Carnitas' Snack Shack – Seen in U-T San Diego
January 4, 2013
As economy tanked, three S.D. food businesses managed to stay alive; what did they do right?
By Padma Nagappan
When the economy tanked, so did many small businesses, including caterers and restaurants. But some mustered staying power to ride out the economy.
It’s been a mixed bag for food businesses, with some that did well and others that did not, said Joe Silverman, a counselor with the Small Business Development Center who advises entrepreneurs.
What sets apart the ones that not only survived the Great Recession, but did well, is the ability to differentiate themselves through their products, he said.
Elizabeth Schott, executive director of Accion San Diego, the nonprofit micro-lender, says she has not seen much of a difference in the quality of its lending portfolio in the food sector, with about 60 percent of its clients seeking loans to expand and 40 percent looking to open a new business, Schott said. “They’ve been doing fairly well despite economic challenges. I know their ingredient prices have gone up, which can pose a challenge.”
U-T San Diego checked with three food businesses to see what worked for them and what lessons they had to offer other food entrepreneurs.
Advice from the entrepreneurs
Location counts: “With food, half the battle is your location,” said Danny Damian, who co-owns Titos Taco Shop. His eateries are located close to a busy freeway exit or supermarket.
Understand money: “Knowing how to cook is just a small part of catering. I know this sounds crazy, but you have to be financially savvy, creative and educate yourself,” said Tess Brown, of Banyan Catering.
Ask for help: “A big part of our success is that we knew we could not do everything, so we got others to help us and we went to seminars on how to deal with employees and how to secure your future,” said Hanis Cavin of Carnitas’ Snack Shack.
S.D. EATERIES’ RECIPES FOR SUCCESS
Want to expand?
Before making any moves, Joe Silverman, a counselor with the Small Business Development Center, offers up this advice:
1. Figure out what your break-even number is — in other words, how many meals a day you need to serve to break even.
2. Based on this, if you like a certain location, figure out if you can afford the rent.
3. Research your competition in the area.
4. Check if the location is already set up with restaurant equipment. If not, be prepared for the expense and permits.
5. In negotiating a lease with a landlord, you have the most leverage when you’re thinking of signing.
6. While considering an expansion, ensure you have all the resources you need — not just the capital, but also the right people. (It’s tough to be in two places at once.)
7. Get really good at time management, train your people well and do everything to retain good talent.
CARNITAS’ SNACK SHACK
Readjusting after unexpected success
Hanis Cavin, who launched Carnitas’ Snack Shack in North Park a year ago with his wife, wasn’t ready for success.
“We actually scared ourselves. We average 300 people a day,” said Cavin, who is the culinary brains behind the business, which — despite its name — serves pork-based American cuisine. “I’ve been a chef and seen crazy volumes before, but didn’t expect it would happen here.” (Carnitas is the name of his pet mini-pig.)
At first, Cavin underestimated his orders and he ran out of food because he hadn’t ordered enough from suppliers. Since then, he has renegotiated contracts with his suppliers, who have given him better long-term prices. Today, he has prep positions open from 8 a.m. all the way through midnight to keep the restaurant fully stocked with ingredients.
His pork-inspired cuisine draws a diverse clientele, from executives in suits to Hell’s Angels bikers and beachgoers. But the restaurant is a tiny, 435-square-foot stand-alone structure between two vacant buildings — something he and his wife, Sara Stroud, did not realize when they did their initial location research.
As a result, Cavin did not have enough seating, which bothered customers. So he decided to convert the two parking spots he had and his driveway into additional seating, creating an oasis filled with plants and jazz music.
Since then, he’s seen business grow exponentially, reaching $1 million in revenue.
Source: Nagappan, Padma. “Staying power: as economy tanked, three S.D. food businesses managed to stay alive; what did they do right?” San Diego Union-Tribune, 02 Jan 2013. C1,C3. <http://www.utsandiego.com/news/2013/jan/03/tp-staying-power/>