Business

Just Baked Offers Cautionary Tale For Entrepreneurs

By Frank Witsil
Detroit Free Press.

For a few years, Just Baked seemed to be just the kind of company entrepreneurs dream of being.

The chain of Livonia cupcake shops started as the economy was entering the worst of the recession. It went from a home-based enterprise run by a mom who liked to bake to a multimillion dollar company with about 90 workers and 17 stores, including three in Ohio.

But now that the economy is in a recovery, the business has collapsed.

“It started and grew quickly in spite of the economy,” said Todd Turkin, who cofounded the company with his wife, Pam. “The product tasted so good it muscled through the bad times. But, we over-expanded. We just opened too many stores.”

Last month, Just Baked closed all its corporate stores, including one in Detroit’s Campus Martius district. Five franchise stores remain open, but it’s unclear whether those stores will keep the name or what will happen to them.

In the past few years, start-ups have been heralded as the engines of American job growth and innovation, and their founders, some of whom have become billionaires, are as recognizable as rock stars.

Just Baked’s story is a reminder that starting and running a business can be daunting.

“To succeed despite the challenges of raising funds, establishing operations, hiring and training staff, and attracting customers are miracles that occur every day,” said Paula Sorrell, vice president for entrepreneurial services and innovation for the Michigan Economic Development Corp. “These are the reasons that entrepreneurs are lauded as brave pioneers.”

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