Teaching Your Children Success & Entrepreneurship FLOSS Cotton Candy | Katie Sterling

KATIE STERLING [0:00]

I would tell people look for those golden nuggets of the world, the people who have this sincere desire to help other people for no monetary reason.

[MUSIC]

CAMILLE WALKER [0:15]

So, you want to make an impact. You’re thinking about starting a business sharing your voice. How do women do it that handle motherhood, family, and still chase after those dreams? We’ll listen each week as we dive into the stories of women who know. This is Call Me CEO.

I can’t tell you how many times I’ve had one of my kids come up to me and say, “I want to do a lemonade stand. I really want to make some money.” And while that is such a fun way to make a couple bucks, maybe even $20 if you’re lucky, creating a sustainable business as a kid can be hard.

Today’s guest is all about how she was able to turn something into a side street hustle if you will into a very successful thriving and growing business. So, if you have ever wanted to teach your child how to be entrepreneurial, you are not going to want to miss this episode. This is Katie Sterling with Floss Cotton Candy.

Welcome back everyone to Call Me CEO. This is Camille Walker, your host. And today, we have Katie Sterling on the call with us. She is the owner and CEO of Floss Cotton Candy, which was a business that she started with her kids. In fact, it was actually her kids’ idea. And so, today we’re going to be talking about their incredible journey and how she has been able to instill lessons of entrepreneurship with her children learning along the way. So, Katie, thank you so much for being on this call with us today.

KATIE [1:50]

Thanks for having me, Camille.

CAMILLE [1:52]

Now, introduce yourself to our audience. Where are you from? Tell us about your kids. I’m so excited to get the nitty gritty of your journey because I only know little bits. So, I’m like I can’t wait.

KATIE [2:04]

Yeah. So, I’m Katie Sterling. I grew up in Cache Valley, Utah. That’s where I currently live now also. So, I’ve lived quite a few places in between, but I’m happy to be back here. I’ve four kids, two girls and two boys. My oldest is now 14. They are 2 years apart, 14, 12, 10, 8.

My oldest is actually the one who started Floss. She was the most involved. She is a spender. And so, she always wants to buy things. And that’s how the business pretty much got its beginnings was for my 30th birthday, I asked for a big cotton candy machine on a cart. And I don’t know, I‘m just a partier at heart. We invited the whole neighborhood over and made cotton candy for everyone. And the years following that, my daughter as she was 6, 7, she just wanted to buy everything at the store. She’s definitely a consumer at heart.

CAMILLE [3:15]

Yes, I have a kid like that. This is the exact same way. He’s like money just burns a whole in his pocket.

KATIE [3:22]

Yeah. As soon as they have it, it’s like, “Can I buy with this?” So, we lived on a road next to a park and this was actually back when we lived in Arizona for a while. And I just said, “Libby, you know what? We’ve got this cotton candy machine. Not very many people have a big cotton candy machine. Why don’t you take it to the park or make it ahead of time and just sell it on one of the half days?” They used to have days in their school district where kids would get out every Wednesday at 1 PM.

So, she started doing that. And she started this little following where they knew if it was a half day, they could go buy cotton candy from Libby. So, she’d come back with $60 after a few hours. And that was a lot of money for a 7-year-old. So, she started recruiting her little sister, the other neighbor kids. And that was the beginning of earning money with cotton candy.

And I saw that she was taking responsibility more for her purchases. I had a way to reign her in by saying, “Do you have any money?” And if she would say no, then the wheels would start turning about what day she could sell cotton candy. Anyway, so that went on for a couple years.

And then, we moved to Cache Valley and we lived on an even better road that goes up to Utah State University. And it was summer time, yeah. And the two girls knew the drill already, but they just started this weekly cotton candy stand going up to Aggie Ice Cream on that road. I don’t know if anyone’s familiar with Utah State. And they were coming back with $120, $130. Just every time they’d go out, they were making more and more money.

And a neighbor noticed them and said, “Your girls need to enter this Child Entrepreneur Fair that’s coming to Logan.” And I was like, that would be interesting. And we did some research and it was put on by The Libertas Institute, which they have a series of books called The Tuttle Twins. And we didn’t really know about the books when we did the fair yet.

