Check Yo Self Before You Wreck Yo Self

What a great piece of advise. “Check Yo Self Before You Wreck Yo Self”. Rapper turned actor Ice Cube popularized the phrase with his 1993 single “Check Yo Self”. Back then, as a twenty something, we used the phrase humorously when someone we knew, was about to go off and do or say something that seemed wrong or had the capacity of ending badly.

Every parent tells their kids to “be careful” as they go out the door. I’m not a fan of rap music, but in my opinion, this may be viewed as one of  rap musics shinier moments. Besides making gobs and gobs of  “Cheddar” or “Benjamins” on selling self-expression or life experience lyrics, laid over a track of head bobbing music, coupled with an over abundance of trunk vibrating bass thumps, it simply means “you better know what you’re doing “.

As mentioned in an earlier blog post, I’ve naively spent money on an idea or two, without really understanding what I was doing and subsequently saw my money fly away like a “homing pigeon”, expecting it to come back with friends, but instead disappeared like a Twitter post that was sent, but never showed up on my timeline, leaving me to wonder what happened?

I believe going into a start-up business without completing an exhaustive analysis of the day-to-day operations, expenses and costs of your business goals and know how, can create the high likely hood of the “wreck yourself” or losing your hard-earned investment of money and time or worse, your home.

Understand why a lender wants you to provide a business plan with a loan application. The operational aspect of your business, your experience are important, but they are secondary to the financials of the business and credit rating of the borrower(s). If you your credit ratings are in the high 700’s to 800+, the lender can usually move your loan application further along, asking about cash on hand, collateral assets.

For us, this was the first time we were asking for a loan to fund part of our dessert truck business. As a first time business owner, with less than 1 year experience in the field, our loan package was looked at with a fine toothed comb. Do you have 30% down? 30% is a big number. Why 30%? Well. if you look at us from a “risk” perspective, we don’t look that good. We have good credit, it helped to show our commitment to this business venture with a Le Cordon Bleu course completion. Still, most lenders don’t want to lend money to anyone new to the food or restaurant sector, considering the high rate of failure in the years 1 thru 5.

That 30% I mentioned, is of your Total Project Costs. So for example if you, through in-depth analysis, research and completion of a business plan, determine that your Total Project Cost is $100,000, you will need to come in with 30% or $30,000, before the lender will let you borrow the balance of $70,000. Our lender only allowed us to add or build 3 months of cash reserves for “fixed” costs into the loan, so any extra cash reserves after 3 months, will have to come from some other source. Our original loan request had 6-7 months of cash reserves built-in to the loan application. The lender quickly explained that wasn’t going to be considered, so we had to bring down our loan request to fit their parameters before going any further. All they can say is no. I like to over insure sometimes, just in case.

There are many ways to fund your new business. Our path to business ownership is the traditional method of Cash, Credit and Collateral. Put a percentage as a down payment, show a history of making good of all your past financial commitments, get a loan for the remainder of your project and give the lender the right to get their money back by taking and selling your home or any assets you provided as collateral, in the event you fail to make the agreed upon payments to repay the loan.

I’ve read up a little on the many techniques to launch a business, from: Crowd Funding, Credit Cards, attract Angel Investors, Micro-loans, borrowing from family and friends, tap into a retirement account, home equity. All of these methods, plus others can help an entrepreneur get over the most challenging obstacle to business ownership.

Thanks Cube…

No Silk Pajamas in this Business Start-up (a Rant)

What the heck is going on! How can someone (a business owner) expect me to hire them for perform the service they are in business to provide, if they treat me like that last doughnut in the box, the one no one wants. You know, that pink glazed with sprinkles. Is business that good! I know the economy is in a slow recovery period, but C’mon, not answering phone calls for 3 days or then sending a canned email response, that they are eager to hear more about what my needs and goals are. I don’t know if it’s possible to make me feel any less important. What’s worse, for me is, that big suck of wasting my time! Thanks for gracing me with the pleasure of your weak late response! You know what, how about this. Why don’t you eat my shorts OK! OK breath Paul, settle down big guy. Just for the record. I didn’t actually say that to anyone. That’s not my style, initially. But that’s what I was thinking after the third piece of bad service. Out of the goodness of my heart, I give people the benefit of the doubt. So, if these were just some Joe Schmoes that I don’t know from Adam, then maybe it wouldn’t matter to me. But these are shops that came recommended from guys already in the food truck business.

The boxer Marvin “The Hit Man” Hagler once said ” It’s hard to get up at 5am to run 5 miles, when you sleep in silk pajamas”.

