Bringing in The ‘Dough’ with Brent TheFoodTruckCEO (Part 2)

Mindy:
Welcome to the BiggerPockets Money Podcast show number 173.5, where we interview Brent, the Food Truck CEO, and talk about starting a retail business right before a worldwide pandemic.

Brent:
And you have to be willing to fail and then know you’re going to fail again and keep failing and keep failing and keep failing and not let that break you down because there’s books on being an entrepreneur, but I don’t think that they are for everybody. They don’t speak to your specific situation. So be flexible, be willing to fail and learn to have very thick skin because you’re going to get a lot of feedback, whether you want it or not.

Mindy:
Hello, hello, hello. My name is Mindy Jensen and with me as always is my pizza loving co-host, Scott Trench.

Scott:
Right to the point this time. No cheesy intro today.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story, because we truly believe that financial freedom is attainable for everyone, no matter when or where you’re starting.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, or start your own food truck business, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:
Scott, today’s episode, we are bringing back the guest that we had on the last episode, sort of. Our last episode was recorded in January of 2020, but we brought Brent back to talk about the experiences he had starting his own business. We don’t really talk about starting your own business, we do have a sister show called the BiggerPockets Business Podcast, and they talk about businesses in general. But we wanted to bring Brent back because of his experiences over the last year and the fact that he did start a retail business right before a pandemic broke out and he still managed to make it successful. So I wanted to share his story with our listeners today.

Scott:
Yeah. And for some additional background, obviously yesterday’s episode, you should go back and listen to that if you haven’t yet because this episode will make much less sense without that. But basically we interviewed him last year right before the pandemic hit and the pandemic hit, we thought, oh, we can’t talk about this right now. There’s more pressing immediate concerns to you guys, the listeners, than this particular money story. Even though it’s a great money story, we just had to change up some things and record some new episodes real quick to address how to handle things during the pandemic. So we’re pleased to be able to release yesterday’s great episode, and then follow up here. We think that it’s actually going to work out really well.

Mindy:
Yeah. I’m super excited to bring in Brent. When we last spoke to Brent, he was Brent from Debt and Cupcakes, a newly retired former nurse who had paid off $109,000 in student loan debt. We shared his debt payoff story on episode 173 of the BiggerPockets Money Podcast. But that episode was actually recorded in January of 2020 before he launched his food truck business, before COVID, before the shutdown. Now he’s Brent, The Food Truck CEO, and he’s here today to share how he started a super successful retail business despite a worldwide pandemic and a nationwide shutdown. Brent, welcome back to the BiggerPockets Money Podcast.

Brent:
Hey, thank you for having me back. I have been looking forward to this for a long time.

Mindy:
I have too. Oh, I have followed your progress and it is exciting. Spoiler alert, he did a good thing. When we last spoke with you almost a year to the day, you had just paid off $109,000 in student loan debt, became financially independent, retired from your toxic day job, and were starting a food truck business. You really need to have more ambition, Brent.

Brent:
I try.

Mindy:
We were all set to release your show in early March when the pandemic hit, the United States shut down, and a story about paying down massive debt and purposely leaving a good paying job seemed to ring a bit hollow when all of a sudden the stock market’s crashing, tens of thousands of people are immediately out of work and not by choice and wondering how they’re going to pay their bills and buy groceries. So we put your episode on the back burner and published more immediately relevant episodes.
But your original episode was really great. I follow you online. I’ve seen your amazing progress, not to mention your pizza promo in pictures. If you don’t follow Brent, @TheFoodTruckCEO, you really should because, oh, your pizza looks so good. Not that I know what it tastes like. To start a food truck, that’s like not an inexpensive venture, right? I mean, you can’t just cook in the back of your minivan, right?

Brent:
Yeah. I mean, we did it initially. I would say probably the most cost-effective inexpensive way possible, not jumping too far ahead but we’re actually on our second food truck already. We upgraded about three quarters of the way through the year. So we started with a pretty small 15 foot trailer with a wood fire oven on the back. We had a canopy and tables and table coverings. We did it all, start to finish, for 40 some thousand, I would say, and that’s a total business start to finish. That sounds like a lot of money, but to launch a business is pretty cheap.
As the Food Truck CEO, I’d love to walk through the unit economics of the pizza business real quick on the show here. You invest $40,000 into the pizza truck and just startup costs, finance your CapEx investment or your investment. And then how much are you selling a pizza for and what does it cost per pizza on average? I won’t get into too much of the details, that’s a quick way to make people upset, but I’ll say we started selling pizzas at a different price than we currently sell them at because I was trying to figure out where my customer base was and what I should be charging. So we started selling it at $10 to $12 for a 12 inch round pizza. That was where we started at. We’re currently at $13 to $14 for a 12 inch pizza.
A lot of the deal with increasing the prices was just trying to slow down some of the orders that we were getting. When you’re that inexpensive, you can get mobbed really fast. And then couple that with being a new business and you end up creating some problems for yourself. So we definitely had to increase our prices, but it didn’t slow down our business too much. I would say we operated about a 65 to 70% margin and that’s where we finished for pretty much the year.

Scott:
And is that before or after labor? Because you said you have some employees and those kinds of things.

Brent:
Yeah. That’s after.

Scott:
After labor. Okay. I’m just doing some round numbers here, but it sounds like you’re bringing home about $6, $7 per pizza. How many pieces do you have to sell in order to recoup your investment?

Brent:
We were able to recoup our startup costs I would say by the end of July of the first year.

Scott:
A six month recovery period, wow. You’re selling a tremendous number of these pizzas, it sounds like.

Brent:
Yeah. We do fairly well, yeah. And we don’t have a ton of employees.

Mindy:
No. No, no, no, no. You don’t do fairly well, you do amazing. How many times have you gone to a location and not sold every single pizza?

Brent:
I’d say we sell out more than we don’t, yeah. We pretty much sell out almost, I wouldn’t say every time, but a lot of the times we do sell out. There was times we sold out before we even opened, and that causes a lot of problems.

