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Moula Good Business

Cupcake Central: Changing the World One Cupcake at a Time

Founder and director of Cupcake Central, Sheryl Thai, started her career in Information Technology. But when the Global Financial Crisis hit in 2009, she lost her job and decided to pursue her dream of opening a cupcake store. Eight years later, she has 5 stores across Melbourne.

“I started Cupcake Central in 2009 after I lost my job as an IT consultant in May that year thanks to the GFC downturn. I went from working at a desk in a corporate office to baking in my kitchen. I bootstrapped, baked from home, built a website, started going out and selling at markets and festivals. I was selling cupcakes online and fortunately, it grew to the point where I outgrew my kitchen, so my business partner and I decided it was time to open up a store.”

From childhood passion to adulthood career

Sheryl’s tumultuous journey from a corporate job to following her dream started with a childhood dream to change the world, and a passion for baking cupcakes.

“When I was 8 years old, my parents asked me what I wanted to do when I grew up.  Instinctively, my answer was ‘to change the world’. I didn’t know what that meant at that time but as I grew up and found my purpose in life, I saw Cupcake Central as my opportunity to change the world for the better, which was making people happy through cupcakes.”

A trip to the famous Magnolia Bakery in New York City when she was 21 years old consolidated her passion for baking and showed her what was possible with a commercial bakery. Then, in 2009 when she lost her job in the GFC downturn, she got the nudge she needed to pursue her passion and start pursue her dream and her own business.

“Baking was a creative outlet for me and it helped me be myself. Whenever I was baking it transported me to another world where nothing else mattered. Whenever I brought cupcakes to parties or into work, I really enjoyed seeing people’s faces light up. I started thinking that was something I wanted to be doing every day and after I lost my job in the GFC, I realised the timing was perfect to make that dream happen.”

Cupcake Central

Making the dream a reality

The early days of Cupcake Central were a steep learning curve for Sheryl. She baked from her home kitchen and delivered cupcakes herself. She was doing everything that needed to be done and because they were bootstrapping, there was no scope to bring on more staff to help out. It was a hard grind, taking online orders, going out to markets and festivals, anything that would help sales and build brand awareness.

“When I started, there was Facebook but no Instagram or other social media platforms, so I posted on Facebook and people reached out to me there and asked me to bake for their friend’s birthday. When I started, cupcakes were really trendy but as the years went on other trends arrived like macarons, frozen yoghurt, and doughnuts. People always asked me when will the “cupcake bubble burst” and my response was that cupcakes aren’t a fad. That’s because they’re a bit nostalgic and have always been a bit timeless. They’re also great for parties and catering because you don’t need to fuss about cutting up cake. And with all the different flavours we bring out, there’s always something new to try.”

Harnessing the power of data

Even in those early days, Sheryl used the data she had available to guide her decision making. She knew it was important to learn as much as possible about her customers so she started keeping track of where she was delivering cupcakes, where inquiries were coming from – anything that would help her better understand her customer.

“From my background in IT, I knew the benefit and power of analysing data. And as I saw how important it was to understand who our customers were, and where they were coming from, I started collecting data. Early on I was delivering cupcakes so even just looking at the areas I was delivering to and building a spreadsheet, which helped when we went to get funding and started looking for a location to open up our shop. We were able to identify where most of our customers were located, which obviously contributed to the store’s success.”

We were faced with so many challenges early on, the biggest challenge was how to prioritise them all.

The first store and the start of the challenges

Sheryl’s data analysis directed them to open their first store – a lifelong dream for Sheryl – in Hawthorn. Sheryl and her business partner accounted for everything before the big store launch. The problem was, they had no experience in hospitality.

“We both came from corporate backgrounds, so on our opening day we had the coffee machine ready, cupcakes all sorted, but we’d forgotten to buy any tea towels, so we couldn’t dry any dishes. In hindsight, it seems like a small challenge, but at the time it was super stressful. We encountered more problems every single day, which led to the realisation that challenges weren’t going away, I’d need to look at how I responded to them.”

The biggest challenge was prioritising challenges

As a new business owner, Sheryl wasn’t experienced in dealing with the constant stream of novel challenges that arose seemingly every day. So she leant on her IT experience and set up systems and processes that would help solve the biggest challenge of all – prioritisation.

“We were faced with so many challenges early on, the biggest challenge was how to prioritise them all. Everything felt urgent and there was so many of them, but we identified pretty quickly that we needed to put some processes and systems in place to help solve the challenges and reduce our stress. We refined our processes so we could fix any preventable recurring challenges instead of just putting our spot fires.”

Cupcake Central

The key to identifying business problems

Once Sheryl implemented better business systems, it enabled her to step away from the business and take time to reflect on the business and herself.

“I believe the key to identifying business problems is self-awareness. There’s only so long you can ignore certain challenges or problems before they continue coming up. For example, when I started Cupcake Central, I was 26 years old, and I never knew how to lead a team, I was inexperienced, and I had this mentality that I was too young to do it. I believed that for many years until I concentrated on self-improvement and confidence and I started to believe that I could lead a team well. As your business grows you need to grow as well.”

