A few weeks ago, I got to meet Heather of Dollop Gourmet in Rochester. Recently, I asked her to share business advice with prospective cupcake business owners.
The most important thing I'd say to do is research! Know what you're getting yourself into. Know what your market is like, who you're targeting, who your competition is and what your brand is going to be.
Also, you MUST have a passion for this. Don't go into starting a business with just a little effort and excitement. You need to be willing to make sacrifices and put your heart and soul into what you're doing.
Thirdly, find at least one mentor. This is something I haven't done and it's been a huge struggle. I'm constantly trying to figure out if I'm making the right or wrong decisions on my own and it's very stressful. Find someone you trust with some business knowledge and experience to run ideas past.