In 2007, Mignon Francois used her last $5 to buy the supplies she needed to bake cupcakes.
Today, she runs a company that sells cupcakes nationwide and earns about $1 million a year.
She uses clever techniques, like allocating money and budget for each purchase first, to get things started.
In 2005, Mignon Francois and her Family moved their family to Nashville, Tennessee, with the promise of a job for her then-husband, but when the job failed, he ended up as a foreman and the entire family had limited income.
Daily expenses like Food and transportation to and from the house became a struggle, and even electricity was no longer an option. Francois would live in the dark during daylight hours, so that when the children returned Home, they would have enough power for their generator.
Francois told Business Insider, “I find myself often walking to the Kroger near the corner of my house to buy water to fill the tub so I can bathe my babies. And by baby, I mean from age 3 all the way to high school graduation. “
Although her neighbors didn’t know the extent of her family’s poverty, they knew Francois had a talent for baking cupcakes, and one afternoon in 2007, as she sat in the dark, a neighbor knocked on her door to order 600 cupcakes from her for $1 each. But since she didn’t have the money to buy all the ingredients for all 600, they agreed to let her make 60 first.
Francois said, “When I closed the door behind me, I had a real Jesus-come-down moment with God and murmured to myself, ‘Is it serious? You gave me this opportunity when I didn’t have any money? I really have $5 to feed us.'”
She decided to put on her shoes and walked to the store to buy the ingredients she needed with her last few dollars. That night, she got the first payment for her order, turning $5 into $60. She then put that $5 back into her dinner budget and continued baking. at the end of 2008, the mother officially launched her company.
Now, her company, The Cupcake Collection (a bakery of cupcakes, birthday cakes and wedding cakes), is thriving and generates nearly $1 million in annual sales. But Francois’ journey has not been easy. From years of baking in her kitchen to running a national cupcake empire, it took years of smart money habits and strict budgeting to gradually expand her company.
She uses envelopes to sort money
With her family living on an irregular salary, Francois never knew how much money she would have each month. Therefore, between the fees charged and the risk of overdraft fees, she could not afford to open a bank account. As a black woman, she would not have been given the same opportunity to build a relationship with a banker.
I think a lot of times in my neighborhood, we were often turned down by banks,” Francois said. At that Time, I put money in my bank account and if I screwed up, even by a dollar, that would cause me to overdraw the bank and cost me $30, and that just snowballed in a vicious circle, in a negative way. “
So she implemented her own system and began dividing her money into envelopes based on necessary expenses. She used Dave Ramsey’s advice that you first pay for the four walls of your house, utilities, transportation and food before you pay for anything else.
When she makes money from the cupcakes, she also divides her profits and taxes into envelopes as well. She will collect 20% of the taxes. Any money spent on supplies is always put back into the envelope to buy the next set of supplies.
She has a plan for every dollar.
Francois cannot use a credit card. Everything she needs to purchase must be in cash. This forces her to become conscious and to plan for each dollar in advance so she doesn’t get into a situation where she can’t buy what she needs. She even has a special envelope for the small things she wants, such as spoons, bowls or mixers.
She follows Ramsey’s 7 Baby Steps to Success strategy and has set an emergency money-saving goal of $1,000. Once she reached her goal, her goal was to save three months of living expenses and then six months.
The envelope system has changed my Life because when I look up, there’s a lot of money in there,” Francois says. “
She gets her kids to develop smart budgeting habits by making it fun
Francois and her children work together to develop habits that allow them to stick to a budget. For example, if they can keep their dinner costs under budget for the week, they will allocate more money for recreational money.
If Francois could buy certain bulk items, such as fish, they would eat these during the week and then joke that they were ‘fishermen’. If the week included vegetables, then they would say they were vegetarians that week. For other snacks and refreshments, they would handle the pantry and use what they had already prepared to make meals.
Her kids will also keep a timer to track their time in the shower. She will joke with the kids and remind them to turn off the lights.
Francois said, “We created this phrase where we’re saying, the room isn’t afraid of the dark, so if it’s not there, why not turn off the lights.
The remaining change will be placed in a pickle jar. If the total purchase amount is $1.01, then that jar will contain 99 cents. Every time they fill up, it means they can go out for dinner or a trip.
Saving money and staying within a budget is like winning a contest. The more they can save, the more they’ll put something fun aside.
She paid off her debt by snowballing
Francois’ student loan and medical bill debt piled up. As her income began to rise, the money left over after the major bills were paid would be used to pay off the debt.
She used the debt snowball method to get out of her situation, making each payment with the minimum payment at the top, while aggressively working on the smallest debt. If extra money came in, she would increase the amount of debt she paid off.
When it comes to her medical expenses, she will write letters asking for forgiveness. She would get settlements and accept them. Some settlements brought her total down by 80%.
She moved forward and didn’t want to owe anyone money, so she would pay her employees weekly. This helps her keep her budget and expenses on track.
Today, Francois serves on the board of directors and mentors at Pathways Women’s Business Center and the Nashville Entrepreneur Center, helping others achieve their entrepreneurial goals.
She also works with Corner to Corner, a grassroots organization that helps people find their way to business ownership, and her company funds scholarships at Tennessee State University and works with a variety of local community organizations focused on Education and food security.
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