So I’ve been thinking about opening a cupcake bake shop for quite some time. For those of you who have thought about or actually opened a small business, I had some questions for you.
What kind of capital do I need to have?
Location wise - Taipei County is definitely less expensive, so what am I looking at rental wise?
Any advice as far as appealing to the Taiwanese market is concerned?
I know that there is already one place that sells cupcakes, but she caters more to the flavor of Taiwan - which totally makes sense, but I was hoping to maintain the integrity of the American cupcake and make’em like we make them in NY. I know Coldstone is pretty popular amongst Taiwanese people, and their ice cream is terribly sweet - so I don’t plan on using salted butter in my icing or anything. I was also planning on selling good coffee.
The thoughts going into this business have been brewing for years, but I am still in the very beginning stages of putting things together and researching here. I originally planned on opening a place in NY when I was living there, but I am here now.
Any comments or thoughts are really appreciated. Thanks!!
Also, if anyone is interested in possibly creating a partnership, I am open to that as well!
[quote=“bakesalot”]Hi Everyone,
So I’ve been thinking about opening a cupcake bake shop for quite some time. For those of you who have thought about or actually opened a small business, I had some questions for you.
What kind of capital do I need to have?
Location wise - Taipei County is definitely less expensive, so what am I looking at rental wise?
Any advice as far as appealing to the Taiwanese market is concerned?
[/quote]
While I don’t wish to discourage you, I would propose this way of modeling your business. Work backward from your expenses to determine how much product you would need to sell.
Average price at Dunkin Donuts & Mr. Donut (your competition) is around NT$40. For this example, let’s say raw material is NT$10, so that means NT$30 per piece would go towards paying off the above expenses.
90,000/30 = 3,000 cupcakes per month (100pcs/day) to pay off your expenses. You would still need to pay off the capital investment: oven, mixing machines, signage, display case, air conditioner, chairs, tables, etc.
This is a very simplistic formula, but it shows that at a bare minimum you need to get 100 people a day to enter your shop and each buy 1 cupcake. Do you know 100 people who would do this? Would these 100 people travel to Taipei County every day? How do you get the word out? (How do you say ‘cupcake’ in Chinese?)
There aren’t enough Westerners around to support you, so you will have to accommodate local tastes.
There’s lots of information on setting up a small business on the web, along with sample spreadsheets for budgeting. You need to do a lot more work on the business side before you move ahead w/ this idea.
So I’ve been thinking about opening a cupcake bake shop for quite some time. For those of you who have thought about or actually opened a small business, I had some questions for you.
[/quote]
I think the post above did a good job of explaining more or less the problems with opening a small business. In Taiwan or otherwise. NT$ 30,000 is highly optimistic for rental. A shitty ground floor location in a small town goes for NT$ 50,000+ (remember the landlords are usually the retired previous operators of the store, and they likely rely for 100% of their income on the rent). Your business will not survive here – and a decent high street location will set you back NT$ 500,000+
If you are serious about your business, another way is to NOT open a shop. Most of your risk is in the expenses for opening the actual store.
One of the Christian churches around here runs a bakery, they make American style cakes. One of my staff knew them, and we used to order the odd cake. Pretty good, nice and creamy. But they don’t have store, they rely on their network to deliver business.
In my office some people enjoy collecting one mad internet offer after the order. One week its tea, the next week Japanese shrimp, or chocolate cakes. They gather a couple of people and then order 5-10 items, to be delivered to the office.
So I guess you could setup a website , build your network and give discounts if people order more than just a couple. If things take off, you can start thinking of either opening up your own bakery, or outsourcing/renting facilities from a local bakery.
Mmm, a cupcakery! I don’t think just a cupcakery storefront is going to be successful. But I’ve been wrong plenty of times.
41783 gives you a lot to think about. ^^^
Just to give you an idea, there is a cupcakery I patronized twice in 2006. It was somewhere around Yanji Street and Zhongxiao East Road Section 4 (I threw away the business card and menu, sorry can’t give you the address). They sold really beautiful home-made cupcakes for $50-$100 each. But they also made cakes to order, so they couldn’t get by with just cupcakes. Both times I was the only patron. The owner was a very sweet woman in her late 20s and she and her sister ran the store and baked in the back and also took orders online. Their location was off the main street, in a walk-up. They had just opened for a few months but looked really struggling. All the cupcakes looked so pretty, but the display case was FULL, like no one ever bought anything.
