Sitting in her empty apartment, Heather Saffer is drowning in emails from independent retailers and large food chains eager to sell her Dollop Gourmet frosting. Thanks to her Shark Tank appearance May 6, 2016, she expects sales to reach $500,000 in 2016 versus a projected $300,000 without the Shark Tank effect. Sales in the week following her episode hit $45,000 on her website alone.
The millennial entrepreneur, at age 32, appeared on the ABC hit business reality show, seeking a venture capital investment of $75,000 in exchange for 20% of her Rochester, N.Y. company. She valued her business at $375,000 based on the presumption she would do $300,000 in sales its second year. O’Leary Ventures founder Kevin O’Leary offered her $75,000 for 33 1/3% and proposed selling her gourmet frosting through his most successful Shark Tank company — Wicked Good Cupcakes. He would have to offer his partners at Wicked equity to make it palatable to them.
Real estate mogul Barbara Corcoran countered O’Leary’s offer with $75,000 for 30% equity. Saffer negotiated Corcoran down to $75,000 for 25% equity. They have a deal. If all goes as planned, Corcoran may see a huge payout in three or four years when Dollop will be ripe for an acquisition. Saffer plans to raise an additional $300,000 soon to hire staff, boost marketing and help bridge the cash flow gap from when she ships and when retailers pay her.
Saffer invested $40,000 to fund her initial business expenses: research and development, new logo design, label design, website redesign, materials and production for the first run. But the money is just cake crumb in comparison to the sacrifices and pain she’s endured to build her third company from the ground up.
From Anorexic to Cupcake Queen
Up until age 26, Saffer had no direction regarding a career. She had held 30 jobs including being a barista at Starbucks, cook at Applebee’s and cashier at a car dealership. She worked at bagel shops, Men’s Wearhouse (MW), a maternity shop, grocery store and others she can’t recall.
“I was a terrible employee, quitting or getting fired from every job,” she says. One time when she was a cashier at a coffee shop, the manager asked her help wash dishes. She said: “That’s not part of my job description.” He invited her to leave.
In part because of Saffer’s struggles with anorexia — which hospitalized her for three months — she didn’t start college until age 21. With long breaks in between semesters, she eventually earned a bachelor’s degree in psychology from SUNY Brockport.
As the cupcake fad took hold on the coasts and had yet to reach Rochester, N.Y. Saffer discovered her calling. She learned to bake insanely delicious cupcakes from Google and YouTube. Click & Tweet! In 2009, she opened her town’s first cupcake shop with five employees. It grew rapidly and was considered a successful small business just after a year. She made cupcakes for business events, weddings and fundraisers.
But like most startups, it took the stairs up and the elevator down. One day while at a wine bar with a friend, Saffer received a call from a customer screaming into the phone. The customer’s credit card had been charged $10,000 by Saffer’s business. Shortly after that Saffer’s bank called on suspicions that her manager had tried to cash a check with her forged signature. Unbeknownst to Saffer, he had long been siphoning cash from the shop and draining her business bank account to pay for daycare, clothes, car repairs, etc. That manager was sentenced to three to five years in prison. Saffer heard he got out early and went back for another crime.
Starting All Over Again From Scratch
Left with merely $200 in her bank account, Saffer was forced to shutter the business. To add insult to injury, the felon’s other victims sued her claiming her business was responsible for his actions. “I cried a lot,” Saffer recalls. She also drank a lot. After she won the lawsuits against her, the felon eventually paid Saffer about $5,500 in restitution. But it was nowhere near some $20,000 she had lost.
Saffer was determined to open another cupcake shop under a new name but was naturally overwhelmed by self-doubt. The devil on one shoulder told her “You must quit. Everyone is going to hate you. Your reputation has been tarnished, and no one will ever trust you again. No one is going to believe you when you tell them what happened and why you rebranded your business.” The angel on the other shoulder said: “You can’t let this stop you. You’re good at baking, and you make excellent cupcakes. There’s a lesson in all of this for you and others. This is what you were meant to do. This is your calling.”
She borrowed $4,000 from her parents to rent another shop, buy supplies and equipment. She opened Dollop Gourmet Cupcake Creations — the first cupcake shop of its kind — in Penfield, N.Y in June 2010. Customers picked their cupcake flavor, filling, toppings and frosting. She appeared on Food Network in February 2012 and won $10,000 from its Cupcake Wars competition. Saffer soon burned out despite her shop’s enviable success. She closed it in late 2012.
