Sometimes Change is the Best Ingredient in Small Business Success

EMILY: I’m Emily Washcovick, Yelp’s Small Business Expert. Every episode I pick one review on Yelp and talk to the entrepreneur and the reviewer about the story and business lessons behind their interactions.

Let’s see what’s behind this week’s review.

AUDREY: I’m a really, really big fan of tres leches cake. There’s actually a bakery in California that’s pretty famous for their Cuban pastries called Portos. They have really, really good tres leches cakes. So my best friend is down in California, and she sent me a picture of the cake that she was eating. And this just really made me crave it. It’s a really specific thing, tres leches cake. The first thing that I did was just go online and see if I know anywhere that sells that type of cake. And I actually found this place called Tres Lecheria and I usually am a person that does a lot of research. So I’ll look on Instagram, look on Yelp, especially when it comes to food. I looked on their website and I found that you can easily order online. And so that’s what I did.

EMILY: We’ve all been there. A certain food pops into your head and you just have to have it, no matter what it takes. My guess is you’ll be craving tres leches cake by the time this episode is over.

It’s easy to feed those cravings by doing a quick search in Yelp, which is exactly how Yelp Elite reviewer Audrey C. found Tres Lecheria in Seattle, a bakery specializing in the Mexican tres leches cake. For those who aren’t familiar with tres leches cake, the name means “three milks”—evaporated, sweetened condensed, and whole milk are poured over the top of a light, spongy cake and allowed to soak in. It’s traditionally topped with whipped cream.

Audrey was not disappointed in her experience. Let’s take a listen to her review:

AUDREY: Such a hidden gem. I’m a fan of tres leches cake and was craving some. I initially discovered this place from a TikTok video and had no idea that Seattle had such an amazing spot like this. Ordering online was easy since they dropped their new flavors on Tuesday and usually sell out of the following days afterwards. I tried the cookies and cream as well as the matcha and they were a hit. Such a delicious tres leches cake.

EMILY: It might seem like an odd business model for a bakery to specialize in only one kind of cake, and you’d be partially right. It wasn’t always just about the tres leches cake for baker and co-owner Kevin Moulder.

KEVIN: We actually started out about six years ago as a totally different business, a totally different bakery concept. We were called Cubes Baking Company, and it was my artistic passion project. I bought my car, I bought a Nissan Cube like back in 2013, and I had this crazy idea about making cakes and pastries and everything that were cube shaped or square shaped because when you go into a bakery, you’re so used to seeing like round cakes, round cookies, round muffins, round everything. And I was like, ‘You know what? What if I could do something as a baker?’ And I’ve been baking since I was a teenager.

What if I could do something where someone would know exactly where that pastry came from without even seeing the box that it came out of? So I was like, let me make cube-shaped cakes and sell ’em outta my cube shaped car. And that’s what I did. That’s what I did back home in Texas. I moved to Seattle in 2014, I think. I still had the idea of opening a brick and mortar, doing cube-shaped cakes and everything with a Mexican pastry angle, because that is my heritage. I’m from south Texas, my grandmother’s from Mexico. I grew up with Mexican bakeries on every street corner. I loved the pastries. Seattle I felt could use a little bit more of that. So I had the opportunity after working in Seattle for a while to open up my brick and mortar. And it was called Cubes Baking Company, and we did 40 different types of things. We did muffins, we did savory items. We did scones, we did custom cakes. I was doing wedding cakes every weekend, birthday cakes, like you name it, I was making it, right?

And it was always just me and one other person. And we were just spinning our wheels, trying to make it work. Trying to stay creatively fulfilled while also being able to have a sustainable business. We did that for about four years, then the pandemic hit. The pandemic hit and myself and my business partner Vince had to have a talk.

I remember it vividly. We were sitting at the bar next door to our bakery. And he was telling me, ‘Hey, things aren’t looking so good Kev, what are we gonna do?’ And I was like, ‘Nine outta 10 customers, they go straight for our little fridge.’ We had a tiny, tiny fridge at the time that had like four flavors of tres leches cake. Nine outta 10 customers were coming in for that.

