During one of the worst recessions in U.S.
history, a little sugary confection - the great American cupcake - is proving
to be an unexpected fast food market opportunity for many entrepreneurs.
One city where the cupcake sector is
booming at a rate faster than your average coffee shop is Washington, D.C.,
where an investigatory article by The
Washington Post found that at least half a dozen cup cake eateries - or
'cupcakeries' - have opened in the past 20 months, with more on the way. ('Cupcakeries Emerge as Washington's Sweet Spot in a Downturn*').
Secret of 'Cupcakery' Success?
Everyone can understand the appeal of
the cupcake, but why the sudden spurt in 'cupcakeries'?
Some see correlation in the popularity
of the little confection with the current recession. Interviewed by The Post, Paul Sapienza, vice president
for the Retail Bakers of America, offers his own assessment of the confection's
popularity: 'They are cute. They are
an economic treat, which helps out in the recession. They are a little
decadent, so you get cake, frosting and sometimes filling all at the same time.'
While others doubt the trend will last.
One fan of the Washington,
D.C. cupcake group on Facebook
told The Post: 'For me, it's a
personal-size treat. You don't have to share it with anybody. It's a
guilt-free, happy treat that takes you back to your childhood,' Jones
said. 'Do I think it's a stable
business? No. I wouldn't invest in a cupcake store.'
But regardless of opinion-based
forecasts, 'cupcakeries' are certainly a sweet option for entrepreneurs. Not
only can you benefit from walk-in sales, but
adding a pre-ordered catering option to the business mix can also be lucrative.
For example, Georgetown Cupcake - cited in The
Post's article - sells between 3,000 and 5,000 cupcakes a day - of which 30
percent are walk-ins and 70 percent pre-ordered.
Servicing anything from kids parties to
workplace soirees and even weddings, cupcakes are a perennial treat and a
potential goldmine given the proper planning, marketing and location.
your Own 'Cupcakery' or Food Service Business
If you are interested in starting a
'cupcakery' or other food service business, you will still need to observe the
basic strategies of starting and operating a business - while observing food
service business laws!
Here are some useful tips and resources
that can help entrepreneurs start, operate and grow their food service
1. Getting Started
If you are a first-time business owner
or entrepreneur, or even if you have some experience under your belt, these 10 Steps to
Starting a Business from Business.gov will guide you
through the process involved in making key business planning and financial
decisions about starting a business.
Whether you are in downtown Washington, D.C. or in America's
heartlands, researching and planning your potential location and market base is
critical. And while city locations may attract walk-in traffic for your food
service business, many suburban locations offer a higher concentration of lucrative
'family-oriented' catering business opportunities.
Use freely available market research
tools to your benefit. You can check local demographics including employment
statistics, consumer statistics, and more using these guides from the
You'll also need to check local zoning laws, even if you
want to operate a home-based food production business - many local governments
restrict what business can be done from home.
Get more advice and tips from
Business.gov on choosing a
Alternatively you may wish to start
your business online - read 'Starting and Growing an Online Business: An Entrepreneur's Checklist'.
3. Understand the
Regulations That Govern Food Production Businesses
are a variety of laws and regulations that govern the food production and
catering business, here are some resources that can help:
Start Local - Most laws that govern this sector are
enforced at the local level. Check your county's Public Health Department for more information.
Business From Home - If you do choose to operate out of your home, read 'Starting a Home-Based Food Production Business: Making Your Culinary Hobby Your Job' to learn more about the rules and regulations that govern
home-based catering or food production businesses
Using or Marketing Organic Produce - If you produce or distribute any
foods labeled as 'organic', then you'll need to be aware of some of the key government
laws for the production, handling and retailing of certified organic food
products. Read more about these in 'Producing and Selling Organic Food Products - A Five Step Regulatory Primer'.
Shipping Food Products Across State
Boundaries -If you
both provide compliance guidelines.
a more general overview of federal regulations that affect this industry, check
out the resources on Business.gov's Restaurant and Food Service Business
Guide or visit www.foodsafety.gov.
4. Hiring Employees
in the Food Service or Production Business
or food service businesses are almost impossible to operate as a one-man-band,
so you are going to need to hire employees. Read Ten Steps to Hiring Your First Employee to understand the legal and regulatory
side of hiring employees.
you choose to operate a food service business or restaurant you will need to be
aware of the laws that govern the hiring and management of employees in the food service business - Operating a Restaurant within the Law: A 101 in Compliance Part 1 and Part 2.
Marketing your cupcake or other food
service business is going to come down to identifying your target market and
using the appropriate tools and tactics to reach them. Here are some tips and resources to help
small business owners develop a marketing plan to support their goals,
including sample marketing plans and online tutorials.
Remember to include community and
online marketing channels in your marketing mix - from your company Web site to
Facebook and Twitter; local newspaper ads to stories written by local
reporters. Use integrated methods to reach your audience wherever they are.
*Note: Hyperlink directs reader to non-government Web site.