Previously, I wrote an article about starting a business with little capital and smart business plan. Here is a great case study:
Bill Daniels has been in the pizza business for a number of years. He has a degree from Wright State University and the business savvy and technical knowledge of the food (pizza) industry. This is a great combination for an entrepreneur.
After starting the successful Pizza Factory years earlier, Bill acquired a building a few blocks away on Wayne Avenue in the South Park neighborhood and began to lease the space on the top floor to tenants. Then slowly he built the success of South Park Tavern. At first, he found Shane, who is a sharp bar manager who had experience in the industry. He gambled on Shane and Shane gambled on him. He opened only on weekends and served no food. The neighbors were thrilled to have a place and so they supported the tavern. Service was terrible and there was no food. But each weekend, the place got better. Bill invested everything earned from those early days back into the business. He began to offer pizza by transporting it from the Pizza Factory store down the street. He extended the hours each time business picked up. The neighbors relentlessly promoted the tavern. If there was a special event, Shane would open the tavern.
Next, the great marketing promotion and understanding of the customer took off. Shane opened through the week. They had open mic nights to bring in bands. They had half price pizza nights on Monday. Bill built a patio outside and remodeled the tavern, installing 12 micro brew taps in the process. Instead of offering the same beers and pizza that most other chains offer, the South Park Tavern offered exotic seasonal beers with unique and flavorful pizzas.
The South Park tavern offers only beer and wine. By not offering hard liquor the establishment identifies itself as family friendly tavern. Many would be tempted to increase revenue by offering hard liquor, but Bill and Shane understood the importance of their market positioning.
So, Bill used a formula that involved several trends in the industry.
- Popularity of micro brew beers
- Different pizzas
- A hang out for the people of the neighborhood
- Bands and music
- No hard liquor
As a result, the South Park Tavern has become a popular and successful business. It did not start with a million dollars of capital. The business stretched the capital and grew in small increments. The business tried to differentiate itself and it created loyal customers. Bill and Shane are not done. They plan to carefully expand the business further.
There are some lessons for entrepreneurs in the growth of the South Park Tavern…