And nine outta 10 reviews that we were seeing on Yelp and anywhere else online were about that. So I said, well, I think people, yeah, sure, they love the wedding cakes. They love to get a birthday cake in the neighborhood. They love all this other stuff, but this is what’s standing us apart from any other business in town.

So let’s give that a shot. If we don’t wanna have to close our doors and we want to survive because who knows what this is gonna look like, let’s just rebrand. Let’s expand the options of our tres leches cakes, and let’s just become a tres leches exclusive bakery and just see what happens. So that happened in 2020, and it’s been the best decision we could have ever made.

EMILY: The pandemic has forced many businesses to pivot, and in the case of Cubes Baking Company, scale down to one specific offering. But that didn’t cause the production or business to scale down. In fact, an opportunity to expand kind of came out of nowhere. In this case, one of Kevin’s former employees brought an opportunity to Tres Lecheria from his new job, and it changed the trajectory of the entire business.

KEVIN: Our very first employee, Bryce, who happened to be a really like long time friend of mine. I knew him when I was a teenager. He moved to Seattle from Texas and needed a job. We were opening the bakery. He was my very first employee. He ended up leaving after about a year to go work for a grocery store down in Ballard called New Seasons Market, which had just expanded into Seattle from the Portland area.

And he got a job as like a bakery buyer. And I was like, ‘What a coincidence?’ And one day he was talking to that store main bakery buyer. And she was asking, ‘What is this tres leches cake that you always talk about?’ And he was like, ‘Oh, it’s my friend’s bakery, whatever.’ And she was like, ‘I need to have that in our assortment.’

So we started with just one grocery store. It was this single New Season’s location. And we were selling like maybe three different flavors of our tres leches cake weekly to this one store. So I always had that on the back burner. We always played around with the idea of expanding wholesale and trying to get new grocery stores or new local cafes and other people to carry our stuff, but we didn’t really know how to do it. We had no idea and never in a million years did I ever think I was gonna run a business that had anything to do with wholesale, especially supplying to grocery stores because I came from the grocery store world and I was happy to get out of it.

So the way that this has been a crazy full circle moment is insane because what ended up happening was New Seasons opened up another location in Mercer Island. So we were easily able to become part of their bakery assortment there. And then they sold to Metropolitan Market. So Metropolitan Market then took over those two locations and guess what?

They had 16 other stores. And so now all of a sudden we’re in 18 stores. And I’m like, what is going on? And then New Seasons still exist down in Portland. They had 18 locations and we had been talking to them for some time and they were like, ‘We really want to help you.’ And I have to give them all of the credit because they really helped us find a local distributor that not only could pick up cases of cake from my location, but get them delivered in a refrigerator truck all the way down to Oregon.

So they helped us put a distributor in our lap and said, ‘Hey, talk to these guys and see if you can get them to deliver your cake to Oregon.’ Now, all of a sudden, we’re also in 18 stores in Oregon, and this all happened within a one year period, pretty much around the start of the pandemic. So I went from one grocery store to now all of a sudden there’s 30 something.

And now we have over 50, which include local cafes, coffee shops, Mexican restaurants,  Frelard Tamales down in Greenwood is our absolute biggest vendor, even bigger than any of these grocery stores. They blow through slices of tres leches cake that they sell along with their tamales. And all of that has afforded myself and Vince the option to be able to expand into California so we can have our cake be present on the entire west coast. And if this wasn’t for my friend, Bryce, who ended up getting a job at this grocery store, if it wasn’t for us being willing and able to make those changes, because I think a lot of business owners get stuck and they’re afraid not to make changes. They’re afraid to abandon a certain concept. It’s hard sometimes, especially when it comes to a passion project, it’s hard to give it up and say, ‘You know what? I really wanted this to work 100%. Sure it’s working fine, but we are just spinning our wheels, never getting anywhere. We need to make that change.’

So Vince and I, we found our own mentors. We talked to our distributor to get answers to our questions. We talked to anyone that would listen and give us the time. And now this is where we are. It’s absolutely insane.