But they entered the fair. And one of the things I challenged them to do was instead of just doing regular cotton candy, that they have something that no one had ever seen before. What if we could do butterbeer cotton candy or what if we could do caramel waffle? I think we came up with 50 flavors together and they designed their booth and their poster. And they took a loan from me for the tent and the setup.

And at the end of the fair, they were able to buy all the equipment and their school clothes. It was just a huge success. And that’s when they got their first Tuttle Twins books, which it’s like a great series that introduces principles of entrepreneurship or just taxes and stuff like that.

CAMILLE [6:44]

I’m sorry. I was going to say I’m familiar with those books because one of my dear friends is Brittany, which Brittany has been on the show. She does the Get Out There Girl and her husband has helped with the marketing for The Tuttle Twins. I need to get my hands on these books. They sound amazing.

KATIE [7:01]

They are amazing. And they also have not just the kids’ illustrated books, but now they have middle school level, high school level, almost like a curriculum. They have a TV show, a YouTube channel. It’s been really beneficial for me to be learning these things alongside my kids at the same time and to be like, why didn’t I ever know this? But to be taught in a kid format so that it’s not like a college business book like very basic, very simple. Another book that inspired me around the same time was the Rich Dad, Poor Dad book. I don’t know if you’ve read that.

CAMILLE [7:45]

Yes, I have.

KATIE [7:47]

It was like I never really knew about assets and liabilities and I want my kids to know about this and why some people think the dream is just to have a really big primary home. And that’s what everyone thinks rich people want. And it was really interesting for me to read that book and to realize how cash flow works and what’s a liability and what’s an asset and how I wanted my kids to know the difference so that they didn’t put all their money into liabilities.

And all those books came into my life at the same time. And when they did so well at the Children’s Entrepreneur Fair, I thought, this has got to be the best opportunity I’m ever going to get to teach my kids about a business. And so, we created an LLC and came up with an original plan of what Floss Cotton Candy would be, which is nothing like it is today. This was pre-COVID. And yeah, we just went in. We started and it took all of these twists and turns and it came out better than I ever could have planned at first, for sure.

CAMILLE [9:00]

Yeah. So, talk to me a little bit about how you get from the entrepreneur fair to I have never seen packaged cotton candy cakes the way you have that. They’re so cute and they are so fun to serve at a party. Who doesn’t like cotton candy? I feel like it is such a fun way to serve a sweet something in any kind of setting. It is just a fun idea. So, talk me through some of those ideations of how you got from selling on the corner to having these beautiful packaged cotton candy cakes.

KATIE [9:40]

Yeah. It’s been three years and the cakes are really recent. So, that was something that came about after so many steps. The first steps we took, we thought we’d be an event business like we would go do parties or we got into some college basketball games, and then we got into college football games, things like that.

And in my mind, that was the only place where cotton candy could fit in. So, we tried those. We realized it wasn’t really the lifestyle we wanted. It wasn’t even really the way that I thought the business was even going to survive doing that kind of stuff because it just didn’t fit my lifestyle mostly. It was a great way for the kids to get out and meet people, but it was a very like you had to be there weekends, evenings, that kind of a thing. So, for us, for our family, for my kids, it just was not working out.

We were able to put a commercial kitchen in a spare bedroom in our home, which was when a local grocery store called Lee’s Marketplace. I don’t know if you have a Lee’s near you, but their headquarters are in Cache Valley. And they said if we could package it commercially, they’d be willing to try us out on their store.

So, it was interesting to find out what you need for a commercial kitchen, what the requirements are, how you can have one in your own home versus a cottage kitchen. I learned so much more about the food world than I ever pictured myself knowing about before. But we were able to do that and package it in a way where it could be sold commercially.

And we were only in one grocery store, their Smithfield location, when COVID hit. So, all of a sudden, we went from 90% events business to how else can Floss continue? And the clear answer was grocery. So, it had done so well in the Smithfield location that they were willing to put us in all of their stores. And that’s really when Floss took off. That’s when it became an actual like, okay, this could be a real business.

CAMILLE [12:16]

So, talk to me about production going from one grocery store to many. Are you fulfilling all these orders yourself or how is this happening?

KATIE [12:27]

So, for the one grocery store, I had a sister of mine who all of her kids were in school. She wanted a part-time job. So, I would figure out how to do it and train her and train my kids. They would do a lot of labelling, packaging, shipping side of things. So, luckily, my sister was so onboard with being our little cotton candy chef. And she went from pretty much running that part of it by herself.

