Despite the economic crisis, Nuno Freitas is one of Portugal’s most successful entrepreneurs by creating one of the most desired brands in the country. While nobody initially believed in the idea, Nuno and his family redefined the norm by establishing an insatiable cupcakes and coffee franchise called Spirito Cupcakes and Coffee. But how did he do it? Find out how you can make your business grow even through a crisis.
What made you decide to start Spirito?
Along with my wife, Nadia, and my brother in-laws, Dario and Ricardo, we decided to start Spirito. The family name, “Spirito” means, Spirit in Italian. I’ve grown to appreciate my family’s homemade pastries and special baked goods. Friends and family used to tell us, “These are amazing cupcakes, you should start a business.” We’re also a fan of the Starbucks brand, but we knew something was missing. Hence, we started our own creation.
How is Spirito different from other franchise chains?
We wanted to create a place where people could relax and for a short time and leave their worries behind. Although there are plenty of coffee shops in Portugal, there is no place where there’s both high-quality cupcakes and gelato ice cream. We needed to identify what was missing in the market. But we wanted to focus on the concept too. We like to use natural and local ingredients. Our milk isn’t UHT pasteurized, it’s fresh as well as our fruits which come from local farms here in Portugal. We do daily bakes everyday so everything is made from scratch, unlike other brands which have their food coming in boxes everyday.
What are the secrets to making viral social media like Spirito?
We always keep focused on the concept. Keep it simple. Don’t buy into too many brands once you reach a certain point in popularity. We do everything ourselves, take the pictures and control what we post online without a PR agency. Also, I think what makes the brand so successful is how our customers enjoy sharing our products on their Instagram or Facebook. We just opened a new store in a city with about 100,000 inhabitants. People waited in line for over an hour stretching a two block radius. On the social front, we had our engagement levels on Facebook reach around 1.9% monthly build and had a 250,000 weekly interaction making us twice the top trends in Portugal Facebook pages.
How has your yearly sales turnover improved through trial and error?
In terms of sales growth, we expect to grow 300% with the new stores. In terms of stores, we have had over 500 franchise requests. We’ve been contacted by big brands such as Nestle and Mars and have featured a few of their products. However, we didn’t want grow too fast or lose control of the concept and performance. We wanted the new franchisees to be extremely serious about the business. They are expected to believe in the concept and bring in the numbers while keeping the store culture alive.
Are you going to expand into international markets?
Yes, we are in the preparation of negotiating an agreement. Next year, we expect to open a store in London. We want to grow the brand internationally. We have our production centrally located in Portugal and expect to build a new gelato factory. Logistics are taken care of in other countries, processes, manuals, agreements with suppliers and making sure our point of sale (POS) is traceable and controlled.
If you could start all over again, what would you have done differently?
To be honest, there is nothing I regret. I mean, we’ve been criticized for our opening hours since we aren’t open on Sundays or open later in the day. But one must be faithful to the concept. Changing it just to accommodate every single customer may put a risk against the essence of your project. For example, we prepare the artisan goods from scratch which takes a lot of time. We start baking at 730-8am . If we open the stores with more hours, that means we need more staff, more preparation and time, which means the prices would have to reflect that. We also want to consider our staff’s salaries. We pay a much higher rate than the typical Portuguese wage. Why work two extra hours that won’t sell as much as we would during a closer time frame? We would have to raise the prices and lower the salaries instead of closing. Our staff are happy and motivated since they are respected. We like to have fun and keep an open environment for discussions and ideas. Overall, it’s really important that your employees enjoy what they do, otherwise you won’t maintain the concept that brought you here.
What advice would you give to other aspiring small business owners?
Find the niche where you are different than the others. Make sure you write down your concept, position, product market, how you can manage and make sure you don’t change your project. Sometimes people start focused in the beginning, but don’t perform so well because they’re not selling enough. Then they introduce other products which distracts them from their original concept. Rather than focusing on making money, know that it takes time to build because it took us some years before we could start expanding. You should only start expanding when you are ready. 500 requests to franchise our store is tempting, but again, take it one step at a time. For example, you can position your store in a controlled radius of 50km. From my experience, I tested it for 6 months, but prepared it 4 months in advance.
Nuno Freitas is an entrepreneur who also manages Mezzolab, a design studio which had clients such as: Cristiano Ronaldo. In his free time, Nuno enjoys traveling and spending time with his family. Follow him on Twitter @nunosfreitas