How One Woman Built A Multimillion-Dollar Cupcake Business With Just $33 To Her Name

• JACQUELYN SMITH
 
•   

• OCT. 24, 2014, 2:15 PM

Courtesy of Gigi ButlerGigi Butler, founder of Gigi's Cupcakes.

Gigi Butler was a cleaning lady with just $33 to her name when she opened her first cupcake shop in Nashville, Tennessee, almost seven years ago.

"People thought I was crazy, and they laughed at the idea," she told Business Insider. "But I just had this feeling that I had to do it."

After securing a location, whipping up a few recipes, and hiring two employees off the street, Butler opened the doors of Gigi's Cupcakes on February 21, 2008.

"I had no investors and literally not a cent to spend on advertising," she says. "So I just hoped and prayed people would come."

And they did.

Today there are 92 Gigi's Cupcakes locations in 23 states, and this year she expects $35 million in annual sales across all stores. It's safe to say Butler's bank account balance is no longer in the double-digits.

"I'm so happy with how things have turned out, but I never thought my success would stem from cupcakes," she tells us. "I always thought it would be music."

Courtesy of Gigi ButlerGigi's Cupcakes.

Butler was born in Oklahoma and grew up on a farm in a small desert town in California, about an hour outside of Los Angeles. Since age 7, she dreamed of becoming a country singer. "Nothing else was even an option. I was going to be a country star, end of story," she says.

But at 15 she needed a job, and she really wasn't interested in working for anyone else. "I decided to buy some mops and buckets, and I went from door to door, ringing doorbells, offering to clean people's homes."

That's how Gigi's Cleaning Company was born.

She cleaned homes, offices, and construction sites (and sang in a band on the side) in California for five years before deciding she was ready to take the next step in her music career.

Courtesy of Gigi ButlerButler singing in a Nashville bar.

So, in 1994, she dropped out of college and moved to Nashville with $500, no job, no friends, and no place to live.

"When I got there, I continued cleaning. So I'd do that all day, then come home and nap, then I'd go sing at bars at night until 3 a.m. — and do it all over again the next day," she says. "But when I turned 31, I got tired of getting my butt pinched and passing the tip jar around. I felt like I was failing since my dream was to sing. But I knew it just wasn't working anymore."

After giving up her dream of becoming a country star in 2005, Butler focused on building her cleaning business in Nashville.

"I was making pretty good money and learning how to be a boss, manage a team, and run a business, all without having to be in the corporate world, which was great since I never really wanted to sit in front of a computer screen in high heels, pantyhose, and a skirt," she says.

Though content, Butler said she knew she wasn't being challenged enough, "and something was still missing."

Courtesy of Gigi Butler"Something was still missing."

In 2007, while cleaning a bathroom in a client's home, Butler got a call from her brother.

"He was in New York for Labor Day Weekend and said, 'You won't believe this, but people are waiting in line for hours for cupcakes! And they're not even as good as yours."

Butler grew up surrounded by bakers. Her aunts, grandmothers, and mother were all talented in the kitchen — and she "inherited the gene."

"It's in my blood, but I never thought about pursuing it as a career or a business."

Courtesy of Gigi ButlerButler with her great aunt Bennie.

She hung up the phone and looked at herself in the mirror and thought, I'm not afraid to fail, so I'm going to do this. I am going to open a cupcake shop.

A month later she was in Texas visiting her great aunt Bennie who owned a bakery. "I had no idea what I was doing, so I went there to learn."

When she got back to Tennessee, she went to the bank to ask for a loan. "I had great credit and no debt, but they literally laughed in my face and said, 'Seriously? A cupcake shop?'"

So, instead, she took $100,000 in cash advance loans from her credit cards. 

After finding a location for the store — which she refers to as "the sweet spot," since it's near three universities, six hospitals, and right off Music Row — Butler's parents came out to help her launch her new business. "My mom helped me develop recipes, and my dad did the store design. They also gave me some money, which I really needed."

Before opening the shop, Butler used up all of the $100,000 in loans, plus the money her parents gifted her, and all of her savings — and she still had $6,500 in bills to pay ($4,500 in rent; $1,000 for ingredients; and $1,000 for her first two employees). She had just $33 in her bank account.

Courtesy of Gigi ButlerButler with a customer.

"I literally cleaned three houses the day before we opened the store to pay the plumber," she says. "And then that same day, my contractor came in with a $15,000 dry wall bill he 'forgot' to give me. I literally fell to the floor and had a melt down."

Butler had exactly one week to pay the $6,500 to her landlord, food supplier, and two employees — and told the contractor she'd need some time to pay off his bill.

"I didn't know how I was going to do it," she tells Business Insider. "I remember looking up, saying, 'Please, just let the people come. Make them like my cupcakes. They have to like my cupcakes.'"

They didn't like them; they loved them, she says.

Within a few hours of opening, a line formed outside Gigi's Cupcakes shop.Courtesy of Gigi ButlerGigi's Cupcakes.

Butler recalls an encounter with one customer that first week. "I was walking around greeting people, and one woman said, 'I'm going to order a Scarlett's Red Velvet flavor cupcake.' So I told her we didn't have that particular flavor that day, and she started screaming at me, 'I've been waiting in line for that cupcake! You're telling me you don't have it?! Are you some kind of idiot?' And you'd think I'd be offended, but I walked away and thought to myself, 'Oh my god, people are yelling over my cupcakes because they want them! Cha-ching!'" 

By March 1, 2008, a week after opening, Butler was able to pay off the $6,500 in bills. "And I still had $300 left," she says proudly.

A few months later, Butler's landlord, Alan Thompson, suggested she franchise her concept. "I said, 'What's franchising?'" 

So together with Thompson, her parents, and her brother Randall, who was eventually appointed as chief operating officer of the company, Butler began franchising the Gigi's Cupcakes brand in November 2008.

Courtesy of Gigi ButlerButler and her 3-year-old daughter, Kendel.

"I thought I'd open one shop and make $50,000 a year, and that's it," she says. "In fact, I didn't even stop cleaning until I had 15 franchises."

Today, 90 of the 92 Gigi's Cupcakes stores are owned by franchisees.

She believes her brand has had so much success because the products — cupcakes, cookies, muffins, cakes, pies, and other baked goods — are "delicious and unique. Each flavor has a story," she explains.

The other reason: "I was never afraid to fail, so I gave it my all."

Butler, a single mom to her 3-year-old daughter, says her biggest challenge has been accepting the fact that she "no longer wears all the hats."

"At the beginning, I did a little bit of everything. I'd be whipping up a batch of frosting, then have to run to a meeting, and then do paperwork. Now we have a great team to do all of those jobs, and my role is to be the face of the brand. But I still want to be everywhere, all at once, making sure everything is perfect, because this business is my baby — it has my name on it." 

Butler says she plans to grow the business to 250 stores by 2019.

"But no matter how big we get, I'll always make time to put on my apron and whip up a batch of frosting, because that's what I love to do."