← Earn Your Leisure
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- [00:00]
Jessica Spalding
This is an iHeart podcast. Guaranteed Human.
- [00:05]
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- [00:35]
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- [02:20]
Podcast Host
How you doing?
- [02:20]
Jessica Spalding
There we go. I'm good, I'm good. How you doing?
- [02:24]
Podcast Host
Good, good.
- [02:25]
Podcast Co-host
Thank you for being here.
- [02:26]
Jessica Spalding
Well, thank you for having me. I really appreciate it.
- [02:29]
Podcast Host
Jessica Spalding this is an interesting and it's an important story to tell so shout out to Adrian Walton, our mutual friend, a butter legend, put us together last last year and then, you know, had to reintroduce the situation recently. But long story short, Jessica is an entrepreneur who owns the Harlem Chocolate Factory staple staple in Harlem and have come across some unfortunate situations. But it's a. I'm g let you tell a story because you could tell it obviously better than I can. But it's an important conversation that I think we need to have as far as entrepreneurship, small businesses in our community, access to capital, brick and mortar, different things of that nature. So can you tell it, can you tell a story to kind of open it up?
- [03:22]
Jessica Spalding
Yeah. I mean, the quick overview is we started the business in 2015 after I joined a business plan competition and I was unemployed and I found out about the competition while I was at the library with my kids. And I wound up winning the competition to start my business for $15,000 and. But I started to learn right after that how media coverage can also tank you. Because immediately that winter we went into 250 media kits given out by Sam Adams and we were flooded with orders. And I was working out of a little six foot table in a commercial kitchen. And so it was just like really a really rapid growth. We went from a two foot table in the back of a brownstone selling our products to now being in like major tourist attractions and selling out every week. And then from there we went to the fancy food show and got selected as like the best bites at the show. And so I'm like, okay, we need to find a larger production space. At the time Amazon, Amazon reached out and wanted this huge six figure order. And so I'm like, let me find a production space, let me find a production space. And I couldn't find one. And I couldn't find the capital to find a space that was big enough for us to really produce in. So we found the store and the thing that I didn't realize I was doing was I was changing my business model. I had been doing wholesale and doing corporate gifting and that's manageable, you know, with a small team. The introduction of retail and brick and mortar completely shifted the model. And it feels like, okay, I'm making so much more money or the sales are different because they're in the face. But now I have this very, very important part, especially for a black owned business, which is customer service. I'm spending 45 minutes explaining to people why my chocolate costs more than what's at the corner store. And customer education and customer acquisition and then distribution for each and every individual order. Where before I'm boxing 100 bars at a time and shipping it out in one box. Now Tamika want six chocolates and I gotta spend a half an hour making sure every Six chocolate is correct. And goes to her, you know, office. And it really, really, really became a struggle to manage in such a small space. Our kitchen is 200 square feet, and we were pumping out thousands of bars. And we've sustained and carried on this time, but at my sacrifice. And so people are like, okay, but let me get you more orders. Let me get you more orders. And I'm like, you're actually low key, drowning me.
- [06:39]
Podcast Co-host
You're crippling you.
- [06:40]
Jessica Spalding
Yeah, you actually. And trying to explain the economics of why more ordering actually has put us in a worser financial position has been really, really difficult to communicate to people who are like, we support you and we love you, and people mad at us because you're not open. And I'm like, I have to be closed because I have to satisfy contracts that actually make us money because I'm basically breaking even in this retail space. So it's just. It's led us to really, really, really pay attention to how we need to shift the model and, and do the thing that I was afraid to do in the first place, which is go after what we truly needed, which was a larger production space and, and satisfying larger clients and larger contracts.
- [07:39]
Podcast Host
When.
- [07:39]
Podcast Co-host
When you say larger clients, larger contracts, that's inside of the new model. I'm assuming what. What else is. Is entailing inside the new model? Because this is interesting, right? People would think if I bring in more revenue, that would help the business, but I'm like, you're saying, like, hold on. We have to catch up to our obligations to actually make sure this makes sense. So what is, what have you done internally to design the new model?