An unlikely solution to business problems

As Sheryl went further down the path of self-improvement, she discovered meditation which she says has been a critical factor in her success as an entrepreneur.

“One of the things that helped me deal with the stress of running a business was meditation and exercise. Once you understand who you are as a person, and have that maturity within yourself to understand your values, strengths and weaknesses, you’re much better equipped to tackle challenges. When Cupcake Central was starting out, I would get flustered and stressed about the smallest issues. Over the years I’ve come to the realisation that problems will never go away, so I need to address how I react to them.”

Early wins that kept the faith

Before Sheryl was offered a coveted space in Melbourne Central after just 9 months in business, there was another win that helped boost her confidence in the business.

“One of the early wins that helped boost our spirits was when noticed we started getting return customers. We had people visiting us who were referred by word of mouth. And then at the nine-month mark, Melbourne Central contacted us and asked if we’d be interested in a shop in their new retail area. We were so shocked, we were only nine months old but everyone was telling us how hard it was to get into shopping centres. Plus it was always a dream to have a store in a shopping centre. And even though we didn’t have the funding, we went and checked out the space and straight away I knew I wanted the space. Even though they contacted us, we still had to go through a lengthy pitching process to show them what we’d do with the space.”

Cupcake Central

Quality before all else

There are so many factors that have contributed to Sheryl’s success, but the first thing she started with was quality.

“Quality is everything. I still love hearing customers say, this is the best cupcake I’ve ever had. That’s what everyone in my business strives for. We want people to have a memorable experience and the quality of our cupcakes is critical to that, we believe customers know quality when they try it. All of our pastry chefs take pride in their work, they develop new flavours each day, bake them from scratch from quality ingredients, and it all combines into what we hope is a cherished memory.”

The keys to driving growth

Faced with such big growth so early on, Sheryl says two factors have helped them grow. Branding has been critical to business growth, and defining their values has helped direct decision making throughout the business, especially when it comes to hiring staff.

“Having a strong brand has been critical to our growth. We’ve invested a lot of time, money and energy into our branding to make sure it’s perfect. We’ve rebranded three times and it is costly, but if you do it well, it pays off. Defining our values has also been critical to our success. Understanding our values helps us make business decisions like whether or not to agree to a collaboration, how to roll out a marketing campaign, they permeate throughout the entire business and help guide us.

When we started hiring staff, we looked for people who were super passionate about their profession and also show that passion in other aspects of their life too. We believe you can teach skills, but you can’t teach passion. And passion is an important factor in applying our three values, which are quality, experience, and aspiration. We always all teach our staff that we’re in the business of selling experiences, not cupcakes. When people walk into our stores, they’re creating memories, and their experience is really important to us. Every element of our business focuses on providing a memorable experience, and our values help us achieve that.”

The double edge of staffing

While Cupcake Central’s growth has relied on new staff, it also accounts for the largest expense for the company.

“Our business is very labour-heavy. Our cost of goods is low, but our staffing costs are a large part of our overheads. Labour costs in Australia are quite high compared to other countries, which is just one of the challenges we need to overcome. We differ to other cupcake stores because we bake all our products in store – it was always a dream of mine to do that. I want people to see what goes into their cupcakes, the quality of ingredients, and just to enhance that experience.”

Using tech to improve efficiencies

Sheryl and her business partner’s professional background in IT means they’re attentive to the latest and best technology that can help them run their business better.

“We use Xero for accounting, and an app called Deputy, which helps us track rostering, signing in, and staff hours. And we run an online store to take orders too, so we definitely use our IT backgrounds.”

Cupcake Central

Work-what balance?

Sheryl’s work-life balance went from corporate 9-5 to all-consuming entrepreneurship, which she’s embraced with absolute glee. She loves running her own business and perhaps unsurprisingly for someone so passionate about cupcakes, she doesn’t believe in work-life balance.

“I don’t believe in work-life balance. When you start a business, it’s very consuming. You need to make sacrifices across most aspects of your life because you need to prioritise making your business work, which can be very isolating. Once I started connecting with other business owners and entrepreneurs, I realised I wasn’t the only one experiencing that. It is possible eventually to get your business to a point where it takes less time to run, once things are systemised, you have staff in to take some of the workload so you can start working on the business instead of in the business. When I work I really enjoy it, so it doesn’t feel like work.

Obviously there will be days when I don’t feel like going into work, but I haven’t dreaded going into work since I was working in IT for a big corporate business. I’d sit in my car until 8:59 am and every day I thought about how I could get out of work. And now, running a business is so tough, but I wake up every day excited about tackling the challenges that come with running a business. Having that freedom and satisfaction from my work is something I wouldn’t trade for anything.”

