Ever eat Japanese-inspired Mexican food? It’s an uncommon mix that food truck owners Debbie and Derek Kaye have combined to create Takumi Taco. But rather than hawking their spicy tuna tacos and miso tortilla soup off a truck, they’re peddling it in another mobile way.
“As far as I know [Takumi Taco] is really the first permanent cart inside an office building in New York City,” Derek Kaye said.
The young entrepreneurs got their start in business four years ago with their Eddie’s Pizza Truck. They quickly learned how difficult it was to turn a profit on New York City’s streets. Strict rules and regulations have them paying fines up to $1,000 a month.
So rather than putting another truck on the streets, they parked a semi-permanent Takumi Taco food cart on the 17th floor of a large office building. It spans one full city block on Manhattan’s west side, houses 5,000 workers and doesn’t have many lunch options nearby.
Related: Is it the end of food trucks? Not quite, says Lemonis
Marcus Lemonis of CNBC’s “The Profit” first talked with the married couple about ways to improve their food truck business. Today on “The Biz Fix,” he’s helping them address challenges with their Takumi Taco cart, which they’ve operated in the same building since August 2012.
“I like the fact that you've eliminated seasonality here which you have outside. I like the fact that you would never see a food truck or a building vending like this,” he said. “So you guys got it on the concept for sure.”
Beating the lunch rush
The lunch rush creates a traffic jam every day around 1:30pm. Customers can wait in long lines for up to 20 minutes. An unacceptable duration for what’s supposed to be a quick food spot, Lemonis said.
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He suggests they offer discounts between off-peak times like 12:00 to 12:30 or a little bit before 2:00pm to unclog the bottleneck. And they could use an online system for customers to pre-order and pick up their food. Cooks could better prepare for the rush and wait times would diminish.
Smaller menu, bigger margins, more money
Besides selling Takumi Taco during the workweek, the Kaye’s also set up outdoor tents at flea markets around Manhattan and Brooklyn on the weekends. The tents’ menu lists very few items, yet the menu at the office building’s cart has 39 options.
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Debbie Kaye wants to keep customers happy, especially the many regulars who eat at the cart. But it’s too many options; they should shrink the menu, Lemonis said.
“I think there's margin expansion if you tighten it up,” Lemonis said. “Just look at your sales register. Take out the bottom 20 percent and reprint.”
Grab and keep customers
Of the building’s 5,000 workers, a little more than 100 of them eat at Takumi Taco on a given day. That’s less than 3 percent, which is an extremely low penetration rate.
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“It's all about customer acquisition. And so you have to think about creative ways to do that. And it's all about what's my universe and what's my penetration in that universe,” Lemonis said.
The Kayes have access to an email list of office managers but aren’t using it. They should send out promotions and marketing materials online. They also should use their loyal customer base to spread word about the business by offering coupons or rewards in exchange for referrals.
After The Biz Fix
Like many entrepreneurs, the Kayes face challenges but are managing well with both Takumi Taco and the Eddie’s Pizza Truck.
“I give you guys honestly a 10 outta 10 in execution,” Lemonis said.
Just one week after meeting with Lemonis, the pair took his advice and cut 12 items off the cart’s menu, including a seaweed salad they found was actually losing them money.
“We said you know what is Marcus believes in it, we believe in it, let’s go ahead and actually do it now,” Derek Kaye said.
See Part 1: Is it the end of food trucks? Not quite, says Lemonis
- Consumer Discretionary
- Mexican food