Academic journal article Journal of Case Studies

Salsa Dog, "Where the Dog Bites Back"

Academic journal article Journal of Case Studies

Salsa Dog, "Where the Dog Bites Back"

Article excerpt

Introduction

Bob Walker, the divorced, 57 year old, owner of Salsa Dog, sat alone in his home office with the most recent company financial statements spread out on his desk. Although he spent the last four hours trying to understand where the numbers came from, he quickly knew they meant his business was in trouble. As he stared out the window, he sighed deeply, and said out loud, "Just how in the world did this happen? Maybe I should have stayed working for the good ole' Post Office."

The numbers on the financials painted a bleak picture of last year's performance--his business had not done well. On top of a $65,900 loss from January 1 to December 31, 2011, he was $57,000 in debt, had no cash, and no line of credit. However, the numbers represented only part of the picture. For Bob, it was more than just the possible end to a business. Not captured by the numbers was the bitter disappointment he felt about potentially failing at his long-held dream of owning and franchising a business. Also missing from the picture was his dogged determination to turn the situation around. Bob decided it was time to stop thinking about how he got here. Instead, it was time he focused on the decisions he needed to make about the future of his business.

Bob knew that changes would have to be made and made quickly. But, at that moment, he had no idea where he was going to start. Bob already had cut his labor costs in January 2012 when he laid off two employees and reduced the hourly wage of the other five. Bob considered a few options to save his business including changing the menu, remodeling the interior of his restaurants, and changing the prices. "Come on, Bob--think! What can you do that will make more money? You have got to make this happen," he said out loud. Immediately after he said this, Bob grudgingly acknowledged that he also had to consider throwing in the towel and closing the door on his dream.

Background

While still working for the United States Postal Office, Bob Walker took the first step toward his life-long dream of business ownership. He first launched Salsa Dog on a small scale when he purchased a portable hot dog cart. His product offering was limited to a few varieties of hot dogs, condiments, drinks, and snacks because of the cart size. On weekends and holidays he set up his portable cart at local events and catered at private parties. Encouraged by his early success, he decided to retire from the Post Office and to expand his business.

The Location

Part of Bob's expansion plan was to find a permanent location for Salsa Dog in his home town of St. Joseph, Missouri. He found a very small building that once had been a gasoline station. The property was on the corner in what was known as an older, historic neighborhood, just slightly south of the city's center. Located nearby were numerous Victorian mansions, a number of historic buildings, and museums. Bob liked this location for Salsa Dog because in addition to the neighborhood customers, it provided possibilities for attracting tourists.

Having found the location, Bob talked with his former wife, who agreed to lend him $35,000 toward opening his business. He convinced her that he could make his restaurant successful at this location. Bob then successfully negotiated and purchased the old gas station at a reasonable price.

Renovating--Inside and Out

During renovation of the old gas station, Bob realized that while it had sufficient room for the kitchen equipment, the building did not have enough interior space for seating. He decided that it would not pose a problem because he planned on being open eight months per year, April through October. This was the time when most tourists visited the city and local residents would be out and about in the neighborhood.

To provide seating for customers during nice weather, he placed picnic tables and chairs outside of the building. …

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