Scott:
Now, is that intentional to sell out or is that because that’s the efficient use of all of the ingredients and those kinds of things? Or is it almost like part of the business model because you’re not reusing any ingredients or whatever from run to run, you’re always starting fresh with the stuff from that day.

Brent:
Yeah. I try to use the freshest ingredients we can possibly find. I have a distributor where I have to get my cheese and things like that through, which has a slightly longer shelf life. However, selling out is a good thing because I don’t want waste. For one, the dough is very hard to carry over event to event. I make all my own dough. It’s fresh at every event. If I have back-to-back-to-back events, I can roll dough over from say Thursday to Friday depending on the temperature outside, how long the dough has been out of refrigeration, and if it’s too far through the fermentation process. If it’s too far, I can throw it away. If it’s not, I can throw it back in the fridge. It actually just turns into a better dough the next day.
However, selling out is extremely beneficial for that reason and also selling out, it’s great marketing because people want to be there before you sell out next time. So you want to bring enough that you think you’re going to sell out, but you also want to bring enough that you serve the vast majority of the customers there, so you’re not turning people away. It’s a guessing game. Trying to hit it right every time is very difficult.

Scott:
Are there huge lines in front of your truck at each of these events?

Brent:
Sometimes. We had a few. There was one event, and I remember it and actually like waking up at midnight, it gave me nightmares. We were getting ready to open and I came outside to flip the… This was when we were in the new food trucks, so we were inside and we had our window closed. We couldn’t see outside of the food truck. I walked out when my staff got there to open the window to say we are open and there was just a line of people around the food truck and it stretched around the corner, and I was anticipating a slow day. I just remember looking at that and just cursing in my brain, like we’re going to be in the weeds all day. I had one person with me besides my wife because it was a day; some days we plan to be slow and I’m trying to train people up on things. I’m like, Jesus, take the wheel. Let’s see what happens here.

Scott:
You started this business from a position of retirement or whatever, and kind of because it’s something you wanted to do here. How much of the income were you kind of hoping for to supplement or use in your lifestyle? Was it any or? Can you remind us of that?

Brent:
Retire is a weird word. I wouldn’t consider myself retired at all. Definitely still want to work, definitely still like to provide income. The pizza business, I want that to supplement all of our income. I want that to be everything. My wife is still a registered nurse, so she works her nursing gig. She works from home running an education department for a really large healthcare organization. So we’re lucky enough that most of the food truck money is either reinvested back into the business or we’re continuing to save. And now I’ve started actually to invest more. I started to back off last year just because of the pandemic. There was a lot of uncertainty and I wanted to be very cash heavy. So a lot of the money we were making, I was keeping in cash outside of our usual smaller investments that we are continuing to make. But we started diving back in last fall.

Scott:
What does re-investing the dough you’re generating look like for you?

Brent:
In terms of what are we purchasing?

Scott:
Yeah. What are you purchasing? Yeah. Sorry that was dough, to try and [crosstalk 00:10:44].

Brent:
When you say dough, I’m not sure if you’re throwing puns at me or you’re asking about dough.

Mindy:
He’s throwing puns at you.

Brent:
There’s a lot of pizza puns. We upgraded our trailer last year. I wanted to do an enclosed trailer from the beginning, but I’m not a big risk taker. So I wanted to start the business and see where we were. And maybe that sounds silly because I quit a good nursing job to start a food truck. Maybe I am more of a risk taker than I thought. But I didn’t want to spend $50,000 on a trailer not sure how it was going to go. Once we started to see that this was working during a pandemic, we were like, okay, we have something here. Let’s go forward and let’s make this what we wanted to make it. So we worked with our original oven donor and a trailer company to build another trailer, a 20 foot enclosed trailer with a big wood fire oven on the back that feeds to the inside. That’s a $52,000 investment is about what it came out to after I got some discounts because it was my second trailer. But yeah, that’s a lot of reinvesting in the company.

Scott:
But you said you brought home around $40,000 or so give or take in margin after operating expenses between January and July earlier. Is that about right kind of in that ballpark?

Brent:
Yeah. July or early August, something like that. January last year was extremely slow. I was happy with what we did because we were just starting. But it was… Looking back now, I mean, my wife and I talk about how almost comical it was when we started. We were like, “Oh wow, we sold 30 pizzas today. This is awesome.” And we were pumped at that. Now in one event we sell as much as we sold in January of last year. So it definitely has ramped up.

Scott:
With that, are you factoring in your time in that, or is that the kind of the fruits of your labor, that income?

Brent:
I’ve started to factor my time in. Initially I didn’t. It’s a lot of time. Working at my old job would feel like I wasn’t working anymore, to be honest. Running my own business, I definitely underestimated how much time it would take to run a pizza food truck from making the dough, balling the dough. Mindy, she follows me on Twitter, constantly changing and testing and working to try to make my dough better and better and better. It was still a constant process. And then trying to network, meet different owners to go cook at their locations, cutting firewood, splitting firewood, stacking firewood. I mean, I’ve started taking my time in consideration. I’ve actually started to pay for things that I was doing on my own because I needed to work on bigger parts of the business, not necessarily like deep inside of the business.

Mindy:
Well, I think that’s a really good point. In the beginning, you have to be able to do it all. You can’t really afford to pay people to do this. I do have a firewood splitter at least. Are you not like swinging an ax?

Brent:
Nope, I’ll do it by hand.

Mindy:
Oh, okay. That’s a bit of work. That’s a great workout, getting your workout in while you’re working on your company. But yeah, after a while, you want to go and buy a lot of firewood. I know you live on a farm so you have space to store it. But if you’re not willing to do everything in the beginning, you need to have relationships with people who can do it in a cost-effective manner because when you’re starting a business, you really do need to be conscious of costs. And I think even from a position of financial independence, you still can’t spend every bit of your retirement money on starting a company and then it fails. I mean, $40,000 for a trailer sounds like a lot of money to me. And then you’re like, “Well, I got one for $52,000.” I’m like, ooh, that’s even more money. What did you do with the first trailer?

