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Having Their Cake

American girls in London combine full-time work with cupcakes start-up

By  Ania Zymelka

Tue Aug 11 2009

The founders of London-based Sugar Cupcakes have had to move fast to set up their business, juggling it as they are with demanding work and school commitments.

The friends gave themselves no more than two weeks to found their own business, come up with a name, a marketing strategy and launch a new range of sweet and moist cupcakes in the UK's capital.

Caroline Jarvis, 29, and Stephanie Clark, 26 met at a New Year’s Eve party at Jarvis’s apartment. After tasting what they considered to be over-priced and sub-standard cupcakes at department store Selfridges, they decided they could do better.

Instead of pondering for very long, they booked a stall at a North London market fair and designated it as their launch event.

But there was no intention to give up their full time occupations. According to Clark and Jarvis, most successful business people have more than one full-time commitment: First of all, “you have to pay your bills,” says Clark. Even if the cupcake business was able to fully support her, she claims she would be too driven to limit herself to just one career path. “I am too passionate”, she says, “and I admit I can't sit still for very long.”

Jarvis recently graduated with an MBA from Cass Business School, and is now working full-time in private banking in the City of London. Most of the practical work has so far been Clark’s responsibility. But the self-declared workaholic, who has been applying for jobs and to business schools, will soon enroll for an MBA at Cass herself: a step which won’t make the workload more manageable.

“I am planning to do early morning shifts once I start my full-time degree”, says Clark. “And we will be working weekends as well.” Of course, Blackberries and iPhones are essential to keep up with the crazy schedule, she adds. “You can manage your business from home or in the long-run hire someone to do it for you.”

This kind of drive certainly helped when setting up their new company in May. Within two weeks they not only came up with a business concept and a website, but also had to bake 600 cupcakes to be sold at their launch event.

“I spent eleven hours in the kitchen of a restaurant the day before the fair”, says Clark. Being covered in icing sugar and flour by the end of the marathon baking session paid off: all the cupcakes were sold during the fair, and a couple of orders were also taken.

The revenue covered their entire start-up capital of £600 ($1,000 US dollars) which came out of their savings. “Our advice to young entrepreneurs is to keep the initial investment low and try and earn their start-up money back as soon as possible,” recommends Jarvis.

Sugar Cupcakes are price-y compared to supermarket fare at £2 ($3 US dollars) each, with discounts on orders of half a dozen or a dozen. Cupcakes have been something of a craze this summer, with upscale stores like Marks and Spencer and Waitrose launching heavily promoted ranges that typically retail at £2.99 for four. However, argues Jarvis,“The way for any successful start-up is to find the right niche in the market.”

Delivering cupcakes to homes and offices has proved their strongest selling point. “We recognized that people not only like home-made cakes, they also appreciate having them delivered to their doorsteps – to their companies, weddings or summer parties,” she says. The firm keeps costs low by using public transport to deliver the goods. Clients include a high-end deli in the chichi Highgate neighborhood. 

According to the latest figures, only three per cent of Cass students risk striking out alone or entering a family business upon graduation. Clark finds this surprising: “I guess that some people tie themselves to a company early on and lose interest in founding their own,” she suggests.

However the support of friends and family helped Clark and Jarvis through the first days. Most of their friends were part of their initial market research strategy which, according to Clark, meant “shoveling all sorts of differently flavored cupcakes into their faces. They loved it.”