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Life is Sweet For Entrepreneurs as Cupcakeries Boom (+ Tips for Starting a Food Service Business)

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Life is Sweet For Entrepreneurs as Cupcakeries Boom (+ Tips for Starting a Food Service Business)

By Caron_Beesley, Contributor
Published: November 25, 2009









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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.'


'Cupcakery' Opportunity

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.


Finding the

Right Location

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

business location.

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.

  • Shipping Food Products Across State

    Boundaries -If you

    produce a food product that is shipped across state boundaries then the FDA and Department of


    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.

5. Marketing

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.

Good luck!

*Note: Hyperlink directs reader to non-government Web site.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

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