Brent:
I’m in the process of selling it. I have it stored right now in our pole barn. I was fortunate enough my father-in-law came and we did, I shouldn’t say we, he did a lot of detail work on it. One year of pulling that around, it beats it up a little bit, chipping the paint and things like that. So I have one person that’s interested in buying it out in Delaware, I believe. But I’m not in any big rush for that. Opportunity may come when I’m not expecting it. I mean, 2020 was a perfect example of that. So whether or not we keep it and run two, which sounds like I don’t have any hair left, but if I did, it would all fall out trying to run two. I don’t know what I’m going to do with it just yet. I’ll hopefully sell it.

Scott:
What’s kind of the next move for your pizza business here? Are you just kind of scaling up or are you trying to… What comes next now that it sounds like you’ve got wonderful day-to-day economics of the business, even though it’s a lot of hours getting poured in?

Brent:
Yeah. This year I have a goal to operate more. We were cooking three, four days a week on average last year. We had some weeks we did five events in July. July last year was a great month. I mean, we ran like crazy though and when it was over, you’re very tired. But I’m looking to operate four or five days a week. The biggest hurdle last year was staffing. To be totally honest, when I look back, trying to find people that are going to work for us be reliable and want to be there is important. If you’re working in that close proximity with people, you definitely need them to be on the same page. I am very lucky now that I have a very good core group of staff members who want to do this. They’re all high school, college kids, but they’re actually interested in doing it, not necessarily just making some money.
I see a lot of good things in being able to operate more throughout this year. From an income standpoint, I should probably be focused more on how much I want to make, but you make the money by getting out there and cooking the food. They go together. If I’m not willing to put the work and the time and to go to events, then I’m not going to make the amount of money that I want to make. So in a perfect world, I’d like to double what I did last year. It’s a big goal, but I think we can do it.

Mindy:
I had typed in a question, do you have any time off or are you at every single event? It sounds like you’ve got some really good employees. I know there was one kid that you really, really were impressed with. He just seemed to want to learn everything about the business. Have you ever considered giving him the reigns and letting him run an event and see how that goes or is that… I mean, I would think that as a business owner, you’re kind of a control freak because you kind of have to be. I mean, this is your business. If you let somebody else run it and they don’t do it right, that’s your money that they’re wasting away, not really their money. So, is it fair to categorize you as a bit of a control freak?

Brent:
Oh yeah, absolutely. I’m a type A person, yeah, 100%. You’re right, you have to be. I don’t know about running another food truck. I’ve never had a food truck that I make hamburgers or lobster rolls or anything like that. What we make requires a lot of skill to make it. We’re hand stretching all of the dough and then it goes into an oven that’s 800 plus degrees. And if you’re not cooking the pizza properly, it can either be undercooked and breaks apart, or it turns into charcoal. The difference between those two things is 30 seconds or not turning it at the exact right time and you burn one side of the pizza. So I like to be on the oven.
I do have a few staff members now who have showed a lot of interest in business. I have one kid who I have taught how to cook and he does cook at some of the events. He just cooked at one this past Saturday. I’d like Kim to cook more and I’d like to be able to step back to do a couple other things rather than just focusing on the oven, because if you’re focusing on the oven at an event, that’s all you’re really focusing on. You can’t step away and talk to people because if you do, you’re going to burn everything that’s inside. So yeah, I’m always going to be there because I believe you can ruin the reputation of your food with one really bad event and I don’t want that to happen.

Scott:
Adjusting for seasonality and those types of things, what do you think kind of like the potential of this business is under your leadership with this setup you have here?

Brent:
As far as growth?

Scott:
Yeah. As far as number of pizzas sold or income or something like that.

Brent:
Yeah. I mean, we can do… Some of our best events have been 120, 130 pizzas in three, four hours, and that’s clipping pretty fast. Everybody’s hopping at that point. The seasonality of it, because I live in central Ohio, definitely plays a part in it. January now, I’m watching the weather because I don’t necessarily want to pull a 12,000, 13,000 pound trailer with snow on the ground. So we’re working through a few things. We’ve been doing a lot more pre-orders and that’s actually the pandemic created that. So we do a lot more pre-orders. We make two different kinds of pizza. I make a pan pizza, which I’m not a huge fan of making because it’s messy and it’s kind of boring to make, but people really like it and it has a much better margin. So I tend to make that in the slower months.
And then I actually don’t even need any staff when I make that. My wife and I can handle those events just because of the way we have it timed out with the pre-orders. But I wish we lived in a warmer climate and I could operate full capacity like it’s July every month. However, January of this month is looking like it’s going to be better than June of last month. So that to me is pretty remarkable. Of last year, I’m sorry.

Mindy:
I want to talk about those pre-orders for a moment. Is that you taking orders in advance and you don’t sell anything day of, you only take the pre-orders at that particular event?

Brent:
Sometimes. We do it two different ways. Again, going back to those Detroit style pizzas that we make in the wood fire oven, it’s not exactly the most efficient way to make them. I can make four every 10 to like 15 minutes. If we do those at live events like we used to, we had a line. At one point after four orders, five orders, you were at an hour wait, and people do not like that. So I just stopped making, I cut it off in September despite everybody wanting me to make them.
So when I do those events, I do 100% pre-orders. Three pizzas every 15 minutes, people know to order. We created our own little ordering system with this app that’s actually used to schedule employees for work. We turned it into a pizza ordering system because it was free and it took a minute to get everybody used to it. But now everybody’s used to how they order. I send the invoices through square. When we do those events, we get to the event, we don’t take any live orders. Everybody’s already paid up and they literally just drive through every 15 minutes and come to the window and take their pizza and go home.

Scott:
Can you bring the other trailer to these events just to double your capacity with those?

Brent:
Yeah. That’s actually something I get a lot. I get a lot of questions about that. Yes, I probably could do that. However, I would need another truck to pull it. We only have the one truck right now. I had to trade in two trucks to upgrade our truck to pull the new trailer. So we have one vehicle, again, and it’s for the business to pull a food truck. But I don’t know that I’d want to run two of those ovens. Then you get into, is it worth it? Paying the staff to run it, doubling your staff for a little bit more pizza, consuming all the extra firewood. Yeah, I don’t know that I would want to do that.

