Tonia and Hatem Jahshan are excited. Their company, Steeped Tea, is in growth mode. Ranked No. 27 on PROFIT 500′s list of Canada’s Fastest-Growing Companies, the Hamilton, Ontario-based direct-sales tea business has grown 3,600% in the last five years. The couple launched Steeped Tea in 2006 after a visit to Mahone Bay, Nova Scotia, where they discovered loose-leaf tea. They stocked up and brought it home to Ontario. “Everyone loved it so I started doing tea parties,” says Tonia. She hosted her first party – similar to a Pampered Chef or Tupperware model – in 2006 and within six months was hosting up to 20 parties a month. “That’s when I decided to turn it into a direct sales company.” In 2012, after seeing a Facebook post announcing Dragons’ Den auditions in Hamilton, the husband and wife entrepreneurs decided to pitch the dragons. Here they share what that experience was like and life after Dragons’ Den.
We spent one to two months wrangling the final deal and $22,000 in legal fees to draft a 200-page shareholders. agreement.
Entering the Den
Tonia: We had been watching the show since it started but we never thought we’d go on because of how the dragons could tear down a pitch. We were four years into our company, growing at a rate of 300% a year already and my gut told me this might be a great move for us. We were planning to expand into the U.S. and we had the numbers to back us up. I thought this could work; it’s worth the risk.
Hatem: It was intense. We had two weeks to prepare for the audition, so we did our homework. The day we pitched in front of the dragons, we were so excited and nervous we didn’t sleep. Tonia was eight months pregnant and when we finally went down the stairs, I thought please God, don’t let her trip. All of the Dragons were smiling. That put us at ease. And then they started digging. They want to know who they are striking a deal with.
Hatem: We were prepared to give up 20% for $250,000. The best advice I got regarding the den was you can spend the three minutes you have on national TV defending a bad valuation, or you can spend it talking about how wonderful the company is. We had $1.2 million in sales going in and went in with a very reasonable valuation. We received four offers and accepted a deal with Jim Treliving and David Chilton.
After the handshake
Hatem: It was always our goal to partner with the dragons. We did not go on the show just for the exposure. They are with us forever. We spent one to two months wrangling the final deal and $22,000 in legal fees to draft a 200-page shareholders’ agreement.
Tonia: We have entered the U.S. market and it’s crazy. What took us four years to achieve in Canada took us one year in the U.S. We have created entrepreneurs all over North America. Thanks to the direct sales model, we have consultants who make $6,000 to $8,000 a month in commissions. And it will only get better for them as Steeped Tea continues to grow. I love it. I’m a mom of three. People look at me and say if she can start this multimillion-dollar company, I can earn a significant income, too. It’s humbling for me. I get emails from people telling me how the company has changed their lives. We now have 3,500 consultants in Canada and 300 in the U.S. but we are small compared to direct-selling companies like Pampered Chef, which has 65,000 consultants. We are at the very beginning and so thrilled to see what the next five years will bring. The vision is to have at least 10,000 reps in the U.S., 20,000 in Canada and to keep growing. We’re looking at Australia as our next step. The possibilities are endless.