Why Businesses in Provo Sometimes Fail

This post is the first authored by a guest contributor. If you would like to submit to this blog visit the Submit page.

by Jake Haws

There is a certain vacant building on North Canyon Road which, at one point, was home to Pizza Pipeline. After several years, they closed it down and a new pizza place took over called Big Daddy’s. After a year or so, Big Daddy’s closed and American Pie took over. Another year or so went by and American Pie closed down, this time with DK Pizza taking over. That lasted for several months but now the place is closed down again and has been for a few years. With this kind of luck, you’d think it was the site of an ancient Indian burial ground or something.

A now-vacant building that once housed several different pizza restaurants.

You can see pizza history repeating itself on Center Street: Pier 41 to The Parlor to Two Jacks to who knows what will be next.  In the 6 years that I lived in Provo, I’ve also witnessed a string of other business come and go: boutiques Coal Umbrella, Mode, and Maddux Couture; cafes Pennyroyal, Vermillion Skies, and F-Stop; and restaurants Maestros, Rooster, and Nellie’s, to name a few.

In a town that was ranked by Forbes as the number one “best place for business and careers”, one has to wonder what’s going on.

The now-defunct Nellie’s Diner in downtown Provo.

Allow me to frame my views with a few lines from Arrested Development:

Tobias: You know, Lindsay, as a therapist, I have advised a number of couples to explore an open relationship where the couple remains emotionally committed, but free to explore extra-marital encounters.

Lindsay: Well, did it work for those people?

Tobias: No, it never does. I mean, these people somehow delude themselves into thinking it might, but…. but it might work for us.

In my mind, the reason some of these businesses failed is that they were unable (or unwilling) to learn from the mistakes of the past. They don’t do their homework and lack an understanding of the local market. They think to themselves “Sure, there have been three failed pizza parlors in this exact location…. But it might work for us.” They think that they can do the same business in the same way and somehow expect a different result.

I would often hear people say things like, “I want to open a [insert hip sounding business] because Provo really needs a cool hangout spot,” when in fact they were standing right next to a few of them and were completely ignorant of a handful of others in the area that had closed down in the last couple of years.

I think people are also attracted to the certain romanticism attributed to running a business. They want to “be their own boss,” unaware that this can often mean 60-80 hour work weeks and some very big headaches.

There are obviously several other reasons why businesses fail — little or no marketing, poorly managed finances, lack of strong initial funding to get off the ground, external events beyond your control, etc. — but my point is that you need to understand what you are getting into when you open a business in Provo.  You are dealing with unique challenges such as a large portion of the population coming and going  every year, fighting a mentality that “there is nothing to do in Provo,” and selling to an extremely frugal crowd (count the number of cars in the dollar theater parking lot on a Friday night sometime).

Now before you label me as a jaded cynic, my purpose isn’t to deter you from starting a business. Win or lose, there is something to be said about taking a risk doing something you are passionate about. There are many successful examples to look at of how to make a business in downtown Provo work.

I’m simply pointing out that you need to do your homework. Talk to the business owners — the failed and successful — and ask them what happened with their business, what things they have learned, and how you can run your business differently so you don’t repeat their mistakes. Look at the successful businesses and identify factors that will most likely be the key to your success. Make sure you are truly fulfilling a need instead of convincing yourself the need exists just so you can start the business.

After you’ve done that, take a deep breath and go for it! Everyone goes through struggles but be adaptive and course correct when necessary. If you can pay attention and learn from other people’s mistakes, than you can avoid becoming part of the graveyard of Provo’s failed business history.

Jake Haws is an online marketing professional and web analyst. He recently completed an MBA from the University of Utah and has worked for Raw Data, a market research startup. Jake also owned and managed Muse Music Cafe for six years until he sold the business in 2011.

Advertisements

5 Comments

Filed under Development, Downtown, economics

5 responses to “Why Businesses in Provo Sometimes Fail

  1. I’m sad for downtown and for the owners that Nellie’s closed. I really wanted it to work out, but after it opened I knew I couldn’t do my part to support it. Another diner-themed diner opened up a few months earlier on South University, and my wife and I had already fallen in love with it. We went to Nellie’s once. I enjoyed walking there and the “hip” location, but the whole time there I felt like I was betraying this other local business.
    I wanted to give Nellie’s another try one Saturday when my father-in-law was in town and wanted to take us out for lunch. I thought it’d be a good way to share some of the new things happening in downtown with him. I was in complete disbelief when we learned it was closed, but it didn’t take long for my wife to say “Well let’s go to Norma Jeans!”
    We went there and stayed for hours talking. It was exactly what we needed, right here in Provo already.

  2. Lisa

    Jake, I’d be interested to hear your thoughts on how you made Muse successful, and how Corey is able to keep Velour open. What makes music venues immune to the market flux?

  3. Thanks for the comments. Lisa, first off, success can be a relative term. In the case of music venues, i think they are usually run by people who care about the scene and less about making a fortune, which is to say as long as they aren’t losing money (at least for more than a month or two at a time), the doors will stay open, whereas with most businesses, the owners usually need to make more money than they could working for someone else to feel like their business is worth their while. Having said that, with Muse, what really helped us was the addition of multiple streams of revenue from adding the cafe and recording studio. We had a built in audience from the bands, the crowd from shows, and from velour’s crowd to market to, which was really nice. In some ways, it spread my attention thin so I wish I would have hired separate managers for each part of the business. There are lots of little things that helped too; building relationships with the artists, carefully watching your costs, creating an ambiance (remodeling), a good staff, etc. This could be another blog article…

  4. Pingback: A Bad Street Kills Yet Another Business | (pro(vo)cation)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s