It seems to me, that some business owners who have built successful enterprises have forgotten what made them successful, namely treating every customer or potential customer like their business is important to them.

During the last year and a half, I’ve met a lot of business owners related to the food truck industry in one way or another. Some I have sought out through my own searches, some have been referred by other food or dessert truck owners. What took me by surprise was the amount arrogance shown by the same people whom I thought, were in the sales business first and foremost. The way I see it, you could have a top of the line, well tuned system in place, but it doesn’t mean much, if the sales person or whoever is tasked with getting jobs for the business, treats potential clients like their OK without your business, even if it’s true. Is that what success means? Some shops were up front by saying that your job won’t be started for 3 more months. so, if you’re not on a rigid time schedule then that might be OK.

After several instances of perceived slights, whether it be no return calls after asking for clarification in some areas of either the build-out, insurance, truck wraps, used cargo vans etc. I told my wife, and she basically confirmed, what I was beginning to conclude, that they blew it, with me at least.

I told these businesses the truth, no BS. We have some cash along with a loan approval and are ready to move, if a deal can be made. It didn’t matter to me if you’re the one shop, that has built some of the most popular food or dessert trucks in town. Goody for you! It doesn’t give me starry eyes, knowing that I’m using “XYZ” Co.

At any level of business you’re going to find me, the guy or gal who just wants straight answers when a question is asked, not 3 days later by email and when asked specifically for phone call. I’m in the information gathering mode, I’m going to remember how you treated me, more so than the service you offered.

I’ve held a sales jobs in the past, what I remember was that it was a rarity to get a potential client to sign on the dotted line at the first meeting. There were always follow up conversations either in person or over the phone. Because I wanted to be there when the customer says “Yes, let’s do this”, and that doesn’t happen until I have shown them, that I was their best option. And yes, there is always other options.

Finally, we kept working through the myriad of service providers here in So Cal, for the gourmet food truck industry, until we were comfortable with the key company’s related to what were are looking to do, when I say “we” I mean my wife and I because let’s face it guys, things are a lot less painful when she’s on board. We have been able to find businesses that demonstrated an interest in our business goals, so much so, that we were comfortable writing big fat deposit checks with more zeros than I’ve ever written.

We didn’t choose the least expensive quotes or estimates, although cost is always a factor, we made agreements that fit into our budget for this item with that feature. One company we will likely hire is for a service that isn’t required until our dessert truck is built and permitted by the health dept. Why? Because in addition to providing a good service at a reasonable price, they follow-up regularly, making sure I remember them, when I’m ready.

Call me Old School, but I still remember when common courtesy was commonplace. Let me also say that many of the business owners, sales people we met through this process made genuine efforts to meet our needs in both services and costs, but as always, you have to choose just one. The jury is still out, but the outcome looks very promising.

The big fat deposit check was written to:

Kareem of Kareem Carts in Los Angeles. He has a 30 year track record, he has his fabricators are working Saturdays to get trucks and carts out. Most of the shops I talked to worked Monday thru Friday only. He has a steady stream of business and is expanding his operation with a third commissary during this recession. He gives guidance through economic development agencies in some of the under served communities of Los Angeles, he answers his cell phone when I call.

If you are looking for financing, we chose after more than several other inquiries:

Richard Pallay of CDC Small Business Financing in Pasadena, CA. They have an SBA backed “10 year” termed loan. I don’t know a lot, but we could not find any other lenders offering more than a 5 year termed small business start-up loan. This excited us because while we plan on paying back the loan as soon as possible, it’s nice to have a lower break even thresh hold in the event business stalls right out of the gate. God forbid…

That’s all I got to say about that.

Check us out at our website: http://www.sweetsuitetruck.com or on Twitter @sweetsuitetruck

Money Left On The Table

Passion, combined with a culinary skill set are two elements to a food business start-up. You will need to find your own inner Gordon Gekko, because ultimately, the bottom line to whether the business is successful is solely based on its profitability.

Get started on the not so fun part of business building. It’s easier for a dessert/food truck wanna-be entrepreneur to spend a lot of time, early in the business building process with the actual truck itself, because it’s easy. I can entertain myself for weeks or months window shopping at Charlies Fixtures (featured in the movie “Chef”) in Venice, CA looking at mobile kitchen equipment supplies, tools. Eventually though, I had can get down to some serious research to determine whether my proposed menu will actually sell.

