Reference no: EM132866781

Sisters Take Love of Baking to Next Step

When the three sisters decided to open a store selling homemade cupcakes, there were many naysayers wondering how it could be possible to make any money on the delectable delights. The owners of Crave Cookies and Cupcakes today have a business that is thriving and growing each year, with a recognizable name throughout Calgary-and [are] selling scrumptious cupcakes by the hundreds of thousands. Actually, the initial enterprise really started in their mother's kitchen as the three young girls- Carolyne McIntyre Jackson, Jodi Willoughby, and Antoinette Knight-grew up on a ranch outside of High River. There were always buckets of cookies in the freezer. Baking was a way of life for the family. Now, those recipes their mom Helen McIntyre used are the ones baked at Crave. "We always grew up with home-baked goods and had a real appreciation for quality. So we all went to university and kind of did our own thing for about four or five years; we were all in different careers," says Willoughby. "And Carolyne and I were ready for a change. Antoinette, as well." The genesis for taking a passion for baking to a retail enterprise came when a cousin told McIntyre Jackson: "You need to sell your cookies. Your cookies are so good." "We found this space (on Kensington Road) and then we started doing a business plan and we started finding all the cupcake shops. And we decided we were going to do cupcakes. We knew we had the recipe. We had this fabulous recipe ... I kind of always thought if I won a million dollars I would open up my own bake shop ... We kind of discovered it doesn't take a million dollars, it just takes some hard work and some organization." "People thought we were crazy," says McIntyre Jackson of when Crave opened for business. "They said, 'So you're going to pay the rent just making cupcakes?' So, of course, we were freaked out. We didn't take salaries for over a year. We had the luxury of being able to do something like that so we kept all the money in the business. And we really kind of grew as we needed to." In their business plan, they thought they might be able to hire a pastry chef in their third year. They hired a pastry chef after about five months. That's how successful the baked goods had become to customers throughout the city. "Everything is baked from scratch every morning," says Willoughby. Crave sells hundreds of thousands of goodies each year with sales increasing by 30-40 percent in each of the last three years. "This year's numbers we're still up from last year and we didn't think we could hardly get any busier from last year," says McIntyre Jackson. About two-thirds of the sales are from customers who come into the two store locations. The other third is from orders. Crave also has a van that makes deliveries throughout the city. Ninety percent of the sales are cupcakes. There are 13 regular flavours, 1 flavour of the month, and occasion-driven specials such as "Super Dad" cupcakes for Father's Day. Crave also bakes and sells cakes and cookies, and recently introduced Gluten-free cupcakes to its product line. In addition to the original store in Hillhurst, which it opened in September 2004, Crave [had] expanded to five locations in Calgary by 2010 and one each in Edmonton and Saskatoon.

Discussion Questions:

1. Given Craves' success was far faster and greater than their business plan forecasted, do you think there is any value in creating a business plan? Why or why not?

2. Many entrepreneurs spend far too much time researching and writing the business plan instead of just getting on with launching the business. What do you think drives them to done this?

3. Do you think the business plan is more or less important than the entrepreneur's ability to execute the plan? Why?

Note: Please use the format of case memo IRAC: issue, research, analysis and conclusion