EMILY: When opportunity knocks, you not only have to answer the door, you’ve got to be prepared for what walks through. It was a lucky connection that started Tres Lecheria’s wholesale business, but it was effort and strategic planning by Kevin and his business partner, Vince, that made it happen. That success didn’t happen overnight—it took a lot of careful time and consideration to scale their business and team.

KEVIN: I did not grow a team right away. The facility that we’re in wasn’t even equipped to produce the amount of cake that we were gonna have to produce. So at every stage, along the way of potentially getting a new grocery store vendor or acquiring new accounts, we’d really have to sit back and be like, ‘Okay, in order for us to take on Town and Country stores, for example, we don’t even have enough freezer space to store,’ cuz we do deliver our cakes frozen. We don’t have enough freezer space to store this stuff. So we can’t even tell them yes, even if we wanted to. So what do we need to work on? We would always give ourselves these short term goals between three and six months of how to make it happen. I remember one of the first steps was well, we need more refrigerator and freezer space. What do we do?

And I’m fortunate enough in the building where our bakery is located, behind that building there is another office building that has vacant workspaces. And I was like, ‘Well, what if we rent one of these workspaces and that becomes our backup storage for freezer goods?’ So we are like, ‘Okay, let’s do it.’ Cuz what else are we gonna do? We have no other options. So we do that. And then that’s going well for a while. And then inside the bakery, we only ever only had one small freezer and I’m like, we need a walk in freezer. There’s no way that we’re ever gonna be able to expand the way that we need to or what was being demanded of us if we don’t have a walk-in freezer.

So then there’s another short term goal. All right. Let’s give ourselves six months to really put our nose to the grindstone—my mom always says—and just work our butts off, cuz we need the funds for this. And we opened this place with no loans. We did not get a small business loan.

This was all just self-funded and because of how well the tres leches was doing, how well the rebrand went. The fact that during the pandemic, people were finally actually demanding individually packaged goods because had I kept doing birthday cakes and wedding cakes business would’ve been zero.

Nobody was having parties, but everyone wanted an individual portion of something that was pre-packaged so it would be safe for them to consume. And that’s what we were making. Our sales tripled overnight because our product was the perfect product for people at that time. Because of how well that was doing all of a sudden six months later, we’re like, ‘Wow, we could afford a walk-in freezer now. This is crazy!’

So we installed this 10-foot by 10-foot walk-in freezer that at the time I allowed myself some extra space, I was like, ‘We need some room to grow.’ This is the size of the freezer we can afford and what we’re gonna get right. One month after installing the freezer, now I have no space. I needed a bigger freezer. That’s how fortunate we were and how quickly we were growing. Okay, well now I have this storage facility in the back that holds however many cases of cake. And now I have this walk-in freezer in the bakery that holds this many and I still need more space. And it was just doing everything at the right time where grocery stores were looking for new individually packaged items for their customers because their customers were also demanding individual portions.

So that kind of opened up because if grocery stores weren’t being affected in a similar way, they wouldn’t have been able to take on new vendors. And it all just struck at the right time for us and just exploded. And now here I am today, right before this call, I’m in our freezer looking at it like, oh, ‘It’s full, but we still need to make this much. Where are we gonna store it?’

EMILY: In addition to logistical growing pains, Kevin experienced some branding challenges as well. He changed the name of the business twice before landing on Tres Lecheria, as he mentioned earlier. And while a label on a piece of cake might seem like a minor part of his success, Kevin shares a different story.

KEVIN: Let me tell you about branding. I just got goosebumps when you said that word, because something as simple as your logo or your branding or what colors you use on a label, or even how you label something, or even the fact that our product has a label on it—cause if we wanted to, we wouldn’t have to sell our products from our shop, even with a label on it. But when you realize people are gonna take photos of this, they’re gonna take it home. They’re gonna share it on Instagram. They’re gonna share it on Yelp. They’re gonna tell their friends about it. They’re gonna send pictures to anyone that they know if they like the product. The branding is important.

And it’s something that I didn’t realize until I actually started reading reviews where people were talking about our branding and I was like, ‘This is so funny.’ I’ve never come across reviews like this, where people are like, ‘The branding is great.’ And I’d even had strangers on Instagram send me messages just saying, ‘Dope branding.’

