Today we talk with former Shark Tank contestant Kelly Chaney the owner of Puppy Cakes.
Today we talk with former Shark Tank contestant Kelly Chaney, the owner of Puppy Cakes – a small business offering cake mix for dogs. Kelly appeared on ABC’s Shark Tank (Season 3) hoping to strike a deal, but as we all know in the world of business, things don’t always go as planned.
“Though the Sharks were hard on me and I didn’t get an offer, I felt that their criticism was constructive and helped me see the holes in my plan.” – Kelly Chaney
Thanks to the show’s publicity and the hard truth of the Sharks, Kelly gain the confidence and learned from her mistakes. Since the show Puppy Cakes has introduced many other products and sales have been increasing at a rapid rate. Let’s hear what Kelly’s been up to.
Q: What’s the startup story behind Puppy Cakes and where did the idea come from?
Kelly: I used to work at a Sales and Marketing Firm and one of my clients made cake mix for people. As I was looking at their past cake mix advertisements for hours, I thought to myself, “Wouldn’t that be great if they made that for dogs?” People love their dogs, myself included and I imagined that many dog owners would want to provide their dog with a cake. That was my light bulb moment. I immediately did a search for cake mix for dogs. After some effort, I found two disappointing options that lacked any appeal because they used crude packaging, had strange flavors like pizza or pot roast and they were expensive.
Knowing that humans are the ones that buy products and not dogs, I wanted to create a cake mix that was close to cake mix for people. People are accustomed to sweet flavors like chocolate or vanilla with professional packaging and easy to use instructions that require things that would already be in their kitchen. I spent the next several weeks researching canine nutrition and eventually came up with two recipes that were healthy, easy and tantalizing to dogs.
To match the traditional chocolate cake, I made a cake with Carob (a natural chocolate substitute safe for dogs) and to match the traditional yellow cake, I used banana. Recently, I released a wheat-free peanut butter flavor that has quickly become my best seller. Similar to cake mix for people, you add one egg, oil and water, mix then bake. Each box comes with yogurt frosting that dogs absolutely love. Just add water, whip it up and top the cooled cake or cupcakes. One box makes 8 cupcakes or one 6 inch cake. My first biggest challenge with actually producing a product was getting packaging.
I quickly learned that it is very difficult to do small runs of anything. I paid over a dollar per box of my first packaging because I only bought a thousand of each design. Now, I order 20k at a time and pay significantly less per box. I taught myself so much those first few months. I became fluent in web design, Quickbooks, SEM and procurement to save money and get the business running.
Q: Why did you decide to go on ABC’s Shark Tank and how has it change your life and business?
Kelly: I had the opportunity to speak with Co-executive Producer, Yun Lingner, over the phone before I applied. She had reached out to me after stumbling upon Puppy Cake. Yun shared with me the benefits of such great publicity citing that some contestants saw their sales jump 700%. It was a pretty easy decision after that. I wanted the publicity and I really wanted an investment. I got more sales in one month after Shark Tank than I had the entire last year. At the end of 2012 I will have grossed over $150k in sales, double of my TOTAL sales of my four years doing Puppy Cake at the time of filming.
The fantastic sales numbers aside, going on the show brought my mentality to another level. I got to meet and share stories with entrepreneurs from all walk of life and levels of business. From their influence and the encouragement I received after the show, I was able to get my mentality out of the stagnant rut that had held me back for so long. While I attended the Global Pet Expo, a goal I cited on the show, I realized just how far I had come when I was confidently speaking with the buyer of several very large chains about Puppy Cake. I ended up closing some of those sales and have dramatically changed the landscape of my business.
Q: You had no offers from the Sharks. So looking back if you had to chance to do it all over again would you, and what would you have done differently?
Kelly: I absolutely would do Shark Tank again. Though the Sharks were hard on me and I didn’t get an offer, I felt that their criticism was constructive and helped me see the holes in my plan. If I were to do it again, I would have…well…I wouldn’t change anything. My goal going onto the show was to walk out of the tank feeling like I had done the very best I could. I wanted to appear poised, professional and knowledgeable, something I feel I achieved. I wish that I had known what I know now so that I could have had better numbers to display on the show as well as had more products so that they would be buying a line of products, as Lori Greiner suggested.
Q: Do you own any other businesses and have you had any other businesses in the past if so what happened to them?
Kelly: PuppyCake LLC is my first and only business…so far!
Q: What are some of the project you are working on now and what can we expect from Puppy Cakes in the next 5 to 10 years?
Kelly: This fall I will be launching a new treat: Puptato Chips and a new flavor: Red Velvet. Soon after those products, I will be releasing frosting that will be in similar containers to the frosting tubs in the grocery store. Subscribers to the Bark Box will be the first recipients of the Red Velvet flavor, shipping November 15th. My plan for the next 3 years is to grow the company to a point where I can sell it for a specific sales price. By that time, Puppy Cake will be well known for providing high quality, fun and innovative dog treats with a focus on natural health. I imagine I will have several different products in my line. After Puppy Cake, I will probably start another business, not sure exactly what, but most likely in the pet industry because I love it!
Q: Can you share some tips and advice for new business owner about pitching ideas to investors?
Kelly: Be confident, knowledgeable, professional and honest. Smart investors can see right through the holes in your plan and they can sniff out your weaknesses. I prefer to talk about the barriers early on because they will always come out eventually. In the end, if it is a good fit and profitable, a deal will be done. Make it easy for the investor to come to that conclusion.
Q: What was the most valuable lesson you learned from this extraordinary experience?
Kelly: I learned to look at my business from an investors point of view. When I look at it that way, I am able to see areas that need improvement and areas of strength. If I wouldn’t buy my own company, how can I expect someone else to? Learning to view my company that way has drastically changed and improved my business and mentality. A great book that every entrepreneur should read that talks about this perspective is “The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It” by Michael E. Gerber.
Q: What is your favorite entrepreneurship quote?
Six essential qualities that are the key to success: Sincerity, personal integrity, humility, courtesy, wisdom, charity.” William Menninger, Entrepreneur