And then, as we grew into more and more stores, we just had to find more family members or friends that needed a job and people we could train became this little semi-related team of people fulfilling all these orders. And now, we have moved the commercial kitchen out of our personal home and it’s in a 1,200 square foot area and we have a small team of people who just that’s what they do. They make cotton candy.

CAMILLE [13:39]

How did you get the idea to make a cotton candy cake? I think that that is such a clever beautiful fun party idea.

KATIE [13:48]

Yeah. It came from just figuring out how to make cotton candy shelf-stable for stores in general. And then, I started thinking of the possibilities of ways we could package the cotton candy in different shapes and forms and what would be appealing to people, what wouldn’t.

And my brother for one of his birthdays just said, “I love your grapefruit flavor. I wish I could have a whole cake of it.” And I got some stuff just out of my kitchen even that was like I thought might resemble a cake like the shape. And we made him the first ever at least cotton candy cake that we had ever made was in his honor for his birthday. And after that, the wheels started turning and I was like, this could be really cute. This could be fun if we could figure out how to get the cotton candy to stay in the cake form.

CAMILLE [14:54]

So, I want to try the grapefruit, that sounds amazing.

KATIE [15:01]

It is really good, yeah.

CAMILLE [15:02]

Yeah. With where you are now in your business and your kids very much being the leaders of this, anyone listening to this can relate to your kids saying, “I want to do a lemonade stand.” That’s what everyone thinks. I want to do a lemonade stand or I have someone down the street who they did a cotton candy stand or I have someone who did a candy vending machine type stop where it’s just treats.

I love that this came from an idea that any kid could relate to that this is like, yeah, I want to sell something, but it became such a unique product. So, what is their involvement now and what do you think they’ve learned along the way? Is this going to be a family business that grows forever? Where is your mind and your headspace right now?

KATIE [15:51]

I know. I’ve thought that myself. Where is Floss going? Where is it going to be in 5 years? And I have to keep remembering where I thought it was going the first year and the world events that have occurred since then. And so, I have to be really fluid in my thinking. I have to take it baby steps like one day at a time.

And for my kids’ involvement, now that we’re in 100 grocery stores, I have to be really careful that I’m teaching them the principles and not locking them into a trap. So, the thing I’ve talked to my kids about is, okay, we now have an opportunity for you to earn money whenever you want. They’ve been trained in all of the positions, especially my two girls.

So, my oldest is 14, my youngest is 12. They’re both in competitive sports. I want them to have a completely normal childhood. So, the way we have done their schedule is there are certain things that you do need to attend. We were invited by the Libertas Institute to speak at a fundraiser event. And I said, “These are really important events that the founders should go to. You should tell your story.” They know when mom’s like, “Okay, you need to be here this day and be working.”

And then, the day-to-day stuff, one of the things I’m the most proud is I’ve taught them how to hand off the hats of the company to different people so that they don’t have to be at work every day that that’s one of the most important parts about being a CEO is that you let go of responsibility. So, we’ve actually created the business where I don’t even have to go in every day. They don’t have to go in every day.

Our goal is passive income where it’s just set up in such a structural way that we get to work when we want to or when we absolutely need to. We have team members who are related to each other who will go on vacation together. And then, we know we need to step in because it's our turn to do that.

But to teach them it’s not healthy to have a business where you wear all of the hats if you’re trying to scale it, so I don’t know. I’ve tried to teach them that balance. They love that our family owns a business, but they don’t resent the business because it’s not like they’re slaves to it, if that makes sense. which I think in childhood, there are small doses go a long way. And that was something I wanted to be careful of is that I didn’t drown them. I didn’t want to turn them off to entrepreneurship by ruining their lives with it, if it that makes sense.

CAMILLE [18:56]

Yeah. No, oh my gosh. I’m listening to this and thinking, that could easily be a scenario for someone where they get swept up in the busyness of it all and get lost in what really matters and what doesn’t. And I think that’s beautiful that you’ve been able to create boundaries of, “No, I want you to be a kid and these are the positions of the business and this is all a part of it,” which a part of me is like, because there are a lot of not necessarily kids that are entrepreneurs with products, but there are family businesses all over of all different varieties.

