How an Iowa Bakery Owner Built a Franchise From Scratch Scratch Cupcakery founder Natalie Brown has grown her business with a customer-first philosophy (and an excellent product, too).
By Ryan Droste •
Opinions expressed by Entrepreneur contributors are their own.
The original Scratch Cupcakery storefront opened its doors in 2010 as part of the historic Cedar Falls, Iowa downtown Main Street district. Founder Natalie Brown's self-professed, lifelong love for baking and making people smile has helped her business grow exponentially since then. Scratch now has storefronts in four Iowa cities (Cedar Falls, Waterloo, Coralville and West Des Moines) and employs more than 150 people, and has a prescence in 150 cities across Iowa and Illinois with Scratch Curbside service. As its website notes, "Things are constantly evolving here and you never know what we've got up our sleeves!"
Brown's exemplifies what it means to be a successful Main Street entrepreneur, which is why we spoke with her about the history of her business and its future outlook.
Tell us about the very beginnings of what became Scratch Cupcakery.
When I graduated from high school, I started a catering business out of the basement kitchen in my home but still had a full-time job. I found myself in a season of discontent early in 2010 and decided to open Scratch in a very short amount of time. My family is full of self-employed people, and while I never knew exactly what I'd be doing, I knew I wanted the risk and reward of owning my own businesses.
What were the earliest and highest hurdles to your business?
My biggest challenge early on was just being taken seriously as a small business. The "cupcake craze" hadn't landed in Iowa yet, and many people told me it wasn't going to work. I accepted that challenge head on and never looked back. There have been small hurdles along the way, but nothing we haven't been able to overcome. We're still struggling a bit after our pandemic shutdown period in 2020, but finding a "new normal" and asking our teams to recommit to the bigger picture has helped us significantly.
Related: How this Founder and 'Shark Tank' Veteran is Fighting to Create a More Inclusive Coffee Category
Did you find yourself second-guessing your instincts?
Oh yes, I still do. Some days are absolutely fantastic, when details fall into place, employees are confident and full of team spirit; deadlines are met, customers are happy. And some days are pure trash when it feels like we're falling apart, no one shows up for work, customers are frustrated, our teams are frustrated and our managers are exhausted. Those are the self-reflection days — the days I wonder if we're doing the right things and caring for our people in the right ways and pushing for the right goals. I think questioning decisions is a healthy part of both entrepreneurship and small business. Otherwise you stop learning, and without learning, growth will cease to exist.
How has your business model evolved over time?
Our model has remained relatively consistent from 2010 to now, though some change has been expected through our growth. We've always offered a low-priced, quality product, but in the last two years we have changed our focus on how that product is put in the hands of our customers — from adding car side pick up, increasing deliveries and changing our hours to how our teams function and what our leadership looks like. We have absorbed an incredible number of vendor increases in the past several months, so looking ahead our plans may change.
Related: How This Entrepreneur Is Changing What We Put on Our Kitchen Tables
How did you ultimately weather the early throes of the pandemic?
The environment was ideal for Iowa small businesses to grow and prosper until early in 2020, when the pandemic created a crisis within the food industry. Scratch was no exception. In March 2020, we temporarily closed our stores. Two months later, we reopened with fewer customers, less staff, limited hours, no seating and curbside delivery. Governor Kim Reynolds had issued proclamations that provided the framework that allowed Scratch to resume operations, and the Iowa Restaurant Association was there to provide information and best practices. Without these resources, Scratch may not have recovered.
What does the future look like for a small business like Scratch?
One of our greatest strengths has been and will continue to be investing time in building relationships with our customers, knowing our suppliers and their challenges and investing in our employees. These relationships guided us through the pandemic and will be our future. Great relationships with customers don't just happen. It is intentional. It is purposeful.
When I started Scratch, my dad told me, "You don't have to be the smartest person in the room to be successful," and he was so right. Scratch culture has always been more about the people than the cupcakes, and that philosophy will benefit us into our future.
