Imagine starting a business with your sister that turns into a cupcake empire featured on Oprah and a hit TV series on TLC. It may sound like a fantasy, but for the Kallinis sisters, Katherine and Sophie, it's a true story. How'd they do it? Well, it's all in the mix, along with some serious business savvy.
"Sophie and I grew up baking with our grandmother every day, and we always wanted to open our own bakery using her recipes," said Katherine Kallinis Berman, co-owner, Georgetown Cupcake.
"We opened on Valentine's Day 2008, just the two of us in a small storefront in Georgetown, Washington D.C., and slowly we grew," said Sophie Kallinis LaMontagne, Katherine's sister and co-owner of Georgetown Cupcake.
"Since the first day in business, we've always stayed true to our core belief, which was to make the very best cupcakes from the very best ingredients and make them from scratch every single day," said Berman.
"The first year we probably baked a couple of hundred cupcakes a day. Last year we shipped over a million cupcakes across the U.S. Overall, we baked over 8 million cupcakes last year," LaMontagne added.
Their growth was not accidental. They found out early that the best business strategy is to listen and respond to your customers, even if that means pursuing new opportunities you hadn't anticipated.
"Shipping wasn't in our original business plan but we had a lot of customers come to us early on asking if they could ship our cupcakes to their friends and families across the country as gifts," said LaMontagne. "It would have been very easy in the early days to tell our customers 'sorry we don't ship, that's not part of our business plan,' but instead we listened to our customers and we made the investment in what they wanted to see. And now our shipping business is the fastest growing segment of our business."
The best business strategy is to listen and respond to your customers, even if that means pursuing new opportunities you hadn’t anticipated.
In 2009, they opened a national shipping facility near Dulles Airport. "We have ingredients coming in every day, batter is being made, eggs being cracked, all in an organized process to bake the cupcakes efficiently, frost them efficiently and pack them efficiently. Every step of the way, where we can be more efficient and save time and optimize the process, that helps us run our business better," said Berman.
Another key ingredient has been working with a shipping partner that brings something extra to the table. "UPS has been our partner as far as logistics every step of the way. And they have helped us introduce technology into our processes where we can print our shipping labels and our order details in a way that automatically collates them, streamlining our process," said LaMontagne.
"I think the important thing that we learned in starting and making that investment in the shipping business is that you have to adapt to change as a business, because if you're not able to adapt, you're not going to grow," said Berman.
The cupcake sisters' success has led them to open five more store locations--Bethesda, New York City, Boston, Los Angeles and Atlanta. They are also the stars of DC Cupcakes and Cupcake Cam Live on TLC. They also have co-authored two best-selling books, The Cupcake Diaries and Sweet Celebrations, and have launched a cupcake mix product line with Williams Sonoma.
But, to quote Ringo Starr, "It don't come easy."
"We work incredibly hard as entrepreneurs. The days are long and hard and it's not for the faint of heart, but when you have your sister by your side, it makes it easier," said LaMontagne.
To see ideas how you can take your retail business to the next level, go to ups.com/retail.
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