And I’m like, how do you even figure out the ownership of that and how it develops as they grow? And maybe that’s something, like you said, it just comes at a step at a time. So, as for yourself and your husband, as this being a family business, what was he doing before and have you completely switched gears to this now?

KATIE [19:53]

My husband has always been very much out of the picture with the business. He’s like, “This is your thing.” Now, that being said, he’s super helpful when I ask him to participate. But he’s an endodontist, so he does root canals. So, that’s a big reason why we need him.

CAMILLE [20:13]

That’s hilarious. Oh my gosh, okay. I was actually going to ask you where did the name came from?

KATIE [20:20]

Yeah. It’s because our kids started a sugar business and their dad’s a root canal specialist. So, I was like, this is funny. This is hilarious. We’ve got to name it Floss to tie all the loose ends together. It’s so silly. And our claim to loving cotton candy that justifies the dental side is cotton candy does have the least sugar per volume of any treat because it’s like 98% air.

CAMILLE [20:50]

That’s so funny.

KATIE [20:51]

So, the rest of it’s all sugar, but it’s like, it’s just some funny thing we came up with to justify it. But really, it just comes down to we love sugar in our family. We totally love sugar.

CAMILLE [21:06]

I love that so much. I love that it’s something that he’s like, “Yeah, I’ll support you and I’m still doing my thing over here.” And your girls are learning so much from it. Now that you’re at the place where you are now, what is the number one thing that you look at and you think, “Man, I’m so glad that they’re learning this thing?”

KATIE [21:26]

I think the main thing is that you can create value from something that you love and that you can be your own boss. The way to create value when I was growing up that I thought was be an A student, be a good employee, which I’m not saying these are important things, they are important things. Just like a people pleaser mentality of you need to fit into the mold that someone puts you in and that is how you become successful.

And the beautiful thing I think about entrepreneurship is if you see a value and you want to go for it and you can create value in the world, there’s no limit to what you can do, how to do it. I just want my kids to know that they can create their own success in the world and they don’t have to follow someone else’s plan of success, if that makes sense.

CAMILLE [22:28]

Absolutely, it makes sense. That was such a beautiful answer. I’m just over here like, yes. Because I think we do sometimes, I know as a kid I did, I thought very much in a linear way of these are the steps to success. This is what I have to give the world. This is what you do. Where an entrepreneurial mindset is different than that. It’s looking for gaps of a need or a service or something that you can provide in a way that possibly isn’t even available or exists in that way, which absolutely is what you do. And I think that that’s fantastic.

KATIE [23:04]

Yeah. I think that is the biggest lesson I’ve learned and my kids have learned. And in our defense, my husband has since started his own practice in endodontics after we started our business and I think for him, he looked at us. He’s less of a risk taker. And I think he saw things that he was like, “I wish my practice was like this. I wish that I could say how things go.” And since we started our business, he’s starting his business and now, it’s like the ice has been broken. It’s like, okay, we know it’s not scary anymore.

Because I think that’s the biggest thing about starting a business is the unknown and the what ifs. There’s a lot of those that can get in your way. And there’s different ways to start. And our business is very unique that we weren’t starting our business for our main source of income. I do think that what’s made it a lot more easy for me to do all the trial and error with my kids and to be way more open to mistakes. And I don’t think I would’ve done that had I been the primary breadwinner with this business that I’m starting. So, I could see how it could get tricky in other scenarios, for sure. But we were fortunate where we were able to experiment a little bit.

CAMILLE [24:36]

I love that and I think there is a big piece to that because even in what I do in creative space and things and coaching and all the things I’m doing online, I was able to start as a blogger making no money for the first few years because my husband had a job that was more the traditional consistent we have insurance and food on the table kind of thing. And so, I think that’s really very self-aware to point that out and to say, we had space to experiment and to give this a go.

In fact, before we started this conversation, I was referencing an interview done with a woman who interviewed entrepreneurs all over the world, but not any entrepreneur, it was child entrepreneurs. And this is an interview that you can look back on, I will look in the episodes and put it in the notes so you can see which one I’m referencing, but she said, “I was really curious to see what the common formula was for entrepreneurs being successful as children,” that she specifically was interviewing not only the child entrepreneur, but the parents as well.