Mindy:
Let’s talk about the setup here. You are doing prep in advance. You’re chopping all the ingredients, or do they come already chopped, and like making all of the things as far as you can go before you get there. Are you actually setting up the pizzas before you get there or is that what you’re doing while you’re at the event?

Brent:
As far as the prep work, my dough that I make, if I’m making my traditional, the round pizzas, the dough starts three days before is when I mix the dough. I like to do a 72 hour fermentation between a mixture of a little bit of room temperature and then a lot of cold fermentation up util the event. Then when it comes to the ingredients, if I’m using a lot of fresh veggies, I’m chopping those either at the event before we open or right before in the food truck, and I get everything chopped, bagged and into the prep table and ready to go.
As far as some of the proteins, depending on what it is, we did an event on Saturday and I was cooking bacon there in the wood fire oven before we started putting it on big sheet trays and putting it in the oven. While I was warming the oven, I was cooking the bacon as well. And then that’ll come out, we’ll cool that, drain it, bag it, put it back on the top of the prep table. So it really depends on what we’re making and what kind of ingredients that we’re using.

Mindy:
Oh, okay. What you’re making. You have how many different types of pizzas that you offer and do you offer those at every event or is it like hit or miss?

Brent:
It’s probably 20 plus different types of pizzas that we’ve put together over the year. And a lot of them have come from customers. I have a rule. If a customer wants a pizza, then they have to tell me what’s on it and they have to name it. If they don’t name it, I won’t make it. You got to name the pizza if you give me an idea. We get some ideas from customers. I’ll name it either after them if they name it or whatever they want it to be called. We usually do four to six pizzas per event, just because we don’t have a ton of space in the food truck to bring all these different ingredients and it would just be a nightmare of waste, I would say.

Mindy:
Okay. Now I have a new life goal to get a farm fired pizza named after me, which means I have to go to Ohio.

Scott:
A lot of people, I think, listening to this are going to be thinking, “Hmm, you had this good job in a stable financial position. And then you go into this new business line, the pizza business. And while you can make good income, you probably did make good income in 2020 and you have potential to earn more, it seems like a lot of grueling work and lessons learned and tough stuff. But it also sounds like you just completely love it and are thrilled with the decision.” Can you walk us through that mental, why this business again, just as a reminder, and how are you feeling about your decision a year later?

Brent:
The reason we started it, it was kind of by accident thing. Who doesn’t love pizza? Everybody loves pizza for the most part, whether it’s a pizza that I think is disgusting or somebody else thinks is a beautiful pizza to somebody, everybody loves it. I always liked making it. I was never that great at making it a few years ago, but I always tried. And then just out of kind of boredom and wanting to do something different, I built a little wood fire oven in my driveway. It no longer exists because I’m not a Mason and it fell apart after about a year. But I started cooking in this little wood fire oven. I’m like, “Oh, I like this.”
I found a couple mentors just through Instagram talking to people and started learning actually how to make dough. We couldn’t find any pizza where we live that we liked. We came from an area in Western Pennsylvania before we moved here that had really good pizza. So let’s just make our own. We started doing that and it kind of just turned into this thing. Leaving the stable job; a stable job is well and good. We did very well. We paid off all of our debt except for our home. We still have our mortgage.
But whenever you hate what you do and literally 40 hours a week turns into every hour of the week because you’re thinking about it, you’re not happy with decisions that are being made, you don’t agree with them, and you’re going insane because you’re so unhappy; then at that point, money is irrelevant. At some point you have to stop and think about, do I want to be 70 years old and look back and be unhappy with what I did with my life? And so we just took a chance. I’m extremely happy with the decision. It is a ton of work and I didn’t recognize how much work it was before we started it.
You think that you make pizza, you go to an event and you work for four hours a week. The number of people that ask me, what do you do all week when you’re not doing this? I don’t even want to explain it to them because it would take too long to do it. But it’s growing. I would say it’s 80+ hours easy when we’re busy getting up at 5:00 AM, making dough and trying to get everything done before the event but I would not… I wish I would have done it sooner. I wish I would have been more intelligent with my finances in my 20s so I could have started this in my 20s because I feel so fulfilled with what I’m doing. Handing somebody a pizza and them telling you that they love what you are making and it makes them happy, I never got that from my old job. Outside of being an ICU nurse, that was probably one of the most fulfilling jobs that I ever had. Outside of doing that, this is… I mean, the motivation that comes from that is unbelievable.

Scott:
That’s I think the big takeaway here for me is because like, Brent, I’m listening to this and I’m like, this sounds like a terrible thing, for me as a person. I don’t want to be chopping firewood, waking up at 5:00 AM making dough, all that kind of stuff with the pizza. But you love it. Everybody I think has, even if you love your job right now, like you loved the ICU gig there, there will come a time I think in most people’s career where they hate it and it will be upsetting or it will be difficult or it will be frustrating, or whatever.
And like if you don’t build the financial position capable of giving yourself options to do these other things, you’re going to be miserable with that because you can’t take the chance that you just took with this, right? You may not have been retired or all the way there with these things, but you had at least a stable enough position to take your shot on this business and you’re happier now working 80 hours a week on something you love than you were 40 hours a week in something you hated. Is that a reasonable summary articulation of the situation?

Brent:
Yeah, absolutely. You nailed it. It is. It’s a ton of work, but when you love what you do, it’s so cliche everybody says it. If you love what you do, you don’t work an hour of your life, or however it goes. That’s kind of true. There are some days where you’re tired, you don’t necessarily want to be balling dough for two hours or something like that because it’s a very tedious job. But when you look back at the macro of the whole thing and you love the creation, you love being in control of your life, it’s hard to go back. I couldn’t imagine going back to working for somebody else after doing this for myself for a year. I think I would probably be a horrendous employee at this point.

