- Conduct a basic PESTEL review. For each PESTEL factor, indicate whether you have found one of the following: Strongly Negative, Mildly Negative, No Effect, Mildly Positive or Strongly Positive influence for the future of Tickle Your Tummy.
Tickle Your Tummy Nut-Free Cookie Company THE COMPANY Tickle Your Tummy Nut-Free Cookie Company is an Aurora. Ontario-based company that sells all-natural, nut-free cookies made with whole ingredients. The company was established in 2003 by Jennifer Montoni, a single, stay-at-home mom with three children. Tickle Your Tummy has recently expanded its product offerings to include cup- cakes, cakes, brownies, and oatmeal bars, all with a quality guarantee. Montoni first saw the potential and market need for a nut-free cookie when one of her daughters was discovered to be allergic to peanuts and tree nuts. Mortoni then decided to create baked goods that tasted great and were safe to eat. With a limited amount of simple, qual- ity, whole ingredients to work with, she made her first shortbread cookies with elaborate and fun designs and saw $20 000 worth of cookie sales in her first year of business. Now, her cookies are available for online pur- chasing and are also sold in specialty food stores across North America for $5.00/package. Sales revenue for Tickle Your Tummy Nut-Free Cookie Company was $800 000 in 2009 and the company has seen 50 to 100 percent growth per year. The company's success is due mainly to Montoni's dedication to quality during the production of her cookies. Each step in the production process adheres to the highest quality standards of freshness. From using whole ingredients, to cutting, decorating, and packaging cookies individually, production and quality are always at the heart of it all with nut-free safety in mind. Personalized baked goods can also be ordered from the company and this contributes to the company's quality image. THE PITCH Montoni's desire to take her business to the next level led her to be a candidate on Dragon's Den, where she pitched her nut-free cookie busi- ness to the dragons. She asked for $300 000 in return for giving the dragons 30 percent of her company Montoni was hopeful that the investment would help her automate the company's current handmade cookie process, and thereby enable the company to continue its rapid growth and keep up with consumer demand. She also wanted to be able to pursue her goal to inspire others and become an allergy educator for parents through various marketing initiatives. THE DRAGONS' POINT OF VIEW Dragon Kevin O'Leary was skeptical of Montoni's claim that her company should be valued at $900 000. He said, "The cookie business is a low-growth business. You're making $70 000, worth $400 000, and you value your business at $900 000, and you are not worth that much." O'Leary argued that the business was worth only about $450 000, and he wondered whether Montoni would still be motivated if he (0'Leary) invested $300 000 and therefore owned 66 percent of the business. Montoni stood her ground, saying that "there is a lot of speculation on how to value a business in the real world; you don't have the formula and neither do I, and my valuation is based on the fact that my company has seen growth from 50 to 100 percent per year." The other dragons were impressed with the amount of cookies that were being sold each year and thought that Montoni was a great sales rep. In particular, Arlene Dickinson was impressed by the allergy educa- for idea as well as Montoni's credibility and knowledge. THE OUTCOME Once O'Leary finished debating her valuation of the business, the other dragons thought about their potential interest in the offer. One said, "You're generating $250 000 a year, if you took a smaller salary, your company would be larger in terms of the valuation that Mr. O'Leary is so worried about. I can take 50 percent of the business for $300 000. Three of the dragons, including Arlene Dickinson, eventually decided to invest $100 000 each. They felt that Montoni had made a great presentation and had an inspiring story to tell. Robert Herjavec said, "I just don't know why she would sell that much of her busi- ness for $300 000 when she built it out of her basement." Dickinson responded by saying. "I know why: she's been on her own with three kids running a business and she is smart enough that she knows she needs people to help her along now, to help her with the next level, and she gets it." Despite one dragon's reluctance because of the low growth rate in the cookie industry, Montoni was finally able to make a deal with three total for a 50 percent ownership share in her company (remember that of the dragons. They are now partners, having invested $300 000 in Montoni was originally offering just 30 percent ownership for $300 000). The big lesson here is ownership