Tall Order: Taking Taco to Next Level
Want to see the future of the economy of Southern California?
Next time you find yourself on the San Bernardino Freeway, take the San Gabriel Boulevard exit in Rosemead and head south to Garvey Avenue, then east to Delta Avenue.
Facing you on the southeast corner is a restaurant called Taco Ready, a small, family-run neighborhood place that may strike you as nothing fancy. Indeed, Taco Ready looks like tens of thousands of other family businesses in Southern California: low-tech, unexceptional, even humdrum.
But appearances deceive. Taco Ready is a family business run by four second-generation Americans whose ambitions say a lot about the future of this economy.
The four--Nora Rojas and her brothers Sergio, Carlos and Juan Pablo Rojo--also run two other Taco Ready restaurants in Baldwin Park and Covina. The siblings, ages 22 to 36, dream of turning their small chain into a big franchise operation modeled after In-N-Out Burger.
Their parents, Manuel and Enedina Rojo, immigrants from Mexico, opened the Rosemead Taco Ready in 1976. Each of their children, including two no longer active in the business, pitched in from an early age.
Given all that hard work, Taco Ready became a success by serving good food--tacos, burritos, carne asada and menudo on the weekends--at reasonable prices in clean surroundings to a loyal neighborhood clientele.
But Nora and her brothers face some big obstacles in transforming this family business into a corporate franchise operation. It takes capital to grow a business, and capital tends to flow to companies run by professional managers, not to companies run in the informal fashion of most family businesses.
If Nora and her brothers are to attract the financing they need, they must become professional managers. That is, managers who run their business in accordance with rules and practices that lenders and investors can understand.
This means dispensing with many of the ad hoc practices by which they now run things. Take, for example, the way they manage overhead. They know they can turn a profit if they keep overhead, which of course includes wages, at 15% of revenue. As each week ends, Juan Pablo (“JP” to family and friends), the youngest of the four and the family’s de facto chief financial officer, lets the others know where they stand. If their expenses are under 15%, they get some time off over the weekend. If not, they work.
The practice targets labor costs, of course, but it is a far cry from the way professional managers keep tabs on the coffers in corporate America.
Becoming professional managers also means understanding the business intimately. To that end, the four have made it a priority in the coming months to analyze every aspect of the business, starting with the cost of every item on the menu and the profit it does--or does not--generate.
“We know that the restaurants as a whole make a profit,” Carlos says, “and we know which items on the menu sell the most. But we don’t know which items give us profit and which ones don’t. We need to know that so we can capitalize on the profitable items.”
Carlos and his siblings also must school themselves in restaurant quality and cost control, pricing, marketing, accounting, risk management and a number of other disciplines crucial to the business.
Put simply, they must have a clear idea of what happens at every step in the production of their profit. The exercise takes a lot of work, but it is absolutely crucial to progress. To duplicate their success, they must understand it.
If they succeed in all of this, they may well attract the capital they need, along with the help of those outside professionals who can guide them in making their deals--lawyers, accountants, investment bankers and the like.
It’s a tall order, but these four young people appear to be good candidates for success. And as it unfolds, their story will probably hold lessons for other business owners.
Like Nora and her brothers, countless business owners in Southern California are the children of immigrants. Even as their parents built new lives for themselves in America, so do their children now strive to take that success to a new level. Their stories are important because they show how things really work in this astonishing economy.
“Our parents taught us to respect hard work,” Sergio says, “and they can rest a little now because we learned what it means. What we want to do is to build something new out of respect for them.”
To keep track of that effort, and to probe it for lessons useful to others, we will visit again with Nora and her brothers in the coming months, checking on their progress, on the obstacles they overcome, and on their achievements.
So stay tuned.
Meanwhile, there’s one more fact about these young people that bodes well for their future. Their newest Taco Ready is a clean and modern place, just north of Interstate 10 on Francisquito Avenue in Baldwin Park. Corporate offices of the In-N-Out Burger chain are a stone’s throw away, and on any given day, you don’t have to guess where Taco Ready gets some of its customers.