They probably survived by taking personalized cake orders online, but I don’t know.
Yeah, so that’s my experience with cupcakeries in Taibei. Oh man, those things were well made.
OK so the first thing you have to know as an entrepreneur is that everyone can give you reasons not to do it.
My wife opened her first clothes shop about 3 years ago. It was kind of random, as she found a supplier she liked in HK sourced a couple of suitcases of clothes (so she was committed) and then was thinking about how to sell them when a shop came up locally. It was NT$15K a month and tiny but she opened it and made decent money.
While she was doing this she found a range of shoes and started selling them on the internet, rented an apartment as an office for NT$30K a month sublet half of that and moved the clothes business in (net cost 0NT$). She lost a little business on the clothes because she wasn’t ground floor any more but has managed to get herself on MTV, in the apple daily and on several TV shows.
Couple of months ago she opened a shop in Shanghai. Everyone told her she was mad but she went ahead, found a place for peanuts rent in a great location. Rmb50K for 10 months opposite a maternity hospital. Shoes have been walking out the door and loads of people have approached about wholesaling from her.
So there is an idea of how you can do something relatively unplanned and make it successful. It takes work, dedication, flair and you have to be prepared to risk your money going in.
IMHO Taiwanese taste in cakes sucks. You may be better off getting a tiny place in a central (foreigner heavy) area rather than going local.
Either way good luck, and join the entrepreneurs group. Plenty of forumosans have businesses in Taiwan and are very supportive.
EA’s point about people discouraging you is well taken.
But, there’s a big difference in that his wife is selling something clothes and shoes–items that have a known market in Taiwan. In addition, if she’s Taiwanese, she probably knows a thing or two about what Taiwanese people like.
Now you may like and enjoy a good cupcake, but I have some serious doubts whether enough Taiwanese people do to support your business. Hell, it took years to get the Taiwanese to start buying doughnuts, and, in the end, it was the Japanese who figured out how to do it.
Perhaps you could diversify your business by giving classes on how to bake. That said, I think you would be better off if you could claim to be teaching French baking or something since Taiwanese adore everything European.
:neutral: There are good reasons for that. Life is often much saver when you draw a salary.
I think running your own business is one of the most rewarding things possible. It is also one of the fastest ways to go through your life savings. When setting up a business, it shouldn’t be like Russian roulette.
A little planning and market research can help avoid some major gotcha’s.
Make a ton of cupcakes and give them away at a fair / sell them at low cost ; with namecards or something. See the reaction of the locals and see if they come back for more ; and if anyone calls you to order more. Its one low cost strategy for trying out if this is going to fly.
My wife told me the story of the Taiwanese octopus balls guy – he started off by learning the skills in Japan. Then he started his own stand on the nightmarket, but he could only sell a few boxes a day. Turned out Taiwanese didn’t like the same flavors as the Japanese. Not one for giving up, he started mixing flavors (getting himself food poisoned several times ) before he hit the right combination.
Now he has his own chain of stores all over Chinese speaking Asia…
Honestly speaking now is a bad time to open a business, especially if it is not low cost.
Personally I wouldn’t see the attraction in cupcakes and I’m not sure if Taiwanese would either. Sweet, artificial flavourings, not very fresh feeling about them. But I like donuts so what do I know! (where is Krispy Kreme BTW?)
They’d certainly have to be adapted to local style. By this I mean you’d have to be selling green tea, red bean, probably make them small and sell them by 6 or the dozen so they think they are getting a bargain, make some fancy packaging. You’d have to have a few QQ ones in there too. It helps it is is a brand name from abroad already but that’s for the big boys.
The above example about squid balls also mentions about localization, however it’s fairly predictable to be honest as it’s very close to what Taiwanese like to eat already. Western food in general is not, there’s a substantial portion of people here who won’t touch the stuff AT ALL.
