How Fairytale Brownies Transformed into the Success It Is Today

Kristen Keogh: Hey, thanks so much for joining us for Desert Dreamers supported by Local First Arizona. In each episode we get to hear from a business owner who went from dreaming it to doing it. And today we have the co-founder of fairy tale brownies. Eileen Spitalny with us, Eileen, thanks for being here.

Eileen Spitalny: You’re welcome. Thank you for the invite.

Kristen Keogh: I’m really excited because you brought really, really yummy treats. You guys, this is a giant bar of chocolate. This is amazing. How heavy do you think that is?

Eileen Spitalny: It’s an 11 pound bar of chocolate.

Kristen Keogh: Oh my Gosh, that is amazing. So this is what you guys are using to make all these amazing products.

Eileen Spitalny: Yes, this is the chocolate we started with and still use 28 years later. Now we just get like a whole container full of chocolate.

Kristen Keogh: That is amazing. And when you guys started it was in 1992 but this is really a story of a childhood dream come true. Take us back to kindergarten when you were hanging out with your co-founder, David. And you guys kind of got the spark for this business all the way back then.

Eileen Spitalny: We did. David and I have been friends since kindergarten, Madison Heights, and we just played together and my mom worked so I hung out at his house a lot. And his mom baked brownies and they were just these great brownies that we grew up with. And then in high school, we did a lot of homework projects together and said, ‘hey, maybe someday we should start a business together’. And the brownie idea just kept percolating along and then after college and then corporate jobs and then starting the brownies came up again. So the brownies have been a part of our childhood since kindergarten.

Kristen Keogh: So how far into the corporate world where you and David? How far separated had you two become at that point? Before you realized, ‘Hey, remember that idea that we had about the brownies. I think it’s time to do that.’

Eileen Spitalny: I think it was always there in the back of our head. Because I shared with you before, I think I definitely have always had a spark of doing something outside the lines because I shared I got kicked off Romper Room here in Phoenix, Arizona. So…

Kristen Keogh: Yeah, so you’ve always kind of been a little nontraditional.

Eileen Spitalny: Yes, yeah. So we, but we always were in touch in college. I actually worked at the entrepreneur program and so I saw what entrepreneurs were doing and I was reading a lot of business plans and, and got my degree in Spanish in business in and was working for (unclear. 02:30) on and then. So it was a corporate job but a smaller, you know, station we’re at and then David was an engineer and (unclear. 02:38) in Cincinnati, very big and very corporate. And so we both just had challenges doing that and we kept in touch. He’s just, he’s one of my best friends today. Even being business partners 28 years, he’s still one of my best friends we still get along. So we just we’re always in contact each other with friends, and about the same time we’re ready to do something. So we’re about six years into our corporate job when we decided to start fairytale brownies, and using the family recipe, and testing chocolates for all over the world, I would go visit my Univision clients and say, ‘Oh, my friends thinking starting a brownie company, you know which brownie with the chocolate do you like better’ and that helps us to decide French chocolate, Swiss chocolate and that’s how we chose this Belgium chocolate. So David and I we were always close and we just needed something to instigate our friendship into a business.

[03:26]

Kristen Keogh: So you guys kicked this off as a small operation, you’re using your friend’s kitchen at this time to bake; really your only expense would be your time, of course, but the ingredients and then you kept your normal job and then you’re kind of doing the market research by asking people to try the product. Now how…

Eileen Spitalny: It was low overhead in the beginning, yes.

Kristen Keogh: Very low overhead. Now how did you start to sell the product beyond just people that you knew? That had to have been kind of intimidating to say, ‘okay, we know these people, but now let’s see if anyone else wants these brownies.’

Eileen Spitalny: Right, right. Well, but those days and now it’s a thing too, I mean, it’s big now too is farmers market. So just like this weekend, if you go to a farmers market in town and there’s some new budding food entrepreneurs, that’s what we did. And so we went out to Borgata, had a farmers market on Friday, we went to town and country, we did all the street festivals. So since it was food, we just knew we didn’t have, we didn’t have money as a small company, right? We’re in a friend’s catering kitchen but we had brownies. So how do we get these in people’s mouths and we’re like, the farmers markets in street fair. So that’s really what we did, it was went out, sampled all the time, gave them away, and then had a sheet out and said, name and address and then overtime, it was name, address and email. And really, it’s just name and email now, please, but that’s how we started getting the word out. And then again, that was pretty low overhead too, because farmers markets are an easy way to get out word to having high rank.