- [08:01]
Jessica Spalding
So what we did is we identified key partnerships that would allow us to scale out. So we have to reach a specific price point and a specific volume to have the profitability to grow the rest of the business, right? Like, it's a different model because now our terms are net 60, net 30. I mean, I'd be trying to get due on receipt for, for certain partnerships, but identifying people that had enough growth for us to start at this smaller level, but then also scale with them. So we have. I cannot mention. I asked for permission to mention it today, but I cannot mention it today, but it rhymes with All Star. You'll be seeing a new partnership this week that we're. That we're launching that again just allows us to open up doors to larger volumes, because especially for chocolate, this is not like any other CPG business. The CPG business, the next, you know, break point might be 2,500 and then I can go to a co packer. I'm competing at the co packers. I'm competing with grocery stores, I'm competing with big brands. So my little oh, I got a 2,500 bar order. They're like, Baby, that's going to cost us $8 a bar to make for you. And so we're not really seeing a break point until we're in the high, you know, we're in a six, six figure kind of like unit number. So by having these partnerships that allows us to like really negotiate with co packers or even if we're taking on production ourselves to increase our volume. Because now I have something to kind of like bet against with it when it comes to funding. I just thought that I have all these eyes on my business. I can give funding and it's not when I talk to venture, when I talk to investors, they're like, you not going to grocery? And I'm like, no, that's where our business would go to die. Because that's what everybody else did and that's why their businesses are closing. And but it's a non traditional model and so they're like, well prove that it works first and come back. So, so the partnerships are just at a larger scale for us to say like, hey, over the course of this year we're going to do 100,000 bars with this one company or we're going to do 50,000 bars with this one company. And that gives us a little bit more leverage when it comes to proving that this has scalability versus I'm going to try to convince 50 more people to come in here per day.
- [10:43]
Podcast Co-host
Knowing everything that you know. Now for the entrepreneurs watching tonight, how would you identify what's the perfect business model for your business? Because we always are taught more is better, right? Scaling. I even seen a comment, someone said, why not start a venture fund? More is not always better, right? So how if you can go back, I know you said your business model is different, but oftentimes the different business model is the one that's going to lead the way. How would you identify what your perfect business model is?
- [11:20]
Jessica Spalding
I think that if I was able to restart, I would start with the equations that I've created now, right? Like what's the volume of products that I need to make in order to sustain at a specific margin for not only operation but for my own life? Like there's all the statistics. Black women. We're the fastest group of entrepreneurs. We're the, you know, most educated, most everything. But the reality is we make the least amount of revenue out of, out of every group. We are over educated in degrees that don't actually make money. Like we have the lowest, our degrees are the lowest income generating degrees. So there's the other side where we're in a lot of the marketing around it. And I know for myself my face was used as a part of many, many, many chains to show love and support for black women. But I think that when I get back to the forefront of it that I would really make sure that my business had me in it. And whatever model I was choosing made sure that there was some version of salary for me. Maybe not a big ticket item, maybe not whatever, so that I can make these decisions more clearly. A lot of this business model shifting is out of a place of for no better words but desperation. Like right, like I need cash in here now this contract, they love us and everything, but they're not going to pay me for 60 days. And that's after I get all of my paperwork uploaded for them to even process the ach. And then what happens when Sheila go have a baby and then my invoice don't get processed? You know, like there are real life things that can, you know, derail you. So when you're choosing a business model and when you're choosing a price point, I think that we have this idea that we want to be these like mega billionaires. But you might be more profitable at a, at a $250,000 a year, you know, like price point. You might be able to take more margin out of that than if you was trying to, I feel like scale globally from myself I realize we've been really boxing above our weight class.
- [13:39]
Mint Mobile Announcer
Trying.
- [13:39]
Jessica Spalding
To do this direct to consumer model and reach all these individuals. That takes money like it takes dedicated staff, human capital. There was a real benefit to not having to pay for staffing for some other businesses. They had 500 years of free labor. I don't have that. My cousin want to come work for me. My cousin bills ain't gonna go nowhere. I have to pay her for the day. She can't volunteer. She might volunteer at night after work, but I need somebody during the day. I need somebody to answer the phone. And AI is doing a lot to help and assist. But there are real physical human capital needs that I would consider and incorporate into whatever model I was choosing. And I think we confuse models with sales channels and thinking that like oh, we're just adding another sales line and you're really shifting your entire model. If it requires you to operate differently. Then it's a different model and it's not an additional sales channel.