What is the obsession with branding? Because it was something that I didn’t really understand the importance of until last year. I had a partner at the time named Danny. He’s local here in Seattle, just the most talented graphic designer. And was fortunate enough to have him in my back pocket and he was willing to work with me while we were together. And he helped me along the way. He developed the original Cubes Baking logo. When I changed to Tres Lecheria by Cubes Baking, he developed that logo. When we rebranded totally to Tres Lecheria, he developed that logo. He developed my labels. He helped me figure out how should the ingredients be formatted. All of those little things that I never gave a second thought to, I was fortunate enough to have this person who was an expert on it.

I learned a lot from him and now I’m actually able to do design changes and stuff on my own. So that took some time, that was a learning experience, but it is important in understanding how, since we do wholesale and our product is sitting on a shelf next to hundreds of other products in a grocery store, how is our product gonna stand out against all these other things? I want a customer to go up to that refrigerated bakery case, and immediately see our stuff. So I was like well, it’s gotta be black. Every other product is either brightly colored or has a very simple white label. I was like, I wanna do black. I wanna do black and white. This is really gonna help us stand it apart.

And at the beginning, all of our flavors, no matter what flavor, the label, they were all black and white. And then it took a grocery chain who was interested in carrying our product to give us feedback—constructive criticism, and say, ‘Hey, we just ordered a case of traditional tres leches and coconut tres leches and dulce de leche tres leches, and on the shelf, they all have just the same black and white label and customers can’t really differentiate. Would you ever consider adding color?’

And so I went to Danny and I was like, ‘Hey, we need to add color. And that’s how we got the labels we have today.’ She was right, that contact at this grocery store was totally right. Not only were we more happy with how everything was branded and how it looked on a shelf, but the sales doubled. Now all of a sudden they’re ordering more cake from us than they ever did before, because it’s putting it front and center in front of a customer who has not tried it yet. These are not returning customers. They are people who are looking for a snack for tonight to eat after dinner and what is gonna grab their attention.

EMILY: It seemed like a simple suggestion—adding color to labels to make the flavors stand out from one another. But Kevin admits at first he wasn’t entirely enthusiastic about the feedback he got from that grocery buyer and almost didn’t take it into consideration.

KEVIN: If I may be honest with you, I do remember thinking like, it wasn’t so much, ugh, she doesn’t know what she’s talking about. As a business owner, my reaction was this is gonna cost more money. I need to pay to have these designed differently. I need to purchase brand new labels now that incorporate color. Printing in color is more expensive than printing of black and white.

So I was resistant, because I was like, this is just more money. And when we’re just trying to survive, why should we make this change right now? So that was the conversation I had with my business partner. And he was all for it. He was like, ‘She’s the expert.’ And I was being  resistant to that. And then I remember the day that the colored labels came in and I did a mock up on all of our flavors and I put them in a line in order of the colors of the rainbow. And I sent Vince a picture of it and I was like, ‘Here’s our new labels!’ And he was like, ‘Those look gorgeous.’

And I was like, ‘They do! Don’t they?’ And then the next week I went to visit one of the grocery stores, so I could see with my own eyes on the shelf how it looked. And I was like, yeah, those pop. This was definitely the right decision. And I’m glad we did end up spending a little bit more money, but look what it afforded us. Now they are selling more of it, which obviously helps us. And it looks better in photos and people now can differentiate the flavors from each other.

EMILY: The new labels might seem like a small change, but they brought about big increases to Kevin’s bottom line. The right investment, even if it seems like the wrong time, can prove to be a real positive for your business. And it didn’t go unnoticed by consumers.

AUDREY: I thought that their packaging, their branding—I thought that was really unique and it stood out to me because with food being such a close interaction with people; you’re touching the products, you’re touching the packaging. I feel like that plays really into it. And it adds to your overall experience. So when I was picking up my cakes, they were packaged really well.  I had a little branded sticker on the front and they put in that little punch card—so just that small gesture.

EMILY: We’re going to take a quick break, be right back.

