Marcus Lemonis, the entrepreneur, investor, and star of CNBC's series The Profit, says that to stand out in the multibillion-dollar confectionery market, you need more than just a ton of capital. A founder's personal touch is also essential.
"The secret weapon in the whole model is you," Lemonis tells Andrea Ballus, the founder and CEO of Sift Dessert Bar. Her California-based company sells sweet treats--like the cleverly named Stud Muffin--through five physical store locations, as well as through its website.
Ballus appears as the featured entrepreneur on Tuesday's episode of Ask Marcus Lemonis, a weekly Web series on Inc.com in which a business owner gets the opportunity to talk shop with Lemonis, who then agrees to answer one, pressing business question.
Since launching in 2008, Sift Dessert Bar has seen impressive revenue. Last year alone, it brought in more than $3.2 million, with online sales making up about 5 percent of the business. The company uses a commissary model, meaning that it leases a 1,500-square-foot kitchen, which supplies the existing store locations across the San Francisco Bay Area and beyond.
Ballus wants to expand beyond those five locations. "How do we discover the access to capital that will help us grow into new markets--and with top talent?" she asks.
Lemonis, who concedes that her cupcakes are "ridiculously good," notes that expanding isn't the way to go--at least not right now. He says that taking on the rent and risk factor of another commissary jeopardizes the health of the business.
Instead, he suggests focusing on making her existing stores profitable. For instance, Ballus could add impulse or gift items, like chocolates, that have a longer shelf life.
"The stores have to be very experiential," he says. "I would advocate that you try to maximize profitability, add more skews, and work on your revenue per square foot."
To learn exactly why a personal touch is key to continuing Sift's success, watch the episode above.