This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So cakes, cupcakes, cookies, bars, pots and putting. Susie Cakes is celebrating its sweet sixteen and if you're from California, or perhaps you've been to Texas or California recently, you might have seen as Susie Cakes in the flesh Well. Susie Sarah Susan Sarach is the founder and CEO of Susie Cake. She joined us on the phone from Los Angeles. Susan, how are you.
I'm great, Thank you for having me on today. Well, it's good to have you with us. Can you take us Yeah, that's true, take us into the origin story here, because you've got a pretty great beginning, taking the ingredients of taking the recipes from your grandmother's and building a really what's become an empire. Thank you for mad Yes. I grew up in Chicago and both of my grandmother's mildren and Madeline lived across the alleys from each other. So while I was growing up, we always had some
great desserts around the house. And fast forward, I went to um Hospitality School for college and then worked in the hospitality industry about fifteen years. While I was in food and beverage and hotels and restaurants, I noticed a lot of women leaving the business because it was difficult to um have a family or have a life outside of work working seven. So I grew up a business model predicated on women. Have women having careers in hospitality
without having to sacrifice other areas of their life. Combine with these amazing three by five d and recipe cards I had from my grandmother's You know, my my mom still has those recipe cards from her mom. We share them. We actually we kind of memiograph now and share them to the family. They're valuable, so don't lose them. So
let's talk about your business. So I think about sixteen years in you have made it through the financial crisis, the pandemic, and then today's supply chain stresses and more, and also and in vironment that continues to be disrupted, in innovation, whether it's in the food space, how we work, who's working. We think about diversity inclusions. So talk to us about kind of that progression. That's a long time to be running a business. How do you think about it?
Today and how you run it it is um You know, one thing I've always been is very true to what our core mission is, which is connecting through celebration and not trying to be all things to all people and just being very good at what you do. And so what I have focused on since to day one was creating the highest quality scratch made products combined with the highest level of guest service to all of our guests, and being very straightforward and open about what we're doing.
Our kitchens are open, we use high quality ingredients. We don't sacrifice on that. And I think as troubling and up and down as the economy has been and times are, people really want to celebrate now more than ever. But you always want to celebrate, right, and so to be able to bring that joy to people and bring your mindset to a simpler time. A lot of people tell me our cakes you're buying them of their childhood or
you know, when when life was easier. And so I think that Susy Cakes has really tribd over the past sixteen years because as life gets more complicated and people are, you know, on their devices more and more, this premise of connecting through celebration with human beings face to face and sharing a cake and celebrating somebody has really resonated well, Susan. One area of life that has become increasingly complicated in recent years has been the labor market. And it's something
that we talked about with companies big and small. I mean, we're in the midst of earning season right now, and there's you know, not an earning it is called that happens without commentary about attracting and retaining talent right now. How's it going for you at your locations throughout California and Texas? Are you having a hard time keeping employees? Are you having to raise wages and are you seeing differences in different areas of the country. Yes, it's been
very challenging actually in both areas of the country. And UM, you know, in order to meet the decreased labor market early in we had to quickly alter our business model to a fewer days, fewer operating hours per day, and fewer product offerings, so we really had to lean heavily on technology and UM have a focus on driving more
sales online. So as a result, we've increased our online sales from six per to thirty one percent, which is huge, but that allowed us to have um less team members in the store taking orders and having an easier production model, creating less waste that we actually ended up with a more profitable business model really, because I do think about like the higher price cost. I mean, are you feeling though a little squeeze sometimes right now just because huge
see huge squeeze, huge squeeze. Um. You know, both our cost of goods and cost of labor are up well over ten percent, and you know, like most retailers, we've had to pass some of that on to guess um. But since we've built our reputation as you know, best in class and highest quality, we've been able to maintain our guest base. One thing I wanted to ask you from what I understand in reading in for this UM is that you pitched your business for like two years?
Is that fair? That? Yeah? It was? I yes, I would say the better part of eighteen twenty. Was it just that? Because we talked about this a lot at Bloomberg UM about the ability or inability of women and certainly minorities to attract investment dollars? What was it was? It? Was it just because did you bootstrap or did you get money or like, tell me about it? Very bootstrapped? UM three UM. Really, literally everyone who I spoke to and showed my business model to said Susie cakes was
a bad idea. And um even the f b A said Susie um baking is a hobby out of business and UM it was incredibly frustrating and difficult at times to you know, keep going knowing that so many people were saying people I respected, we're saying that, UM, it was a bad idea and so are really only options that we had were bootstrapping and you know, gathering UH money from friends and family. Who would you know, at least, you know, have a little bit of faith in me,
UM to get the first door open. What would you say to the world at large having seen the business that you're building and it sounds like you continue to grow um because it does sound like investors, whether it's angel investors or an s p A, that there missing
a huge part of our population. So much of my time outside of work is spent on supporting the next generation of female entrepreneurs because they are still struggling with getting UH funding and UM, you know it needs it needs to shift and I don't know what will create that shift, but I'm still seeing it sixteen years later. Okay, you guys have locations, Susan in Texas and in California, but you can actually order online and you do ship nationally, so people who don't live in those areas can get
Susie Cakes. What about expansion in terms of bricks and mortar, because on our planning call this morning, we were thinking, wait a second, this would work in New York pretty well and just have about twenty seconds. Yes, Um, we are looking for brick and mortar expansion as well as a nation wide shipping. So we're looking to have a flagship location in major metropolitan areas and then build out the brand name from that and enhance our nation wide shipping.
Wait you do ship? We start. We just started shipping as a new initiative for us. Checking out a carrot cake and a flowerless chocolate cake. I am hungry all right, um, Susan, good luck, stay in touch, let us know how the expansion plans are growing and just running the business. Um. So great to catch up with you, um, Susan. Sarah. She's the founder and chief executive officer of Susie Cakes, joining us on the phone from Alice. I love me
some flowerless chocolate cake actually for your birthday. Maybe promise I'm gonna hold you to it. Okay, mark the date. It's July two, all right,