How East Austin Succulents Fell From $1.2M to $300K After a Move and Got No Deal

We're here at East Austin Succulents who were forced to move about a year ago from a high foot traffic location to this one.

We are kind of hidden in the neighborhood. It's kind of crickets on weekends. Our sales right now are about $3.50 a year, but they used to be 1,000,000.

The question is how do we get more people on-site to grow revenue again?

Anything to bring in more people would be nice.

What have you tested to get people here?

We haven't actually asked anyone to do anything in this space.

Why not, though? Mean, you have to get foot traffic. I'm gonna go meet the owner and see if my check plus his ideas can get this thing back to a growth story.

Hey, you must be Eric.

Yeah.

I'm I'm Nathan.

Alright.

Tell us what you're selling. What's the business model?

Everything in the succulent world that you're looking for, we should have it. Succulent is anything that is drought tolerant. So these plants retain water. So they can go without water for a long time. So, and all cacti are succulent.

How many individual skews do you have on-site today, if you had to guess?

There's hundreds.

You don't think it's thousands?

Maybe thousands, I don't know.

What's your best seller?

Whenever we have something rare that we can only produce a few things of every year, those sell quickly. Everything sells out that's rare eventually.

What's the most expensive individual plant you've

ever Probably Sirius forbesii spiralis variegated. I'm kind of the one that first introduced those in the trade. It's just this big spiraling cactus. We used to be able to get about 400, but now it's down to like two fifty. When something is brand new, you can charge more. And then as it becomes more propagated, prices go down.

That's your highest margin product. How do you experiment with new species? Do you have a, you know, a super scientist lab at your house where you're mixing concoctions trying to figure out the next great plant?

Yeah, little bit. In the world of succulents, everything can go crested or variegated.

What does that mean?

Or monstros. What do those mean? Like, this is monstros. The regular form of this is just columnar. So this is monstros, and this is crested, so it goes in a fan shape. This is a variegated golden barrel. It has yellow mixed in with the the green. Something has a variegated part or a crested part, and you're a grafter, you can slice that part off, put it onto, you know, a a plant that grows faster, graft it just like people graft trees and everything.

Why are those called grafts?

Because you're taking something that's slow and you're putting it onto something that's fast so that it will grow 10 times faster and be way less likely to die.

Those are two separate plants you put The base and the top are different. Yeah. You are like the plant evil genius. Shirt is Are on you comfortable sharing sort of how many flowers or how many succulents you sell in a given year?

Our sales right now are about $3.50 a year, but they used to be a million, you know? So we've taken a big drop in the last few years.

What happened?

We are kind of hidden in the neighborhood, so that's the biggest change we've had to go through. We used to have a lot of foot traffic over on Tillery on the East Side. People getting lunch would pop in, and we have none of that now. So it's kind of crickets on weekends. Also, I think that our soil mix is not a good business model because when people grow in our soil mix, these things don't die. The

plants just live forever and they don't need to come and buy more. So things have changed and that's okay, but it's not okay to be in debt and whatnot. Need to get more people to this location, you know?

How much debt do you have?

Like 45 ks right now.

Okay. Yeah. And what was the purpose of raising that debt? When did you raise it?

Well, over the winter, you have to spend a lot. You you go to California, and you buy a lot, and then you spend a lot on seeds and orders from China and whatnot, and then you want to keep everybody going through the winter because you're going to have a big spring. When the spring came and sales were down 30% across the board, should be out of debt right now going into the slow season, and I'm still

heavily in debt, so it is very scary going into the winter. I haven't paid myself in a long time, you know? I need to figure some stuff out, yeah?

What's your plan right now?

My plan is to just produce, produce, produce. That's kind of why, you know, the business isn't very scalable. It's kind of based on how much I can put in, you know, just late nights grafting. And that's not a very good plan because my body can only take so much, you know? So I just keep going seven days a week, long days, and you know, I have a toddler now, so.

Is it a first kid? Yeah. Congratulations.

Yeah, yeah.