And she said, “What was really interesting in my findings was that very often, there was only one entrepreneur in the family of however many kids there were and that it wasn’t necessarily that the parents were entrepreneurs, but that the person that was an entrepreneur and found the success had the devoted support and love from the parent.”

So, it wasn’t necessarily that they had to have a specific personality type or that they had to be raised by entrepreneurs or all the siblings were entrepreneurs, but just very much a consistency of love and support. And she said, “It’s really interesting because even within the same family, there was that person that was really driven to that entrepreneurship route where others were like, yeah, no, thanks. I don’t want that uncertainty or I would rather go this way.” So, I think it’s really awesome that you’ve been able to tap into that desire that your children had and love them and support them and build something so beautiful.

KATIE [26:42]

Thank you. Yeah, I think it would be miserable for anyone to be told what they should or shouldn’t do with their life, if that makes sense. And I was really clear with that with my kids that I can only imagine if my parents would have expected me to go down the same road as them with their careers and how different I am from my parents and all of my siblings and that I could see entrepreneurship being so exciting for so many people and so terrifying for a whole different group of people.

But for me personally, it has been something that I love so much. I definitely want my kids to know how to do it and that it's an option whether they choose to pursue that for the rest of their lives or not will be totally up to them. But for them to even have that as I’ve got the tools in my toolbelt where if I have a great idea one day, I can pursue it because I feel like both my husband and I were really scared at first to even create an LLC. Just the little steps that prevent so many people from entering the business world because they have no clue what they’re doing.

CAMILLE [28:09]

Yeah. And I wish there was a little more and maybe hopefully this will change in the near future with entrepreneurship and education in general that there can be a bigger embrace and widespread thought of what that can look like and even just teaching those fundamental pieces of how to set up an LLC or your EIN or any of those things.

Because I’m coaching women in business and for those who are starting their virtual assistant businesses, those are some hurdles that they’re like, “I have never even heard of that. Where do I start?” And so, I think that having a mentor like you or for other people a mentor that can help you through those steps, honestly those first few steps are some of the biggest, but then you look back and you’re like, that really wasn’t a big deal. I just needed to decide and fill out those forms and it was done. I did it.

KATIE [29:05]

Right. And I really admire the mentors who that is their passion in business. I had one. My husband’s business professor from BYU named John Richards, so we were living in Arizona at the time when I started Floss and he was willing to take a break out of his family vacation. They were staying at the Great Wolf Lodge and they all came out of the swimming area to taste test my cotton candy and his kids, his grandkids.

CAMILLE [29:36]

Oh my gosh. Of course, they did. They’re like, heck, yeah.

KATIE [29:39]

But just thinking absolutely no reason for him to say yes to this and he invites me to come over. They step out of the swimming pool area and take the time. I was so small, so, so small in my business. And he spent so much time with me that day in such a kind non-manipulative way that I would tell people look for those golden nuggets of the world, the people who have this sincere desire to help other people for no monetary reason.

And I’ve met other people who just have bumped into or that you can tell that is not what they’re there for. And that’s fine too, but to find the people who genuinely want to help that care about people starting a business, it’s a gift that some people have. And I was lucky enough to run into one that was very encouraging, just the nicest people ever. It was really helpful for me.

CAMILLE [30:54]

Awesome. Very cool. I want to ask you just a couple questions to wrap this up. The first, and this is maybe I don’t know, because we haven’t talked a lot about your sons, so I’m curious about the effect that the business has had on them and if they’re interested in it/motherhood for you in that regard. And then, I’ll follow up with number two. So, first I’d love to hear about that for your sons.

KATIE [31:18]

Yeah, for sure. They were 3 and 1.

CAMILLE [31:23]

They’re just tiny babies.

KAIE [31:25]

They were. So, when it started, they were 2 and 4, I think. And it was just like they were the taste testers, very little. But they definitely were learning through osmosis, if that makes sense. They invent names of flavors for it. They go to the grocery stores and help us stock sometimes. They love wearing their Floss gear to school and telling everyone that their family owns Floss.

I feel like they probably don’t remember the creative process as much as my girls do. But they definitely have their own little jobs within Floss. So, now that they’re 7 turning 8 and almost 10, they get to do the beginners steps that my girls were doing at first. They’re too young to make it still, especially in the setting we have it in now.