I had to work through my own research, to determine if the gourmet food truck niche is going to stick around for years to come and then decide, with a calculated risk, if I should put some of my own money out, for a business start-up. I slowly (2-3 months) came to the conclusion the dessert trucks I’m researching, are leaving a lot of money on the table. But these trucks are doing very well, most of the time. “Waffles De Liege” or “Chunk n Chip” are well established dessert trucks in Southern California. Both have recently grown into brick and mortar buildings of the same names as their perspective trucks. While researching, I couldn’t help but notice how many food and dessert seekers, stopped, paused to look at the menu and then move on to the next truck.

I’d like to ask the passer-byes why, after looking at a dessert truck menu, they chose not to buy from that particular truck. If I did ask, I may get answers like “I haven’t eaten a main entrée yet” or “nothing sounded good” or “I’m not in the mood for that”. When all is said, it’s the latter answers that would have me wondering, how many sales are not made because of a very limited dessert menu. One dessert truck offers a quality fresh made to order Liege waffle, while the other provides good “Sammies” or ice cream sandwiches, both with a variations of toppings. What If, a dessert truck offered more of a variety to choose from? The “savory” gourmet food trucks have expanded menus, usually with no less than 6 or 7 food items to choose from. So, I wonder to myself, is it time for dessert trucks to evolve? There are “Sammie” trucks, “Waffle” trucks, “Shave Ice” trucks. But no ‘Sammie” truck that also serves Waffles, Shave Ice or CupCakes. This may be a tall order, but the more I thought about it and analyzed the ingredients and preparation steps the better the idea sounds.

To use part of a phrase attributed to Ralph Waldo Emerson, my competitor analysis has shown us how to “build a better mouse trap” in theory. The current heavy hitters of the So Cal dessert truck scene have laid down a path of what sells in our plentiful warm, dry climate. The “Sweet Suite Dessert Truck” is slated to be equipped with enough refrigeration and freezer space and generator power to facilitate various desserts and an oven to bake goods during the cooler evenings of mid November to March. It appears to this soon to be dessert truck owner-operator, that there is an opportunity to fill a gap between customer wants and variety choice.

Author Richard Myrick wrote in Chapter 3 of “Running a Food Truck for Dummies” the concept of “Competitive Response Cycle”, which he describes as ” a process of researching the competition so that you can continually make sure your food truck is meeting the needs of the customers you are targeting”. Passion, combined with a culinary skill set are two elements to a food business start-up. You will need to find your own inner Gordon Gekko, because ultimately, the bottom line to whether the business is successful is solely based on its profitability.

I will be posting a video series named “Watch Me build My Food Truck” on YouTube, Facebook in the coming weeks, introducing viewers to the experts that we are relying on, to help us through the start-up process.

Follow us @sweetsuitetruck on Twitter.

Email: info@sweetsuitetruck.com

Take What Is Given To You

     It didn’t take long working behind the window, feeling the heat of the deep fryer and the large griddle sizzling up italian sausages, mixed peppers and onions before the thought came to mind “I want to buy my own food truck”.

We were parked maybe 300 ft. from the crashing waves of Corona Del Mar Beach, on the coast of Orange County. Chef Ted Rodriguez and his lovely wife Alex run the “Flavor Rush” gourmet food truck. Ted knows one the Brazilian born founders of Wahoos Fish Tacos, a very successful chain of fish taco restaurants, when the Wahoos truck isn’t in this same spot, Teds Flavor Rush truck fills in. It’s a prime location mainly because this cozy city beach does not provide much more than snack shack foods.

Supposedly one of the owners of Wahoos resides in one the beautiful over-sized three and four-story homes that fill in the cliff side along the beach for half a mile or so, before the terrain separating the water from the land gets stunningly unbuildable. If a tsunami similar to the one that crashed upon the shores of Sumatra in December of 2004 ever made land at Corona Del Mar Beach, these coastal homes would be the first real estate casualties. At least the bottom floors of these extravagant show pieces. It was at this location that chef Ted casually offered a little nugget of advise to me, “take what is given to you”.

As I planned for this blog entry, I thought about what he said way back when. That phrase could be applied to many environments, be it sports, sales or relationships. In my first or previous blog entry I used a football analogy “The Ground Game Has Been Established” to provide a little historical perspective, reminding readers that in 2008-2009 several chefs went to the streets with restaurant quality culinary skills. Many have enjoyed success, having already moved into brick and mortar restaurants or run a small fleet of same named mobile food providers, with an established following.

Chef Ted was referring to the opportunity to regularly park his “Flavor Rush” truck and sell his food at this beach. Relationships sometimes turn into unexpected opportunities. When you can spend enough time around other food truck owners, your name may come to mind, when someone is in a pinch. This beach location, in a very high income community serves Teds business well.