Many people traditionally associate the expansion and growth of small businesses with additional storefronts. More stores meant more success, more revenue, and more opportunity. But that’s not always the case anymore. With online e-commerce platforms and shipping optimizations, you don’t necessarily need a new physical location to increase sales and revenue.

KEVIN: It is so easy to assume that a brick and mortar is the right decision until you open a brick and mortar. And then you see all of the issues, right? Your electricity bill is now through the roof. Just everyday maintenance, every day there’s a crisis. Every single day, there’s a crisis. I’m proud of myself for always being good at putting out fires. That’s what I always tell everybody. I’m like, ‘You know what? I can handle it because I know how to put out a fire,’ but it’s not necessarily what we wanna focus on in California. The fact that the wholesale branch of our business has been the thing that has been growing exponentially, it makes more sense for us to really focus on wholesale in a new market like California.

We’ve been talking to grocery chains in the California region. We’ve been talking to distributors in the California region because we need somebody to pick these up and deliver them for us. Currently in California, we are available in Orange County, around the Disneyland resort.

We’re available on DoorDash, Uber eats, GrubHub, these apps that people are using more now than ever to get food to their door. We’re focusing more on that. So a brick and mortar is not necessarily what we’re focusing on now, but if we’ve learned anything since the beginning of all of this is that let’s take it day-by-day.

Let’s give ourselves these short-term goals. And if there is ever a moment where it does make sense to have that brick and mortar, then of course we will think about it again. But for now it’s wholesale. It’s the food delivery apps. And last month we actually put a deposit down on a food bus. So a Tres Lecheria food bus is being built for us. Once again, like I’m so grateful because if people have not been purchasing our cake, like how would we have ever done this?

But I think a food bus right now is going to be better than a brick and mortar because we can move it wherever we wanna move it. It gives us flexibility to do events. Let’s say you’re having a quinceanera or a wedding, and you want a unique dessert offering for your party.  We could just roll up the bus and serve all of your guests cake, and who else is doing that right now?

I’ve always been competitive. I’ve always been someone who tries to keep my own unique ideas and focus on those and do things that stand us apart from other people. And that’s the trajectory at the moment, but never do I close a door or say no.

EMILY: One thing business owners often say no to? Responding to reviews. And that’s one thing we at Yelp talk about a lot with business owners—responding to reviews shouldn’t be considered optional. Your customers and your potential customers are paying attention.

AUDREY: I remember I wrote a review for Shake Shack in University Village and I think they were pretty new. It was a grand opening sometime. And I remember the experience not being the best because they were so new and they were getting staff trained.

And so I explained that in my review, and the business owner actually immediately reached out and sent me their email and contact information and was trying to make my experience the next time better. And so I felt like that was really impactful because they were able to essentially change my entire impression of it because I assume that they’re chain businesses, they don’t really care. They’re not going to read my review. It doesn’t really matter. But hopefully I can help  any future customers just have that impression of maybe you have to wait a little bit longer for your food.

EMILY: Reviews are also a fantastic business tool. They can provide feedback you need, and some you maybe didn’t know you needed, especially if you’re a very small business with just a few employees.

KEVIN: In the early days I was looking at reviews, hoping that it would give me insight into things that I would never think about. At the time, was our packaging good? When the customers received cupcakes and they got them home, did they stay looking pretty or was our packaging not doing its job? So that’s sort of the thing I would pull outta reviews at the time. Of course, if there’s a quality issue, you know, cause like, especially in these days, like we get different ingredients from different suppliers. If there are supply chain issues, if there’s pricing issues, sometimes we do make minor changes and it is important to know, is this affecting the quality of the product? And reviews are really great for that.

They are absolutely really, really great for informing you of something that you may have no idea about. So I definitely look to reviews for things like that. Also for the customer service, to make sure that they’re having a great time when they enter the door and up until they walk out of that door and then we hope to see them back again, that is important. And as a business owner, I have to hold our whole team accountable to make sure that we all give great customer service. And I am fortunate enough to say that our people are great. They’re friendly. They smile, they’re happy. They’re also equally excited about our product, so that really helps and reviews help  fortify that for me.

EMILY: Your employees are your front line. To your customers and clients, they’re the first impression of your business, and happy employees who enjoy their job will resonate with your customers.

