Serial entrepreneur Candace Nelson shares the secret behind her cupcake empire, Sprinkles, and explains why she decided to start all over again
Candace Nelson, 48, never thought she would be able to turn her hobby into a profitable business. But the founder of the Sprinkles nationwide chain of cupcake shops 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 to people thinking about starting their own business.
Nelson herself never thought of baking as a career until she lost her job in finance.
"I had been working in the Silicon Valley when the dot-com industry went bust and I became unemployed," she explains. "I had no idea what was next for my career. I was upset and depressed."
"I leaned into baking because it was a hobby that always brought me a lot of comfort."
She recalls going from working 16 hours a day to spending afternoons lying on the couch watching daytime television and baking. "I leaned into baking because it was a hobby that always brought me a lot of comfort," says Nelson.
At the time, in 2000, there were fewer places to find business inspiration. "There wasn't social media or podcasts to listen to for business advice or to teach entrepreneurial skills," says Nelson. "Television shows like "Shark Tank" didn't exist."
But there was Oprah and Martha Stewart. "I would see women come on Oprah's show who had overcome so much to start their own business," Nelson recalls. "Their stories inspired me."
The Little Cupcake That Could
Nelson began baking cakes in her kitchen and selling them out of her house. She quickly realized that the cake racket would be a tough way to earn a living because pastries — even those with high frosting-to-cake ratios — are a treat, not a staple.
"People buy cakes for special occasions, not every day," she says. "It is difficult to be profitable when you aren't selling something people need on a regular basis."
To Nelson's good fortune, she became a cupcake monger just as a trend that The New York Times christened "cupcake chic" made it profitable to peddle fancy versions of the childhood favorite.
"Cupcakes had always been around as a dessert for kids' birthday parties," says Nelson. "But when I was getting married in 2001, elaborate cupcake towers became fashionable as an alternative to the traditional wedding cake. I thought there might be a way to market this trend in a less formal way."
Keeping the Faith
However, having an idea that really excites you is only the first step in starting a business. Nelson's next hurdle was getting others as excited about cupcakes as she was.
"Friends of mine who were in the fashion and music business wanted to support me," says Nelson, who splits her time between Los Angeles and Sun Valley, Idaho. "They would invite me to their parties and urge me to bring my cupcakes."
But their encouragement backfired.
"It was really brutal in the beginning," recalls Nelson. "Other guests would come up to me and ask, 'So what do you do in the entertainment industry?' I would have to explain that I wasn't in that business, that I baked the cupcakes. They would walk away completely disinterested. I had a lot of humiliating moments and a lot of rejection. It was humbling."
Instead of giving up, Nelson took it in a new direction. "I still believed I had a good idea," she says. "I just needed to find a different 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 acknowledges that some skeptics thought it would be difficult to start a cupcake business when it seemed everyone was on a low-carb diet. But she wasn't deterred.
"My goal was to create a product that was so delicious it was worth the splurge," she says, "If you are eating dessert, you shouldn't be disappointed in the taste."
Beyond making tasty cupcakes, Nelson was determined to create a tasteful brand. "Cupcakes were seen as cute, childlike and feminine," she says. "I didn't want that for Sprinkles. No pink logo or lacey doilies. Instead, we chose an artsy, playful and gender-neutral aesthetic."
Nelson jokes that she was an influencer before there was a name for it. She came out of the kitchen to star in front of the camera as a judge on Netflix's "Sugar Rush" and Food Network's "Cupcake Wars." She also was an executive producer of both shows.
"Your personal and business selves need to align," Nelson says. "Customers want to know who they are buying from; they want to know you. And in a world full of mistrust, being authentic and trustworthy makes customers want to be loyal to you and the brands you stand by."
Tips for Home Bakers
"Bake from scratch," says Nelson. "Box mixes are convenient and will guarantee success every time. But box mixes are filled with preservatives. It's easy and tastier to bake with real ingredients."
Her second big tip is to use an ice cream scoop when placing cupcake batter in muffin tins. She explains, "The simple spring-release scoop will ensure that each cupcake is the same size and bake evenly."
"You're never too old to be an entrepreneur."
"Sometimes people look at a successful business and think it was easy to achieve," Nelson says. "It takes work to build a brand. It's tough and, at times, very lonely. There are a lot of challenges and moments of doubt."
She adds that it's important to prepare for setbacks and disappointments as you grow a business. "You can't avoid it and you have to know that going into it," she says.
"Even as Sprinkles took off and became successful, there were still times I would read a bad Yelp review and feel personally attacked," she recalls. "You need to re-frame the criticism and say to yourself, 'At least I am in the game.'"
In addition to sweet cream butter and pure Nielsen-Massey Madagascar Bourbon vanilla, Nelson believes enthusiasm has been key to her success.
"Enthusiasm helps your mission," she explains. "Not only do you have to be excited about your product, but you want to surround yourself with people like employees and suppliers that feel 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 an amazing time for them to start a business. They have the financial resources, the time and the energy it takes to be successful."
Nelson is taking her own advice. After selling her controlling interest in the Sprinkles brand in 2014, she took some time off to focus on her family. While she had no thought of getting back into the food business, she wound up doing just that, co-founding a chain of Neo-Neapolitan pizza restaurants called Pizzana.
"Having run a business before," she says, "I am excited to do it again and take what I learned from my first business into this next venture."