Scott:
Just in case someone didn’t listen yesterday, could you just recap your financial position for us one more time, the financial position you had before you started the pizza business here?

Brent:
Sure. Yeah, it took us I think it was about five years or so to pay off $109,000 of debt. It was a mixture of car loans, student loans, credit card debt, random other tractor debt, because I mean, who doesn’t need a giant tractor at the time when you don’t own any property? Just stupid emotional spending that we were doing when we weren’t really thinking about our finances. So it took us about five years to pay that off. Once we paid that off, we developed our emergency fund. We followed all of those boring steps that people kind of don’t want to do, but if you follow them, it eventually takes you somewhere really good. We created the emergency fund. Once we had our emergency fund, we really started investing, whether it was with our 401(k) or post tax brokerage.
Then we got kind of this idea of the business and we started allocating some money toward saving up to make the purchase for the business; because when we launched the first food truck, we bought the food truck, all of the equipment and the initial truck, we did all of that in cash. We started with no debt in the business whatsoever. Maybe that wasn’t the best idea, I truly don’t know. I mean, it probably would have worked out either way, but it gave me a lot of freedom and confidence that even if it’s slow for a month, it doesn’t matter. We don’t have anything hanging over our heads.

Scott:
Do you think if you’d use debt to finance the business, that you’d be as happy right now as you are?

Brent:
Probably not. I mean, owing somebody something is never, in my opinion, something that I want to do. I don’t think all debt is bad. I’m perfectly fine having a mortgage with my home. We just refinanced, we have a loan in the 2%. Paying that off, in my opinion, just isn’t what I want to do right now. But if I would’ve had debt on the business, I think it would have added a level of stress that I didn’t need because I thought I knew what I was doing and I didn’t know what I was doing for my food truck. So then it would have added a whole nother dynamic and it probably would have drove me nuts.

Scott:
Yeah. I think in the case of a business like this that using debt to finance that first $40,000 or so of acquisition is tough. I think if you’re buying an existing business, for example, that’s been in operation for five, 10 years, has pretty stable cash flows and those kinds of things, that can be used to get started that much faster. But I like your decision not to use debt in this particular endeavor because it was so experimental, so new to you. I just imagine that there’s a misery that comes with owing the bank for maybe you purchase a little more than you should. If you’re using debt, you’re not as careful in some of those things, and it takes you until January of this year to finally pay it back or have the option to pay it back. I don’t know.

Brent:
Yeah, no, I agree 100%.

Mindy:
Did you use debt to finance the new trailer?

Brent:
Half. Yeah, I paid half of it in cash and we did an SBA loan for the other half. I had no idea much about what the ASB loan was going to turn into, that the rate was good, but at the time, because of the pandemic, the government is paying that. So they’re currently paying the principal and interest on that loan I think for, they said six months, it may go longer. So even though we purchased this, the first payment would have been I think September, October, we haven’t paid anything on that yet. They’re continuing to pay that and I think they will until March or April. They said it may extend past that as well.

Scott:
Wow. What’s the term on that debt? Is it a couple of years?

Brent:
A five. Yeah, five years.

Scott:
That’s great. So they’re going to pay a good chunk of that for you.

Brent:
Yeah. They’ll pay a good chunk of it, and we have the cash to pay it off. We could just wipe it out if we wanted to, it’s just, I don’t know, again, trying to think long-term is that money better spent somewhere else. I have other things that I need. I need another mixer for the business. The mixer we have, I outgrew it very fast. And so I’m having to spend more time mixing dough where if I had another mixer or a bigger mixer, that would free up hours some days of time. So it’s like, well, do I want to spend a couple thousand dollars to invest that, or do I want to put a couple thousand dollars into something that I may have to spend a couple hundred dollars on per month until I’m ready to pay it off. Trying to make the best decision is something I struggle with.

Mindy:
I was just going to say, how do you decide what you want to do? Is there a cost benefit analysis that you can do? Because it seems to me that dough is so important, it’s the foundation of pizza. But it’s really important to get your dough right. So having one of those big, big mixers, is that what you’re talking about?

Brent:
I have a 20 quart right now, which is pretty large. People would probably look at that and think that thing is gigantic. I can mix 35, 40 pizzas in it, depending on the type of pizza, the hydration and the size. But if I’m bringing 120, 150 pizzas to an event, then I’m doing three, four, sometimes five batches of dough, and each batch takes about 45 minutes with my process of mixing with the rests and certain things that I do. That’s a lot of time.

Mindy:
Yeah. What is the next size that you could get? This is a 20 quart and you do what, three batches. What is the next size up?

Brent:
I mean, it can go, there’s a rabbit hole that’s very deep as far as mixers goes. I use a planetary mixer, which is like a KitchenAid mixer except much larger. I have a Hobart. I could go to a 30, 40, 60 quart mixer, which are very big. They do require a different type of electricity. They would have to go to 220, which is different than the 110 that I have. So that’s a cost to take in as well. And then there’s also things called spiral mixers, which you can get a larger spiral mixer and it actually mixes the dough a little bit better. So, I probably would go up to like-

Scott:
Do you have an electric dryer?

Mindy:
Yeah, that was my thought. Does it come with that big plug you can just stick it in the dryer and see if it works?

Brent:
Yeah, except I don’t do that. Yeah. I don’t do that stuff here though. I mean, you can, but then you have to look at what you can do with where you’re making it. Having two mixers that go into 110 would make the most sense and I want to move to a spiral mixer. They’re just a better mixer. We’re starting to talk about, next year or the year after, potentially moving to brick and mortar if this continues to grow, and a spiral mixer is what I want for that. So it would be something that could roll into the next possible step in a couple of years.

Mindy:
Is there any market for used equipment? Can you go and find a used mixer to try it out and see if that’s what you’re looking for? Or do you buy used already? I might just don’t know anything about restaurant business.