Kristen Keogh: What I love about you talking about doing that in the early 90s is that, that is still a really good way to get your product out there now. I mean, I go to the Uptown Farmers Market all the time, and it’s amazing that you know in a world where we have Amazon and Walmart you know and all of this flexibility, we still really want that experience of finding our local creators and trying their products and that community environment.

Eileen Spitalny: …And hearing of stories.

Kristen Keogh: Yeah, we want to support local and I love that the farmers market is really still a great way for businesses to get known but I mean so much has changed outside of that. I mean we’re looking at you know, these different tools and…

Eileen Spitalny: Yeah, I brought for fun our original knife and cutter. So this is a pizza cutter and a Derby divider but we would get out a, you know, ruler and have it three inches wide because our original brownie is a three inch square and then that’s how we would you know cut the brownies once after they were baked in. But now it’s an automated machine right, there’s some cool machines out there that do things and so of course that was something we didn’t know either though. We just really wanted to bake the best brownies, be friends, have a business and we’re like ‘oh my God, we’ve started a manufacturing company and aren’t these you know, tools and equipment very expensive.’ So…

Kristen Keogh: Yeah.

Eileen Spitalny: …But they’re also very helpful for you know, efficiency. So we have a cutting machine that that has blades for different size of brownies, and but we’ve kept these because it’s kind of a good remember too for some of our employees that see this big building and it all looks so whatever, you know, so chic and efficient. It all started, you know, with the same. It’s just I don’t know, started with blood, sweat, tears, really.

[06:31]

Kristen Keogh: So you had a business education, you had that business background. So that had to have been very helpful, but there was a lot that you didn’t know. I mean, you weren’t a professional baker.

Eileen Spitalny: Right.

Kristen Keogh: And you know, starting a baking operation. How did you come up with a business plan in this territory that you hadn’t quite been a part of yet?

Eileen Spitalny: We, Well, we were, one thing and back to the entrepreneur program at USC, what I learned was the students meeting real entrepreneurs, how helpful that was and the business plan. So I just said to David, who do we know in the Phoenix community that could be a mentor to us, we asked for help. Basically, what we did was ask for help, we had to write a business plan for the bank to get money. So that was good for us to go through the cash flow cycle and the operational cycle every year. But then also, we have always and we still do ask for help. We just said, ‘Who do we know that we can ask?’ And so one of the gentlemen that started China missed in town, Dan Spiker, he and I were on an arts you know, committee, you know that my you just start thinking, who do I know and where our weakest links we’ve tried to what are we not good at and let’s try and find help in that area. So we had an advisory board that that helped us for many, many years and we met with them quarterly, and in the beginning, we couldn’t pay for their time, but we could give them brownie credit. So we gave them brownie credit for gifts and then what was funny is over time, we could pay them but they all still wanted their brownie credits.

Kristen Keogh: Oh I love that.

Eileen Spitalny: So, yeah we paid them and they’d get their brownie credits.

Kristen Keogh: And that speaks to the quality of the product too and the fact that it is a great gift to give someone you know. When you think of what can I give someone that will make them feel special and that they’re going to enjoy, you guys have really created something where you’re top of mind, which is really cool.

Eileen Spitalny: Thank you, yeah, yeah. That’s our goal. To spread joy and the memories and happiness. And then we have fun with all the flavors you know really started out with just original and walnut and Nancy who has her recipe she called it plain but to us it’s the ‘OG brownie’ sweet coffee rich.

Kristen Keogh: I love that.

Eileen Spitalny: And now we have 12 flavors now of brownies.

[8:40]

Kristen Keogh: So since you are a great gift, of course a lot of your annual income is going to come around the holiday time.

Eileen Spitalny: Yeah.

Kristen Keogh: …which did you realize that going into it? Tell me how you had to be flexible once you started to figure out ‘okay, we are a holiday heavy business.’

Eileen Spitalny: So we started in the fall of 92 the brownies and the friends being happy doing our thing and then Christmas came and because I was in sales before had a lot of business and so we loved it and then January came and then the revenue didn’t come anymore. So that was our first realization that ‘oh my goodness we’re a seasonal business’ but we’re like ‘oh well Valentine’s Day is coming and Easter and Mother’s Day’. But no, those are little blips on our fiscal you know, on our sales if it’s to be a chart but the holidays, the first three weeks of December, we can ship over half our so if we did 6 million brownies last year, we baked and shipped 3 million of them the first three weeks of December.

