

    pureindulgence

  • #26
    vvaannmmaann said:
    I'm available as "Head Cup Cake" taste tester! :)

    (PS I won't charge that much either.)
    Click to expand...

    Why thank you, thats very generous.....trust me, after a week or 2 you will never want to see another cupcake in your life! I sometimes have to force my partner to try new flavours! After some weekends baking 1000 cupcakes the last thing you want to do is eat them.
     
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    Green_Jelly

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    Apr 28, 2010
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  • #27
    Hi

    I think that although for a 'normal shop' you need fixtures, signage etc, I think that there are ways you can do a pop up shop with limited money; if you have the backing of good marketing behind it, this should push the brand and the concept. There are a number of ways you could do this by getting the press involved, offering promotions, online, speaking to potential affiliates etc.

    Honest - I don't work on commission for pop up shops :) Think it may be a good idea.

    Having said that, whatever you do you will need the backing of some good marketing to develop the brand and awareness; a lot of this is free or at least relatively cheap, except for your time.

    I would also like to echo the request of a taster - I love cakes!

    Shari
     
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    MyAccountantOnline

    MyAccountantOnline

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  • #28
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    L

    Lee Jones Jnr

  • #29
    I think a 'pop up shop' is a terrible idea.
    The usual suspects are Christmas shops, fireworks shops etc. Look at the locations locally where you have seen such places open up. They are the run down dingy shops that are willing to accept short term let's because they are difficult to get a tenant into because they are in a state and need money spending on them - would you buy something that you intended to eat from somewhere like that?
    The kiosks in shopping centres etc might be a better way to guage the feasibility of a full time shop.
     
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    V

    Vision2

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  • #31
    pureindulgence said:
    I am going to do some research into a pop up shop, will still need to be kitted out with fittings and signage.....

    As for online sales....seems to be a quicker solution however we did sent some in the post to a friend, when she got them they were slightly damaged, so its put me off going down that route, I want people to have perfect cupcakes at the other end! Anyone got any ideas on this?

    Concession in a department store is another good idea, although where to start with that one I dont know, in one of the shopping centres in Nottingham they have almost stalls in the walkways, selling jewellery, sweet corn (random!) pastries etc, that would be ideal however my partner knows someone who did this and said they wasted a load of money on it and the rents were high.

    Ive got so many ideas and information, I don't know where to begin!
    Click to expand...

    not saying go national :) you'd need to sort out the issue of deliverying the product without it as you mentioned, getting damaged.

    I'm more of the thinking of a butchers, serving the local area and expanding outwards.

    Deliverying cakes for events for example, diversify, doesn't need to just be cupcakes.

    I think there would be quite a demand for this, and if you did have a small shop somewhere, anyone and everyone who came into the shop, give them the website address, get them ordering, sending over to their friends, social networking - facebook etc!

    Business events, business meetings, local businesses, larger businesses.

    Allows you to expand a bit further and further the more business that comes your way :)

    oh and i already put dibs on testing the cakes! it's a legally binding contract! :)
     
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    B

    Billmccallum

  • #33
    pureindulgence said:
    I am going to do some research into a pop up shop, will still need to be kitted out with fittings and signage.....

    As for online sales....seems to be a quicker solution however we did sent some in the post to a friend, when she got them they were slightly damaged, so its put me off going down that route, I want people to have perfect cupcakes at the other end! Anyone got any ideas on this?

    Concession in a department store is another good idea, although where to start with that one I dont know, in one of the shopping centres in Nottingham they have almost stalls in the walkways, selling jewellery, sweet corn (random!) pastries etc, that would be ideal however my partner knows someone who did this and said they wasted a load of money on it and the rents were high.

    Ive got so many ideas and information, I don't know where to begin!
    Click to expand...

    Lots and lots of comments..... please feel free to ignore me, I do go on....

    Firstly, your web site has your valentines offer on the front page (almost 2 months after), little details can put people off, if the page is old, how old are the cakes???

    Your valentines offer was 4 cakes for £7, was this a special offer or the normal retail selling price? Is your price point too high?

    So what is the normal selling price compared to the wholesale price?
    Are you giving trade customers opportunity for decent mark up?

    How much custom do you get from wedding planners, caterers, etc?
    What might seem like a small item, cupcakes instead of a normal centrepiece on each table?

    How much business from cafes, restaurants hotels, B&B's?
    Back to the third item, are they getting enough out of it?

    For selling food items in Nottingham see http://www.nottinghamcity.gov.uk/index.aspx?articleid=757

    for premises see http://www.nottinghamcity.gov.uk/index.aspx?articleid=1346

    Finally, a shop can be a huge burden on your time or involve employing people to take care of things while your away doing other things, do you have the time and resources to manage ths aspect of your business?

    I do offer free online consultancy, so feel free to email me with any questions.

    Bill [email protected]
     
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    KidsBeeHappy

    KidsBeeHappy

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    Sunny Troon
  • #38
    pureindulgence said:
    As for online sales....seems to be a quicker solution however we did sent some in the post to a friend, when she got them they were slightly damaged, so its put me off going down that route, I want people to have perfect cupcakes at the other end! Anyone got any ideas on this?
    Click to expand...

    This is one of the questions I get asked a lot. So I wrote a webpage on how to post cupcakes!
     
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