“Customers weren’t happy unless I was there in my 400-square-foot bakery personally making their cupcakes,” she said. “My staff was great. But I was getting too many complaints from customers who had come to the bakery to see me.
“I wasn’t feeling fulfilled spending day after day in my little bakery and I felt like my creativity and ability to grow was waning. I didn’t want to get out of the Dollop Gourmet business. But I no longer wanted just to bake cupcakes for everyone.”
The following year, she published a cookbook, . It provides recipes for 45 mouthwatering, exotic frostings such as maple bacon, cinnamon whiskey buttercream and orange cardamon. It also includes outlandish recipes for blackberry brownies, Sriracha brownies and salted triple chocolate brownie batter cookies.
Debuting Dollop Gourmet
Saffer rolled out a line of frostings called Dollop Gourmet in November 2014 after spending two years developing it. Her frostings come in four to-die-for flavors: hot chocolate, Madagascar vanilla, peanut butter cookie dough and sea salted caramel. Besides, of course, cupcakes, Dollop Gourmet can be eaten with fruit, pretzels, pancakes and cookies.
“Dollop Gourmet is the healthiest and tastiest shelf-stable frosting that has ever hit the market,” Saffer said. “It’s non-GMO, gluten-free, vegan, allergen-friendly, and it contains half as much sugar as other frostings and spreads.”
“I use the highest-quality sustainable ingredients that are organic whenever possible. Dollop Gourmet is not only better for you, but it tastes incredible. Dollop Gourmet inspires creativity in the kitchen. It’s a frosting like you’ve never experienced before.”
One jar costs $2.30 to make. It retails for $6.99 to $8.99, depending on the store. It sells for $8.99 on dollopgourmet.com and $12.99 on Amazon. It’s produced by a co-packer in Wisconsin and distributed by three distributors: Cavallaro, UNFI, and KeHE. She’s offering a Shark Tank special of four jars — one of each flavor — for $34.99. Get six of any flavor for $49.95. Click & Tweet!
Total sales since launch in November 2014 until her Shark Tank appearance in May 2016 came to $290,000 with net profits of about $50,000. Before Shark Tank, Dollop Gourmet could be purchased at nearly 600 retail locations and online via VeganEssentials.com and Amazon.com.
Saffer hopes to expand her offerings with frosting flavors and gluten-free snacks to dip in the frosting. She hopes to eventually sell her business to a major food company such as Kraft (KFT), Hershey (HSY), or Betty Crocker, a brand owned by General Mills (GIS).
Filling a Void in the Dessert Market
Saffer shares the sacrifices she made to start her company, the business advice she’s received from Barbara Corcoran and how she finds the strength to continue her business despite all the blows.
Ho: How did you come up with the idea for your business?
Saffer: My first love was always frosting. Not being able to find cupcakes with amazing frosting was why I started the bakery, to begin with. That’s when I thought, how great would it be to create a product for the world to buy instead of creating a product that people only around Rochester could buy? How great would it be to sell a product that could be sold in thousands of stores and shipped around the country instead of selling a product that had to be hand delivered or picked up from my single storefront?
With these two thoughts in mind, I began researching shelf-stable frostings sold in supermarkets. After days of research, I was shocked to learn that there was not a natural healthier frosting on the market. There were dozens of natural and organic versions of almost all other foods, but there was not a natural preservative and chemical free frosting made with healthier and organic ingredients. I decided at that moment that no one knew frosting better than me and that I was going to be the one to create a healthier tastier frosting because the country needed it.
Ho: Who is the target market for your product?
Saffer: I like to say the target market is anyone who loves dessert and wants to eat healthier. I call Dollop Gourmet a frosting “spread” because it truly is not just for baked goods. It makes an amazing dip, spread, or topper for a multitude of snacks. Dollop Gourmet fans are people who appreciate good food and quality ingredients.
The other target market is people with food sensitivities and food allergies. I purposely created Dollop Gourmet to be gluten free, dairy free, vegan, and soy free to eliminate a lot of the common allergens so that more people could enjoy it. I’m unable to eat gluten or lactose or several other foods, so I know how difficult it is to find delicious foods that are safe to eat.
