Copyright The Street
Once upon a time, independent businesses could grow into thriving chains. Today, achieving that level of success is far more difficult as competition has become fiercer, costs higher, and consumer loyalty increasingly unpredictable in an uncertain economy. For small businesses to survive, many factors must align, from a well-thought-out business model and prime location to reliable funding and, often, luck. Yet even beloved brands can find themselves on the losing side. The top reason most businesses fail is due to an inability to secure adequate financing and running out of money, according to a survey by CB Insights. Most others simply can’t keep up with their products, are out-competed, or consumer preferences evolve. After years of overcoming those odds, The Chubby Baker, a popular Utah bakery known for its unique sweets and beverages, will close all locations on November 9, marking the end of a self-made success story that began in the pandemic. The Chubby Baker history Founded by Ying Nance in 2020, The Chubby Baker began as a delivery-only bakery in Salt Lake City during the peak of COVID-19 lockdowns. It quickly earned a following due to its creative offerings, including donuts, cakes, croffles, cinnamon rolls, and a mix of teas and coffee drinks. Within a year, the business expanded to its first physical location, eventually growing to three stores across Utah. The Chubby Baker locations closing Orem: 1167 S State Street Salt Lake City: 317 E 900 S Sandy: 9470 Highland Dr. Suite 2 But, despite its popularity, operating costs became unsustainable. In an Instagram post, Nance cited the escalating price of goods, payroll, and other expenses, as well as personal reasons, for the decision to close. “As our family continues to grow, I’ve realized how much time and energy this business takes — time I want to spend with my little ones. I am a businesswoman, but I will always be a mom first,” wrote Nance. More Closures: Mexican restaurant closes unexpectedly amid alarming legal troubles Beloved family restaurant chain closes another location 100-year-old grocery chain closes all stores in several states As the bakery’s final days approach, Nance encourages customers to visit the stores while they can. The menu will focus on donuts and cakes, with croffles and cinnamon rolls available while supplies last. Broader industry challenges facing businesses The Chubby Baker’s closures are part of a troubling pattern across the food service industry. Many small operators that managed to survive the pandemic now face mounting economic pressures, including higher food, labor, and rent costs, along with reduced consumer spending and foot traffic. According to the U.S. Bureau of Labor Statistics, about 17% of new restaurants close within their first year, and nearly half fail within five. “Small businesses may find it difficult to operate during challenging economic conditions. Exit rates typically decrease with firm age and cash liquidity, which can help businesses withstand downturns. Historically, the median life expectancy for small businesses has hovered around five years,” according to JPMorganChase. While independent restaurants have opened at a faster rate than chains since the pandemic, they also account for most closures. Restaurant Data reports that in the first half of 2024, around 13,265 independent establishments shut down compared to 2,712 chain locations. “A business owner has greater potential to mismanage certain aspects of the business without a dedicated management team, whether it be finances, hiring, or marketing,” per Investopedia. Why small businesses struggle Several recurring factors contribute to the short lifespan of small businesses. Source: Hancok Whiney
