Hokulani Bake Shop sells cupcakes and cookies in what has turned out to be a sweet little venture for the entrepreneurial couple who started the business.

Co-founders Tushar and Ana Dubey (pronounced Do-bay) clearly enjoy their work and their customers. They bake at their main location, a cute but compact 445-square-foot shop at Restaurant Row.

And they have found a dessert niche by specializing in cupcakes and sugar cookies. "Everyone comes here happy and they leave happier," Ana said. "It's a happy business."

Some of the most popular cupcakes are red velvet, strawberry guava, chocolate, liliko'i and the seasonal specials that come and go. For St. Patrick's Day, they did green velvet and Guinness flavors.

"We use butter, real sugar, local eggs and food colorings. We're not all-natural," Tushar Dubey said. "I like to say we have real calories."

At a typical price of $2.25 each, they offer a small indulgence for customers who pop in for one or two to get them through a workday afternoon, as well as a popular stop for a potluck item and a solid business as a caterer to weddings, birthdays, graduations and office parties.

Customer Edwina Jones works nearby and drops in at least once a week to pick up four for her family: two for her husband, one for her and another for their son.

She likes the taste and the aura of innocent celebration. "It kind of takes me back to my childhood," she said.

The most popular flavor is red velvet. "Without the red velvet, I couldn't pay any of my bills," Dubey said.

Tushar, 33, is a 1994 'Iolani School graduate who went to Hōkūlani Elementary — and yes, that's what inspired the name. He was looking for a name with a Hawaiian flavor but one he had an actual connection with and not just something he adopted without meaning.

A friend since elementary school days proposed it and it stuck.

The child of parents who emigrated from India, Tushar was born and raised in Hawai'i and graduated from Carnegie Mellon University with a degree in economics and public policy.

He lived for four years in Silicon Valley working for an investment company and broke his neck in a surfing accident, then spent three months recovering in Hawai'i. He moved to New York in October 2002. Tushar and Ana met in New York City.

Eventually they got married and moved to Hawai'i. Dubey learned a lot from his first business, which sold "Pidgin on the Fridge" refrigerator magnets.

Then, they were inspired to start a bakery based on the success they'd seen with cupcakes and cookies in New York. "I didn't need a lot of capital to start a bakery," he said.

The first bakery was called Good Kine Cookie company, but School Kine Cookies issued a cease-and-desist letter saying the names were too close, so the Dubeys changed theirs.

Dubey said he learned a lot from that experience and School Kine was gracious in not objecting to them selling what packages they had on hand while they changed the name.

The couple said they have been able to stay small but profitable. The success took time, more than Dubey thought it would. "The hardest thing was adjusting my expectations," he said, after seeing friends strike it rich in a hurry in Silicon Valley.

"And realizing that it may not become a million-dollar business or it might take five years," he said.

They started with sugar cookies and moved into cupcakes by mid-2006. The little treats have proved popular, even in a sagging economy.

Dubey said his measure for success has changed since getting married and having a 1-year-old son.

In California, "I would have measured success by hey, what's in the bank account?"

Now, "it's time to grow the business and spend time with my family," he said.

But he's still thinking of more ways to innovate and dreaming up the next move. "We're trying to develop a red-velvet cake mix to sell in supermarkets."