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Bakery

Globe and Mail Update

Choosing a name for her new Toronto bakery was a no-brainer for Mandy Kan. The 28-year-old had spent two years working as the pastry chef at the Ritz Carlton in Florida, where her loyal customers nicknamed her "the Dessert Lady."

Ms. Kan began fooling around in the kitchen when she was seven. As a teenager, her idea of a good time was recreating dishes she'd seen in shops and restaurants. But her parents, who'd immigrated to Canada from Hong Kong in 1990, when Ms. Kan was 12, wouldn't even think of allowing her to pursue a career in cooking.

"I'm from a very traditional family, and all they wanted was for me to go to university," says Ms. Kan. She obliged and studied commerce at the University of Toronto.

By the time Ms. Kan graduated six years ago, she knew she wanted to open her own business — and she knew that business would involve food. She'd already worked in a couple of professional kitchens, but to give herself a real edge, she decided to attend the French Culinary Institute of New York. Six months and $26,000 later, Ms. Kan was a professional pastry chef.

After working at a handful of Toronto restaurants, Ms. Kan headed south for a job at the Ritz. She returned to Toronto, her hometown, in 2002 and, while working as a pastry chef at a high-end grocer, she began to put together a business plan for her own shop. In February 2004, she started shopping for a location.

Ms. Kan's plan was to sell high-quality products at her bakery, so she had to find a space in a neighbourhood that could support her business. And she needed enough space to install a small kitchen in the back of the shop. It took an entire year to find the right spot. "I got 22 rejections before I found my location," says Ms. Kan, who says her lack of experience as a retailer put landlords off. "I kept getting no, no, no."

One year later, Ms. Kan saw a space in Toronto's trendy Yorkville neighbourhood. She instantly knew it was right for her. "It was love at first sight," she says. And the landlord liked her idea of selling homemade cookies, cakes, truffles and ice cream.

Ms. Kan quit her job at the grocer. Then she researched and ordered her equipment — an oven, mixers, a fridge and freezer, and an Italian ice cream machine — all of which took nearly two months to arrive. While she waited, Ms. Kan began designing and renovating the 800-square-foot space, which was a blank canvas. Luckily, she had lots of friends (among them an interior designer) willing to lend a hand. They did everything themselves, except the electrical work. "We made lots of trips to Home Depot," says Ms. Kan. A graphic designer pal helped her design a logo. Doing the work herself not only saved lots of cash, but it also gave her a sense of ownership, as well. "It made me love my shop even more," she says.

With construction under way, Ms. Kan took care of the details: She bought a used cash register, and ordered her sign and packaging. She also tracked down suppliers and hired two employees — one to help with the baking and one to work on the retail side.

Two months after taking over the space, Ms. Kan was ready to open her doors (getting approval from the health inspector was easy, thanks to her previous kitchen experience). There was just one problem: She hadn't done any marketing, and money was tight. "When you open a small business, it's all about money," she says. Instead of buying ads, Ms. Kan launched her own word-of-mouth campaign by hosting a grand-opening party. "I printed 500 invitation cards. I went door-to-door in the neighbourhood, and passed them out to anyone who walked by," she says. Hundreds of guests showed up.

Two days before opening day in April, 2005, Ms. Kan and three friends began preparing inventory. In just 48 hours, they whipped up 14 flavours of ice cream, 15 kinds of truffles and 20 varieties of cookies and biscotti, plus half a dozen cakes.

How she did it

Mandy Kan fused a commerce degree and a love of cooking to create the Dessert Lady, a pastry shop in Toronto's Yorkville neighbourhood.
Equipment: $70,000 (including a $20,000 ice cream machine, an oven, a fridge, a freezer and a display case)

Construction equipment: $5,000 (includes mirrors, wood, paint, shelves)

Store sign and cash register: $2,500

Packaging: $20,000

Baking supplies: $8,000

TOTAL START-UP COSTS: $105,500

Rent:$2,700

Baking supplies: $3,500 a month

Staff: $4,000 (two full-time)

Utilities: $1,000

TOTAL MONTHLY COSTS: $11,200

NUMBER OF $6.99 PACKAGES OF BISCOTTI SHE NEEDS TO SELL A DAY TO BREAK EVEN: 53


The Dessert Lady was a hit. Ms. Kan still hasn't spent a cent on marketing — instead, she relies on her repeat customers to spread the word. To lure passers-by into the shop, a staff member often stands outside handing out samples.

Now the reality of running a business has finally sunk in. "I go for a month without a single day off sometimes," says Ms. Kan. And meeting sales targets can be tricky. She quickly realized that the bakery business is seasonal — holidays like Christmas and Valentine's Day are crucial. "So when you have a chance to make money, you have to work hard and plan for those times."

Her favourite part of owning a pastry shop — aside from playing with her $20,000 ice cream maker—is coming up with original creations. It makes good business sense, too. "You can't offer the same things everyone else has," she says. "I come up with a new product at least once a month."

Ms. Kan wasn't sure how customers would take to her smoked chili chocolate cookies or her cappuccino cinnamon biscotti, but those are the products that keep regulars coming back again and again.

What really takes the cake for Mr. Kan is the pleasure she brings to her customers. "I'm a real people person," she says. "I love making each customer's day, and seeing them smile after they've tried my products."

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