And so the great cupcake bubble of the 21st century has burst, taking with it the industry’s most prominent chain. New York-based Crumbs has closed all of its locations a week after NASDAQ suspended trading of the company’s stock. “
NO. The Cupcake Business IS NOT DEAD.
This is the simply the outcome of 2 very common, classic mistakes made by new business owners
1. Expanding too big too fast
(especially going public and taking on major problems -which is deserves an article of its own)
2. Expensive expansion based on a Fad or Trend
The former is seldom sustainable and the latter-almost NEVER.
The classic mistake made by many new business owners who see major success early on (especially when the success is predicated on media hype-as with the reality TV cupcake wars) is to begin to believe that if small is good, then BIGGER is even better and they build themselves right out of business.
Without the major problems of doing business as a public entity or by the high daily overhead expenses
they created when they expanded they could easily have stayed in business for years.
Some business can and do make a killing on fads and trends, but major expansions based on such shaky ground never works.
by Kymmberly Gail
The “Master of Main Street”