When either a start-up food truck owner, clothing or an electronics retailer sets out to provide a product that he or she has perceived to be on some level, in demand. The owner is still bound by the consumers preferences, tendencies or buying habits.

Going back to the football example. If the opposing team is revealing a defensive formation that can be exploited with a particular set of offensive plays, that are designed to be most effective against that particular defensive formation, the coaching staff (offensive coordinator or play caller) should be able to recognize the opportunity and “Take What is Given to Him”, rather than rigidly sticking to the pre-planned game plan.

Food trucks, whether Savory or Sweet must adapt to customer preferences, within reason. A savory kitchen cannot provide a variety of sweet or frozen desserts and vice-versa. Some gourmet food trucks today have developed such a positive reputation, that they spend more time catering private parties and rarely open their services windows at curbside. This is the goal of every long termed thinking food truck owner. The efficiency of a catering job allows owners to maximize goods, with a minimal of staff. Knowing the pre-sold sales volume, instead of hoping or guessing at a curb side location of other public event.

Thank you for visiting the sweetsuiteconnections blog. Keep an eye out for our video series “Watch Me Build My Food Truck” in the coming weeks, documenting our steps and introducing viewers to the experts we are relying to help us through the start-up process.

Questions:

email at: info@sweetsuitetruck.com

follow us: @sweetsuitetruck

Watch Me Build My Food Truck

Los Angeles is like any other big city. It has plenty of everything you enjoy, as well as loath. For instance, many come for the work, warm weather, university education, beaches and so on, but like a new relationship, once you begin to settle in, the flaws become clearer and clearer. Be it, a meddling family member, control issues, work instability. So, in a word,  we compartmentalize. We do a little analysis of the circumstances and say, well, it has this going for me or that going for me, so I’m good.

This LA landscape has high housing prices, crime and lots of smog. But wait, This list wouldn’t be complete if “traffic” isn’t included right? Well, this is where we, as Angelenos really stand out. We create gridlock like it was an Olympic sport. We are so good, we bring home the gold every time. OK, stay with me please, while I make my transition to my chosen topic for this blog entry using traffic as the bridge.

3 years ago, I decided I was going into the gourmet food truck business. Past experience reminded not to jump in with two feet without the thorough vetting necessary,  prior to starting your dream business. I mean, I once dropped a few G’s into a business start-up, only to be contacted by the US Dept. of Justice just after my money was received by the franchisor. Apparently this franchisor was already under investigation. The DOJ eventually flew me to West Palm Beach, Florida to testify against the persons I dealt with. Well, the day of the trial, the defendants settled on the charges being brought against them. I’ve watched enough cop/lawyer TV to know how it works. lol. The DOJ probably used the threat of victims testifying against them in a jury trial to get a submission. The Gov’t put away two criminals. I’m still waiting for my money to be returned. lol again. I drove their rental to Miami to check out South Beach. Florida is unbearably humid in June.

Getting back to vetting and traffic. Before investing a piece of my hard earned retirement money from an old IRA that was just slogging along with Fidelity Investments, I was going to make damn sure the segment of the food truck business I want to be involved in, is not only sustainable but more importantly, profitable. The “savory” side of the food truck business here in L.A. is already saturated in my opinion, my interest and field of expertise is in the “sweet” or dessert trucks segment. I completed a 6 month Baking/Patisserie program at Le Cordon Bleu in Pasadena back in 2011, before deciding on part-time work in a food truck to gain experience in the food truck business.

I’ve attended several “small business start-up workshops” put on by non-profit SCORE (So. Cal. Organization of Retired Executives) and concluded that a business plan is one of the first orders of business for any aspiring bus. owner. The various “Start a Food Truck Business” books I read, also advised the same if, you are going to finance part of your start-up. The “Business Plan Pro” program ($85 online) requires certain data that can only be gained by physical research. Not just statistical research, but actually seeing with your own eyes the amount of business your competitors are doing. Once I had an idea of what kind of desserts I wanted to make and sell, I set out to visit the particular dessert trucks that were already selling what I plan on selling, where ever they were in LA, Orange Co. to count the amount of items that passed through the dessert truck service windows. I recorded them in 30 mins. increments for 3 to 4 hours each time.

