The term "mobile business" may bring to mind street peddlers, ice cream carts or late-night food trucks. Although those associations are not wrong, they exclude an increasingly popular segment of mobile businesses that offer everyday services and products in a unique and convenient fashion.
Kush Kapila and his business partner Alex Helm founded Sterlings Mobile Salon and Barber Company in San Diego after realizing how unhappy they were with traditional business service. "It was just so hard for me to go at night to wait in line at a chain salon for a mediocre haircut and then I saw the explosion of mobile services and thought, 'Could we do this and run it like a mom and pop organization?'," Kapila says. With the goal of revitalizing and simplifying hair care, Kapila launched Sterlings Mobile a little over a year ago and today has a customer following of more than 1,300.
As Kapila and several other mobile shop owners explain, this business model comes with its own set of challenges, but by investing a little time, money and effort, it can become a great entrepreneurial opportunity.
Reasons for going mobile
Emily Benson, owner of The Fashion Truck mobile boutique in Boston, Mass., always wanted her own shop, but couldn't imagine investing in a brick-and-mortar space in an average location. "I had seen food trucks in New York and I was like, 'Hey, if you can fit a whole kitchen in a truck, how easy would it be to put a store in a truck?' Benson says. "I thought it was a great way to keep my upfront expenses lower and also a great way to explore who my customers are." Two years later Benson has booked nearly 100 private parties for her mobile business and has three designated weekly parking spots to reach her customers.
Benson's desire to save money and still have the flexibility to make the business her own is a common sentiment among mobile business owners. When rent in New York City became too high for Tiffany McCrary to profitably operate her vintage clothing store, she had to find a brick-and-mortar alternative. "I decided to go mobile because I would be in control. I own my trailer, I can go wherever I want, and my rent doesn't increase," she says.
Moving from a 3,500 square-foot SoHo retail space to a 100 square-foot trailer shop aptly named The Mobile Vintage Shop in Bushwick, New York, was a challenge for McCrary, but she quickly learned to do a lot with a little space and realized another perk of mobile businesses: Mobile business saves money for the customers, too. "I can sell clothes affordably now," McCrary says. When I was paying SoHo rent, I had to price accordingly. Now everything in the shop is $10 or less and everyone seems to love that."
The flexibility of mobile businesses also allows those with another job to follow an entrepreneurial dream without disrupting their existing schedule. "Instead of having to hold traditional hours, it is up to the individual owner how they want to market themselves and how they want their business to operate," says Stacey Steffe, co-founder and President of the American Mobile Retail Association and owner of La Fashion Truck in Los Angeles.
The start-up costs
Because it's up to owners how much they want to commit to their business, the amount needed to start and operate a mobile shop varies, but typically the shop vehicle is the biggest expense. "From what we have seen, the average start-up costs of a mobile boutique are around $20,000," Steffe says. "With $20,000 out the door, you can pretty much have everything you want." The average price for a bare trailer can start as low as $8,000, and owners can spend $100,000 and up building it out and adding amenities. Business and retail permits are factored into this cost too, and vary based on location.
Another big expense mobile business owners face is the customization of their shop. Customization can range from very basic to very elaborate. An owner could start with basic shelves and light fixtures or add hardwood floors and stainless steel appliances. For Kapila, Sterlings Mobile's driving force comes from the experience it sells so the business partners invested in a higher-end trailer model right off the bat.
But, for those still determining their business objectives, Steffe suggests outfitting the mobile unit with only the basics at first to save money and time both upfront and later. "Once you get into the business, you will look around your truck and say things like 'I don't need this space, I need to open it up more here, I need a dressing room, I need less shelving here, etc,'" she says. "You can always add on later."
There are a variety of financing options for those looking to get started in the mobile business world. Possibilities include dipping into personal savings, selling off equity, or taking out a private loan, but for those who might not have access to those types of resources right away, Steffe recommends crowdsourcing funding. "It's becoming a lot more popular and can really help people out," she says.
For example, Sterlings Mobile was successfully launched on $200,000 of crowdsourced funding. "If you have a home and you are willing to take out a loan against it, that is one route a lot of small businesses take, but that was not an ideal path for me," Kapila explains. "I was quitting my job, my wife was working, and we had a small child, so I went to people I met during my master's program, family and friends, and encouraged them to invest."
The mass of smaller investments has continued to help Sterlings Mobile to this day, as the investors give Kapila and his staff business advice and free word-of-mouth business promotion, another potential benefit of this funding method.
There are aspects of a mobile business that in a traditional brick-and-mortar shop, you wouldn't have to give a second thought, so take time to learn about what your exact need will be to make the venture easier. "Going from land to mobile is very difficult," McCrary says. "There are things I never even thought about, like, 'How am I going to have lights? And where am I going to park it? What about security?'"
It helps if you go in knowing that it will take time and often feel very difficult, Kapila says. "I went in a little naïve," he adds. "I thought, 'we will just get a trailer, put in a couple chairs and some water and we will be good to go.' No, there are regulations. You have to spend time figuring that out." Organizations like the American Mobile Retail Association and local government offices are stocked with information about business codes, permits and city regulations.
Research your target market now to reduce time spent and profit lost later. "Actively go to events, go to festivals and hit the streets to know the places you can and cannot go," Benson says. "Hunt down your customer and find out where they are so once you get your truck up and running you can feel like you can get some success and sales off of parking in those places."
And finally, keep saving money. "Spend little and save money because in the truck business, one of the biggest surprise expenses is maintaining your truck," Benson says. "You can hear a funny noise one day and guess what? It needs a $5,000 new transmission. And you can't make money without a working transmission."