Ho: What made you think it could be a successful product?
Saffer: The number one thing that made me think it could be a successful product is that it tastes really good. I remember days when I was struggling to find a manufacturer, afraid I never would, and I would stand in my kitchen tasting spoonfuls of each Dollop Gourmet flavor.
I was so upset and stressed thinking how awful it would be if the rest of the world didn’t have an opportunity to taste a shelf-stable frosting as delicious as mine. It felt heartbreaking. I knew that I couldn’t let that happen. The second thing that made me think it could be a successful product was the fact that there was nothing else like it on the market. There was a void that needed to be filled.
Ho: How did you develop your recipes? How did you source the materials and find a manufacturer?
Saffer: I first began toying with the idea of creating a natural healthier shelf-stable frosting in the kitchen of my bakery in 2012. After closing my bakery at the end of that year, I continued testing and developing my recipes in my home kitchen. It took many tries to get my formulas to where they are now.
I didn’t know anything about sourcing materials in mass quantities, so I started researching and calling places to figure it out. I would call an ingredient supplier and ask for a sample to be sent, telling them I’d be ordering in very large quantities if I liked their quality and price. Once I found the ingredients I liked I began negotiating for better pricing and volume discounts.
I’m very specific about my ingredients, so there wasn’t much wiggle room for me to pit suppliers against each other to get better pricing. Most importantly I needed to make sure my organic palm oil was sourced from a company certified by the Rainforest Alliance. I deeply believe in protecting our environment and animals, so I needed to make sure my ingredients reflected my morals.
Finding a manufacturer was extremely difficult. That was the main hold up for a year and a half. For more than a year and a half, I called 70-80 manufacturers, each one telling me no, they could not make the frosting and put it into jars. The two or three manufacturers that could make frosting in jars had minimum order quantities of a million units, which was a number far outside my immediate realm.
Finally, I called one manufacturer that had never made frosting before but said they’d be willing to try. We went through many months of testing and sampling. I remember the day I received the email from them saying that yes, they could make my product. After a year and a half of trying to find a manufacturer, that was a truly glorious moment.
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Bitter Hardships and Sacrifices
Ho: What hardships did you encounter in developing and launching your product?
Saffer: The hardest thing I’ve encountered in developing my product was finding a manufacturer. There was about six months that I gave up because I couldn’t find anyone to make my product. During those six months, I was working on my cookbook, .
I would walk down the frosting aisle of the grocery store, shopping for ingredients to create recipes. As I walked that aisle, my soul would ache at the feeling of possibly never seeing Dollop Gourmet on store shelves. Something inside me kept nudging at me to try again. Something inside me just wouldn’t let me quit.
The other hardship I’ve encountered is the fact that I’ve been a one-woman show. I’ve been the one sourcing ingredients, organizing freight, invoicing, accounting, doing R&D, sales, social media, and marketing on my own. It’s hard to take on all the tasks yourself to grow your business. I’ve learned what I’m good at and what I’m not.
It saves money to do everything yourself, but it expends a lot of energy. I’ve reached the point that I need to take some of the workloads off my plate to continue growing. I think the advantage in starting the way I have is that I’ve had to learn how to do and manage every single piece of my business, which will be an asset as I continue to grow.
Ho: What sacrifices, if any, did you make to start your business?
Saffer: I’ve sacrificed a lot of money, for one. I’ve used my entire life savings to both start my business and live on since I wanted to reinvest all profits back into the business instead of paying myself.
On that note, I’ve sacrificed owning things. I don’t even own any furniture. Probably the biggest thing I’ve sacrificed is the building of a relationship. I’ve been perpetually single because my main focus has been on my business for so many years.
Ho: How much are you paying yourself? If you are not taking a salary, how are are you funding your living expenses?
Saffer: I’ve been living off my saving from Dollop Gourmet Cupcake Creations for the past three and a half years. Suffice to say the bakery was a success right up until I closed it. I’m about to begin taking a salary now because my savings are just about gone. It’s tough for me to start pulling money from the business for my personal expenses because I’m so dedicated to putting everything I have into growing the business, but I need to live.
Sweetening Up the Sharks
Ho: What did they like most about you, the company and product on Shark Tank?