There’s a reason Taiwanese like European stuff, it’s generally fresher and healthier and uses better ingredients. Of course European is covering a hell of a lot of cuisines in there! But in terms of total sales of western products donuts and fast food rules. I’m surprised at the success of ColdStone Ice Cream , to me its really crap and sweet. mixed on a cold stone, wahaay, (oreos and reese bars ?!?) but it packs them in, so you never know, the power of marketing.
Right. Ever notice how so many ‘western’ restaurants serve ‘German Pork Trotters’? That’s because Taiwanese people love pork trotters already, and it’s a good way to sell someting for NT$400 or $500 that would be NT$150 tops if it was just a plain 'ol Taiwanese-style pork trotter. The point is that most people choose something familiar when confronted with an alien cuisine.
[quote]
There’s a reason Taiwanese like European stuff, it’s generally fresher and healthier and uses better ingredients. [/quote]
That may be true, but it’s not the reason Taiwanese people like European stuff. They like it because it has cachet simply for being European. And besides, you are talking about real European food, not the stuff produced by giant corporate chains. Maybe Europeans don’t do that kind of business so much, but I’m fairly confident that when they do it is just as crappy as the American one.
I doubt very much that European stuff is fresher and healthier than what is served at restaurants in the US like Chez Panisse in Berkeley or the French Laundry. And there’s plenty of fresh healthy stuff in Taiwan for that matter. That’s not the selling point of ‘European’ in Taiwan.
Expanding on your point, you hit the nail on the head about German food here. I’d never eaten German food until I came to Taiwan. Could not for the life of me figure out the fascination with the stuff. Ate it and I thought ‘not bad’ but not amazing. Then, like you said, figured out it’s all about sausages and pork… it’s a no-brainer for Taiwanese!
Eh Feiren, the examples in the US you mentioned are ‘European food’ no? I’m not criticising everybody in America just because there’s a lot of crap food there, there’s crap food everywhere. I’m Irish so I can’t talk too much, we eat ‘heart attacks on a plate’ for breakfast. In the last few years I’ve figured out that both mediterranean people and Asian people eat the healthiest freshest stuff.
I agree a lot of interest in European food here is just for the cachet in Taiwan of course. Take that Paul’s bakery for example, incredibly expensive. People buying it for the boast value I guess.
Sure my examples are European food. But (and here’s my point), if you opened a restaurant that served contemporary California cuisine, I think you would have a tough time because Taiwanese would not perceive it as being European. Even wines from famous California regions like Napa and Sonoma have trouble competing with French shlock, or so my friends in the wine business say. The Taiwanese think any wine from France must be better. And it’s cheaper!
Sounds like the food scene in Ireland has brightened up a bit…
Ok, STOP, there is no such thing as “European food”. Every single country in Europe have their own specials and often different regions of the same country eat quite different things. When my dad married my step mum which is from Norway I really didn’t expect things to be so different, but boy was I wrong. Going travelling in any European country and you’ll find that the food is quite different in the various regions of the same country.
And there really is good German food, it’s just that the “famous” stuff is usually pork sausages and fatty bits of pork, but I’ve had some great food there and what is possibly some of the best steak I’ve ever eaten, vastly better than stuff I’ve had in the US for the same kind of money, although not quite as good as the stuff I had in Ireland.
But back on topic, cupcakes are going to be a hard sell here, not wanting to be discourageing or anything here, but considering the kind of baked products the locals eat, well I just want to cry…
Cupcakes to me are just sweet and horrible, but if you could come up with some other stuff as well, you could possibly be doing allright if you start small enough. What else are you good at baking? I’ve found that local friends like some of the stuff I do, while other things aren’t popular at all.
It seems near enough impossible to figure out what people will like or not and I think I’m with some people with regards to coldstone here, it’s way too sweet.
And yes, bring on KrispyKreme, it’s already in HK and the Philippines, so why not Taiwan?
Cupcakes could be on the cusp of a new food fad. Put some nice icing and people would flock. A friend brought a 12 cupcakes @ 3 dollars each from Calgary to Vancouver from a shop called Craves. That’s 36 dollars canadian. Cater to weddings and events too. As long as you don’t have competition, market the heck out of it. Good Luck!
