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Teen Article: Baking Up Business


Teen member Simran BhardwajI blame the TV show Cupcake Wars for the creation of my business, Simi’s Cupcakes. I began baking cupcakes many months ago just for the fun of it. I enjoyed making satiating sweets and watching people savor a delicious cupcake. I began to realize the popularity of these pastries and concluded that if I started to sell them, I could earn some money.

At first, I used my parent’s money to purchase ingredients for my cupcake business but decided I did not want to rely on them for funding. I took $100 out of my savings account and began buying ingredients. My very first order was 120 cupcakes for a conference—I sold them for just 50 cents each. After many hours of baking, I only made $60 profit. Considering the amount of money I spent on ingredients and the amount of work I put in, that did not seem like enough. After this experience, I realized I needed to figure out how to price my cupcakes, and my dad told me I needed to keep track of my expenses and revenue.

To those wanting to start a business, it is important to determine how much it costs to make an item and figure out how much to sell it for to make a profit. I determined that one cupcake costs approximately 50 cents to make. I had to sell the cupcakes for $1.50 each to earn $1.00 per cupcake. After selling many batches of cupcakes, I was able to make a profit, replace the $100 taken from my savings account, and begin saving for college expenses.

Starting a business requires more work than simply generating products. A business owner needs to track the amount of money going in and out of a business to truly determine if the company is profitable. Through this cupcake experience, I learned the importance of calculating revenue and expenses and gained pride in being able to earn money without my parents’ help.

Teens Can Get $100

SLFCU members age 13-17 are invited to submit an article on a financial topic to be considered for publication in our Dollars & Sense newsletter and on our website. SLFCU will award teens $100 for published articles. Click here for details and to submit an article. SLFCU will review all submissions and respond within 30 days.

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