But every summer, they’ll take our cotton candy that’s either out of season or something like the color’s off, something like that, the reject cotton candy, they’ll take it out to the road and they will have little cotton candy sales every summer. They do three or four or five of those and people know now, “There’s the Floss kids.” So, they still have their stands and our kids all know that they can label, whenever they want to earn money, the cotton candy.

I think for the boys, neither of my boys are huge spenders, if that makes sense. So, the conversations haven’t been coming up nearly as young as it was with my two girls. But they also are just like in it. They’re born in it and just listening to us talk about it. But the business is definitely more oriented around my girls. So, it’ll be interesting to see if the day comes where we find something that’s more my boys came up with. I haven’t really thought of that.

CAMILLE [33:49]

Yeah. I just look at this. And even from just what it’s become in the last two years, can you imagine what’s possible into the future? So, I’m curious because maybe we could do a follow up episode in a couple years’ time. I would love to hear your vision of what you think that could look like?

KATIE [34:12]

Yeah. I feel like grocery has been a huge, huge part of Floss. I can’t ever imagine it going away from grocery. It’s created to be a gift and party favor. So, that was our intent when we made it. So, specialty stores also do really well. I can see anywhere from Costco to just expanding into the beyond Utah grocery stores. There are so many markets. I think there’s even California, Vegas, Arizona.

It’s really the bottleneck is production and facility size, stuff like that. So, one thing I’m really, really careful about is not letting it prevent me from living the life I want to live, if that makes sense. I still like to be there when my kids get home from school. And I still like to have my weekends with my family. And so, whereas if someone else were growing it besides me, there would probably be a lot more rapid growth with it. And so, for me, it’s just taking the plunge for the next step to have more production because I know as soon as we produce more, there’s plenty of places that would love to have it.

CAMILLE [35:52]

Yeah, for real. I love that you have such a clear understanding of your values of how you want to be spending your time, the kind of mom you want to be, and what this product can do to bring happiness to other people, but most importantly, happiness to yourself. And I think that that is beautiful.

So, I just want to say thank you so much for coming on and sharing your story. I can’t wait to see what you do with it and already I’m just cheering you on from the sidelines. And I’d love to meet your girls. I think it’d be really fun. I should’ve had them on here too. That’ll be fun to see their cute faces.

KATIE [36:23]

Thank you. Yeah, they’re spunky little girls. They’re fun and I’m excited to see where it goes too. I don’t think if I would’ve placed a bet three years ago, I would’ve never, ever guessed that it would’ve been this successful. So, it is exciting. I feel really blessed that way. And anyway, I think that it’s just a really fun family business to have and just such an education tool. If anything but that, it’s been successful just to teach my kids the lessons I’ve learned along the way.

CAMILLE [37:08]

That’s wonderful. Please tell everyone where they can find you and support you online.

KATIE [37:13]

Yeah. So, our website is www.flosscottoncandy.com. And then, we’re on Instagram @flosscottoncandy. If you live in the Utah, Idaho area, we’re in quite a few grocery stores. We’re in Harmons, Lee’s, Kent’s, Stokes, Macy’s, all the AFS grocery stores in Utah and some outside. But we have all those listed on our website too.

CAMILLE [37:41]

Awesome. Thank you again. And, of course, we’ll link to all of those in the show notes below. And thank you so much for being on the show.

KATIE [37:46]

Yeah, thanks for having me, Camille.

[MUSIC]

CAMILLE [37:51]

Hey, if you’re listening to this episode and wondering how am I going to create a sustainable business working as a busy, busy mom? Look no further than my 60 Days to VA program where I share with you how you can create a sustainable business at your own schedule working to your skillset. I have so many busy entrepreneurs who are coming to me constantly looking to offload some of their stress and needing to bring on extra help so that they can grow their business.

So, whether you’re looking to hire a virtual assistant or you’re wanting to start your own business that has flexibility and the ability to grow, reach out to me @camillewalker.co. You can also schedule a free discovery call with me. And I’d be happy to go through it with you and see if it would be a good fit for you. Thank you so much for listening to this episode. I really appreciate your support.

[MUSIC]

Hey, CEOs. Thank you so much for spending your time with me. If you’ve found this episode inspiring or helpful, please let me know in a comment and a 5-star review. You could have the chance of being a featured review on an upcoming episode. Continue the conversation on Instagram @callmeceopodcast. And remember, you are the boss!

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