This is a hell of an opportunity cost, right? Another hour with the toddler at night or another hour grafting plants so you can grow sales. Yeah. How old are you today?

48.

When did you launch the business?

Like twenty years ago or so.

Wow. Your best year of sales was $1,000,000

Our best sales year was around $1,200,000

What amount of revenue do you need to be doing on a monthly basis so that you're not worried about making payroll?

I need to sell 52 a month to break even.

And what are you selling like last month?

28.

How much of the decline from 1,200,000 per year down to $32,000 a month is because you moved away from the foot traffic?

At least 30%.

When did you move here? How many months ago?

It was September, so it's been almost a year.

And what did the build out here cost?

Probably around $100. The hardest part was just the ground that we're on. This was an old roofing company's area. To get this ground smooth in August on your hands and knees with a jackhammer getting little pieces of metal out, that was the hardest part of this whole thing.

What are you doing to get foot traffic here?

Well, we're on Facebook and Instagram, you know, telling people that we've moved in, you know, things and we have sales and we try to have events, you know, like a market here and there, but those haven't proved to be proven to be very that great. We're trying to work out Google Ads, but we just can't figure out if we figure that out, you know, there's something wrong with it.

What makes it how much how many much have you spent on Google ads?

We're to spend. It won't let us. And it says that our ads have been active and we just have to like fix, fix these glitches. There's something that's not working with, with Google ads that we need to figure out.

Can you take pallets of these and have partnerships with local coffee shops and put these in the local coffee shop and sell that way?

Yeah, I've tried everything. I used to wholesale a lot. You know, I used to run routes all around Texas. But then when retail gets so good, you're like, I can't be wholesaling this stuff out. There are other growers now that can fill those spots, so, but it's not

Well, why can't that be you, Why

Larger can't you get that growers that have huge greenhouses can wholesale easily because they just have so much of everything. We're trying to grow a little bit of everything, you know, so we don't really have the greenhouse space to wholesale without buying stuff in also.

So if you can't take your plants to coffee shops, can you bring a coffee, like food truck and stick it here on-site to get foot traffic?

Yeah, I mean, that would probably be good. I don't think that a food truck would do well enough here though because, you know, on a given weekday, if we only have like five or 10 customers...

The flip side is, is like you have parking here, right? A lot of coffee shops downtown Austin, there's nowhere to park, and you certainly can't sit in a beautifully designed plant environment and get work done and enjoy your coffee. I mean, is very peaceful. We have to pause under the wind chime. I mean, it's just so, if you put a little coffee table here, I'd be here all day long.

Yeah, yeah, yeah.

Like just right, I would be sitting right here. Yes. Let's just close our eyes and imagine, right? We put in 10 ks, we get some small round tables, we distribute to the property. Get a, we convince a coffee truck to come, right? Yeah. People are coming buying coffee, they're then buying more plants. They could also maybe wander over this area. What would this area be? I mean, you could make this a super, super unique experience and charge a premium for the coffee because it's so premium.

Yeah, yeah, yeah. That's a good idea. And, you know, I'd love to just let some yoga or meditation person come here. We can cut the music off and just, yeah, anything to bring in more people would be nice.

What have you tested? I mean, you say these are all good ideas. Have you tested We to get people

haven't actually asked anyone to do anything in this space.

Why not, though? Mean, you have to get foot traffic here.

You know, I don't know. We'll have to have a meeting about that. I'm doing

Screw meetings. Is just a focus thing? You have so much going on?

What is the best thing? Would it be like a yoga space or would it be a coffee person?

You know? I haven't seen someone do a coffee plus flower experience really well. Yeah. And they definitely add to each other in mind.

Yeah. It's a great idea.

Plus you have the parking. Do you guys have a web presence at all right now?

Oh yeah. Yeah, we do.

What is it? What would I see if I went to the website?

Lots of plants. The the ultra rare stuff, though, we do on our Instagram auctions and Palm Street auctions or eBay.

Tell me about the Instagram auctions.

