It's Six of One, Half a Dozen of the Other

James Gray looks a little scruffy today - unshaven, rumpled T-shirt and dark circles under his eyes. That's in stark contrast to his bakery - a tiny, sparkling clean shop with robin's egg-blue walls and a décor he describes as "country chic."

Dozen Cupcakes, the 700-square-foot shop in Pittsburgh's Squirrel Hill district, makes and sells one thing - cupcakes and sells them well.

So well in fact that Gray has decided to open a second store in the up and coming Butler Street area of nearby Lawrenceville. And that explains the dark circles under his eyes - "I look like I'm in two places at once because really I am," he says. His new shop was due to open imminently when we chatted earlier this month, but that didn't mean he can completely stop keeping tabs on his first born. He spends much of his days shuttling back and forth between the two locations.

James Gray, owner of Dozen Cupcakes and Dozen Bake Shop. (Photo by Sharon McLoone)

Gray initially was overjoyed at finding a very small space on a bustling street that enjoys a lot of foot traffic from stores and restaurants of all stripes. About 75 percent of Dozen Cupcakes' sales come from walk-ins.

"I knew that working in this small space would be less time consuming and more cost effective just starting out," he said, as we chatted across one of the three tables in the store. It took about two and one-half months from conception to opening - a very quick turnaround. One drawback was that the space smelled like incense for about two months after he opened from its previous tenants - an Asian import-export store.

He loves the space and speaks fondly about choosing how to decorate it. "But eventually we found that the size of the space was constricting us from doing the kind of volume that we knew we could be doing," he says. The demand became overwhelming and as the company expanded into catering, it had to turn jobs down.

Pittsburghers like their cupcakes. Dozen Cupcakes whipped up $340,000 in sales in 2007 and with the new larger space, Gray expects to bring in at least a million in revenue in 2008. He financed his first business in part through a Small Business Administration-backed loan taken out from PNC Bank.

He has been taking his lessons learned from opening that store to his new 1,700-square-foot, 25-seat café, which he's dubbed Dozen Bake Shop.

One of his smartest moves, he says, was making friends with city workers who deal with permits. "They are actually there to help you, not just to inspect your space and tell you to be better." He advises establishing a relationship with the city and health inspectors so that they can give you pointers along the way. He had to retrofit his charter space with new plumbing and cooking equipment and worked with city planners to make sure his contractor was doing it correctly. And, he says, it didn't hurt that he brought them cupcakes.

Dozen Cupcakes' 700-square-foot location. (Photo by Sharon McLoone)

"Go online and find out who will inspect your space and let them know your plan so you won't get any big surprises at the end of the process."

He also says to be "smart about what you're doing. Do as much research as you can that the product or service you're providing will be wanted. I would never have considered myself a business person before I started all this, but now I would in a way."

Gray notes that his shop, which he opened Dec. 29, 2006, would never have worked at that time in Chicago or New York, but in Pittsburgh, which he says is a little culturally behind those cities, it worked great.

Gray, who holds a degree from the Chicago Culinary Institute, is expecting big things from what he characterizes as the "urban renewal area" that he's expanding into. It's close to downtown Pittsburgh and the city's pediatric hospital is relocating there, bringing with it thousands of jobs and hungry-for-baked-goods employees.

He signed a lease for his new spot in December "from a guy who owns at least five blocks of Lawrenceville," Gray said. He liked that because felt that his landlord was really vested in making Butler Street a better place. He decided to work with his landlord's contractors to get the placed fixed up. "They already know the HVAC system and everything else about the building we're in so that makes things go a lot smoother," he said.

He's also moving the cooking operations for the Squirrel Hill store to Lawrenceville where the cupcakes will be driven in daily. It will save costs by consolidating, but "ugh," he says with a sigh, clasping his hand to his face, "we may need a new delivery vehicle. My Honda Fit may not cut it... On to the next thing."

By Sharon McLoone |  February 4, 2008; 9:00 AM ET Profiles in Entrepreneurship
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Please email us to report offensive comments.

Thank you for coming to Pittsburgh, invite your friends from Chicago! We need more people like you!

Posted by: Zach Simon | February 6, 2008 1:01 PM

I disagree with Gray's assertion that Pittsburgh is "culturally behind" compared to cities like Chicago and New York. The comment is insulting and shows his lack of respect for his customers.
More importantly, Gray's admission that his bakery would not have been successful elsewhere says something about the low quality of his products. In fact, word around the city is that the baked goods are, at best, mediocre.
Once the newness fades, Gray will have to put more effort into his baked goods, by using better ingredients and searching for a trained pastry chef. The slick marketing won't get Dozen through the long haul, not even (as he hopes) here in Pittsburgh.
Pittsburgh boasts many bakeries and restaurants that would do more than hold their own in cities New York, LA and Miami. And, in defense of Pittsburgh's cultural offering, one need not look further than the Pittsburgh Symphony, The Warhol Museum, art galleries, the indie craft scene (Handmade Arcade) and local music scene.
Mr. Gray, if you are reading this, you owe the Pittsburghers that have supported your fledging business an explanation as to how they are "culturally behind."