KEVIN: I think that it starts with the way that we treat our employees. If we want a customer to come in and have this feeling that you’re family, it’s gotta start at the top and we need to treat our employees like family. So then they will pass that down and treat customers like family. We are super mom and pop—or super pop and pop shop.

And that’s something that has been true to us since day one. We are all people that do not enjoy a corporate setting. We do not enjoy strict rules and guidelines and being felt like you’re being watched like a hawk. We really help our team become comfortable with the work that they’re doing and also help them feel confident in what it is that they’re doing, because we know that that is going to translate and that is going to be passed over to the customer and ultimately give them a good experience.

So I think for us, it’s being like that and being authentic in that kind of mom and pop, this is very small. We are all family, we’re all in this together. I am always there side by side with everyone putting milk and cake and frosting and making sure that things get done and leading by example and showing that, ‘Hey, we’re all doing the same job here.’ We all have the same goal and we all are family really affects the customer experience as well, ultimately. So I’m very proud of that.

EMILY: If you are craving tres leches cake right about now, and not located on the west coast, they deliver nationally via Goldbelly. And because tres leches cake is a part of his heritage, taught to him by his Mexican grandmother, Kevin appreciates any opportunity to educate people about his culture and its food.

KEVIN: I will say that since the beginning, Yelp has been so helpful in not just teaching people that we are a place that makes something good, that gives good customer service, but the product that we make—even though it has existed forever and it exists in other places, and a lot of people are familiar with tres leches cake, where we are located, a lot of people are not familiar with tres leches cake. So these reviews really help to spread the word and teach other people what this is. We hear every day when people come in, they’ll tell us, ‘Oh, we saw you on Yelp and I have no idea what this is, but I am curious.’ That gives us the opportunity to teach you what it is.

And I think at my core, I’ve always been a teacher and being able to teach people, what this is, it is a new thing that you haven’t had before, but also we take it to the next level—and we also have 15 flavors of this. That is what makes us super unique compared to other places that might make a similar product.

It’s that not only do we make it in a traditional way and we have this traditional flavor or these two traditional flavors, we have 13 other flavors that you’ve never heard of before. And that’s what also helps us continue to be creative. It continues to help this feel like a passionate project for me. It helps me feel like I didn’t sell my soul and just like totally given to the wholesale world, because guess what?

I can still be creative. I can still be artistic in the way that we design and redesign our branding,  the way that we make new flavors. And we have special events in the shop. I learned that I don’t have to make artistic wedding cakes and birthday cakes to still be an artist and to still be passionate about what it is I’m putting out.

AUDREY: A lot of people aren’t able to try out these different foods yet, for example, people who’ve been native to Seattle, from the recent years that we’ve seen, they might have been able to try like maybe bubble tea or different types of specialty foods.

So I feel it’s really important because as you travel to different places, you’re able to experience more and actually learn more about different cultures or different foods in general. And I feel like that brings a community together because you’re able to relate with those around you. If you’re having a meeting with colleagues or friends, you guys are able to explore different restaurants and have more unique experiences.

EMILY: As a small business owner, Kevin is proud of his ability to share his culture with the people of Seattle and beyond. Embracing a rich heritage can be the thing that helps your business stand out. After all, the popularity of tres leches cakes—above any other kind of dessert—changed the course of the entire business.

KEVIN: It’s great to be a Latino business owner and to show other people in the community that whatever it is that you’re passionate about, you could be passionate about, I don’t know, whatever, anything! If you have the vision, the passion. Obviously you need to be a hard worker and don’t be afraid to give up, but also be willing to make those necessary changes. It’s going to happen for you. So as someone as a part of this community, it makes things even more fulfilling. And as like an LGBTQ+ owned business, that adds a whole other layer to everything.  I’ve never looked at myself as a role model for anybody, but having customers come in and give us stories about those things.  I have so many people that have heard about us and their family lives in Mexico and oh, their parents are visiting Seattle and they just had to bring them into the shop. Those moments are like, wow, this sort of goes beyond just making a good product. There are so many other layers here and I’m forever grateful for that.