It was near closing time one night last week at Mockingbird Cupcakes when a family came in for a treat. Everyone found a cupcake except the little girl — the flavor she wanted had sold out.
Co-owner Rachael Henderson thought on her feet, giving the girl some chocolates that were in the shop and making up a gift certificate for the family to come back another day for free cupcakes.
Later, she and her sister, shop co-owner Sarah Alsup, wondered what would have happened if Henderson had not been there. How would an employee have handled the situation?
Turning over the operations of a small business to employees who often are essentially strangers is one of the hardest things a business owner has to do.
The sisters who started Mockingbird Cupcakes have the skills to run most of the aspects of their new business themselves, but not all of them at once. They realized employees had to be hired, trained and trusted, so the owners can spend less time running day-to-day operations and more time on marketing and long-term business goals.
“When you start a cupcake business, you're no longer a cupcake maker — you're a business owner,” said entrepreneur and small business expert Jim Schell, a co-author of “Small Business for Dummies.”
For the business to stay open and grow in the long run, he said, it's essential the sisters focus on the most difficult parts of entrepreneurship, things like marketing and finance.
“An A-grade business with a B product will outperform an A product with a B-grade business every time,” Schell said.
To best handle some of those business chores, he suggests small businesses outsource their payroll, CPA and bookkeeping functions, and look for a CPA who will not just handle the taxes but also actively evaluate financial statements for strengths and weaknesses.
Henderson said Mockingbird Cupcakes is using a payroll service and has an accountant. The owners are handling bookkeeping themselves using QuickBooks.
Hiring is another behind-the-scenes task that falls to the owner of a new small business. It's detail-oriented and not especially fun but something that must be done right, Schell said.
When it comes to hiring, he said, “Hire slowly, fire quickly.”
The U.S. Small Business Administration has a wealth of detailed resources to help small-business owners on hiring, including how to structure benefits, how to write a job description, how to conduct a background check and how to meet tax and reporting obligations.
Schell advises a five-step process: Write a job description, advertise, conduct a first interview, follow up with references — both listed and unlisted — and interview the candidate a second time.
Henderson and Alsup didn't follow all Schell's steps when hiring staff members for their shop. They relied on gut feelings instead of references, for example, when making offers to their workers.
They started the process by taking out a $250 ad in The World-Herald classifieds, and invited respondents to interview with them at a Scooter's in the Elkhorn area. Some didn't show. Others they thought weren't well-suited to working in the public eye. Every applicant tugged at the sisters' hearts, with stories of job loss and children to support.
“They just throw themselves at you, wanting to get a better life,” Alsup said.
The sisters questioned the applicants on their experience, and even quizzed them on baking knowledge, like how many teaspoons are in a tablespoon, and the proper way to crack eggs.
In one case, the women ignored some hiring advice they got. Alsup's husband had told her, “Whatever you do, don't offer them a job on the spot.” “I said, 'Don't worry, we're not going to be that stupid.'”
That was before they met someone who seemed like an ideal candidate for a baker position. They offered the woman the job during the interview, then regretted it when an even better candidate came along.
The first candidate ended up turning down the job, and the sisters got to hire their first choice, Brianna Heidesch.
Heidesch's position was one of three full-time jobs — two bakers and a manager — and two part-time jobs that the entrepreneurs created by opening their west Omaha cupcake shop earlier this month.
The second baker they hired, Kassandra Norrgard, interviewed with the sisters after seeing the ad in the paper and thinking it was “too good to be true.”
The 22-year-old from La Vista was working part time in a local supermarket bakery when she answered the ad that led to her new job. Now she makes more per hour and works more hours in a setting she said is more like a team and less like a factory.
“I've never had a manager that baked with us,” Norrgard said. “It's nice — everybody seems closer that way.”
Norrgard and Heidesch work from 4 a.m. to noon Tuesdays through Saturdays baking and decorating cupcakes. The sisters' cousin, Mandy Rath, who gave up a job in Borsheims' bridal department, also works full time for them Tuesdays through Fridays, running the cash register, answering customer questions and serving as shop manager.
A part-timer, Davina Andrew, works the counter four days a week including Saturday while attending school, and Alsup and Henderson's sister Emily Brodersen works one day a week at the shop and three days helping out with the sisters' combined eight children at their homes.
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The biggest challenge so far in training employees is taking the sisters' recipes, developed in their home kitchens with their own intuition as bakers, and translating them into instructions for cupcakes that can be produced by the dozens yet still have a handcrafted look and taste.
In a week of training and the nearly four weeks since the shop has been open, the sisters have tried to instill that ethic of perfection in their bakers, who are coming from work environments where desserts were mass-produced and the priority was on speed and quantity.
One day, Henderson said, she told one of her bakers that the frosting had come out too thin. That's what the recipe says, the baker told her.
“Well, the recipe is wrong,” Henderson said, and they threw it out and started over.
She is also negotiating her role as a manager. Henderson and Alsup are both assertive but haven't had much professional experience as supervisors.
“It is hard to be a boss and yet be a friend,” Henderson said. She hopes to create an atmosphere where everyone feels like family and can take ownership of their roles.
Henderson and Alsup are taking turns coming to work at 4 a.m. right now to oversee the baking process. At noon they switch swifts, with the other sister staying until closing time. They hope to be able to push their start time to 6 a.m., to where they are just making sure the cupcakes are ready to go when the shop opens at 7 a.m.
The bakery's new jobs are a small part of a positive local hiring picture. The number of people employed in the Omaha metro has nearly reached pre-recession levels, and Nebraska boasts the nation's second-lowest unemployment rate.
Nationally, the picture is less optimistic. Small-business hiring took a nosedive during the recession, according to polling for the quarterly Wells Fargo/Gallup Small Business Index. The index has recovered somewhat but still shows negative net hiring among small businesses surveyed. Poll respondents said in January that overall business conditions are a concern, as well as the state of the economy and the cost of health care.
Henderson and Alsup said they tried to strike a balance between hiring enough people and facing the possibility of not making payroll.
One goal they've met since opening is paying their staff from store sales proceeds. The shop pays employees every other Friday, and with both their first payday and the one coming this Friday, Henderson said, sales have been strong enough that they've been able to meet that expense and other operational costs out of sales revenue.
When they were still in the hiring phase, Alsup said, she lost sleep thinking about their responsibility to their employees. She would lie in bed and think, “Oh my God, these people are changing their lives for us.”
The sisters themselves haven't seen a payday and won't for some time, as they plan to build up their level of working capital and reinvest in the business.
For now, they said, they are happy to be able to pay their team.
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