and control. An entrepreneur must know when to relinquish control in order to be able to expand and grow the business. Tickle Your Tummy Nut-Free Cookie Company THE COMPANY Tickle Your Tummy Nut-Free Cookie Company is an Aurora. Ontario-based company that sells all-natural, nut-free cookies made with whole ingredients. The company was established in 2003 by Jennifer Montoni, a single, stay-at-home mom with three children. Tickle Your Tummy has recently expanded its product offerings to include cup- cakes, cakes, brownies, and oatmeal bars, all with a quality guarantee. Montoni first saw the potential and market need for a nut-free cookie when one of her daughters was discovered to be allergic to peanuts and tree nuts. Mortoni then decided to create baked goods that tasted great and were safe to eat. With a limited amount of simple, qual- ity, whole ingredients to work with, she made her first shortbread cookies with elaborate and fun designs and saw $20 000 worth of cookie sales in her first year of business. Now, her cookies are available for online pur- chasing and are also sold in specialty food stores across North America for $5.00/package. Sales revenue for Tickle Your Tummy Nut-Free Cookie Company was $800 000 in 2009 and the company has seen 50 to 100 percent growth per year. The company's success is due mainly to Montoni's dedication to quality during the production of her cookies. Each step in the production process adheres to the highest quality standards of freshness. From using whole ingredients, to cutting, decorating, and packaging cookies individually, production and quality are always at the heart of it all with nut-free safety in mind. Personalized baked goods can also be ordered from the company and this contributes to the company's quality image. THE PITCH Montoni's desire to take her business to the next level led her to be a candidate on Dragon's Den, where she pitched her nut-free cookie busi- ness to the dragons. She asked for $300 000 in return for giving the dragons 30 percent of her company Montoni was hopeful that the investment would help her automate the company's current handmade cookie process, and thereby enable the company to continue its rapid growth and keep up with consumer demand. She also wanted to be able to pursue her goal to inspire others and become an allergy educator for parents through various marketing initiatives. THE DRAGONS' POINT OF VIEW Dragon Kevin O'Leary was skeptical of Montoni's claim that her company should be valued at $900 000. He said, "The cookie business is a low-growth business. You're making $70 000, worth $400 000, and you value your business at $900 000, and you are not worth that much." O'Leary argued that the business was worth only about $450 000, and he wondered whether Montoni would still be motivated if he (0'Leary) invested $300 000 and therefore owned 66 percent of the business. Montoni stood her ground, saying that "there is a lot of speculation on how to value a business in the real world; you don't have the formula and neither do I, and my valuation is based on the fact that my company has seen growth from 50 to 100 percent per year." The other dragons were impressed with the amount of cookies that were being sold each year and thought that Montoni was a great sales rep. In particular, Arlene Dickinson was impressed by the allergy educa- for idea as well as Montoni's credibility and knowledge. THE OUTCOME Once O'Leary finished debating her valuation of the business, the other dragons thought about their potential interest in the offer. One said, "You're generating $250 000 a year, if you took a smaller salary, your company would be larger in terms of the valuation that Mr. O'Leary is so worried about. I can take 50 percent of the business for $300 000. Three of the dragons, including Arlene Dickinson, eventually decided to invest $100 000 each. They felt that Montoni had made a great presentation and had an inspiring story to tell. Robert Herjavec said, "I just don't know why she would sell that much of her busi- ness for $300 000 when she built it out of her basement." Dickinson responded by saying. "I know why: she's been on her own with three kids running a business and she is smart enough that she knows she needs people to help her along now, to help her with the next level, and she gets it." Despite one dragon's reluctance because of the low growth rate in the cookie industry, Montoni was finally able to make a deal with three total for a 50 percent ownership share in her company (remember that of the dragons. They are now partners, having invested $300 000 in Montoni was originally offering just 30 percent ownership for $300 000). The big lesson here is ownership and control. An entrepreneur must know when to relinquish control in order to be able to expand and grow the business