Kristen Keogh: That is crazy.

Eileen Spitalny: So it’s ridiculous and it’s crazy. And we’ve learned, learned, learned because that that puts an impact on our staffing, our cash flow, just marketing everything. So, but that’s what we realized in the beginning was right away and then in the beginning, we tried to fight it but now we just embrace it.

Kristen Keogh: Yeah. You have to plan for that, though.

Eileen Spitalny: Yes.

Kristen Keogh: Talk about how important it is to be able to go to your team and sit down and say, hey, look, this is something that’s a challenge. How are we going to figure this out? Because that was probably something that was kind of scary at the time was like, ‘how are we going to stay alive the rest of the year?’

Eileen Spitalny: Well, we asked for help because I think we just a couple of us in the beginning, but we were the, since we were…the employees gave us ideas, but I think they kind of wanted us to figure it out too as the leaders, you kind of need to go figure it out and then it’s kind of good to present the vision and the plan to your company versus just a little ‘what should we do’ because sometimes too, that can be a little frightening, I think for the employee.

Kristen Keogh: Yeah, they want to know that they’re safe.

Eileen Spitalny: Yeah, yeah, and yeah. Because we’re paying their paycheck. In the beginning, though, is you know, me and my partner and my husband, who was my boyfriend. So it was very like that in the beginning, which we do, which we do. But again, we had a mentor that said, think of yourself as a big company from the very beginning even though you’re so small. So think about processes right in the beginning and and think about the you know the look and the experience; so we just right away went for help and kind of tried to do it on the side, David and I with mentors and then present the plan to our employees, you know, this is how we’re going to do it. But now to grow, we have many team leaders now, that are managers and they do understand the financial and the risk and they you know, we can now hire people with experience, people that know more than we know.

Kristen Keogh: And you can kind of forecasts for changing seasons.

Eileen Spitalny: Yes, we forecast with projections and yeah, with projections of the baking and then also the packaging so there’s a lot of that. But right we look at last year and then with marketing this is you know, digital marketing and direct response marketing just kind of, you know, however much money we can put out there, catalogs we mail; the kind of response we get, we know our average order size, so kind of at all then it trickles down to how many brownies and how many boxes of this type and that type. And that’s taken many years, but we have, you know, kind of managers now, in each of the areas whether it’s IT or baking, shipping that can help us with all those projections.

Kristen Keogh: And then you’ve hired people who can help you in areas that you’re not an expert in, as you mentioned, and I think it’s so important to know what you don’t know.

Eileen Spitalny: Yes, yes.

[12:10]

Kristen Keogh: …and hire the right people, appropriately. A couple of the things that you’ve said that I really love is that idea from the mentor of thinking of yourself as a big, big business even when you’re a small business and your ability to ask for help. So with that, what would you say to someone who hasn’t quite gotten their dream off the ground and they don’t know if they can do it?

Eileen Spitalny: Well, I think if you have because we we’re not going to give up so if you have the resilience in yourself to fail and keep going and fail and keep going, then you just need to go for it and you need to ask others for help and you need to also start sharing your dream with others. You need to then, if somebody, if I have this dream and you’ve decided to come along with me then I do need to share with you and empower you so that you can help me grow it because you cannot do everything yourself. Because if David and I were still just with Mike, the only ones that knew how to bake the best brownies and never taught anybody else, then we wouldn’t be where we are today. So I think really, the empowering your employees and letting the vision grow within others helps your company you know, grow outside of the walls you’re in. Because then they’re out and about talking about where they work. So I think it’s good to, to empower and share the vision with others is an important thing.

Kristen Keogh: Wonderful. Well, it’s awesome to see your success being around since 1992 is very, very impressive, Eileen, thank you so much for sharing all that insight with our viewers to really a lot of good advice. And my final thank you to you. Thank you for these amazing packages.

Eileen Spitalny: You’re welcome, you’re welcome.

Kristen Keogh: I cannot wait to eat all the goodies, this chocolate smells so good. So huge thanks to Eileen and thank you for joining us. We’ll catch you next time