Just Baked: Cupcake Shop Finds Sweet Success in Detroit
Editor's Note: This is the first in a series of posts profiling businesses located in depressed or troubled communities. We'll be spotlighting businesses in other areas in coming weeks. If your business is charging ahead despite being located in a depressed locale and you'd like to be profiled, we'd love to hear from you.
With one of the nation’s highest unemployment rates and widespread poverty, Detroit doesn’t seem like a promising place to start a business. But Pam Turkin’s cupcake shop, Just Baked, is evidence to the contrary: Launched in 2009, the business recently opened its seventh store and is beginning to franchise. Last year, Just Baked recorded $2 million in sales.
Initially, Turkin hadn’t even intended to open a retail shop. She’d simply been doing some catering on the side while working at a marketing job. She’d wanted to jump into catering full-time, so she went looking for a commercial kitchen. “I found an old bakery that had been closed for months,” she says. “There were so many vacant buildings around, so the owner was willing to give it up for a song.”
One day, not long after moving into the commercial kitchen, Turkin baked more than she needed for her clients. She decided to sell her excess inventory in the bakery’s attached storefront. “We put up an open sign, and sold out almost immediately,” she says.
Turkin believes Detroit’s depressed economy is actually a contributor to the business’ success. “A cupcake is a small luxury that someone might buy, instead of going out to dinner or going to a movie if they don’t have the money for that,” she says.
The specialty bakery sells more than 30 varieties of gourmet cupcakes, with flavors such as s’mores, rocky road, and the popular “Fat Elvis.” In contrast to many cupcake shops, which charge as much as $40 or $50 for a dozen cupcakes, Just Baked sells its cupcakes for just $24 a dozen. “We were very conscious of keeping our pricing low enough to be affordable to everyone,” says Turkin.
There are other benefits to operating in Detroit as well: “We’ve been able to secure real estate much more cheaply than we could have before the recession,” says Turkin. “We have a location in an upscale suburban mall that we never could have gotten into five or six years ago.” And, because so many people are unemployed, Turkin has had no trouble finding qualified help.
“The biggest negative is that there’s no financing available,” says Turkin. “There are a lot of great deals available, but you need to have the capital to get them.”
That hasn’t slowed Turkin down. She plans to expand Just Baked to 25 locations by the end of next year and has partnered with an investment firm that will aid their expansion throughout the country in the years to come.
Just Baked proves that, for an entrepreneur with a great concept and the willingness to work, success can be sweet — even in Detroit.
Kathryn Hawkins is a business writer for Intuit and is passionate about solving small business problems.