The CupCake lady in Austin, TX. Bakes all-organic “vegan” cupcakes (only 3 icing/cake combos: chocolate/vanilla, chocolate/chocolate, and vanilla/chocolate - one of which is called the Michael Jackson, but I don’t remember which)
Sells them w/cold milk from a restored vintage 1950s-era “silver bullet” camper she can haul around town depending on where the crowds, tourists, locals and festivals are that day. No rent, significant utility fees or hassle w/location,
…but I don’t think that idea would really apply here. No parking, narrow roads & lotsa potentially angry competition for curbside spots. Not to mention the existing overabundance of sugary sweet stuff.
Not sure about Taiwan, but I recall reading that in U.S., European & Japanese markets, “up market” or “gourmet” items marked WAAAY up beyond reason actually sell better due to implied value and “cachet” as mentioned (ie tasteless Japanese/French-style cakes that look pretty but have zero flavor) and exaggerated profit margin (sell fewer to break even).
Maybe you could sell “Mm’selle’s Organique Oven Tarts” @ Jason’s or Sogo? Use their real estate & existing customer base to sell “designer” cakes. The wedding, custom online & gift ideas are good too. Niche markets.
As for me, if I knew how to make the meat & where to buy the spindle-oven thingy, I’d set up a traveling Turkish kebab wagon in front of the popular nightspots 3-4 nights a week. You’d make a killing & be a hell of a lot better than the disgusting local sausage guy! The night markets all shut down too early, leaving drunken revelers no choice but to attack the 7-11s or McD’s for crap food.
…That lady’s van sounds like the coffe vans in Nantou, East Coast, etc. touristic areas have many. Quite good business if I remember correctly from an article I translated years ago.
There is a lot of Mediterranean food that is quite cheap to make, extremely healthy, and you could sell with big profit. Most of them are pretty simple to make, and all my Taiwanese friends seem to enjoy eating them when I do it at home. The whole problem of Taiwan is that importers have normally no sense of the quality of the products they sell, just as long as the tag they carry is good. Take coffee, by example - pretty much there is only 2 or 3 places in Taipei with decent coffee… and you overpay for it.
If you want to do some bakery biz, try to find a recipe that is old, reliable, not too heavy on sugars and that you can sell only by saying the name. May it be a “mille-feuille”, semla, zeppole, biscotti, etc… Just by using the deep fried doughnut, you can make a big number of different things…
But it all comes down to taste… start making something on your own and offer to your friends, asking them if they would buy it…
What are cupcakes? I had a look online but all I could find were silly wee mini sponge cakes with icing on the top that children are wont to make as their first attempts at using a kitchen. Are you serious that people would actually buy such things? Is this an American thing?
[quote=“sjhuz01”]
As for me, if I knew how to make the meat & where to buy the spindle-oven thingy, I’d set up a traveling Turkish kebab wagon in front of the popular nightspots 3-4 nights a week. You’d make a killing & be a hell of a lot better than the disgusting local sausage guy! The night markets all shut down too early, leaving drunken revelers no choice but to attack the 7-11s or McD’s for crap food.[/quote]
This indeed might work. When you go out in LKF or Wanchai in Hong Kong, you will see there are several kebab shops, open till very late. Problem in Taipei however is that there are no real “bar districts” anymore. The kebab shops in Hong Kong do so well because there are lots of foreigners bar-hopping in LKF and Wanchai. Bar-hopping in Taipei is mostly by taxi. Nevertheless, several times I took Taiwanese friends to the HK kebab shops. They love it.
There are 2 or 3 spots that host regular weekly events w/predictable schedules & good crowds. I think nearly anyplace w/the business model of “people + alcohol + late night out” naturally involves “= wants food to avoid hangover” … but I could be wrong
Yes. Very hip in the States now. Even getting popular to forego the traditional wedding cake for a cupcake arrangement. Genearally though, IMO, they’re too moist and sweet for the Taiwanese palate.
) before he hit the right combination.