Inspiration struck one night as Rachael Henderson was watching TV in her Elkhorn-area living room and “Cupcake Wars” came on.
Visions of sugar, butter, eggs and flour danced in her head as two thoughts clicked: one, west Omaha needs a cupcake shop and, two, we can do better than those bakers on TV.
She put on her slippers and ran outside, taking the well-worn path over the berm and through the hedge to the house next door, where her sister Sarah Alsup lives.
“Dude, I've got it,” she told Alsup. “We're going to do cupcakes. We're going to open up a cupcake shop.”
A Business from Scratch
Today's story starts as two sisters turn a dream of running their own business, Mockingbird Cupcakes, into reality.
Monday: The message
Tuesday: The loan
Wednesday: The shop
Thursday: The staff
Friday: The family
Henderson and Alsup, then-37-year-old twins, were stay-at-home moms with professional degrees feeling a midlife itch to start their own business. They talked into that February night in 2012 about how perfect it would be to own their own cupcake shop. They were like many new entrepreneurs: giddy, nervous, confident in their abilities — but with only a vague notion of what starting a business from scratch would involve.
“The hardest part about starting a business is, where the (heck) do you start?” Henderson said. (Did we mention these tanned, blond sisters have a penchant for swearing? Consider their quotes edited for publication in a family newspaper.)
So, what was the first step? This week, The World-Herald will detail many of the steps the sisters took over the last 13 months to prepare for opening their own shop: product development, marketing, getting a loan, working with a contractor, hiring staff and leaning on family members for more help at home.
Whether it's cupcakes, industrial manufacturing, professional services or other business ideas, more entrepreneurs are going down the same winding path as small-business activity rebounds amid the larger economic recovery, according to the U.S. Small Business Administration and the Ewing Marion Kauffman Foundation.
The sisters' business, Mockingbird Cupcakes LLC, became one of 8,659 domestic businesses incorporated in Nebraska in 2012, a 19 percent increase over 2011 and part of a pattern of rebound after a drop in incorporations during the recession.
For all of the optimism entrepreneurs feel, most new small businesses don't last. About 30 percent don't survive their first two years. About half survive at least five years, and only about a quarter stay in business 15 years or longer, according to the SBA and Bureau of Labor Statistics.
Business development experts say there are many steps entrepreneurs should take to ensure they are prepared to launch and sustain a business.
Having a solid business plan, plenty of working capital, family support and a passion for the industry are just some of the ingredients for business success, said Barbara Foster, lead economic development specialist for the SBA in Omaha.
Fortunately, she said, the SBA (which backed the loan that Alsup and Henderson were eventually approved for) and organizations like the Nebraska Business Development Center at the University of Nebraska at Omaha (which helped them with their business plan) offer free services and advice to entrepreneurs.
The sisters weren't thinking of all that when they started out. They weren't even sure the idea would work.
“I thought it was nuts,” Alsup said, thinking of the night Henderson burst into her kitchen with the big idea.
They did know that whatever they did, they would do it together, as they have in every other part of their lives.
They graduated first (Alsup) and second (Henderson) from Elkhorn High School in 1993 and went on to the University of Notre Dame. After the death of 17-year-old brother Carl in 1995, they returned home and transferred to Creighton University, Henderson earning a law degree and Alsup a degree in elementary education.
They stuck by each other — literally, building houses side by side in Elkhorn — as they married and started families, and through scary times like Henderson's treatment for breast cancer and the premature birth of Alsup's fourth son, who spent the first fragile weeks of his life in the hospital.
Compared with that, starting a business didn't seem so daunting, especially with each other to lean on.
Whatever it would take, Henderson said, the sisters knew they had to get started.
“It's our time,” she said. “We're almost 40 years old.”
The sisters had been to enough cupcake shops while traveling in other cities that they had a feel for what their cupcakes should look and taste like. They started baking samples at home and developed what would become their core flavors, the “Vanilla Standard” and “Chocolate Standard,” meant to evoke a “gold standard.”
A trip to Florida with their mother last March led the sisters to the name of their business.They were lying on the beach, brainstorming cupcake names and cute words, when it came to Henderson: the song they sang to their children at night.
“I said, 'Mockingbird,'” she said. “We both got goose bumps.”
Back at home, they let their housework slide as they worked on more flavors and started sharing their creations, taking them to the religious education class Alsup taught and selling them at school charity events.
They took a trip to Walmart to price ingredients for mass production, scratching out back-of-envelope projections for how many cupcakes they'd need to sell at a time to make a reasonable profit.
Initially the sisters weighed operating the business from home, and they searched for a commercial kitchen space they could rent in the Elkhorn area.
But then, “We thought, 'Go big, or go home,'” Henderson said, envisioning a real shop where they could host parties, cater events and just be a place a customer could stop in for a treat.
Making sure they were ready to “go big” meant talking to the one business owner whom they wanted to impress more than any other with their plans.
Roger Brodersen, their father, is a former chief executive officer of Data Transmission Network, the Omaha agricultural information service he founded in 1984 when he was chief operating officer for the Scoular Co., an agricultural commodity risk management firm.
Earlier, at a family dinner, he had scoffed at the idea of selling cupcakes, asking, “Why would anyone pay $3 for a cupcake when a doughnut is 50 cents?”
Apparently, he'd never seen “Cupcake Wars.” He didn't know about the trend, about cupcakes being the thing brides serve at weddings and moms serve at 3-year-olds' birthday parties.
The sisters are not at the forefront of the trend, which started about six years ago. More than a half-dozen shops known for cupcakes already are open in the metro. They include Jones Bros. at Aksarben Village, Bliss Old Market Bakery, the Sweet Stop in Council Bluffs, Cupcake Island at 119th and Pacific Streets, Gigi's at Village Pointe, Cuppycakes in the Elkhorn area, Sweet Magnolias bakery at 40th and Cuming Streets and Drizzles Bakery in Bellevue.
Still, the sisters thought the west Omaha market specifically was underserved, and while Gigi's opened nearby when they were still in the planning phase, they thought of ways their shop would be different enough to compete. For example, their kitchen is visible to customers, who can watch the baking and decorating process.
After they'd done the math and knew they wanted to go ahead with the business, Alsup and Henderson went to see their father at his office, but not to ask for a loan.
“This is our deal,” Henderson said.
They just wanted his approval.
“We were sweating bullets,” Alsup said. “We went in there. We gave our spiel. He's just, 'Mmm hmm.' We could see he was starting to get excited about it when he saw the numbers.”
Finally, he was on board, telling them, “Roll the dice.”
Thirteen months after their inspiration struck, Henderson and Alsup stood together on a chilly March Saturday outside the Lakeside Plaza shopping center at 173rd Street and West Center Road, in front of their new store, Mockingbird Cupcakes. They wore their “uniform” of denim shirtdresses under pastel aprons. Henderson took one handle of a pair of giant wooden scissors from the Western Douglas County Chamber of Commerce, and Alsup held the other.
“Ready?” Alsup asked.
Yes, her sister said, shifting into position to cut a wide red ribbon. “One, two, three.”
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