Blueprint for Success
East Lansing has seen its fair share of businesses leave the area, such as BTB Burrito being replaced by Brother’s Grill, which was replaced by Señor Georgio’s, which was then replaced by No Thai!, 403 E. Grand River Ave.
In a world of economic uncertainty, starting a business from scratch can prove to be a challenge.
Small businesses typically struggle to make it after five years, with only half of small businesses still running, according to the U.S. Small Business Administration. Succeeding after 10 years is even harder, with a third of small businesses still going.
Trying to maintain that business might be an even harder challenge, especially in the city of East Lansing, where attracting a clientele and appealing to the student base is key for success.
From filing a liquor license application with the city to maintaining clientele, East Lansing businesses do what they can to survive.
Before anything else, East Lansing Planning, Building and Development Director Tim Dempsey said the hopeful entrepreneur needs to evaluate whether their business plan is viable and whether there is a market for the business.
“A lot of people assume, because it’s a college town, that it’s easy just to open up across the street from campus and as soon as you open up your doors, you’re just going to get all this business,” he said.
Finance junior Mike Neill said while he could see himself opening a business in the future, East Lansing might not be the best place for him.
“It’s kind of restricted ‘cause it’s all students,” he said. “Finding some big customers and clients would be tough at first.”
For retail stores, Dempsey said picking the location of a business is the first step in the process of establishing in the city.
“Most businesses, if they’re going to construct a building, they’re going to have to come through site plan review and all the approvals,” he said. “If they’re leasing space, depending on the type of business, they may or may not have to come to us for certain approvals.”
The process then goes to the city council, which looks at the business proposal and site plan to see if it’s the right fit for the city.
Seth Tompkins, owner of What Up Dawg?, 317 M.A.C. Ave., had difficulties when he brought his business idea to the city because of concerns raised by neighboring St. John Church and Student Center, 327 M.A.C. Ave., that the restaurant might bring more crime to the area.
“They are very protective of their liquor license establishments in East Lansing,” he said. “If you’re going to be dealing with the city, they’re going to tell you how to run your business.”
Mayor Pro Tem Nathan Triplett said many factors go into decisions on a business including concerns about public safety and looking at the applicant’s track record.
“In situations like that … the city has to balance the needs of the businesses with the needs of the general public,” he said.
Dan Kerbel, creator of SpartanApp, said he would consider opening a storefront business in East Lansing.
“It’s a great market,” he said. “A lot of revenue to be made in East Lansing.”
Although he believes there is money to be made in East Lansing, Kerbel said what might prevent him and possibly others from starting a business in the city is the city itself.
“The city of East Lansing is too strict and too narrow minded on what they allow people to build,” he said. “It’s very expensive to start a retail location in East Lansing.”
The first year for any business can be particularly difficult, local owners said.
For What Up Dawg?, which celebrated its two-year anniversary last week, Tompkins said opening in February was one of many problems the business first faced.
“I opened up in the worst month you could possibly open up in East Lansing,” he said, citing students’ reluctance to wander out in the cold as a hindrance to business. “A lot of mistakes that were made … we didn’t even know they were mistakes at the time.”
Tom Donaldson, director the Capitol Region of the Small Business and Technology Development Center, said the small businesses that struggle typically don’t have a strong sales and marketing plan.
“There’s a tendency for entrepreneurs to be very optimistic,” he said. “That’s good, (but) that can sometimes lead companies to be overly optimistic … that something’s going to be a successful just on its own merit.”
Donaldson said for a business to be successful, listening and changing to meet local consumer needs sometimes is needed.
“The successful businesses are the ones that listen to customers,” he said. “Business owners have to pivot a little bit to adjust ideas to what market demands.”
As time went on, Tompkins picked up on what he needed to change with his business in order for it to improve, and learned from mistakes in purchasing and overstaffing. He also cut business hours from seven days a week to Tuesday through Saturday, a move he said led to an increase in sales.
“It was really trying to minimize the damage that we were taking,” he said. “What can we do to maximize our sales and minimize our costs?”
Staying for good, or closing doors
Not all businesses work in East Lansing, and the city has seen its fair share of businesses come and go.
Spar-Thai was open from May 2011 to December 2011 because of increasing licensing fees.
The pedicab service offered customers rides on three-wheeled electric bikes.
Spar-Thai owner Dave Thorin said while he doesn’t hold a grudge against the city, he believes tripling the licensing fees for cab services crippled the business.
“It killed us,” he said. “Nothing (we) could do about it.”
When Harper’s Restaurant and Brewpub, 131 Albert Ave., first opened more than a decade ago, owner Trisha Riley said the restaurant brought something unique to the city.
“We were offering fresh-brewed beer, which wasn’t offered before,” she said.
Now with the possibility of a new brewpub in The Residences and the increasing amount of liquor establishments in the city, Riley said the hard times might be coming.
“Supply and demand is a big issue when it comes to the needs of running a business,” she said. “I think it’s going to be harder for everybody.”
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