Exclusive Q&A with Duff Goldman, Founder of Charm City Cakes, Charm City Cakes West and Duff's Cakemix

Pastry chef Duff Goldman founded Charm City Cakes in 2002, and the shop quickly became known for its awe-inspiring creations. After starring on the Food Network’s Ace of Cakes, Duff opened a second Charm City location on the West Coast in 2011. He most recently opened Duff’s Cakemix, a decorate-your-own-cake shop, in 2012. Here Duff shares his advice for small business success.

If you had $500 left in your monthly budget at the end of the month, how would you spend it?
I would either put it in a high yield money market account, or, if i was a smart businessman, I would use use it to do a high-end charity function. High-end charity functions are great. In my case, I could make a cake for a black tie charity gala. Those things are great because one, you’re doing a good thing, you’re helping out a charity, which is always fantastic. And two, you’re going to a black tie gala, and these are the people who will spend money on whatever it is you’re selling. In my case, it’s cakes.

How did you plan to set yourself apart from other bakeries?
When i first started, I definitely planned to set myself apart from other bakeries, not necessarily by doing things that were super super different, but by making cakes that were really nice. Back in 2002, in Baltimore, it was really difficult to find the kinds of cakes that you see in wedding magazines. Brides were looking through wedding magazines and seeing all these beautiful cakes, but when you read the list of all those bakeries, they’re either in New York or San Francisco or Chicago. You don’t see a bakery from Baltimore in Martha Stewart Weddings. So they would see all these cakes and go to a local baker in Baltimore and get something that kind of looked like [what they wanted]. So what I was trying to do was say “Hey, look, I have the skills. I can make the cakes that you see in the magazines for a tenth of the price.” So we got the reputation of not only making really crazy cakes, but also making really beautiful wedding cakes as well.

What went in to the decision to expand your brand and business into television and retail?
When we decided to expand into television, that was really an opportunity that was presented to us. [It] was a pretty easy decision to make…but reality TV, it definitely has a stigma. So we were very careful about how we made the show because this is our reputation. TV is finite, and our business hopefully is infinite. So we wanted to make sure that we got on television and were portrayed in a way that made sure that we had a life after television, and thank God it worked.

Moving to retail was a natural extension of what we had been doing already. We started to have a lot of people come to us and say, “Look, we want you guys to do X, Y and Z.” And a lot of these things made no sense. I didn’t need the Duff Goldman brand of bed sheets. But cake decorating supplies absolutely made sense because people looked at us like we’re the best in the country. We are the people that are setting the trends. So making cake decorating supplies totally made sense. Going into things like making chocolates with Godiva absolutely made sense. Making ice cream with Blue Bunny also made sense. That is in my niche. Making car tires or air fresheners, not really my thing.

What’s the advantage that a small business has over a larger business?
One of the advantages that a smaller business like mine has over a larger business is that we can move really fast. If trends change, chocolate got really expensive for some reason, I could move really fast to change the way I did business. Larger companies are thinking 6, 8, 12 months out. But for a company like mine, we can change things and move things really really quickly. The other thing, too, with a small company, it’s a lot clearer how the company is doing on a day-to-day basis. When you have a large business with hundreds of employees, thousands of employees, the information that you’re getting about how your company is doing is like looking at the stars. When you’re looking at the stars, you’re looking at light that is a trillion years old. A large business when they’re looking at their data, they’re looking at data that’s a month old, two months old, or three months old, so it’s harder to know how well that business is doing. Whereas with my business, I know exactly how well I’m doing. I look at the board, and see how many cakes we sold this week. Did we sell enough cakes to pay the rent? Cool. We’re good.

If you had one piece of advice for small business owners, what would it be?
One piece of advice for business owners would be don’t be lazy. Nobody is there to do your job for you. You don’t get a paycheck. I haven’t had a paycheck in ten years. That’s scary. The day that I woke up and I didn’t have a job anymore?…That is a very terrifying and very liberating feeling….So don’t be lazy, don’t let somebody else do your work. Just because you’re the owner, you still have to put in the time. But I think most successful entrepreneurs, they know that. And I think that’s what sets them apart from other people.