The Smart Baker Before Shark Tank
Daniel Rensing became an overnight entrepreneur when he decided to make his wife’s life just a little bit easier. Stephanie Rensing loves being in the kitchen and the majority of her time is spent baking all kinds of pastries, cakes, and other sweet treats. As most people who love to bake know, things can become a little difficult when you try to make more or less than an original recipe calls for. In attempt to remedy this issue, Daniel created an apron that has a conversion chart on the bottom of it. This way his wife wouldn’t have to stop every few minutes to look up the conversions on the phone or computer.
His wife was thrilled with the new invention and insisted that they put it out on the market. That was when the Smart Baker line came into creation. Their new apron received a lot of recognition and brought in enough sales that Daniel and Stephanie were capable of adding other new products to their line. Smart Baker introduced a line of high quality cupcake towers in addition parchment paper that was designed to fit perfectly into baking equipment. On their website they also feature an array of various other baking accessories, but it wasn’t until Stephanie lost her job as a teacher that the couple decided to invest all of their time into the business.
With that in mind, the Rensings figured that if they were going to get their Smart Baker brand out there on the larger market, they were going to need an investor who has connections with distributors. The best place to find that kind of investor seemed to be ABC’s Shark Tank, which is exactly why Daniel and Stephanie decided to take their business there. Hopefully one of the Sharks would take a bite and help the Smart Baker line get its name out there.
During Shark Tank
Daniel and Stephanie enter the Shark Tank seeking a $75k investment in exchange for 25% of their company. Then they begin to explain how home baking has recently become a new common pastime that a lot of people take part in. The Smart Baker’s goal is to make the lives of those home bakers easier by creating and selling products that make the baking process a little less complicated. Stephanie then explains how she was always messing around with recipes because they made way too much for just two people. However, when she tried to tamper with the ingredients, the end product always ended up being a disaster. That was why they created an apron that has a conversion chart printed on it upside down, so this way the baker could read it while baking.
When they first introduced their product to the market, they only sold a couple of units a week, but eventually it caught on and they started to sell 50 aprons a day. In addition to that, they started selling pre-cut parchment paper sheets that fit common sized baking pans. These sheets also have tabs that allow you to easily lift the cake out of the pan once it is finished. The Rensings also put together one of their reusable cupcake towers to demonstrate just how versatile the Smart Baker brand really is.
After the couple hand out baking aprons and cupcakes to the Sharks, Kevin O’Leary is the first to get down to business by asking what their sales look like. In total they have made around $72k in sales, but over the past three months they made about $33k. By the end of the year they plan to have made $140k and net about $100k of that money. Robert Herjavec is impressed with this margin and asks if this is something that they’re both doing full time. Up until very recently, Stephanie was an elementary art teacher, but she just lost her job the day before appearing on the show. That is why it is so important to her now that they make this business work.
As far as actually selling the products goes, Smart Baker sells online through catalogs and some trade shows. Their best selling item right now is the cupcake tower, which sells retail for $64.95. It is their belief that it is so popular because you can use it at weddings because it is large enough, but you can also downsize it to make it a great display for small house parties.
Herjavec asks them what they would do if they were given the money and time to make more sales, what
would they do? Daniel responds by saying that he would take Smart Baker to more trade shows because when people see it, they absolutely love it. However, this causes Mark Cuban to not invest because he claims to be an “internet geek” who would try to hold them back from launching into the retail business. So by not investing, he believes that he is actually looking out for their business. O’Leary thinks that they have a good concept, but for him there isn’t “enough meat on the bones” so to speak, or that there isn’t enough profit to be made. As a result of this, he too does not make them an offer.
That leaves only three Sharks left, and Herjavec doesn’t believe that he would make a great investor because he doesn’t know much about the baking and cooking industry. But even though he isn’t going to be a partner, he admits that he likes their idea so much that he would definitely become a customer of theirs. Daymond John decides to make them an offer though. He decides that he will give them the $75k they asked for, but only if he gets 40% of the business in return. The Rensings don’t seem too thrilled with that offer, so they hold off on making a decision while Barbara Corcoran puts her offer on the table. Corcoran offers them the same deal that John made, but also wants a 5% royalty until she makes her money back. What makes her a smarter business partner is that she knows the baking industry and has a lot of connections that could be very useful to them.
Corcoran and John go back and forth for a while, arguing about why and why not they would make the better investor. The choice is ultimately up until the couple though, and they decide to counter Corcoran’s offer by asking for $100k in exchange for the 40% investment and 5% royalty. She declines that, but her previous offer still stands. They take a moment to think about it, but then decide to accept her offer and go in on a partnership with Corcoran.
The Smart Baker Now in 2018
After appearing on the show, the deal with Barbara fell through as a result of not being able to come to an agreement on making a less expensive version of the cupcake tower. Even though no deal was made, Daniel continued to work towards the growth of Smart Baker. In addition to that, Stephanie received a call a week after the show finished taping to find out that she got a new teaching job.
As far as the Smart Baker success goes, Daniel managed ship six tons of product to an Amazon distributor. In addition to that, he started working on making a licensing deal for their parchment paper with Reynolds Wrap. The most of their sales are made during holidays like Christmas and Mothers day, but they still revamped their website which definitely helped to increase their popularity. You can find their website here, http://www.thesmartbaker.com/, and view all their offered products. Clearly even though they failed to make a final agreement with Barbara Corcoran, Smart Baker definitely ended up becoming a success story.