Entrepreneurship Zone: 06 February 2021: Nigerian entrepreneur turns side-hustle into thriving bakery business

Sat Feb 6 09:27:44 CAT 2021

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Entrepreneurship Zone: 06 February  2021: Nigerian entrepreneur turns
side-hustle into thriving bakery business

When an acquaintance tasted Nike Majekodunmi’s cookies for the first time in
2006 at a housewarming party in Lagos, Nigeria, he immediately enquired
about the selling price. Majekodunmi, an e-business management consultant at
the time, felt a bit offended that he would think baking was “all she did
for a living”. Yet, he persisted and became her first client.

Shortly thereafter, the same man placed a large order for his company’s
Christmas party. “That is when I finally admitted I also bake, with regular
orders coming in,” she remembers.

Her products became increasingly popular. “For a while, I was a baker by
night, e-business consultant by day.” It was around this time that she got
married, and when the couple wanted to start a family, she chose to leave
her day job and focus on the baking. The idea of the flexibility, that she
could work from home and have time to spend with the kids appealed to her.

“Little did I know the business was going to snowball into this machine,”
she laughs. The customer base grew so quickly, she had to move out of her
home kitchen into a shop less than a year later.

Majekodunmi officially rebranded to Nuts About Cakes in 2010 to highlight
the expertise the bakery had developed in cakes. What was once a side-hustle
has turned into a thriving bakery chain with more than 130 employees and
eight retail outlets.

Securing finance and reinvestment

One of the early milestones for the company was when it moved from its
original location to a more prominent space in Lekki Phase 1, a
well-planned, mapped-out residential scheme by the Lagos state government.
“I realised I had to raise finance for this move, because I wanted to go
large-scale. I wanted the modern comforts, quality equipment and a café,”
she says.

Majekodunmi drew up her business plan and tried to sell her dream to friends
and acquaintances. “It is very humbling when you are looking for finance. I
took that business plan from home to home, office to office.”

In the end, the only investors who did take equity were her husband and her
father. Her mother also provided a small loan.

However, it was enough to get Nuts About Cakes into its new space. The team
of four had to lock various rooms because they initially had no use for
them. The company immediately received its first walk-in customers. “The
first day two people came into the store and we were so excited,” she
laughs. “Then we had four, then six and it grew from there. Today, across
all the locations, we probably have 700 to 800 daily walk-ins.”

There were a few steps the team took to grow the business. From the start,
reinvestment was a focus. Majekodunmi did not draw a salary at first,
instead, ploughing all the revenue back into the business. Nuts About Cakes
steadily expanded its product options. The cookies and cakes were popular
but the company opted to hire a pastry chef so it could sell bread. This
brought a steady stream of everyday foot traffic through the doors.
Majekondunmi then added meat pies, sausage rolls and scotch eggs. “Another
big milestone was when we opened the café at our Lekki Phase 1 shop. We
became well known.”

The product line-up – combined with the café model – was replicated in the
next location, Ikoyi, one of the most expensive real estate areas in
Nigeria. Then followed a bakery and café in Circle Mall, Lagos. Today, there
are eight retail outlets.

In 2014, Majekodunmi went back to the classroom to complete a business
course at Lagos Business School. “It was an owner-management programme which
helped me think of myself as a bakery director instead of just the baker,”
she says. She also completed a Seed Transformation Programme in business
administration and management from Stanford University Graduate School of
Business in 2018.

A multichannel approach

Nuts About Cakes supplies its cookies, cakes and pastries to customers
through various “clicks and bricks” channels, explains Majekodunmi. About
30% of all sales come through telephonic orders. Walk-ins remain a mainstay
despite the impact of Covid-19 restrictions.

A channel that is fast gaining traction is sales generated through social
media. The company is active on Facebook and Instagram. One channel that has
surprised Majekodunmi is the company’s WhatsApp Business account. “I never
thought people would be comfortable placing orders over WhatsApp; it’s a
growing channel for us.”

A Nuts About Cakes store

Nuts About Cakes also has an e-commerce platform. It is not performing as
well as the others but it is popular with people living abroad –
particularly the US, UK and Canada – who want to place orders for delivery
to family members in Lagos.

The company counts major businesses such as Citibank and Microsoft under its
corporate clients and also supplies schools, boarding facilities and
churches.

“Our next step is to develop a mobile app to further support this
multichannel platform,” says Majekodunmi.

Old and new competition

The company has two main competitors in Lagos, both of which have been
around for more than two decades. There are also new rivals. When
Majekodunmi started baking cookies all those years ago, cake celebrities –
like Buddy Valastro, the Cake Boss, or the team from Charly’s Cake Angels in
Cape Town – were not as popular. There was also no Instagram.

“From around 2014, when the TV shows really took off, people began making
cupcakes and cake pops. Things changed; today, Instagram businesses as a
collective have grown to become a huge competitor.”

Nuts About Cakes had to change its approach to be able to compete with
Instagram bakers when it comes to bespoke cakes. A home baker on Instagram
would spend a day or two decorating a cake and posting the best photographs.
“For me, if I have a decorator that only decorated two cakes in a day, he
has not shown up for work! You have to do at least 15,” she says. “We had to
move towards more front-end off-the-shelf cakes that can quickly be
inscribed with a name while a customer waits. This is the effect Instagram
had on our business.”

Overcoming obstacles

Majekodunmi had to overcome a lack of confidence in herself and the business
in the early days. “I would tell people what I did and they would roll their
eyes,” she recalls. “There was not a lot of support and I had to pull myself
through that.”

Along the way, external challenges also surfaced. Businesses in Nigeria have
to make additional investments to be able to survive off the grid. Nuts
About Cakes has its own generators to combat the unreliable electricity
supply and a borehole to ensure clean water for baking. It also pays for
private security.

The company lost one of its stores to an unexpected state government policy
that ruled all retail stores on one street had to be demolished. In the last
year, the company also had to deal with the devaluation of the naira, the
#EndSARS protests and subsequent curfew, and then Covid-19 and a lockdown.

“Everything can change in the blink of an eye. When the lockdown came, we
had to close five stores and move from 30% of sales being deliveries to 80%.
We quickly had to employ independent delivery drivers – sort of a
man-in-a-van concept – and train them. You have to be nimble and think on
your feet,” she says.-Howwemadeitinafrica

Nike Majekodunmi

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