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August 11, 2021

A tough welcome to the cupcake nation

Forget that bed-and-breakfast. Now there’s a new money pit for those who long to own their own business: the cupcake shop.

Nationwide, cupcake sales, according to the market research firm, Mintel, are projected to rise another 20 percent over the next five years at a time when other baked goods are expected to grow at less than half that.

It’s numbers like these that prompted sisters and business partners Sophie LaMontagne and Katherine Kallinis to open their Georgetown Cupcake store in Washington two years ago. Armed with spirited business resolve and their grandmother's cookbook, the pair is now claiming to sell more than 5,000 cupcakes a day.

You can follow their lives and business challenges in DC Cupcakes, an unscripted series that’s now airing on TLC.

And they're not alone. Vancouver’s Cupcakes, for instance, is now several stores strong and plans to take the franchise across Canada this year. Their travails are documented on their own watch-us-work series, The Cupcake Girls, now airing on the W Network.

Then there’s the Cupcake Shoppe in Toronto, a veteran venture now in its six year of operation. Baked in-house daily from scratch, and in a completely nut-free environment, it’s one of a growing number of bakeries that serves nothing but the little delicacies -- including Butch Bakery, a New York-based startup that tries to put a masculine twist on the menu.

All of which begs the question: Just how many cupcakes would a fledgling venture have to sell to pay the bills? At least 120 a day, suggests one estimate, assuming you're working seven days a week and are only looking to break even. So the real number is likely closer to twice that to turn even a modest profit, assuming a similar cost breakdown. 

That's a lot of baking.

What do you think: Are cupcakes really a viable business or just a weekend gig to boost the vacation fund?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...