Be focused. If self-financing is your only answer, consider starting slow and small. Grove's start-up cost was a modest $25,000, because he shared the expense of a kitchen with a restaurant and focused on wholesale for the first two years. He opened a retail location, Wicked Bakery & Café, in 2006 only after demand from customers grew too loud to ignore. The cost: $160,000.
Another way to get a foothold: Develop a niche. That could be learning what the local competition does not do well. It could be unearthing a family recipe and promoting the hell out of it. Edibles Incredible Desserts started with a little kiosk at the local mall selling fudge made from a secret recipe and toffee. After three months, owners Alan and Robyn Furman knew they had a business when they did $60,000 in sales and people wouldn't bother taking the escalator up to the Godiva.
Freebies are a must. To further break out of the pack, the Virginia and Vermont-based dessert company offers free samplings once a month of cakes, fudge, cupcakes and any new product they're developing. "I always believe that you sample, sample and sample," says Robyn. "You'll get more back than what you give."
Consider allergy-free. Given the growing number of people who have food allergies, offering desserts and sweets catering to this market could be another means to differentiate yourself from the competition. Whenever Seema Kalia needs an egg-free birthday cake for her kids, she turns to Edie Connolly of New York City's Cakes 'N Shapes. Her cakes are not only egg-free, they're baked in a nut-free environment.