Cinnaholic, the gourmet vegan cinnamon rolls store that opened on Oxford Street in July, has struggled through the recent bout of unseasonably hot weather. The store needs sales of $600 a day to survive, but co-founder Florian Radke said some days recently have produced only $200 in sales.
In addition to the slowing sales, Radke said there have been some unexpected equipment and permit expenses.
So what’s a small business to do? Radke and his wife and co-founder Shannon Michelle Radke came up with the idea of appealing to fans and customers for support. They hope to close a $5,000 gap by selling gift certificates with a difference: you can buy a gift certificate online with PayPal for $25, $50 or $100, but the certificate will only be redeemable from December 1, 2010. However it will carry a 15% bonus. So if you buy a $50 certificate, you’ll be able to buy $57.50 worth of Cinnaholic rolls in the run-up to Christmas. By delaying the redemption date of the gift certificates, Cinnaholic should be able to lock in some valuable cash at a difficult time.
The plan was only announced yesterday on the store’s blog, and it has already attracted 147 Facebook “Likes”. Florian Radke said early sales of the gift certificates have been encouraging.
“We have a very solid business plan,” said Florian Radke. “And we started very well. People really like our product, so we wanted to give people an opportunity to help us out. It’s a good deal for our friends.”
The Radkes hope in particular that fellow vegans will come out in support.
When the Radkes founded Cinnaholic they were determined to do things differently. As well as being 100% vegan, the company pays its workers at least 50% more than California minimum wage and has announced its intention to provide benefits once the business is established and stable.
Florian Radke said the gift certificate scheme is not a last-ditch attempt. “There’s always a back-up plan,” he said. “We have no intention of closing the store.” Should the unexpected happen, however, he said that supporters will get their money back.