Soupergirl
A Washington, DC, based food company that has created a fresh and more healthy soup for people. Soupergirl was pitched by an entrepreneur and her mother. The entrepreneur, a former standup comedian claims that the health aspect of the soup is real, stating that her cholesterol has dropped from unhealthy to the very healthy range.
The business started as a local delivery service in Washington, DC, but has since expanded to two retail locations and sales in fifty natural good stores and twenty big box stores.
Soupergirl as a business is ten years old. Two years ago gross sales were $1,400,000. The business finished the prior year with $2,400,000 in gross sales and the current year is projected to finish with $3,400,000 in gross sales. However, this isn't as good as it looks.
Soupergirl, in the previous year, only netted 5% on the $2,400,000 in sales. Additionally the business has $640,000 in small business loans and only $20,000 cash in the bank.
Much of this is due to the fact that the entrepreneur recently decided to expand the business into a subscription service. She sees this as a viable way of expanding the customer base and increasing the margins since each subscription box costs $50 to make at a $99 price tag to the customer.
Of the $500,000 being asked for, $100,000 is for finishing the website currently under construction and the other $400,000 is to "bring down staff costs."
When asked whether the entrepreneur might consider partnering with a comercial co-packer to bring the costs down further, the entrepreneur stated that she was unwilling to because the product was certified kosher and that existing kosher co-packers did not produce the quality that she wanted for her soups. This did not impress the sharks.
Mark left the deal when he heard about the margins and the amount of cash in the bank, stating that the entrepreneur was on the brink of going out of business entirely. Kevin too issue with the valuation, stating that with the current debt, the company was worth no more than $150,000. Lori did not like the 5% margins.
The entrepreneur left the tank without receiving a deal.
This deal aired on Episode 10.03.
Making A Deal