- [14:45]
Podcast Host
Yeah, I wanted to bring you on, I want just to put it in perspective for people. So yeah, you've become a staple in the community as far as Harlem Chocolate Factory. But I thought it was important. It's like a real life case study because we bring a lot of entrepreneurs on and a lot of times the stories are extremely success story. You're successful story also, but you're facing hard times right now. Right. Like so I think that this is real education that people can actually learn from because there's ups and downs in entrepreneurship. It's not always somebody making a million dollars a month and somebody that's killing it and stuff like that. Like we've highlighted that story a lot. But I think it's also important to highlight people that may have currently be going through rough patches right now. So talk specifically about where the business is right now. I know that you're in a business, you're currently closing the physical location. Right. And then also talk about how like the access to capital conversation and how you were actually on New York City's website. Yes, explain that, explain that part of it.
- [15:50]
Jessica Spalding
Right. Like I do a lot of like behind the scenes work because I mean I literally needed money for myself because there's also a reality. Right. Like I don't want to even participate in my own gaslighting where I pretend like there wasn't a sacrifice that went into scaling this. Right. Like the original SWOT analysis said that this was capital intensive and it was going to be hard and the market is saturated and all these things and the only way in was through this niche. But the, what I did is I built like a platform for myself because I am extremely, I find myself to be honest about what it really takes to build a business. I'm not going to front for you. I'm not going to pretend like, you know, like, oh, whatever. I've been on Oprah's favorite things I did and they called me twice and all of that and I could do all of that and I could swing. But what does that do for anyone? If the reality is when I go for funding, I get turned down. When I've tried to raise money for, for, for contracts, they, they shift the goal posts and so I think I just got to a place of frustration because my face was on the New York City's fund finder. I, I launched this go after I got rejected for accounts receivable funding. I don't want to close our store. The goal is to.
- [17:11]
Podcast Host
Let's slow it down a little bit. Let's. Let's take. Your face was on New York City's go explain that.
- [17:19]
Jessica Spalding
It's called. It's called the funds finder, right?
- [17:21]
Podcast Host
Like, that's a website from New York City where you go to get money for your business.
- [17:26]
Jessica Spalding
Yes. Where you find funds. It's literally the funds finder. So when I.
- [17:31]
Podcast Host
You. You were essentially the poster child for that. Your face was on there.
- [17:35]
Jessica Spalding
Yes.
- [17:36]
Podcast Host
But you couldn't get funding.
- [17:39]
Jessica Spalding
Zero funding options available is what it said to me. And that becomes the thing, right? Like, people are like, oh, well, you have all these connections. Like, you good. Like, you could get funding whenever. And I'm like, yeah, you know where the funding comes from? Me, I keep my salary in that business every year. Like, we are still here at my sacrifice. And so people were like, responding to our GoFundMe by saying, like, well, you want funds finder? Or there's like, hey, I found the link to the New York City funds finder. Go on there. Like, oh, wait, your face is on there. So I kept getting it and kept getting it. So I literally made the video to show, like, there are no. There were no funds. Like, it was 0. From 250k plus to less than 10,000. There was no funds.
- [18:25]
Podcast Host
So how.
- [18:26]
Podcast Co-host
How did they respond to. Have they responded to this? Like, what, What. What's the update? Obviously, you brought this to their attention. Obviously, you're getting hit up and it's like, yo, this is. This press is actually working negative for me because people think I got it. They not likely to help if they think I got it. It's just unfortunately, how have they responded since you brought it to their attention? Obviously they put you there. They know it.
- [18:47]
Jessica Spalding
They called me to told me that they took the picture down and that I should find some grants to apply for.
- [18:56]
Podcast Co-host
Which grants are not the easiest thing just to. For those who don't know, they just don't fall out the sky.
