MINI-CASE STUDY
SLAWSA
By THE BUSHA GROUP, LLC
1. In what year did your company begin operation?
There was an attempt made by my former partner to launch the brand back in 1998 I think, but when I became involved in 2011, Slawsa was not being sold in any stores, farmers markets, etc. Slawsa saw its first placement on retail shelves in late 2011 (Ingles Markets) as it took some time for me to get the brand retail ready (website, means of production, labeling, etc)
2. When did you appear on Shark Tank and what was the time line from the initial application to actual taping pitch?
I went to the Shark Tank season 5 open casting call in Atlanta in mid-April (I think), 2013. That was the beginning of multiple levels of casting which ultimately led to me being the final person to pitch on Sunday night, July 15, 2013. My episode initially aired on November 15, 2013.
3. What was the amount of the investment asked for and what was the final investment (if any) proffered by the Sharks?
Requested $150K for 15%. Given we were closing year 2 sales with $500K, up from $212K for year one, I thought my valuation was more than fair. Never in a million years did I think I would not have received multiple offers, much less one, but that’s what happened.
4. Please describe the long term benefits and any drawbacks resulting from your Shark Tank appearance.
While it did not turn out as I expected, I have nothing but positive things to say about the entire experience, the professionalism of the producers and staff. Sure, I wish there were some other things that would have made the edit such as more focus on Slawsa itself (flavor, versatility, health benefits), revealing my background in marketing in NASCAR for over a decade having served General Mills as a client for 9.5 years, etc. Overall, I had a very powerful and inspiring edit that made viewers shake their head and wonder why they passed. It was nice to have received so many compliments and it’s not often that you can walk out the door and Mark Cuban is still talking about his respect for you and your business. Despite the non-optimal timing of the airing (during the winter months), we were able to receive some larger immediate sales versus those who perhaps had limited distribution. When you walk into the tank knowing you have the confidence of thousands of retailers including industry leaders, you can capitalize more if that air date comes. Not everyone who tapes will air so it’s not like you can use that information to sell product in…and it’s not like our industry can move that fast anyway because we’re only given a few weeks notice. We were in 5,200 stores by our air date and while the winter airings weren’t ideal, it exposed many new consumers to our product. Certainly, the best thing about appearing on Shark Tank is the support that we received from those influencers in the food industry who really understand how revolutionary Slawsa is. When people like Lisa Lillien, Melissa d’Arabian, Ashley Koff, Chef Art Smith and more profess their love for your product, that’s a great compliment to our business.
5. How do you define success? Are you “there” yet? Did the Shark Tank experience add to your success? Please describe.
I don’t think a Shark could ever put more pressure on me than what I put on myself so NO, we are a long way from what I perceive success to be. In fact, I’m a person who sets lofty goals and when I attain them, I just set new ones as there really is no end-game to growth in my mind. I have a new line launch that I’m waiting to execute, simply because I want timing to be right and to be optimal for marketing.
6. How long did it take for your company to be successful? What challenges did you face in establishing your company?
I guess it all depends on what the definition of “success” is. If someone says success is gaining entry and growing sales in the nation’s largest retailer and the nation’s largest grocery retailer, than I guess Slawsa saw success in less than a year. However, if it’s me speaking, I won’t consider the brand successful for probably 10 more years. I certainly had to jump a few extra hurdles in the last few years. After Slawsa had entered into our 4,000th store, I received the biggest shock of my life…my former partner requested that I buy him out of his equity. I simply never anticipated that. Now, for a 34-year old who had already put so much of her time and savings into the business to get it to where it was, that’s a serious and significant question to entertain. Had my husband and I not been tireless workers and savers in the previous 12 years, never would it have been possible. I figured I could look at it as either:
• A tax on my efforts, or
• An opportunity to assume more risk and grow the business into a much brighter future. I chose the latter and bear that additional responsibility, just as I told the sharks. I prefer to look ahead than behind.
7. How long did your initial roll-out for the above product line take (months or years?) and how much did it cost? ($5,000? $20,000?) What kind of funding was available to you other than a Shark Tank investment?
I would say that it took me a solid four months to get Slawsa to a place where I was pitching retailers and closing the first major retail commitment. In terms of costs, I can get more out of a dollar than most, and I wear many hats so I didn’t need to contract out for design (web or otherwise), marketing, PR, etc. I’d say that including the first production run, it was about $15K to launch and it wasn’t too long after that we were operating off of profits. The line was converted to all natural, new flavors were developed and we’ve expanded in various ways. Of course as we grew, there had to be an influx of capital into inventory.
8. Please share your insights and advice for new to industry companies. Don’t hold back!
I have actually written a number of business articles, many of which can be easily found on the right hand side of the Shark Tank page of the www.slawsa.com website. They deal with gaining publicity, branding, starting a food business, etc. but the most beneficial one deals with marketing: http://www.sharktankpodcast.net/small-business-marketing/. The reality is that there are thousands of potentially great products that will never reach their potential because they lack two things: effort and marketing. Success in our industry is mostly driven by marketing and the little guy without deep pockets has to be more creative and ultra targeted than the major manufacturers. Knowing your break even ROI for units sold in terms of marketing expenditures, targeting your audience, making wise decisions and evolving marketing as your business grows are some of the principles I discuss in the article. Likewise, if you’re starting in the food industry, you have to realize that our industry, slower-moving and based on volumes, not margins, is one where you should expect to run a marathon. Our industry has a high attrition rate purely because people don’t realize the long-term commitment and perseverance necessary to succeed. They assume that getting on the shelf is the goal….when in fact, that’s merely where the work begins.
9. How would you define your long-range “vision”? Where do you want to see your company positioned in the next 5 years? 10 years? [Vision statements are made n the present tense].
I think it was Shark Robert Herjavec who quoted (not to me, but in general), “You’ll overestimate what you’ll do in the first year or two and you’ll underestimate what you can do in years 5 and 10.” God, I hope he’s right. I do realize that I’ll probably never receive an “update segment” from the show simply because I didn’t get a deal, but that won’t stop Slawsa from earning one.
10. Was your participation in the 2015 Winter Fancy Food Show in San Francisco successful? What was your total investment (booth, travel, etc.)?
Yes, it was very successful by the initial assessment, but how successful it is will be determined a few months down the road. In terms of costs, you hopefully saw how fiscally responsible I was on the show. I was very fortunate to utilize a 3-bedroom apartment for my stay at no cost, got a roundtrip flight from the east coast for $350, etc. All in, soup to nuts, I spent shy of $4,900 (with the booth being $3,500 of that)….but I will get $2,200 back through SUSTA. Net cost: $2,700. Either way, you can say I’m a cheap date or I just prefer to put as much as possible back into marketing Slawsa to consumers and growing the business.
Julie Busha
302 Lord Court, Cramerton, NC 28032
O – 704-879-4411 – F – 704–879-4570 – C – 704–756-3661
JBusha@slawsa.com – www.slawsa.com
“Well Done is Better than Well Said” – Benjamin Franklin