Saffer: The sharks loved the taste of the product. None of them had anything bad to say about my company or me. They were all extremely respectful and complimentary. Robert Herjavec was impressed with the fact that I started a bakery, won Cupcake Wars, launched a frosting line, and wrote a cookbook. At one point he asked if I also had my pilot’s license and a Ph.D.
All the sharks liked my story of perseverance. Lori Grenier complimented my presentation and recognized me from Food Network, which was flattering. Mark Cuban loved the frosting and didn’t stop eating it. Robert Herjavec said I am the definition of “don’t know when to quit.”
They all appreciated and were impressed that I taught myself how to bake by attending the school of Google and YouTube. They were also all impressed by my sales figures and the names and volume of stores that I was already in less than a year. Their comments of admiration were fantastic to hear.
Ho: Was there anything you wished the producers included that was edited out? Was the edit fair to you?
Saffer: I was very pleased with the edit. The only thing it would have been fun for the producers to leave in was Mark Cuban saying he ate all his frosting. Every time the camera showed him he was eating frosting. He said he couldn’t make an offer because he loves icing and would gain 300 pounds if he invested in my company.
By the extent of how much he enjoyed the samples I offered, it’s probably a good thing he didn’t invest. Overall the edit was extremely fair and representative of everything that happened in that room.
Ho: How did you prepare for your appearance? What made it a success?
Saffer: The part I prepared and practiced most was the opening pitch that I had to memorize at the beginning. I have a terrible memory so knowing I had to memorize a pitch was the hardest part for me. I rehearsed it over and over again during any free time I had and every day in the shower. I honestly didn’t prepare much for the Q&A portion.
Because I run and control every piece of my business myself, I know my numbers, my story, and the ins and outs of my business backward and forwards. I was confident that there was nothing the sharks could ask me that I wouldn’t naturally know the answer to. As long as I was sincere and genuine and got my story out, I knew I would be OK.
I think the fact that I was confident in my product and confident in myself made it a success. I worked hard for years on my own to get to that point, and I left it all on the table. I gave it 100% and held nothing back. Also, I traveled to LA to film Shark Tank alone instead of bringing someone for support. That might not be a good decision for a lot of people. But I think it helped me because it allowed me to focus on myself and what I needed to do.
Ho: What about being in the Tank (or whatever happened before or after) surprised you the most?
Saffer: What surprised me the most about the process was that you truly never knew if you were going to make it to the next step. Even while I was in LA waiting in my dressing room to be called to set I didn’t know if I would be called or sent back home.
If the producers ran out of time, then some people could be sent home without pitching to the sharks. I was the last person on the list to pitch so it was a close call and I was panicking the entire day fearing I wouldn’t get my chance.
Cooking Up More Business
Ho: What are the biggest challenges facing your business now and how are you addressing those issues?
Saffer: One of the biggest challenges is the fact that I’m still doing everything. I need to begin the process of hiring admin, and social media help to take some things off my plate so I can focus on growing the business. I’ve made it a point to personally reply to every person who has reached out via email, message, or social media.
I want customers and Dollop Gourmet fans to know how much I truly appreciate their support. This has taken a lot of time and caused many late nights, but it’s totally worth it. Also, I’m up to my eyeballs in orders and spending long days in the warehouse right now trying to get those orders out. I do everything I can to make my customers happy. That’s my number one priority.
Ho: What are your goals for your business over the next year and five years?
Saffer: My most immediate goal is to bring my costs down so I can bring the shelf price down. I think I’ll be able to move more volume if the price point is slightly lower. I’ll be exhibiting at the Fancy Food Show next month in NYC, so I’m planning to pick up some new retailers from that in conjunction with my Shark Tank appearance. I’d also like to expand the product line within the next year.
In five years I foresee Dollop Gourmet being a major player in the dessert snacking category. Personally, I’d like to share my story of perseverance more and help other entrepreneurs keep their ideas going when they feel like they’re alone and wanting to quit. I want to build Dollop Gourmet to the point that I can give back in the way I feel called to do. Click & Tweet!
Ho: What was the most effective thing you did to get more exposure for your business before going on Shark Tank?
Saffer: One of the most effective things I do to get exposure for my business is to do regular dessert segments on the news. These segments create content for me to share and keep my face and brand on TV.