- [19:02]
Podcast Host
Why'd they put the picture up there to begin with?
- [19:06]
Jessica Spalding
I think that. I think that black women are the marketing. I think that it's very, very easy. I think that's the way in to prove that you, like, show support for the community. And I think black women sometimes are very, very. And I can't. Let me not talk for all black women. I think that there are times that I've approached entrepreneurship happy to be invited, and it's encouraged and air that I'm easy to take advantage of. And so I snapped and I went online and I told the whole world that there was no funds because normally I'm quiet and I don't say nothing because maybe it could help someone else. And black women are very, very amenable. And you know that we get this rap about our attitudes, but I've seen women cry after haircuts and when their nails was messed up. So we don't say anything. And I said something this time. So they took the picture down. Still no funds. They connected me to another funder who had already rejected funding me. But I guess people are moving now. But it's like a eight to 12 week process. And I'm like, I needed money years ago. And so it's just literally like, I would never want to turn to my community that I already know is facing things to, like, beg for money. But this where we're at in this and especially on the precipice of these partnerships, I'm like, nah, I've taken. I've taken all the Ls that I'm going to take. And I can only come to people and be transparent about where we are and what we have going on and ask for some assistance. Because my goal ultimately is to help my community. Like, this ain't Jessica Spalding's chocolate factory. This is Harlem's. And so I feel like I'm just a steward of the opportunity and so it's worth the fight and the embarrassment because somebody just left a comment before I came on here telling me I should stop begging and all different type of losers and whatever. I took a screenshot of you and you in my file of all the people who ever talked about me, because I plan to come back around the block. But you from my tribe, really from Harlem.
- [21:20]
Podcast Co-host
You're really from Harlem.
- [21:21]
Jessica Spalding
No, no, no. For real, for real. Like, I grew up on 111 between 5th and Lennox. I've lived in Harlem my whole life. Stop playing with me. Y' all be talking very crazy on this Internet and I'm trying to be.
- [21:32]
Podcast Co-host
Then stop playing on Beyonce Internet, please, Please.
- [21:37]
Jessica Spalding
When you never did nothing.
- [21:39]
Podcast Co-host
Yeah, but. But a lot of people are going through pain and take it out on others to have a successful business. What pushback were they giving you for not giving funding for those who are looking to pitch?
- [21:52]
Podcast Host
What.
- [21:53]
Podcast Co-host
What roadblocks were they putting in front of you to tell, you know.
- [21:57]
Podcast Host
I.
- [21:57]
Jessica Spalding
Will tell you that the amount of goal posting that I have faced during this. So it's like when I first started and I was in. There was money at the bottom when I had the sad story, the single mom that, you know, I have my two kids, and. And I don't have my life together, and I'm going to, you know, try to find a job. They was throwing money at me. I got a micro loan when I had no job. So it built in me that, like, okay, well, if I prove that I have whatever, I'm going to get it. Then they gave me 10,000, and I paid it back. And then they gave me 20,000, I paid it back. And then it was time to, like, put your money where your mouth is. And I'm like, yo, I want to build out this facility. I think that we can really, like, grow contracts. I found a way in. Into this industry. Then it was like, ooh, too risky. Too risky. Like, ooh, what you're going to do?
- [22:56]
Podcast Host
What.
- [22:57]
Jessica Spalding
What do you. Everything I just said I was going to do the things that I. I did them. And. And so the goalpost moves. It was get a contract and come back. Come with a contract. Yeah, but how do we know it sells? Like, airports. Like, people don't even spend money in airports. Huh. Okay, hotels. I mean, are people even staying at hotels anymore? Is there any? Like, what? Then I'm like, all right, let me come back with the invoice. I'm gonna come back with the invoice. Yeah, but you didn't ship the product yet, so, you know, this doesn't really funder, you know, fall under accounts receivable. You need growth capital. Okay, well, you look at the growth. Give me the capital. Yes, but you know, what we would really want is the contract. I can't get the contract until I give them the product and they see that it sells. Yeah. So after it sells, then we'll do it. But we know it sells because it's been selling, because I got 10 years of historical data that it sells. What? And that's when I realized, like, oh, everybody's lying to me. Y' all hate me, and let me just stop. And I just did the gofundme, and I was like, here, boom. Like, let me do this. And then I'm gonna double back and charge everybody twice. And I have a list I want you to know. You're all in my little black book, allegedly.
