Kim “Daisy” Nelson turned a million-dollar business out of her family’s heirloom cake recipe. Daisy Cakes, her bakery in Pauline, South Carolina, is known for its hand-sifted, made-from-scratch cakes, which are now shipped nationwide.
Nelson and her mother started the business in 2009, making all of the cakes themselves. Nelson went from selling 2,000 cakes in a year to selling 2,000 cakes in a single day after appearing on “Shark Tank.” Learn how this entrepreneur and mother of three scaled her bakery business to become a source of serious dough to help you grow your own business.
It All Started With a Family Recipe and a Baking Passion
Nelson learned to bake from her grandmothers and great aunts, who began teaching her their family recipes when she was a child.
“I was so young,” Nelson explained, “that I had to sit on my knees on my little yellow stool to reach the counter.”
Having a Case of the Entrepreneurial Bug
Nelson was bitten by the entrepreneurial bug at a young age. She was selling cakes almost as soon as she finished baking them.
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“When I was ten years old, I sold my first cake,” she said. “It was chocolate icing on a yellow cake.” I got a whopping $7 for it! Since then, I’ve been baking and selling cakes.”
Taking a Chance on Her Own
Nelson pursued a career in the restaurant and catering industry because of her passion for cooking and baking. She knew she was ready to start her own business after more than 20 years of working for others.
“My mother and I decided to keep things simple and go back to the beginning,” she explained. “Daisies Cakes was founded in June 2009.”
Getting Her Business Up and Running
Daisy Cakes was founded by Nelson with a $93,000 investment from her parents. Despite the fact that she was risking thousands of dollars, she never doubted that her business would succeed.
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“I had no fear when I first started Daisy Cakes,” she said. “I was doing what I really enjoy.” Ignorance is, and always has been, bliss!”
Getting the Word Out
Kim Nelson quickly realized that running a business entailed far more than just baking cakes. She and her mother needed to spread the word in order to grow their business, so they went on the road with their cakes. They were vendors at the Houston Nutcracker Market and attended Junior League holiday shows in Louisiana.
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“This is how we started the party — by driving a lot of miles and selling Daisy Cakes,” she explained.
Sharks in the Water
Nelson made an appearance on “Shark Tank” in April 2011 and managed to get one of the sharks to bite him. Barbara Corcoran agreed to invest $50,000 in Daisy Cakes in exchange for a 25% stake. The show not only provided Nelson with an invaluable investor and mentor, but it also caused sales to skyrocket.
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“We sold about 2,000 cakes our first year.” All of them were baked and shipped by my mother and me. “We got over 2,000 orders in 24 hours after ‘Shark Tank’ aired,” Nelson said. “The website went down, and the phone lines went down.” It was mayhem and chaos on steroids! It’s fortunate for me that I thrive in chaos.”
An Excessive Demand
Nelson admits that she and her mother were not prepared to meet the new demands, despite the show’s success.
“We didn’t have a plan because the huge increase in sales came at us so quickly,” Nelson said. “No one anticipated such a dramatic increase in sales in such a short period of time. “Neither did the producers of ‘Shark Tank’ nor my new partner, Barbara Corcoran.”
A Loss of Six Figures
Daisy Cakes moved some of their production to three large-production bakeries to try to keep up with the high volume of orders. Unfortunately, the quality of some of the cakes produced fell short of company expectations.
Nelson explained, “We ended up losing 6,500 cakes due to poor quality at a cost of $165,000 — that would have translated into $300,000 in sales.” “It was a calamitous loss.” It’s a miracle that we’re still in business.”
Returning to Her Roots
Nelson realized she needed to find a better way to scale her business while maintaining the integrity of her original family recipe after the big-bakery disaster.
“With Barbara’s wisdom and counsel, there was nothing left to do but bring all baking and shipping back to South Carolina, bake as many cakes as we could, and advise customers to place their orders as soon as possible,” Nelson said. “Every week, we bake for the cakes that will be shipped the following week.” This has proven to be the most effective method of ensuring quality. No one will be able to bake my cakes as well as I do. These other bakeries had no stake in the outcome, and it showed.”
Leaving for the West
Daisy Cakes’ high shipping costs were one factor that continued to hurt the company’s bottom line. This became an even bigger annoyance for Nelson after the “Shark Tank” appearance resulted in a surge in sales, with more people from the West Coast wanting cakes.
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“Shipping a perishable cake in a large, heavy, insulated shipping container with dry ice has always been a problem,” she explained.
As a result, Nelson decided to take the plunge and open a second bakery in Las Vegas in 2019.
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“I decided to take the risk rather than live with regret after months of deliberation,” she explained. “On March 31, 2019, my son, Sam, and I flew to Las Vegas to celebrate my grandmother Nervielee’s birthday. We moved into our new house on April 2 and got ready to start Daisy Cakes West.”
Creating New Objectives
Daisy Cakes currently sells around 18,000 cakes per year, generating about $1.2 million in revenue, and Nelson anticipates that number increasing in 2020 with the opening of their new West Coast location. She also intends to broaden their services.
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“Adding new vegan Minikins to the Daisy Cakes lineup is one of my future goals,” Nelson said. “Plant-based alternatives are essential.” I’m looking forward to getting started.”
Success Has a Sweet Taste
Nelson is pleased with where Daisy Cakes is now, despite the fact that owning a business hasn’t always been easy.
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“While I believe Daisy Cakes is a successful business, I also believe it is critical to never rest on one’s laurels,” she said. “Every day, I work hard to ensure that my cakes are as delicious as my grandmothers’ and great aunt Daisy’s.”
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“Success for me is the peace of mind that comes from knowing that I get up every day and do something I enjoy,” she continued. “I make people happy by providing them with a delicious and joyful product.” As a result, I’m even more content.”
The Best Advice Nelson Has for Other Aspiring Entrepreneurs
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“Anyone starting a business needs to realize that it takes commitment and sacrifice,” Nelson advised anyone else who wants to turn their passion into a business. “There’s no way it’s going to be easy.” You must be willing to give 110 percent of yourself, including a lot of blood, sweat, and tears.”
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“You might also need a separate bank account for attorney fees because chances are you will (need) one along the way,” she added.
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