Another effective thing I do is share my story at trade shows and in meetings with buyers and let everyone know that Dollop Gourmet was created by a winner of Food Network’s Cupcake Wars, and a successful bakery owner and cookbook author. In other words, Dollop Gourmet had validity and was not created by Joe Shmo, rather by someone who’s an expert at frosting.
Most Appetizing Books and Business Apps
Ho: What business books do you recommend people read and why?
Saffer: and remind me to be vulnerable and unafraid to express my truth and be myself. There have been times when I’ve started to get caught up in what “everyone else” is doing and trying to emulate someone else’s success. These books remind me that I’m so much happier and more successful when I do me even if “me” is different. Not everyone’s path has to be the same. There is more than one path to success.
Ho: What are you favorite business websites, tools or resources that you love and why?
Saffer: I use Dropbox with just about everyone I work with. It’s the best tool for sharing large files and folders. For e-commerce shipping, Shipstation has been great as it connects directly to Shopify and makes printing labels a whole lot quicker and easier.
LinkedIn is a surprisingly great resource for finding store buyers. Once you find a store buyer, you can learn what his/her email address is by finding out the email address format of the specific company and then inputting the buyer’s name into that format. It’s worked almost every time.
Food for Thought on Running a Business
Ho: What’s the worst mistake you’ve ever made in business and how can others learn from it?
Saffer: The worst mistake I ever made was not listening to my intuition. I’ve made this mistake several times. The first time was in my very first business, and I told this story on Shark Tank.
I entrusted a man to help with my business even though everything inside me was telling me not to. I thought he could take my business to levels that I could not. The other mistake I made in that scenario was not keeping close tabs on my bank account and the cash coming in. He wound up wiping me clean and going to prison, and I had to dissolve my company.
The other time I didn’t listen to my intuition was when I hired these two food and beverage consultants to help me figure out my manufacturing and get into stores. They wound up doing absolutely nothing for me, so $10,000 and two months later I broke our contract. The connection between both of these stories is that I didn’t listen to my intuition telling me not to trust these people.
Both times I had reached a point in my business that I felt desperate for someone to fly in and help me, which is never a good position to be in. Never get desperate, and never convince yourself that you need someone to save you.
Ho: What is the best advice and business insights you’ve received from your Shark, Barbara Corcoran?
Saffer: Barbara and her team have been great. Barbara advised that I offer an online special for $19.99, which was great advice. It took me awhile to rearrange my numbers and shipping options to be able to hit that price point. I took a hit on my margins, but I think I got more orders online than I would have if I didn’t offer a $19.99 price point special.
Ho: What motivates you to continue to pursue your business in the face of obstacles and lack of profits?
Saffer: I’ve wondered this many times myself. I honestly feel like I’m continually being called to pursue my business. There have been so many obstacles, and so many times that I wanted to and by all means should have quit. But something inside me has continued to drive me forward. I don’t know how else to explain it other than a calling.
Not to get all woo-woo but I’m very spiritual, and I feel like I’m here for a reason. That reason is what keeps me from quitting. I’ve experienced so many hardships in my past and so many failures, yet something inside me won’t let me quit. I think I’m meant to persist and pursue to inspire others to build something out of nothing and to get up if repeatedly knocked down. Click & Tweet!
Also, I’ve seen a lot of examples of successful businesses led by two or more people and I think it’s important to show that even if you don’t have a partner, or family involved in your business, or a significant other for support, you can still create a very successful business.
Ho: Is there anything else I should have asked?
Saffer: Great questions! Shark Tank has been an amazing experience and an incredible opportunity. I’m honored and grateful to have been chosen out of the thousands of people who apply each year. I think the greatest things that have come from Shark Tank may be surprising to most people.
Shark Tank has not been a magic bullet for me. It hasn’t made me so much money that I can buy a house and go on vacation. It hasn’t financially changed my life nor brought me that right hand to split my workload with. One of the greatest things Shark Tank has brought me though is a community of entrepreneurs who have also been on Shark Tank and who are the most supportive and wonderful people. To have this new group of like-minded friends is incredible.
The second thing being on the show has brought me is a community of amazing new customers. The outpouring of support, love, and encouragement for Dollop Gourmet has refueled my tank and proven to me that this product I created is needed and wanted and that my story is needed and wanted to be heard. For that, Shark Tank is life changing.
This story originally appeared in Forbes in July 2016.
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