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Starting a Cupcakery By the Numbers

Cupcake businesses are posting steady sales despite a sour economy. Interested in starting your own cupcake company? Here's what it took to launch The Sweet Tooth Fairy Bake Shop, a brand new cupcake shop in Provo, Utah.

Owner Megan Faulkner Brown, 28, tapped out her entire savings account first and then called up her grandmother for the rest.  “My grandma is acting as our bank,” says Faulkner Brown, who didn’t even bother filling out a traditional bank loan application amid all the bank brouhaha. 

Her family loan carries an unbeatable 5% interest rate, and for Grandma, it looks to be a promising investment so far. Daily sales at the Sweet Tooth Fairy—which sometimes exceed $1,000 a day—are surpassing expectations. “If we keep going at [this] pace," says Faulkner Brown, "we’re going to be out of debt easily in seven to eight months.”

Here’s a rundown of the cupcake shop’s start-up costs and monthly expenses:

The Small Business:
The Sweet Tooth Fairy Bake Shop
1227 S. University Ave.
Provo, Utah
Est.  Jan. 31, 2009

The Start-Up Costs:
Security deposit = $3,600
Construction = $25,000
Start-up inventory =$5,000
Oven = $8,000
Pots, pans, tables and racks = $8,000
Permits = $1,000
Total start-up costs = $50,600

The Monthly Expenses:

Staffing = $3,500
Rent and utilities = $3,000
Inventory = $1,500
Insurance = $100
Rough monthly expenses = $8,100

Number of $2.25 cupcakes she must sell a day to break even: 120

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