Cooking Up a Sweet Business
Kate Carrara of Philadelphia, the self-proclaimed "Cupcake Lady," sold her house and car and gave up a well-paying job to start Buttercream, a mobile cupcake shop.
As told to Caitlin Dewey
What did you do before you sold cupcakes? Everyone in my family is a lawyer -- my father's a lawyer, my grandfather's a lawyer. So I went to law school and spent six years working as a trial lawyer for my family's firm. Then I did coding for two years at another law firm, which was insanely boring. But I was also planning my cupcake business and trying out cupcake recipes on my co-workers.
When did you make the switch? I quit my job in July 2009 after I saw that someone in New York City had opened a cupcake truck, which I thought was a great idea. I realized I had to do this in Philadelphia or someone else would.
What are your costs? For the first year of operation, start-up costs were about $50,000. The truck alone was $20,000, and the vendor's license was about $5,000. The rest depends on rent and salaries. I have five employees, whom I have to pay a good wage.
How did you raise the money? My husband and I took out loans and sold a piece of the business to a family friend. We also had to live off my husband's salary after I quit my job, so we downsized everything we could. I sold my diamond engagement ring. My husband and I went from living in a three-bedroom home with two cars to a small apartment with one car.
How many cupcakes do you sell a day? We aim for 500. It's a little slower in the summer, when the students are away.
And what do you pay for ingredients? Our baking costs are not that high -- we're not talking oysters here. For $500 I can bake 2,000 cupcakes. We sell them for $2 each.
Is the business profitable? In the first year, we made $100,000, but we're putting a lot of that back into the business now. I'm starting to look into retail and wholesale outlets. I'd like to open some kiosks.
Do you have any regrets? Sometimes when I have friends over to my apartment now, I'll see them glancing around discreetly, as if they're looking for something. I have to ask them, "You're just here for the cupcakes, aren't you?"