It's Six of One, Half a Dozen of the Other
James Gray looks a little scruffy today - unshaven, rumpled T-shirt and dark circles under his eyes. That's in stark contrast to his bakery - a tiny, sparkling clean shop with robin's egg-blue walls and a dÃ©cor he describes as "country chic."
Dozen Cupcakes, the 700-square-foot shop in Pittsburgh's Squirrel Hill district, makes and sells one thing - cupcakes and sells them well.
So well in fact that Gray has decided to open a second store in the up and coming Butler Street area of nearby Lawrenceville. And that explains the dark circles under his eyes - "I look like I'm in two places at once because really I am," he says. His new shop was due to open imminently when we chatted earlier this month, but that didn't mean he can completely stop keeping tabs on his first born. He spends much of his days shuttling back and forth between the two locations.
Gray initially was overjoyed at finding a very small space on a bustling street that enjoys a lot of foot traffic from stores and restaurants of all stripes. About 75 percent of Dozen Cupcakes' sales come from walk-ins.
"I knew that working in this small space would be less time consuming and more cost effective just starting out," he said, as we chatted across one of the three tables in the store. It took about two and one-half months from conception to opening - a very quick turnaround. One drawback was that the space smelled like incense for about two months after he opened from its previous tenants - an Asian import-export store.
He loves the space and speaks fondly about choosing how to decorate it. "But eventually we found that the size of the space was constricting us from doing the kind of volume that we knew we could be doing," he says. The demand became overwhelming and as the company expanded into catering, it had to turn jobs down.
Pittsburghers like their cupcakes. Dozen Cupcakes whipped up $340,000 in sales in 2007 and with the new larger space, Gray expects to bring in at least a million in revenue in 2008. He financed his first business in part through a Small Business Administration-backed loan taken out from PNC Bank.
He has been taking his lessons learned from opening that store to his new 1,700-square-foot, 25-seat cafÃ©, which he's dubbed Dozen Bake Shop.
One of his smartest moves, he says, was making friends with city workers who deal with permits. "They are actually there to help you, not just to inspect your space and tell you to be better." He advises establishing a relationship with the city and health inspectors so that they can give you pointers along the way. He had to retrofit his charter space with new plumbing and cooking equipment and worked with city planners to make sure his contractor was doing it correctly. And, he says, it didn't hurt that he brought them cupcakes.
"Go online and find out who will inspect your space and let them know your plan so you won't get any big surprises at the end of the process."
He also says to be "smart about what you're doing. Do as much research as you can that the product or service you're providing will be wanted. I would never have considered myself a business person before I started all this, but now I would in a way."
Gray notes that his shop, which he opened Dec. 29, 2006, would never have worked at that time in Chicago or New York, but in Pittsburgh, which he says is a little culturally behind those cities, it worked great.
Gray, who holds a degree from the Chicago Culinary Institute, is expecting big things from what he characterizes as the "urban renewal area" that he's expanding into. It's close to downtown Pittsburgh and the city's pediatric hospital is relocating there, bringing with it thousands of jobs and hungry-for-baked-goods employees.
He signed a lease for his new spot in December "from a guy who owns at least five blocks of Lawrenceville," Gray said. He liked that because felt that his landlord was really vested in making Butler Street a better place. He decided to work with his landlord's contractors to get the placed fixed up. "They already know the HVAC system and everything else about the building we're in so that makes things go a lot smoother," he said.
He's also moving the cooking operations for the Squirrel Hill store to Lawrenceville where the cupcakes will be driven in daily. It will save costs by consolidating, but "ugh," he says with a sigh, clasping his hand to his face, "we may need a new delivery vehicle. My Honda Fit may not cut it... On to the next thing."
By Sharon McLoone |
February 4, 2008; 9:00 AM ET
Profiles in Entrepreneurship
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