In The Black

As I mentioned in a previous blog post, we recently were able to pay of one of our two loans we borrowed to work on the storefront. Since that post in May 2017, we are proud to say we paid off our second of those two loans. This month of June 2017, has been record setting for our small business. Exceeding our already record setting May 2017, this month saw our highest number of events, and highest revenues. A rainbow of cupcake flavours

For the first time since late 2013, and since opening our flagship Cupcakery in January 2014, we are in the black in our bank account. In. The. Black. What does that mean? We have been working diligently to pay our rent, pay our employees, buy inventory, grow, handle miscellaneous troublesome costs and this has always been a challenge. Well, on Monday, June 26, we deposited some recent sales money into the bank and we were on top of our overdraft. 

In detail, here is how it worked for us: 

2010-2013 worked independently and tried to save money towards expanding, investing every penny we brought in as revenue to growth

2013 – received two small business loans, crowd-funded some generous support and went into overdraft (essentially taking a loan for $25,000 from our bank)

2014 – present, been making loan payments, selling cupcakes, growing the business, all the while, operating using our extensive overdraft

August 2015 – launched Sprinkle – our cupcake food truck – with a huge investment and ongoing lease payments (with guaranteed commitment to buy it at the end of our lease)

September 2015 – became B Corporation certified – spent countless hours on labour, and of course the costs associated with certification

May 2017 – paid off our first loan, outstanding balance of near $5000

June 2017 – paid off our second loan, outstanding balance of over $5600

June 26, 2017 – climbed out of ‘the red’ and into the positive side of our bank accountKids enjoying Sweet Temptations cupcakes at the Aberfoyle Farmers' Market

What this means is an incredible weight has been lifted off our shoulders. It is almost like a reopening for Sweet Temptations Cupcakery. We can now work towards growth and the future without the pressure and weight of our outstanding debts. 

Functionally, this means the $25 loan admin fee and the $150-$200 overdraft interest charged by the bank are both avoided. If you’ve ever paid of a debt, even a small one, you know what serious impact around $200/month can have. This is huge for our small business. 

Please don’t be mistaken, we’re not suddenly a huge, profitable corporation, we’re still your neighbourhood cupcakery. The difference now, is that when you take home a box of cupcakes for dessert, we get to keep every penny of that sale, and it’s not going to outstanding debt, the banks or being wasted in expensive interest charges. 

Recently, our business mentor, Steve Barrett enlightened me with a point about retail and our marginal revenue. Excuse me while I butcher the succinct way he put it, but basically he said after the first chunk of our sales, we enter a different marginal revenue growth, where every dollar after a threshold that covers our costs, we become exponentially more profitable. So for example, if we bring in say $5,000, we largely break even, but if we bring in $6,000 – that extra $1000 is a much more profitable thousand dollars compared to the first thousand. For those economics fans out there, this is no surpris

Canadian Flag Made of cupcakes

Canada 150 Cupcake Flag Mosaic

e. But for myself, someone who never took a business course in her life, this was eye-opening. 

This truly is a game changing moment for Sweet Temptations Cupcakery. After nearly 7 years in business, and nearly three and a half years with our storefront, this has been a very long time coming.

I want to thank our staff, our Cupcakery team, who we rely on to achieve these goals. Without them, we would not be able to serve the quantities of desserts we do. From hand scooping every cupcake to greeting each customer with a smile, we’re proud to have them along for this journey, and hope they feel the reward of working for a small business.

Most importantly we want to thank our customers, whether you tried your first cupcake from us this week, or have been with us since the very first day, we thank you. Your support now and continued support over the years means the world to us. 

More recently, many of you have been referring us to your workplaces, and we’ve been honoured to bake cupcakes and serve ice cream from our food truck at our office picnics, BBQs, and staff events. This is the fastest growing part of our business and we need your support to help it grow. If you work for a medium to large sized business, we would greatly appreciate you passing our name along to the social committee, HR manager or Office Hero in charge of planning fun days at your business. Thank you in advance, it truly is a game changer for us.

Yours in sweetness, with a warm cupcake heart,

Jakki 

Tags: , , , , , , ,

Leave a Comment

No comments yet.

Leave a Reply