Brent:
I have used already. There’s a gentleman up in Cleveland who kind of refurbishes Hobart mixers. My Hobart mixer was probably on a Navy ship in Vietnam for all I know. The thing is old. But they last forever. He kind of goes through them and updates them and then sells them as refurbished. They go for $3, $4,000, and I bought my first one for $1,100. I don’t see myself buying a new mixer per se as I would look for something. I already talk to him about getting something refurbished.

Mindy:
Okay. Let’s look back at all the things that you’ve learned this past year. Knowing what you know now, what advice do you have for someone who’s thinking about starting their own business, because it sounds like you’ve learned a lot in the trial by fire school of learning.

Brent:
I would say I jumped into this maybe overzealous with what I thought I was getting into. I wish looking back that I would have spent six months or even a year of hands-on work in a wood-fired pizza shop. I wish I would have done that. I was doing it at my house, but there’s a certain amount of being self-taught that just prolongs the learning. I feel like I know it better because I’m self-taught, but I could have really shortened the learning curve up if I would have gone somewhere and been taught actually how to do this stuff.
The first thing that jumps into my mind though as far as the actual business is when you do your first event, don’t hype it up to the point that you are going to sell out when you don’t know what the hell you’re doing, because it’s a mess. Our first event was, boy, it was my wife and I and one of my buddies from high school. I thought we were going to… Some people would show up and we sold out in really quick time and it was just chaos start to finish. I feel like it took me a little bit of time to recover from that because maybe people expected something better than what I was making at that time.

Mindy:
Knowing what you know now, let’s talk about financing the business because you did pay cash for your trailer. You invested from a position of as financially strong as possible. Your wife had a job that would be able to pay all of your bills, so you could go out and explore this idea. What sort of financial decisions would you have made differently if you knew then what you know now?

Brent:
Knowing now, I would have stayed with cash. I think launching a business, you want to make yourself as lean as possible to start because you don’t know what’s going to happen, and 2020 is the perfect example of that. We had no idea that the world was going to shut down and you’re going to have to take your business from your whole plan and pivot it to a totally different direction. The fact that we were extremely lean financially in the business, we didn’t have any debt, made those decisions very easy. There wasn’t the stress of, oh my gosh, we can’t work, we can’t pay our bills.
If you’re going to launch your own business, don’t just jump into something without looking down the road at the worst case scenario. If it fails, if you don’t work for a month, what are you going to do? I would say be very cash heavy, do it as much initially as you can in cash and stay away from debt. It frees you up and it gives you a lot more creative freedom too when you’re not thinking about money.

Mindy:
It sounds like you’re being financially independent, or working towards financial independence in your business. Like the personal finance journey to financial independence is you aren’t taking on more debt and you aren’t spending money frivolously; just like in your business model, you aren’t taking on more debt, you aren’t spending money frivolously. You’re being frugal as a business person because you don’t want to put yourself out there too far. There’s a lot of parallels between running your own business and being financially independent, like running your own financial…

Scott:
I don’t think that changes even as you grow larger and larger. I mean, it’s about spending less than you earn, increasing that gap, having a sustainable long-term view and never putting yourself in a position where the short term financing overruns the long-term interests of your personal financial position, your small business, or your very large business, or I guess medium-sized businesses here at BiggerPockets, I guess. But yeah, I mean, we think about BiggerPockets almost the same way when we think about those types of things. It’s just cash flow, making sure that we always have lots of good options so we never have to do things that are against the long-term interests of the business, which is what you’re doing. We could experiment and figure things out.

Brent:
Yeah. I agree 100%. And being that I’m not a trained businessman, I’m not. I have no formal business training. I’m a registered nurse. Maybe that helped me because I wasn’t looking at this from that total business standpoint. I was looking at it, I was managing my business, just as you said, the same way I manage our finances for our home. I was just trying to do things that made sense, that didn’t make me feel uncomfortable. And if we had an issue where we didn’t have events, if I broke both my legs and we weren’t able to work, that I had enough cash reserve for the business that it wasn’t going to hurt us. So, yeah, I just ran it like my home finances. I have a budget just from the same Excel spreadsheet for the business, the next tab over is for our house, and I just run through them both.

Mindy:
I love that you changed your pricing once you started becoming too popular. I think that a lot of people who are starting a business are like, oh, I’m going to sell it for $X, and they never consider raising their prices, like they start too high. I love that you tested the concept at, what was it, $10 and $12, and now you’re at $13 and $14. Do you have any plans to raise your prices again?

Brent:
There are two different kinds of pizzas. The rounds are $13, $14. If I’m making one that has more proteins on it, it will be more expensive. But with the squares, I just increase the price of my squares again. They’re an 8 by 10 Detroit style pizza, $18 to $20 is what I charge for one of those because there’s a lot more. I finally started taking consideration of my time into making them. It was a conversation my wife and I had. And so we had to add some cost to it for that reason because it takes so long to make them. I mean, it adds another 10 hours to my week to do one Detroit event. So if I do two of those a week, I’m adding almost 20 hours of my life into that.

Scott:
I just want to chime in there. I completely agree with that, and I feel like you are clearly undercharging with that. If you’re working 80 hours a week during busy weeks, that’s a 4,000 hour work year, right? And so at $80,000 in income divided by 4,000, what is that? 20 bucks an hour. I think your time is more valuable than that, and that’s not being reflected in your pricing. You mentioned something earlier that you’d be mad, for example, if you know how much margin I have on a pizza or whatever.
No, that’s not the deal. That margin is evaporating because a highly, highly, highly skilled laborer, an artist potentially, is waking up at five o’clock in the morning to stir his dough in these little vat over the course of these hours to prepare for this event seven hours later that he’s going to sell 130 pizzas. That is a, I don’t know, I just think that would be a place to look, I would suggest, because of the way that you’re so devoted to your craft and those types of things. That’s a different price point, I think, than Domino’s. No offense, Domino’s.