- [24:23]
Podcast Co-host
We're just trying not to make this.
- [24:26]
Jessica Spalding
Not in that way, but just like, yo, you know, because these same people. When the cameras come out, I know what y' all are gonna do. Y' all want to pull up. Y' all want to. Oh, let me take a picture.
- [24:36]
Podcast Co-host
I'm so proud of you.
- [24:38]
Jessica Spalding
I'm so proud. And we knew you was going to make it. I want you to know I know who all you are, and I am. It's me and 50. You will not get in. You will be standing outside. You will not get in. I am very nice. I'm very sweet. I don't have. I. No, no.
- [24:56]
Podcast Co-host
But we're going to pray for them now. We're going to pray for them.
- [24:59]
Podcast Host
So chocolate factory is definitely a staple in the community. Explain the GoFundMe. Me. Explain the GoFundMe. What's it for? What's the goal? Yeah, and it. Yeah, explain that.
- [25:14]
Jessica Spalding
So it's. Yeah. So what we. What we're trying to do is we have, like, some specific debts that we need to clear in order to just free up cash flow. Then on the other side, there are deposits that we need to make immediately in order to fulfill these contracts. And the. If we wait, we're going to be outside the window and we're not going to be able to fully take advantage of them. And so the GoFundMe, we're trying to raise 50k. If we could get to 100, y' all would literally be saving my little life. But 50 is what we need to, like, you know, like, really make these specific investments to have that leverage the way that we need to for our cash flow and really not be waiting for 60 days for. For the invoices to clear and be able to go out after even more contracts.
- [26:09]
Podcast Host
And what's the. What's the. What's the website or what's the Instagram? How. How can people, if they're interested, where do they go?
- [26:15]
Jessica Spalding
You can go to harlemchocolatefactory.com and we have the link there. And then on our Instagram, it's harlemchocolate Factory. The link is in our bio. Ultimately, I want to create an entity with like. With community shares. Like, I'm still researching on how to do that and how to set up the structure, because I want the community to have shares in it. This is the temporary need that we have that will help us bridge and. Yeah.
- [26:48]
Podcast Host
Well, thank you for coming on, Jasmine.
- [26:51]
Jessica Spalding
Thank you for having me.
- [26:52]
Podcast Host
Really appreciate your story. And I'm going to encourage everybody to. To try to give what they can because it's important. You know, we got trying to save a black business a vital part of our community. We understand that entrepreneurship is a real gateway. And you talk about businesses, you know, it employs people, it gives level of inspiration, hope, and is the whole economic system that's done. And when you think of Harlem, you think of the mecca of black culture going back from, you know, 1920s Harlem Renaissance and Sugar Hill and all of that. So you know, it's the, it's the season of giving. Some people say Christmas is the season of giving, but it's Black History Month. So I feel like February is the season of giving and we wanted to highlight you just, you know, for educational purposes. But also, you know, we have a platform so we try to try to do good with our platform when we can as far as to help people that are have some level of need because we all going to need help at some point in time. And it's a good story as far as what you've been able to accomplish and would love to see, you know, the trajectory, you know, change on the situation. So yes, go toharlem chocolate factory.com if you're interested and we will definitely stay in contact. Wish you all the best and thank you for coming and telling your story. Greatly appreciate it.
- [28:23]
Podcast Co-host
We appreciate you.
- [28:24]
Jessica Spalding
Thank you so much.
- [28:26]
Podcast Co-host
Thank you for sharing.
- [28:27]
Podcast Host
Appreciate you.
- [28:28]
Jessica Spalding
Thank you guys.
- [28:30]
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Jessica Spalding
What do you have to lose?
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- [30:20]
Jessica Spalding
This is an iHeart podcast. Guaranteed Human.