Take the Cake

This story appears in the November 2006 issue of Entrepreneur. Subscribe »

New York City wouldn't be the same without its tasty selection of cupcake bakeries. But there was a time when the nostalgic goodies hadn't yet made it big in the Big Apple. In fact, today's cupcake frenzy wasn't even a blip on the trend radar when founders Allysa Torey and Jennifer Appel opened the doors to Magnolia Bakery in 1996. But their selection of freshly made cupcakes, artfully displayed in a 1950s setting, soon caught the attention of customers, making this quaint bakery a hit. Magnolia Bakery also spawned a number of cupcake offshoots. In 1999, Appel ventured off to start Buttercup Bake Shop, another cupcake hit. Today, entrepreneurial-minded employees of both bakeries have followed suit, each hoping to add a unique touch and find the path to sweet success.

Friends Peggy Williams, 43, and Debbie Weiner, 40, had worked the counters at both Magnolia Bakery and Buttercup Bake Shop before they started Sugar Sweet Sunshine in 2003. Creating a '60s and '70s vibe with the help of mismatched thrift store furniture and gracing their sweet concoctions with unconventional names like "Ooey Gooey" and "Bob," the duo quickly proved they had a style all their own. "The flavor of the store is reflective of our personalities, from the baked goods to the big green chair to the names on the cupcakes and cakes," says Weiner. "The flavor is just us."

Also in 2003, Lauren Reece, a manager for four years at Magnolia Bakery, introduced her own special creation with the launch of Billy's Bakery. She offers a wide spectrum of cakes and desserts and happily accommodates special orders. "Other places tend to be a bit more streamlined, and you've got a standardization of what you can pick from," says Reece, 27. "Those places tend to be like cupcake factories--they're just pumping out the cupcakes."

Meanwhile, Mark Libertini, a former manager at Buttercup Bake Shop and co-founder of the Little Cupcake Bakeshop with brothers Luigi and Salvatore LoBuglio, 27 and 24, respectively, created a cafe setting. The spacious bakery, which opened in 2005 and has frequently been described as a little dollhouse, serves high-quality espresso drinks. "It's more of a destination spot than other bakeries," says Libertini, 33. "It's not the type of place where you just walk in, buy a couple of cupcakes and walk out."

All three spinoffs have met with success: Weiner and Williams sell hundreds of cupcakes a day at $1.50 each, Reece reports that she sells 500 cupcakes daily at $1.75 each and Libertini projects year-end sales to be well into the six figures. But their success is thanks, in part, to the knowledge they acquired as apprentices. Weiner and Williams gained experience in dealing with hundreds of customers in a fast-paced setting. Libertini learned about customer service and managing a team of young employees, while Reece took note of day-to-day processes, customer preferences and basic lessons of running a retail operation. Says Reece, "If you have the opportunity to work under someone and learn from that person's mistakes, that's worth its weight in gold." Or in this case, icing.