By Doc Souza
Elk Grove is losing another small food service type business. Baguettes Deli announced over the weekend that they were closing. In November the Sage Mill and Mrs. Kay’s Sweet Treats also closed.
It is very tough running a small business in the food service industry. If a friend or family member were to ask me for advice about starting one up, I would advise them not to. At least not here. Maybe other areas it may work out. Too many obstacles and it is too expensive. Many of these businesses have put their life savings into it and are working 6-7 days a week, long hours each day. Start up costs are very high for a restaurant. Over $100,000 for a new business. Less if you take over an existing spot. That is a huge investment.
The increasing regulations and cost of doing business are going to send more and more out of business in the next few years. Minimum wage is going up. Other costs will also go up with that. Insurance is expensive. Too much competition and often times a clientele that doesn’t appreciate the service you provide. Some businesses are making it. Many are older, more established businesses with a loyal customer base. It is harder for new restaurants to survive.
There are many reasons why they fail. Some are not their fault, but some are. Location is a big issue. If people can’t see you from the street, then they won’t stop by. That location comes with a price that most non chains can’t afford. If the location isn’t visible, then the business needs to find ways to reach people. Marketing becomes a huge component and unfortunately many small businesses don’t do enough. There is no specific sure fire way to reach people. There is social media, direct mailings, email, print and radio. I work with over 100 local small businesses and I talk to others all the time and some just don’t want to spend money on marketing. In this business, you have to spend money to make money. You have to look at the return on your investment. You can’t spend, in some cases hundreds of thousands of dollars to start up, and then not spend the money to market. Some do get it. That’s still only part of the problem.
People in Elk Grove has asked for better choices, more small businesses, more higher end businesses. The reality is that we, as a community, do not do enough to support and patronize small businesses. There are certainly reasons why. Maybe we tried the place and it wasn’t very good. Maybe the service wasn’t good. Maybe the place has no ambience. Cost is an issue. Take a place like Baguettes. Food was good, service was sometimes slow, but some people want quality at Subway prices. Small businesses can’t give you a $5 sandwich with chips and a drink. You can’t make money on that. Hey I like Subway too. It’s fast, it’s convenient, tastes fairly good.
A lot of people didn’t know about Baguettes or where it was at. Less knew about Sage Mill. Another place I like to frequent is Bravo’s. I was there for lunch last week for a meeting and from 11 am to 12:30, there was two other customers. The location isn’t great because you can’t see it from any of the roads. Yet, just a 200 hundred feet away In N Out Burger has lines of cars all day. Of course people want fast food, in some cases, waiting in that line may take longer that going to Bravo’s. Bravo’s is all fresh made, in house, local ingredients, farm to fork. It’s not fast food. It’s faster than a sit down restaurant. They’ve been there over 3 years. They just can’t get people in the door. Part of that is the location, part of it is not enough marketing. Part of it is that people don’t appreciate it.
There are a lot of other small restaurants too in the city that we should be supporting. Just about ever strip mall has one or two. Explore new places when possible. Most people don’t want to or can’t afford to spend a lot of money on eating out, so they choose fast food or eat at home. For the ones that do eat out, mix it up and try new places.
Elk Grove has over 171,000 people, but our track record for supporting nice things is not very good. Nordstroms and other higher end retailers will never come here. They know we won’t support it. That’s why we are only getting an outlet mall, if and when that ever comes. There’s a reason that’s not open yet. They can’t get retailers to commit to signing on. We want Nordstroms at Walmart prices. No knock on Walmart. I shop there too. This is where we lose out to Folsom and Roseville. Folsom is much smaller than Elk Grove. Less than 1/2 the size. Of course a lot of people would support nicer things, but businesses are not convinced it is enough.
In a few years you will likely only see a few holdout small restaurants and the rest will be chains unless we make an effort to support what we have. It really is up to the community. You can’t keep asking for different things to come in when we don’t support what we have. Business owners see that too. They see these other businesses closing.
Of course restaurants are only one component of the small businesses that make up the city. There are other service businesses and retailers too. Some of the smaller retailers suffer from the same issues. Poor location, lack of marketing, more expensive.