Slow, considered growth

A little over eight years after Cupcake Central opened their first store in Hawthorn in August 2010, they have added four stores in Melbourne Central, Highpoint, Eastland, and Fountain Gate. Such huge growth in such a short time frame can be catastrophic, but Sheryl says they staggered their growth and waited patiently for the right opportunity.

“When we started, there were four of us – my business partner and me, and our brothers. Over the last eight years we’ve grown to about 75 staff members and five store locations, so we’ve enjoyed significant growth. I never dreamed it would become so big, I never thought I’d have more than one store. But as we developed our brand and built brand awareness, opportunities started coming to us. We’ve always used our values to guide our decision making and when it came to growth we tried to stagger it to avoid too much growth too quickly. All our stores are located in very different areas of Melbourne based on where our customers are located.”

Cupcake Central

Using customer service as a marketing tool

Cupcake Central’s focus on providing a memorable experience has proven to be a powerful marketing tool. Their customers have provided countless word of mouth referrals, positive online reviews, prolific social media content, and it helps more people discover Cupcake Central.

“We’ve grown our business by focusing on customer experience. We welcome customer feedback and listen to our customer and respond to enquiries and questions. Especially with complaints – we actually receive very few complaints, but we priorities replying to them quickly. Growth is all about giving your customer a great experience because it’s easy to sell something to someone once, but it’s much harder getting them to come back again and each and every time. So we looked for ways we could engage with the customer beyond just selling cupcakes in store. So we started running workshops and I spoke at a lot of events to share my story, and participating in lots of different events to help get the brand out there, and supporting charity events too.”

Despite starting her business before Instagram was launched, Sheryl was quick to adopt the platform as another touchpoint for customer experience. Cupcake Central’s customer engagement helped them build a strong, loyal and vocal following.

“Social media is a powerful marketing tool for us without spending much money. We have the opportunity to engage with customers every day through our social media channels. We were on Facebook early on and actually started before Instagram was around but we jumped on it before it was huge, which has helped us grow a strong following. I also tell my story a lot and believe because it is through stories that people can truly and meaningfully connect. I wanted people to see the passion that started this company and continues to be an integral part of it.”

The trick to finding good mentors

Sheryl has constantly sought inspiration and guidance from mentors ever since she read a book in high school that changed her life. As she began seeking more mentors, she found them in books and podcasts.

“I’ve had a lot of mentors throughout the years. One thing I’d say is that a lot of people think that a mentor needs to be a face-to-face interaction, but a lot of my mentors are through books and podcasts. When I was 15 I picked up a book by Tony Robbins and it changed my life. It made me start thinking about living beyond just one prescribed way of living. I made me question how I wanted to live my life and how much passion I want to put into my life.”

After going through the challenges of starting a new business in the isolation of her kitchen, she started going along to mentor groups. She realised quickly that there were very few entrepreneur networking groups for women. So, of course, she started her own.

“Cupcake Central started from my home. I didn’t know anyone who’d started a business and a lot of my friends didn’t understand what I was going through. I felt like I was the only one facing the challenges that I later learnt were so common for startups. So I went to networking groups to try to find people like me and one particular group, which was great, was 95% men. It was quite tough to connect with a lot of the people there, but I met a few women who were going through similar challenges. So we decided to meet up every couple of weeks and chat about business and life and that grew into the League of Extraordinary Women. Now it’s Australia-wide, we run events and conferences around the country every year and bring together sometimes 500 women in business to network, learn and help one another. And now I’m part of Entrepreneurs Organisation, which is how I know Hannah Vasicek from Francesca. I constantly seek out impressive women because I believe the truth in the saying you are the average of the five people you spent the most time with.”

Cupcake Central

How mistakes encourage growth

Sheryl says there’s one thing she wishes she knew as a truth early on in her journey to becoming an entrepreneur – that mistakes are a critical part of growth.

“Everyone always says making mistakes is part of growth, but when I was starting out I wanted everything to be perfect. It took me a while to realise there’s no such thing and I wish I realised that much earlier on, it could’ve saved me a lot of anxiety and stress. Another thing I wish I knew earlier was how to meditate. It’s helped me so much and I know it would’ve helped me in those early, stressful days.”

Long-term business goals

As Cupcake Central continues growing, and Sheryl continues her mission to change the world, one cupcake at a time, she’s aiming to create more memorable experiences with more people around the world.

“Long term I want Cupcake Central to continue making great memories for people. Part of that will be looking at how we can connect with more people around the world and create amazing content instead of being limited to interacting with people in our Melbourne stores, and social media. I want to share my story so people can see that no matter how small or seemingly silly your dream may be, like opening a cupcake store, it is possible to achieve it. I hope that my story of achieving my dream through cupcake can help inspire people to follow their dreams, so I want to share it with more people around the world.”

Cupcake Central

Catastrophic muck-ups and how to avoid them

What’s the worst catastrophic muck-up Cupcake Central endured? Find out here and see how Sheryl turned it into a positive learning experience.

Author:

Sharing customer success stories from good businesses around Australia, practical good business guides and the occasional catastrophic muck-up (and how to avoid them).

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