Brian Murphy: From Trader to Bakerby
For more than a decade, Brian Murphy spent six days a week trading commodities like electricity and natural gas—and even weather derivatives. Working his way up at Constellation Energy Group (CEG) in Baltimore, he was, by the age of 30, overseeing a group that brought in $4 billion in annual revenue.
Then Lehman Brothers declared bankruptcy.
As a counterparty with Lehman on energy transactions, Constellation saw its stock price sink 40 percent, and the company came under siege. Highly paid traders like Murphy were now expendable. He took a severance package in December 2008 and retreated to his family home in Easton, Md.
Options soon poured in. "I could have gone to banks in London or New York or Chicago," says Murphy, now 32, and the father of four. "But I've lived in eastern Maryland since the second grade. My wife and I just didn't want to move."
Instead of returning to trading, Murphy made an unconventional bet on his home state: He decided to open a bakery on remote Smith Island, a small former fishing village with 250 residents, an eight-mile ferry ride from the Maryland coastline. His plan did have some logic. While Maryland's state dessert—an artery-busting 10 layers of yellow cake and chocolate fudge—is named after Smith Island, the area never had its own bakery. (Trivia junkies: Some states even have official snack foods. Louisiana has an official meat pie.) "[My wife and I] said, 'What the heck? Let's start our own company,'" says Murphy. "It was like taking the red pill from The Matrix: Once you take it, you can never go back again to your old life."
Smith Island Baking opened its doors in 2009. After a shaky first month that saw the company gross only $248.50, word of mouth and a feature in The Washington Post started some buzz. Smith Island now boasts 20 employees (including 17 bakers) and ships to 48 states.
As further proof of his commitment to his home state, Murphy recently announced that he's running for governor of Maryland. Although he is widely considered a long shot, the Republican candidate is hoping to create jobs both inside and outside his bakery.
FROM TRADING COMMODITIES TO BAKING CAKES
Cost of 10-layer Smith Island cake, depending on size and flavor: $29.25 to $45
Cake weight, in pounds: 8
Hourly pay for bakers: $15
Sampling of key ingredients used in an average week: 50 pounds butter, 100 pounds sugar, 100 pounds flour, 420 eggs, 1.5 gallons vanilla
Total revenue over 2009 winter holidays: $60,000
Number of cakes expected to ship for same period this year: 3,000
Calories per cake (est.): 8,720
Number of cakes per month ordered by local insurance company: 70
Ultimate revenue goal: $1 million a year
Pounds gained, owner: 0
Data: Smith Island Baking, The Washington Post (Calories)