How Two Sisters Traded Corporate for Cupcakes

Driven by a childhood dream, the stars of TLC’s DC Cupcakes made the leap to an entrepreneurial life.

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Katherine Kallinis and Sophie LaMontagne, sisters and stars of TLC’s reality show DC Cupcakes, had been dreaming of opening a cupcake shop together since they were kids. “But we never considered it as a real career option. We were expected to go to college, get good jobs, and we were afraid we would disappoint our parents,” says LaMontagne. Even as LaMontagne excelled in the venture capital world and Kallinis in the fashion industry, the idea of launching their own bakery continued to nag at them.

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“In 2007, we had a frank conversation. We said, ‘We have to stop thinking about what other people will think about us, and we have to do what makes us happy. We didn’t want to spend the rest of our lives wondering ‘What if?’” says LaMontagne. Still, she adds, “It’s a very scary thing to quit a job that’s stable, secure, and comfortable, and to give it up for something that’s relatively unknown.” At first, she says, their family thought they were making a big mistake.

LaMontagne recently spoke with U.S. News about how she and her sister prepared financially to make the leap, as well as their money mistakes and other lessons learned. Excerpts:

What motivated you to leave your corporate jobs?

It was a really tough decision for both of us. We both loved our jobs and were very happy in our careers. [But] ever since we were young, we had talked about opening a bakery together… in the two years leading up to [the launch], we became more serious, and started tweaking our recipes and deciding on our products. We did a lot in our downtimes, on weekends and evenings. It was hard, but you learn when you want to be an entrepreneur that there’s no more ‘me’ time or relaxation time, it’s all about going after your dream.

Did you start small?

We tried to do things in baby steps, so you can see whether or not it’s feasible. If you’re afraid of making a big commitment, you can see about renting a commercial kitchen space or certifying your home and baking for family and friends. In our case, we probably didn’t do it the smartest way. We jumped in and then looked back. But for people who have families, you want to be cautious about it, you don’t want to do something foolish. In our case, we didn’t have kids yet, so it was a good time for us.

We didn’t want to ask family or friends for money. We maxed out our credit cards and were turned down by so many banks because of the recession. But we were at the point in our lives where we thought, ‘If we do this and lose our savings, we’ll be okay with that.’

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Did you do anything to minimize your expenses at first?

Katherine moved in with my husband and me and slept on our couch. We streamlined our lifestyle. We did no advertising, except I bought a $50 color poster at Kinko’s, and my husband was screaming at me, ‘We don’t have $50 to spend on a poster!’ In our case, at the beginning, we drained our bank accounts. We were painting the walls ourselves and doing a lot of work we should have hired professionals to do, but we couldn’t afford it.

Did you make any financial mistakes along the way?

Tons. We probably started way too small, but that was all we could afford at the time. We spent a lot of money rebuilding things. We were undershooting every single time. We did our kitchen three or four times in the first location, and finally moved to M Street, trying to keep up with demand. If we had planned that from the get-go, we wouldn’t have wasted all that money.

Did you create an official business plan before launching?

We did. I used to work in venture capital, so I’m used to working with start-ups and know the importance of a business plan. We drew up a rough business plan. But I also learned that your business plan goes out the window and doesn’t necessarily go how you think it will. So we drew one up for initial planning. We were very conservative in our projections, and we thought our business would be mostly special event orders, for baby showers and weddings, with little walk-in traffic. We didn’t plan on the walk-in traffic.

On the first day, we said, ‘We’ll bake 500 cupcakes.’ We ended up selling out in a couple hours, and now we bake 10,000 cupcakes a day. We couldn’t have predicted that. Our business plan became obsolete on day one. So it’s not about planning but about how you adjust to changes. The people who do well are the ones who will adjust.

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Was branching into television always part of the plan?

It happened by accident. A customer came in. He was a TV producer. We’re always in the thick of it, and he saw the chaos and the stress, and our mother in the back. We filmed for a weekend and he brought it to TLC. They ordered the first season, and before we knew it, we were filming more episodes. It happened really quickly, and the most surprising thing is the amount of letters and emails we received, mostly from women around the country, who said, ‘I have the same dream.’ They’re not necessarily unhappy with their jobs, and it is a lot of moms who want to go back into the workforce. So many people have this desire to quit their desk jobs and start a bakery.

What’s your advice for those people?

I always tell people, go for it. You don’t want to spend your life regretting it. Take baby steps. It’s very scary, but see if you like it, and grow it from there. When we first started, it was very small. For our first shop, we would have loved to open our M Street shop, but financially we couldn’t do it. [Georgetown Cupcake started as a smaller shop around the corner from its current location.]

It’s the most rewarding thing you’ll ever do, and people should take comfort knowing it’s scary for everyone. But if you have your heart and passion in it, you’ll do well.

Twitter: @alphaconsumer