Brent:
Yeah. I mean, the cost of ingredients we use is probably the most expensive ingredients you can find, because when it comes to food are 99% of the time the best ingredients as well. It’s not like other things. Part of my issue with raising my prices last year was because it was 2020 in a pandemic. It didn’t quite read the room to launch a food business. And then when people aren’t working and they’re coming to support me, and then I’m going to charge them more, at that time it didn’t make a ton of sense.
We did increase our prices twice last year, but it was something that came, it took me a long time to do it and a lot of thought to do it. And every time I do it, I always think I’m going to get negative feedback from customers about how expensive our food is. We haven’t got that yet and I started to think that some people just aren’t going to be my customers. Not everybody’s going to like what I make, not everybody’s going to like the style of pizza, and not everybody’s going to like my prices. So I can’t try to please everybody because then I’m going to please nobody and we’ll run ourselves right out of business.
Once I made peace with that, it was a lot easier to increase it. And yeah, we haven’t seen any negative kickback as of yet. I’m still not sure where our final price point is going to go. I try to look at what other people are doing and stay somewhat in line with them, but I don’t know what they’re doing as far as their time and I don’t know what their ingredients are either. A $15 pizza from a local pizza shop might be something I would charge $20 for if we are using the same ingredients, or vice versa, they would charge $20 for. So it’s hard to compare but 2020 in the pandemic made it hard on me to charge people more for food.

Scott:
Nope. Fair enough. I can’t argue with that. I’m just I’m glad you’re continuing to think about pricing as a thing there, because what I hear is that your customers are getting exceptional value for that pizza that’s being handcrafted start to finish by you. That’s all.

Brent:
Yeah, no, I appreciate that. I really do.

Mindy:
Handcrafted artisan pizza is going to cost more than pizza at Costco, and that’s okay. There are people, I don’t think my parents would ever be a customer of yours because they want to go to Costco and get the $9 pizza that’s this big or round. They don’t find value in paying for like really, really crafty artisan food, and that’s okay. They find value in other things. I find value in really good craft beer. I don’t drink the big PBR and Miller Lite. My dad doesn’t find value in that either. He drinks Bud Light and loves it.

Brent:
Mine doesn’t even know what the thing that keeps the pizzas warm is called.

Scott:
That’s a good point.

Mindy:
A pizza warmer.

Scott:
It’s a good point.

Mindy:
You aren’t going to be able to make everybody happy, but when you are running around ragged, clearly there is so much demand at $13. How much demand is there at $14? Oh, the exact same. How much is there at $15? How much is there at $16? Oh, at $16 it started to slow down. How much demand is there at $50? None. So you know that you need to be between $13 and $50, and then as you adjust, you’ll find a really good price point. It seems like you already have, but you’ll find a good price point where people find value and you’re selling out, but you’re not so overwhelmed that-

Scott:
That’s called the price elasticity curve, if anybody’s interested in looking at that, and it’s a concept that’s explored in economics. I did study economics in college in that. And Brent, that might be helpful to you as well if you think about some of that stuff is learning some of those concepts and how to do it. I mean, Mindy just put it out there. It’s intuitive, but it could be valuable if you’re looking to kind of find that sweet spot.

Mindy:
It’s not intuitive. I don’t think it’s intuitive at all. I think it’s, you’re like, “Oh wow, everybody loves my pizza. I’m doing great.” Well, oh, nobody would buy it if it was a dollar more. That’s not true. Nobody would buy it if it’s $100 more unless, I mean, I don’t know how good it is because you won’t drive your truck out here. I’ve heard good things. But it can be like you said, “Oh, this is the middle of a pandemic. How can I raise my prices?” Well, try it, see what happens. If you get such negative feedback, then that wasn’t the right move for your customers. But it sounds like you got almost no negative feedback.

Brent:
Yeah. We didn’t. Being that we’re a food truck, it definitely offers us an opportunity to go to our customers. We target specific locations because we know the people that are there are most likely, in my opinion, going to appreciate what we’re offering. So we go to vineyards, we go to craft breweries. We started going to, with the pandemic, certain housing developments would have us out and we’d go set up in their housing development and people would just come out and order food. But we don’t set up in some spots where we don’t know that we would do very well there. For example, we did a little league baseball tournament last year somebody requested us to go and cook at.
That was the only event that I lost money on. I went and I lost money by making food for other people, because nobody at a little league baseball tournament wants to buy a $14 pizza. Most of them don’t even want to be there by the looks on their faces. Everybody looked unhappy and people are bringing their own food in. Yeah, it was 90 degrees. The place that wanted us to come and cook also wanted us to kick a percentage back to them to donate, which makes sense and we did that. But people that went there were bringing their own food. They were bringing their own drinks, and they would just walk right past us. I was expecting a very busy day, so I made like 150 pizzas. I brought three staff members, including my wife and I, and I went home with less money than I came there with. So you have to know where your audience is at and go to them.

Mindy:
That’s a good tip. Brent, this has been fantastic. I’m so excited to talk about your story again and to share your journey of starting your own business in maybe less than ideal circumstances. Is there anything else you would like to share? Do you have any final thoughts for our listeners?

Brent:
Yeah. If you want to start your own business, I think you have to go into it knowing that you have to be very, very flexible. You have to be willing to put in a lot of time and sometimes get a negative reaction. You’re going to fail and you’re going to fail a lot. I failed a lot. You have to be willing to fail and then know you’re going to fail again and keep failing and keep failing and keep failing and not let that break you down because there’s books on being an entrepreneur, but I don’t think that they are for everybody. They don’t speak to your specific situation. So be flexible, be willing to fail and learn to have very thick skin because you’re going to get a lot of feedback, whether you want it or not.

Mindy:
Brent, since you won’t drive your pizza truck to Colorado, where can people find your delicious pizza?

Brent:
You can follow me on Twitter. TheFoodTruckCEO is my handle on Twitter. If you want to follow the business on Instagram or Facebook, it’s Farm Fired Pizzas, and you can give us a follow there. Always posting pictures of pizza every day. I do the same thing on Twitter. Yeah, you can find me there.

Mindy:
I didn’t know you were on Instagram. I’m going to go look at all of his pictures. If you like a good picture of pizza, you really need to go check out his pictures. They’re beautiful.

