Nigel (left) and Shane

Jill Hunter/Getty Images for Scholastic Inc

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Baking Brothers

This duo runs a successful business baking sweet treats

April 13, 2020
By Natalie Smith

Jill Hunter/Getty Images for Scholastic Inc

Brothers Nigel, 12, and Shane Mushambi, 14, have loved to bake since they were toddlers. After winning a baking competition three years in a row, they decided to take their passion further.

“On the third year, people tried to buy the cake out of the competition,” says Shane. So in 2018, they decided to start selling their baked goods, and the business 2 Bros. in the Kitchen was born.

Their bakery, located in Missouri City, Texas, sells cakes, cupcakes, and other sweet treats. Shane and Nigel complete their schoolwork early in the week, freeing up Thursdays and Fridays for baking. It’s a time commitment—one cake can take six hours!

Running the business takes more than just managing time. They also manage their expenses for ingredients and supplies to create the most effective budget. “For seasonal items, we’ll try to know when certain ingredients are going to be cheaper,” says Nigel. “In the fall, sweet potatoes are almost free.” So they mainly make sweet potato pies in the fall.

Nigel Mushambi, 12, and his brother Shane, 14, love to bake. They started when they were toddlers. After winning a baking contest three years in a row, they decided to take their passion further.

“On the third year, people tried to buy the cake out of the competition,” says Shane. So in 2018, the brothers decided to start selling their baked goods. They named their business 2 Bros. in the Kitchen.

Their bakery is in Missouri City, Texas. They sell cakes, cupcakes, and other sweet treats. To make time to bake, Shane and Nigel do their schoolwork early in the week. Then they bake on Thursdays and Fridays. And they need the time—one cake can take six hours!

Running the business takes a lot of work. The brothers have to keep track of what they spend on ingredients and supplies. “For seasonal items, we’ll try to know when certain ingredients are going to be cheaper,” says Nigel. “In the fall, sweet potatoes are almost free.” So they mainly make sweet potato pies in the fall.

Jill Hunter/Getty Images for Scholastic Inc

The cost of ingredients also helps the brothers determine the prices on their menu. Strawberry cakes, for example, cost more in the winter, when the berries are out of season. To maximize profits, they’ll stock up on ingredients when there’s a sale. “If flour is 30 percent off, we can buy 10 pounds of it, and it won’t expire for about a year. But we’ll use it up,” says Nigel.

Shane and Nigel love baking, but the real treat, they say, is the opportunity their business provides for helping others. They regularly donate all their tips and a portion of their earnings to charities. This year, they raised $1,000 for the J.B. Dondolo Foundation, which is repairing a hospital in Zimbabwe.

“We’ve been blessed by our community, so we want to give back,” says Shane.

The cost of ingredients also helps the brothers determine the prices on their menu. Strawberry cakes, for example, cost more in the winter. Berries are more expensive then because they’re out of season. To earn more profits, the brothers also stock up on ingredients when there’s a sale. “If flour is 30 percent off, we can buy 10 pounds of it, and it won’t expire for about a year. But we’ll use it up,” says Nigel.

Shane and Nigel love baking. But they say the real treat is the chance their business gives them to help others. They regularly donate all their tips and a portion of their earnings to charity. This year, they raised $1,000 for a foundation that is repairing a hospital in Zimbabwe. 

“We’ve been blessed by our community, so we want to give back,” says Shane.  

CALCULATING GROSS PROFIT MARGIN

The profit of an item is the difference between the amount earned from selling the item and the amount spent to produce it. The gross profit margin represents the percentage of sales that have made a profit.

EXAMPLE

 A simple chocolate cake costs $10 to make. The brothers sell it for $30. What’s the gross profit margin on the chocolate cake?

STEP 1

Determine the cost of goods sold (COGS), and revenue, or how much it sold for.

COGS: $10

Revenue: $30

STEP 2

Calculate the profit by subtracting the COGS from the revenue.

$30 – $10 = $20

STEP 3

Divide the profit by the revenue, and round your answer to the nearest hundredth.

$20 ÷ $30 = 0.6666… rounds to 0.67

STEP 4

Multiply by 100 to express it as a percent.

0.67  100 = 67%

So the gross profit margin on this chocolate cake is 67%.

CALCULATING GROSS PROFIT MARGIN

The profit of an item is the difference between the amount earned from selling the item and the amount spent to produce it. The gross profit margin represents the percentage of sales that have made a profit.

EXAMPLE

 A simple chocolate cake costs $10 to make. The brothers sell it for $30. What’s the gross profit margin on the chocolate cake?

STEP 1

Determine the cost of goods sold (COGS), and revenue, or how much it sold for.

COGS: $10

Revenue: $30

STEP 2

Calculate the profit by subtracting the COGS from the revenue.

$30 – $10 = $20

STEP 3

Divide the profit by the revenue, and round your answer to the nearest hundredth.

$20 ÷ $30 = 0.6666… rounds to 0.67

STEP 4

Multiply by 100 to express it as a percent.

0.67  100 = 67%

So the gross profit margin on this chocolate cake is 67%.

The cost of some items the brothers bake changes with the seasons. Use this information to find the gross profit margin for two sweet treats in different seasons. Round answers to the nearest cent or tenth. Use the online answer sheet to measure, and record your work and answers.

The cost of some items the brothers bake changes with the seasons. Use this information to find the gross profit margin for two sweet treats in different seasons. Round answers to the nearest cent or tenth. Use the online answer sheet to measure, and record your work and answers.

Shane and Nigel’s recipe for sweet potato pie calls for 1.5 lbs of sweet potatoes. The other ingredients are staples that cost $10.52 year-round. Use this information to complete the chart above.

Shane and Nigel’s recipe for sweet potato pie calls for 1.5 lbs of sweet potatoes. The other ingredients are staples that cost $10.52 year-round. Use this information to complete the chart above.

The brothers’ strawberry cake recipe calls for 0.5 lbs of strawberries. The other ingredients are staples that cost $12.32 year-round. Use this information to complete the chart above.

The brothers’ strawberry cake recipe calls for 0.5 lbs of strawberries. The other ingredients are staples that cost $12.32 year-round. Use this information to complete the chart above.

What would the winter gross profit margin of the strawberry cake be if they didn’t raise its price?

What would the winter gross profit margin of the strawberry cake be if they didn’t raise its price?

Gross profit margin compares the COGS to the sales price. What expenses are not factored in here? Explain on a separate sheet of paper.

Gross profit margin compares the COGS to the sales price. What expenses are not factored in here? Explain on a separate sheet of paper.

Financial Literacy
Income, Cost, and Profit

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