Serial entrepreneur Candace Nelson reveals the secret behind her cupcake empire, Sprinkles, and why she decided to start over
Candace Nelson, 48, never thought she could turn her hobby into a profitable business. But the founder of nationwide chain of cupcake shops, Sprinkles, did that — and more.
In her new book, Sweet Success: A Simple Recipe to Turn Your Passion into Profit, Nelson shares her experience as a serial entrepreneur and offers advice for people thinking about starting their own business.
Nelson herself never considered a career in baking until she lost her job in finance.
“I was working in Silicon Valley when the dot-com industry went bust and I lost my job,” she explains. “I had no idea what was next for my career. I was upset and depressed.”
“I got into baking because it was a hobby that has always brought me a lot of comfort.”
She recalls working 16 hours a day to spend afternoons on the couch, watching TV and baking during the day. “I turned to baking because it was a hobby that has always brought me a lot of comfort,” says Nelson.
Back in 2000, there were fewer places to find business inspiration. “There was no social media or podcast to listen to for business advice or entrepreneurial skills,” says Nelson. “There weren’t any TV shows like Shark Tank.”
But there was Oprah and Martha Stewart. “I saw women coming onto Oprah’s show who had overcome so much to start their own businesses,” Nelson recalls. “Their stories have inspired me.”
The little cupcake that could
Nelson began baking cakes in her kitchen and selling them outside of her home. She quickly realized that the cupcake beater would be a tough road to make a living because pastries — even those with a high frosting-to-cake ratio — are a treat, not a staple.
“People buy cakes for special occasions, not every day,” she says. “It’s difficult to be profitable if you’re not regularly selling something that people need.”
Luckily for Nelson, she became a cupcake dealer just as a trend the New York Times dubbed “cupcake chic” was making it profitable to sell fancy versions of the childhood favorite.
“Cupcakes have always been a dessert for kids’ birthday parties,” says Nelson. “But when I got married in 2001, elaborate cupcake towers came into vogue as an alternative to the traditional wedding cake. I thought there might be a way to market this trend in a less formal way.”
keep the faith
However, having an idea that really excites you is only the first step to starting a business. Nelson’s next hurdle was getting others to love cupcakes as much as she did.
“Friends of mine who were in the fashion and music industries wanted to support me,” says Nelson, who splits her time between Los Angeles and Sun Valley, Idaho. “They invited me to their parties and pushed me to bring my cupcakes.”
But her encouragement backfired.
“It was really brutal at first,” Nelson recalls. “Other guests came up to me and said, ‘So what do you do in the entertainment industry?’ “I would have to explain that I wasn’t in this business, that I made the cupcakes. They walked away completely disinterested. I had a lot of humiliating moments and a lot of rejection. It was humiliating.
Instead of giving up, Nelson took a new direction. “I still thought I had a good idea,” she says. “I just had to find another way to market my product.”
Creating a Brand
On April 13, 2005, Nelson and her husband Charles opened Sprinkles Cupcakes, a cupcake-only bakery in Beverly Hills, California. Nelson admits that some skeptics thought it would be difficult to start a cupcake business when it seemed like everyone was on a low-carb diet. But she wasn’t deterred.
“My goal was to create a product that was so tasty that it was worth it,” she says, “if you eat dessert, you shouldn’t be disappointed in the taste.”
In addition to making delicious cupcakes, Nelson was determined to create a flavorful brand. “Cupcakes were considered sweet, childish, and feminine,” she says. “I didn’t want that for Sprinkles. No pink logo or lace doilies. Instead, we opted for an artistic, playful, and gender-neutral aesthetic.”
Nelson jokes that she was an influencer before it had a name. She came out of the kitchen to act as a judge on Netflix’s Sugar Rush and Food Network’s Cupcake Wars. She was also an executive producer on both shows.
“Your personal self and your business self need to be balanced,” says Nelson. “Customers want to know who they’re buying from; they want to get to know you. And in a world of distrust, authenticity and trust will make customers want to stay loyal to you and the brands you represent.”
Tips for home bakerss
“Bake from scratch,” says Nelson. “Crate mixes are convenient and guarantee success every time. But crate mixes are packed with preservatives. It’s easier and tastier to bake with real ingredients.”
Her second big tip is to use an ice cream scoop when pouring cupcake batter into muffin tins. She explains, “The simple spring-loaded scoop ensures each cupcake is the same size and bakes evenly.”
“You’re never too old to be an entrepreneur.”
“Sometimes people see a successful company and think it’s easy to achieve,” says Nelson. “It takes work to build a brand. It’s tough and sometimes very lonely. There are many challenges and moments of doubt.”
She adds that when building a business, it’s important to prepare for setbacks and disappointments. “You can’t avoid it and you have to know that when you go into it,” she says.
“Even when Sprinkles was starting and growing, there were still times when I read a bad Yelp review and felt personally offended,” she recalls. “You have to reformulate the criticism and say to yourself: ‘At least I’m in.'”
Along with sweet cream butter and pure Madagascar Bourbon vanilla from Nielsen-Massey, Nelson believes enthusiasm was the key to their success.
“Enthusiasm helps your mission,” she explains. “Not only do you need to be passionate about your product, you also need to surround yourself with people like employees and suppliers who think the same way. This energy helps you get back up when you face challenges and obstacles.”
Next up: pizza
“You’re never too old to be an entrepreneur,” says Nelson. “I have many friends who are empty nesters and I believe this is a great time for them to start a business. They have the financial resources, time and energy it takes to be successful.”
Nelson follows her own advice. After selling her controlling interest in the Sprinkles brand in 2014, she took time off to focus on her family. Although she didn’t think about going back into the grocery business, she did just that, starting a chain of neo-Neapolitan pizza restaurants called Pizzana.
“Having run a company before,” she says, “I look forward to doing it again and bringing what I learned from my first company to this next one.”