Launching your own bakery is no piece of cake

When serial entrepreneur Graham Brooks met wife Indi, she was working for a bakery. Brooks convinced her to branch out on her own and with his support she set up London Cakes.com as a sole trader.

"At first the business was quite low key and focused on taking individual orders for birthday cakes over the internet," says Graham. "But before long we had branched into wholesale bread and cakes. I had a full time-job working in a sales and marketing position and some mornings I would be up for a 4.30 start delivering bread, this would then be followed by a full day in the office."

When the family business began to take off, Graham decided to leave his day job and become fully involved in London Cakes. It was a perfect partnership. Indi was a culinary goddess, brimming with ideas and recipes, while Graham took charge of operations. But the business model was flawed.

"I remember there were times when Indi would work 36 hours straight," recalls Graham. "This would have been fine if we were raking it in but the business was not efficient and often Indi would earn little more than a pound an hour."

When the opportunity to acquire a coffee shop came up, Indi and daughter Nikki saw a chance to fulfill a lifelong ambition, but the acquisition proved more than the family business could handle. Graham quickly spotted that none of the businesses were performing as profitably as they should have been.

Overcoming barriers

"We needed to make some changes," explains Graham. "The businesses were all ticking along nicely but it was very hard work keeping all the balls in the air. Considering the effort we were putting in, we should have been making a tidy profit. But we weren't."

Drastic changes needed to be made. The family sold off the wholesale bread and cakes side of the business, followed soon after by the coffee shop and poured all their efforts into Londoncakes.com, the internet side of the business. Capital was raised through Graham and Indi's side of the family including aunts, uncles, nephews and nieces.

A now fully streamlined and focused Londoncakes.com went from strength to strength. The winning combination of Graham's business expertise and Indi's cake making skills began to reap dividends.

"We really focused on our USPs," says Graham. "We made Londoncakes.com all about producing quality birthday cakes with a quick turnaround. Typically if you place an order online by 2pm we can get a cake to you anywhere in the country by 12pm the next day."

However, the family element that had been the strength of the business was also becoming a weakness.

Family matters

"The family was incredible," says Graham. "Because of the nature of the work, at times, it was literally a case of all hands to the pumps. I remember receiving an order from a council that had won an award and we had to make enough cake to feed 11,000 people. By 12noon the following day everyone got a slice.

"But running a family business is a challenge," he continues. "My background was corporate so I understood how to run a business. What I hadn't accounted for was how much of a role the personal and emotional would come to play in the boardroom."

Graham turned to Business Link in London for advice. He was primarily looking for someone to offer the type of impartial advice that he was unable to get from within the family business and was introduced to adviser Ashley de Safrin.

"Business Link in London was instrumental in the restructuring of the business," he says. "The coffee shop was not working from a business perspective but because Indi and Nikki had invested emotionally in the project, they were not interested in hearing what they perceived as negative input from me. However, when the advice to review the investment in the coffee shop came from Ashley, it was clear that a serious business decision had to be taken.

"Ashley has also been great at keeping our feet on the ground, we tend to be rather optimistic in our projections and Ashley will have no qualms in pulling us up on this optimism if it seems lacking in substance."

The outcome

Indi, Nikki and Graham still see their adviser once every six months, a process which, according to Graham, provides them with a really clear view of how the business is progressing. De Safrin has also put them in contact with other consultants ranging from financial advisers to marketing experts.

Graham is now planning the family's exit strategy and expects to sell the business in the next three years. By 2014, Londoncakes.com should turn over projected revenues of between £12-15m. Should the family decide to exit, their investment in Londoncakes.com and sister company, Cakesnextday.com could prove to be the best move they ever made.

"Birthday cakes is a fun business to be in," says Graham. "The people we deal with are happy and, with 30,000 birthdays a day in London and 1.2 million a week in the UK, the work we do can be exhausting but also very exciting.

"The international opportunities are particularly exciting," he adds. "We are able to take an order from a mum in Australia, deliver the cake to her son in Earls Court and even send Mum back a picture of a smiling son holding his birthday cake on his birthday."

And Londoncakes has a celebrity following too. "We've provided cakes to the Ritz with two hours notice and responded to calls from Sony who needed a cake for an X Factor contestant on a live show in a matter of hours," says Graham. "We even have a regular customer who runs a bar in Old Compton Street which is frequented by celebrities. When one of his customers gets a number one he gives us a call and orders a cake for them to celebrate. We recently delivered four cakes to him, one for each member of JLS. If the business turns out to be as successful as predicted, it really will be the icing on the cake."

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