Cupcakes are the latest entrepreneurial frontier, at least according to the New York Times.

New York City’s Magnolia Bakery, which was featured in an episode of “Sex and the City” and a popular “Saturday Night Live” video, seems to have started the cupcake craze which is quickly spreading to other parts of the country. Traffic to cupcake blogs is on the rise, and the Food Network will debut a new series called “Cupcake Wars.”

The market research firm Mintel predicts cupcake sales nationwide will grow by 20 percent in the next five years, the Times reported.

The Times outlines four cupcake business models:
— The Chain: You need a great product, brand and location to get a chain off the ground.
— Web-Only Store: One blogger decided to start selling cupcakes through her Web site, but has yet to make enough money to quit her day job.
— The Cupcakes and More Store: A number of bakeries make cupcakes their signature product but also sell coffee, lunch fare and other baked goods to draw more customers.
— The Cupcake Bakery: This means making enough cupcakes to sell to other bakeries and stores. One business owner stressed the importance of branding and marketing in making this kind of operation successful. For example, she lets customers know her cupcakes are made with organic, local and natural ingredients.

Some small businesses are planning for an economic upswing, and they are rethinking business models, launching new marketing campaigns, considering real estate deals, and some even hiring new staff, said the Associated Press.

These business owners say they are moving past short-term thinking about the economy. Donn Flipse, owner of Field of Flowers, floral superstores in Florida, told the AP, “Business is going to get better, so I’m going to do something to position myself to do even better than my competition.”

The real estate market around the country has been especially hard hit by the recession, putting many small companies out of business. But some survivors are looking toward an upswing in the housing market.

Kathy Braddock, co-founder of Charles Rutenberg Realty in New York City, said she’s readying for the next boom in a city where real estate is king. She told the AP the company is improving technology so it can take on more agents – preparing to go from 250 to 1,000.

Lorrie Thomas, who runs an Internet marketing training firm in California, started implementing changes to her business model early in 2008 and launched a new Web site this March.

“That’s the best part, to do it now,” Thomas told the AP. “Other companies, when the boom kicks back in, they’re going to start doing what I did a year ago.”