Anatomy Of A (Tasty) Startup Business
Dec. 12, 2014
National statistics say 80 percent of small business startups fail -- an even higher percentage for restaurants. So given those numbers and the already stiff competition among Mexican and Latin restaurants in the area, The Ticker was especially struck recently by one, quiet yet booming success on the local food scene.
On any given Saturday -- or almost every day in the summer -- you'll find a line to or out the door at Spanglish, the little eatery behind Building 50 at the Village at Grand Traverse Commons. You'll also find husband and wife team Vicente and Anna Serrano at work in the kitchen.
So how has this little place bucked the odds and thrived? We inquired with Anna.
Ticker: How many people are coming through this little place every day?
Serrano: Hundreds of people every day. In the summer it's all you could do to get food past the people and out the door onto the patio. So probably selling 300-400 items a day. In the summer we just have to decide to close the doors sometimes with people waiting to get in.
Ticker: What's your secret ingredient? It sure seems like you've experienced success from the day the doors opened.
Serrano: It's a lot of things. The product is one for sure. When we first started catering [before the restaurant], whenever we made tamales, I was always surprised how people responded; there was a real excitement there. But then lots of hard work; We're here five or six days a week, physically here cutting onions, mopping floors...that's pretty crucial. And then integrity, and really being nice to people. These seem like really simple things, I know, but if you can't have consistently good food and be nice, you won't be successful.
Ticker: Was there a recognition early on how much of a risk there was in opening a restaurant?
Serrano: People say it all the time, but failure just wasn't an option. We opened in June  and had a mortgage and child care due in July, and it had to work. But my husband and I had a lot of food service experience.
Ticker: But you started small, right?
Serrano: Before the restaurant, yes. It was just like baby steps. My husband was still working at Bay Bread, so we first started catering and making tamales for the Commons farmers markets. We sold out 120 right away, every time. So we started catering more, rehearsal dinners and we'd setup a tent and do the Cow Fest or a concert here at the Commons. After a year and a half, we were selling 300 tamales and 40 pounds of salsa in three hours at the market.
Serrano: Then we looked at different opportunities to expand the business. We looked at a food truck, but that's so seasonal, or renting kitchen space from someone. But because we started at Building 50 at the farmers market, it seemed like a good fit. That was right when the Underground Cheesecake's lease on this building was running out. So we wrote a business plan and worked with SCORE counselors, which was a real highlight. We started to build a team, like a woman who had been a banker for 40 years, and we knew we'd need funding. But we were able to keep overhead low and plan ahead.
Serrano: Every time we did a really big catering event, we'd reinvest; after one event we bought a new blender. Things like that. I saw a place in Houghton Lake had closed, so we rented a 17 foot truck and brought back a bunch of stuff like our sink and mop bucket. The estimate for an 8-foot ventilation hood was $25,000; we ended up finding a used hood that came from Ferris State. Our return air is from the former Dunkin Donuts. That counter you see here? We found that at Habitat For Humanity's store for $7. We used the Mexican business model, not the American one.
Ticker: Interesting. What's that mean?
Serrano: We didn't say, 'we're gonna need $400,000, and look at these beautiful 18 dollar plates.' or expect to open the door and have it be perfect. We started small and let it grow organically. We opened the doors with just a couple plates and sautee pans. When we needed something, we'd have to get it. Finally a dozen plates weren't enough so we bought 24, but we didn't start with 200. It was also about sustainability.
Ticker: You worry about competition? There's a lot of it.
Serrano: We worry about competition, but we also I think our food is a little different. There are lots of authentic places and some called authentic that are not. Our food is from the west coast of Mexico or California, a little lighter. It isn't that gut bomb you think when many think of Mexican food.
Ticker: And now you're ahead of where you thought you'd be at this point?
Serrano: Yes. It's funny. We had to do three years of projections for SBA loan, which is the land of make believe for me. I was basically guessing; we did the first year's projection and then added ten percent to each of the years. But yes, you do different versions of projections, and one that seemed astronomical -- we're there.
Ticker: So what next?
Serrano: Right now I'm focusing on sharpening and honing and updating. Hopefully around the end of year we'll be doing a new counter with more seating; there aren't enough chairs inside in the winter. We're getting some church pews from the Habitat store that we'll repurpose for the dining room. And this summer we'll be adding to our patio space. We've got a few different ideas for the future as the business expands.
Ticker: What else?
Serrano: Just that my husband and I work so well together. We work next to each other on the line in the kitchen, which can be a very stressful environment. But we like it, which is very hard to come by.