Brent:
They do look good.

Mindy:
Do you have a schedule of where people can go to get your pizza? Like a schedule of events?

Brent:
Yeah. We’ve put that together. We’re starting to do it now. I think pretty much I’ve booked up Thursday through Saturday for the whole year already for 2021. So I’ll add that to our website, farmfiredpizzas.com. That’s going to be undergoing some maintenance here soon. I’m going to have a professional make it. But the public events will be there. We also do private events as well. So we do graduation parties, weddings, wedding rehearsals, things like that. So you can find all that on our website, and each week on Instagram and Facebook, I share where we’re going to be for that week as well.

Mindy:
Oh, cool. Okay. Well, that’s fantastic. Well, Brent, thank you so much for coming on today. This was lovely to catch up with you after your year of, frankly, ridiculous success, which is, I hope you feel excited about it because… It sounds like you feel excited about it. This is impressive. This is incredibly impressive. I know I threw out a statistic that people have told me is incorrect and I don’t care. The first 90% of small businesses fail in the first year, in the first five years or something like that.
But it sounds like you did research. You puts forth some effort into. You didn’t just say, “I’m going to start a pizza truck because I had pizza once.” You had a pizza oven in your driveway, you tried it out, you tested recipes, you’re constantly working on it. You’re not just sitting back and like, “Well, I made a pizza, you should love it because I made it.” I think that that, there’s a lot of elements to your success that can’t be overlooked and I’m so pleased to share that with our listeners. So thank you so much for your time coming back to share your story with us.

Brent:
Thank you so much for having me. I hope people find maybe some motivation from it to break away from something that they’re unhappy with and invest in yourself and see what you can do.

Scott:
Yeah. Thank you so much for sharing this. This was wonderful and I do think a lot of people are going to learn a lot from this.

Mindy:
Okay, Brent, we’ll talk to you soon.

Brent:
Bye-bye. Yeah, thank you so much.

Mindy:
Okay, Scott, that was Brent, the Food Truck CEO. What did you think of his story?

Scott:
Oh, I mean, I think it’s really interesting and I think it’s wonderful that he set himself up with such a strong financial position going into his business and that he’s so clearly as passionate about and enjoys what he’s doing right now. I think that that’s just another example of how strong money foundations can really help set you up to be happier or have more options or have a better life. And in this case, it goes from a high paying job as a nurse to a, I guess lower paying, at least lower paying for our job running a pizza truck company. But with upside, something that he’s excited about, something that could make him a lot more money down the line and something that’s he genuinely making his customers and himself happy.

Mindy:
Yeah. I really think you can’t underestimate the absolute draining nature of a toxic job; a job that you hate going to, a job that all you do is think about this horrible experience that you’re having. And like Brent said, it seeps into every minute of your life because when you’re not there, you’re thinking about how much you hate it. You’re talking about how much you hate it. It’s horrible to be part of that. What is that phrase, Scott? Entrepreneurs are the only people on earth who will work 80 hours a week to avoid working 40 hours a week. And then there’s the other cliché, you never work a day in your life if you love what you do. That’s so true. I’ve had jobs that I hated and I love this job and I’m excited to come to work. And jobs that I hated, it was like, “Oh, let me hit snooze one more time. I don’t want to get up. Let me take my time. Oh, darn, I’m late to work.” Like it’s just, you don’t care as much.

Scott:
I just want to chime in here as well that I think that going beyond that, like at BiggerPockets, we have this thing around GWC. It’s just from the book, Traction. It’s a model for running a business. But employees need to get it, want it, and have the capacity to do it. They need to understand what they need to do, what they need to want to do that job, and they need to have the skillset and time to be able to do it. If you hate your job, you don’t want it and you’re at risk for losing it at some point as well, at least over the long term. Even if you’re not in immediate danger in the short run, you’re just not going to do as good a job with that.
And so I think that when you’re thinking through this stuff, a lesson to learn from Brent is that if you hate your job and you don’t want it, set up that strong financial position. Work on it that much more aggressively, get yourself to the point where you have options if not total financial freedom for the rest of your life, options to do stuff like what Brent is doing here starting a business or getting out of it, because you’re going to be happier and healthier right away after starting the business, even if you’re making less money in the first year or two of getting it started than you are if you stay at that miserable soul-sucking job, which by the way is not a guarantee, especially if you hate it and you allow that to show.

Mindy:
Yeah. And it’s hard to not allow that to show when you hate your job. Leaving your soul-sucking job, just your whole body lifts up. It’s so fantastic. But you can’t leave your soul-sucking job if you are in a position of financial weakness. I mean, you can go get another job, but when you have to work for somebody, it’s not as much fun.

Scott:
That’s the trick. If you’re optimized on the income front for your job and spending every bit of that income, you are stuck. Sorry, you can’t do what Brent just did. If you spend less than you make and do that for a prolonged period of time, so many options appear, many of which are going to pay you a little bit less in the short run but have the potential to earn more in the long run or make you happier immediately. And so that’s the whole trick to this thing called capitalism. Don’t max out your income and then max out your spending to match it. Simple as that, if you’re listening.

Mindy:
This doesn’t exist. This easy button does not exist in the financial space. You have to do the work.

Speaker 4:
That was easy.

Mindy:
Oh, it comes out the back way.

Speaker 4:
That was easy.

Mindy:
I love this easy button. Yeah, everything. What was the David Greene episode 12, an Overnight Success in 12 Short Years. Like you have to put the work in, but when you put the work in, look at what you can have, a lifetime of working 80 hours a week in a hot pizza oven in a hot pizza trailer, but he loves it.

Scott:
And with that, let’s sign off. 80 hours a week in a hot pizza oven trailer rolling in the dough.

Mindy:
Rolling the dough. Oh, I quit you. Okay. The show notes for today’s episode can be found at biggerpockets.com/moneyshow173-5. Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
From episode 173 and a half of the BiggerPockets Money Podcast, here is Scott Trench and I am Mindy Jensen saying, we got to hit the road.