Posted by: Maggie Johnson | February 9, 2008 3:33 PM

Maggie, as James Gray's partner in Dozen Cupcakes and Dozen Bake Shop I feel I should to respond to your comment.

James' comment that Pittsburgh is "culturally behind" was not a reference to the Carnegie Museums, the Pittsburgh Symphony Orchestra, the Pittsburgh Opera, Phipps Conservatory or others like them. James was referring to pop culture's lag in the city, a sentiment with which I would agree. For example, while the concept of the cupcake bakery was a new thing in Pittsburgh when we opened in late 2006, it had been happening in other cities for a good while: Magnolia Bakery, the cupcake bakery that is credited with starting it all, opened in New York City in the mid 90s.

Additionally, James is a trained pastry chef and we do use quality ingredients in our baked goods. For example, we use local sweet cream butter and other local dairy, belgian chocolate, organic rolled oats, and madagascar vanilla to name a few things, and will be using local produce at Dozen Bake Shop as the season allows. We work really hard and pride ourselves in what we do. And while we know we can't please everyone, many Pittsburghers seem to like us and our baked goods. We are very grateful for their patronage and know we couldn't succeed without them!

James and I both moved here from Chicago because we think Pittsburgh is a great city. I grew up in the area and moved away because there weren't opportunities in my field at the time. I now run my own graphic design business here (hence the "slick marketing"), an opportunity I'm thankful for every day. Now we're both happy to call Pittsburgh home!

Posted by: Andrew Twigg | February 11, 2008 9:53 PM

As a previous employee, professionally trained pastry chef and a resident of Pittsburgh my whole life i have to say that by no means was James comments directed in a bad way to the city of Pittsburgh. Also admit it, if you are from Pittsburgh like me and honestly believe that we are current to cities like new york when it comes to food trends then i would say your not a credible voice for the hospitality industry.

As far as the baked goods, compared to most bakeries in the city, believe me the product is nothing but slacking. You will not find Emulsified shortening or low end chocolate in any of these dishes. The amount of quality ingredients from a chefs point of view was amazing. The only time i encountered someone as passionate to quality ingredients was when i worked for Boyne Mountain Resort in Northern Michigan.

I feel that people are not used to this style of from scratch all butter baking in Pittsburgh. We are an old city with alot of history that is in need of more people like James and Andrew to bring touches for other areas to help us progress in to a modern food city. with out outside influence we are creating and cooking in a vacuum and creativity will always progress slowly if not at all.

Hey but what do i know i have only cooked in different states, in top end restaurants and four seasons resorts, have a degree in this field and have been cooking my whole life.

To wrap up: for a city that has the second oldest population in America i am glad that there are other people than myself that want to change that fact and bring a more young and hip vibe to the city. Don't fight change its unavoidable and necessary for growth as a city. I am from PITTSBURGH, I love PITTSBURGH, I have been living here for 25 years and totally support the growth and improvement of "our" already amazing city.....Go Steelers haha

Posted by: Michael Feden | February 13, 2008 11:58 AM

I'm not surprised by the mix of comments to this article. As with everything in life, some people love you and some hate you. As a business owner I have learned that the best you can be is the best you can be.

Food is such a strange landscape. So many different approaches, so many different preferences. In my own life I have adopted a food philosophy that works well for me: If I don't like something it might be because I just don't care for it and that doesn't necessarily mean that it is implicitly bad. I've had some bad food at otherwise "good" restaurants and great food at at places that no one I know likes. I once saw a cockroach crawling up a wall at a cafe in NYC and still thought the food great.

I do appreciate all the criticism however. I have to admit that we don't get a lot of it, but when we do it usually hits pretty hard. I'm glad these folks have a venue for expressing themselves. And I do take it all seriously and consider it very hard.

Thank you.

Posted by: James Gray | February 14, 2008 2:05 PM

I spent a couple years in Pittsburgh and loved it. But James is certainly right that Pittsburgh is maybe a couple years behind some of the bigger cities on these kinds of trends. It was probably more reasonable to be one of the first cupcake places in the burgh than trying to be just another one in NYC or Chicago. Anyway, that's not such a bad thing, it's just a fact of life. And I'm glad to see more people doing new things in Pittsburgh. The city may have been behind on cupcakes, but they were one of the earliest cities to have a car sharing program.

Posted by: Kurt Smith | February 27, 2008 8:14 PM

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