For example, if I was researching a dessert at the extremely popular Abbott/Kinney First Fridays in Venice Beach (as seen at the end of the excellent foodie movie “Chef”, when the chef meets up with the food critic again), I would just bring my folding chair and park my butt down on the sidewalk and count using a cell phone counter. I like to move over a truck or two as to not look like some weirdo food truck stalker, but still in view of the service window. Yes, It can get boring after a while, but if you enjoy people watching like I do, it’s not so bad. I would multitask by plugging into a podcast about business start-ups, food truck start-ups or social marketing to learn something new about my business of interest every time I was out. It’s about getting things done.

This takes a lot of time, I wanted at least 5-6 consecutive days of sales for each truck I researched. At home, I planned out which truck I’m going to visit that week, after work each day or on the weekend. During the week I would ask and sometimes make my then 11yo son to come with me, so I can travel across town in the diamond lane to avoid the gridlock. After a while, he would ask me when I got home “are we going to do some research today dad”, he knew the payoff for him was he could eat out of any of the food trucks at that location. It works out for both of us.

Getting a weeks worth of sales data enabled me to roughly calculate the amount of money going into the business on a monthly basis by multiplying the weekly figure by four. It’s not an exact science, but using their menu to figure out an average price point, coupled with the amount of items moving through the window every hour, you can get a pretty good idea what the sales total are that any truck took in, at that location

After estimating what my costs are for my dessert truck ie. truck, build-out, labor, food costs, fuel, commissary rent, insurance, fees, permits and licenses etc. and the loan payment for all or part of it, I can make a calculated assessment. The food industry has a reputation for gobbling first time owners. This calculated risk is one that I choose to take, based on research and my own experience.

The business plan program allows for customization of sales, costs and expenses monthly, this allows the plan writer to account for seasonal slow-downs. Trust me, when I say get the business plan complete as soon as possible, it can easily drag out to several months.

I will be posting a video series named “Watch Me build My Food Truck” on YouTube, Facebook in the coming weeks, introducing viewers to the experts that we are relying on, to help us through the start-up process. Follow us @sweetsuitetruck on Twitter.

A Ground Game Has Been Established

Like any high level football game, the team that can control the line of scrimmage with 4-5 yard running plays (ground game) can and usually will win the game. At some point during the contest, a sustained running game affords this same team, the option to add to their original strategy to move the ball down the field in larger chunks of yardage per play, by opting to pass the ball. When a passing strategy is successful, along with the a for mentioned running game a victory is all but assured. Those of us with at least a basic working knowledge of football also know that this is only one side of the game. But for sake of this article, this is as far as I need to delve into the pigskin game to help the reader understand my point of reference.

The “Gourmet Food Truck” industry has established itself as a viable alternative to brick and mortar restaurants. The real movers and risk takers more than a few years ago, out of necessity plowed into uncharted territory and forged a new sub-set or niche for dining outside the home. I imagine visionaries like Kogi BBQ’s Chef Roy Choi in Los Angeles weren’t viewed by their brick and mortar counterparts in 2008-2009 as considerable rivals for the dining dollars walking or driving down the street. For most established heavy hitter eateries this is still the case. With 9 million Los Angeles residents and 3 million Orange County residents not including the neighboring San Bernardino and Riverside County residents, the local gourmet food truck industry was embraced and garnered prime time news coverage and gained a national following with new cities across the nation changing zoning regulations or updating street side parking time limits to allow this niche sub-set of the restaurant business to engage in street side commerce. Many professional chefs, wannabe chefs, culinary school grads or regular 9-5ers quit their day job and go out on their own, to get behind the wheel of their own food truck.

Once the glitz and excitement of owning a food truck has past, comes the realization that operating a food truck can be downright dirty, draining and difficult work. Many novices realized too late that concepts or practices like a thorough market analysis to determine if there is demand for their proposed menu items or using a business plan to guide them through daily, weekly and monthly operations and having a 6 month to 1 year of working capital reserve to pay for unforeseen problems that can keep the wheels from rolling to the next location. There are many other reasons for success or failure in food trucks or any other start-up business.

In my next blog post I will discuss the higher level strategies being used to advance the acceptance of Gourmet Food/Dessert Trucks, by some of the most sought after food trucks.

Thank you for reading Blog Post # 1 by sweet suite connections blog, of the Sweet Suite Dessert Truck, scheduled to launch in Southern California in May or June of 2015.

Follow us on Twitter: @sweetsuitetruck  email: info@sweetsuitetruck.com

<img src="http://clicktotweet.com/img/tweet-graphic-3.png" alt="Tweet: Food

<img src="http://clicktotweet.com/img/tweet-graphic-3.png" alt="Tweet: Food Truck Enthusiasts/Start-upsread this blog