We do those on Sundays, but we used to do it every week, but viewership has kinda dropped. We're doing those monthly because people are going to Palm Street. So we'll do Palm Street twice a week.

I don't know what that is.

Palm Street is just an auction site. People are bidding on it. We're excellent at shipping. You know, everything is meticulously packed. Everyone's always happy.

If I pick up a plant from here and I want to buy it, where do I go?

You just walk over to our checkout area.

Okay. Wanna take me over there? Pottery is. Yeah. Okay. So ring me up here. I'll actually pay for this thing.

Okay.

So I'm paying. So it's nice. You accept all forms of payment. You take cash Absolutely. Or You take cash too. I see some other products and things in here. You're selling rocks as Yeah.

Gems, minerals for your arrangements and for your yard.

So of the $300,000 of sales you'll do annually, how much is rocks?

Probably just like 2%. Small. It's low. Yeah.

Okay. Is there anything else you sell that makes up five, 10%?

I mean, pottery. Pottery is probably a 30%. Everybody needs pots to put these things in, and we make arrangements right here. So that's about 5% of our sales.

What would you cost if I said I want you to put this in a pot for me?

Yeah. $5.

Okay. It's $5 extra. Uh-huh. I'd pick a pot first. Yeah. How much does this cost?

This is 30.

Okay. Great. So 30 plus 5 plus 8. Now what?

Get rid of some of this dirt. And I would This is a really easy pot up. It's just one plant, but usually people have three plants. And then I'll ask you what color gravel do you want? We have so many rocks that we can do some cool things here. You know, maybe something like that.

How much of your sales come from event driven arrangements like weddings? 5 percent. So it's not a big it's not a big of your business. That feels like it

should We would be love for interior designers and wedding planners and everything to realize that we're here and we're wholesale, you know, 25% off, and we need to work on that.

First thing I would do if we work together is I would cold outbound all the wedding and event planners in Austin, Texas and say we are doing yoga, free coffee and a free $20 arrangement right at East Austin Succulents on Friday at 9AM. You're hired. Are you expensive? I'm very expensive. What is the growth plan? Right? The reason I do this show, the reason I have my fund is because I like to find small business owners

who have a passion about something, a clear need for capital, and then I can jump in and try and help them. So what's the growth plan and what's the capital need?

The growth plan is to just get back to square, making money again and not going further into debt towards the winter. I'm just not that much of a businessman versus a grower, I need to focus on some different things, but...

There is no plan.

Yeah, probably.

So how do I invest money if there's no plan? That'd be a very dumb business decision.

That's why I don't think that I'm a very good investment, and it's not really the most scalable business because so much of the business is just hard work.

I have another investment in this space. Would you sell a whole company for $100,000 cash and I'll go have the other guy run it?

No. Yeah. No. This is my life. You know, this is my life's work. I wouldn't want to sell out, and I wouldn't want everybody to have to find new jobs, and I wouldn't want our customers to not have this available anymore. Also, it's so nice. Everybody that comes here is so happy. You know, they love it. If everything fails, I can always just go back to farmer's markets or just narrow it down to just online or

just auctions or just even Facebook. I know that this can be incredible like it used to be, and I know what it takes on my end to get there.

-But what is that?

You told me there wasn't wasn't a changed.

-What's the plan to get back -No.

The plan used to be just create the most incredible, undeniably amazing plants there are. I need to come up with better plans to deal with, you know, changes in the world, I guess.

What percent of your $300,000 of annual sales will you do online?

Maybe around 50.

How do people find your website? Is it SEO?

Yeah, Succulents Austin, Rare plants, Austin. You know, our SEO is decent, but it could be a lot better.

Look, the purpose of the show is for me to invest money. That's what I want do, but I also don't want do bad deals, right? You don't really have a plan. This would be a lot of work if I put money in, right? Our team is very good at SEO, but I haven't looked at your SEO ahead of this. I'm just meeting you forty five minutes ago.

Right, right.

So I don't know if we can drive more sales online without looking at the competitive space. Who else is ranking for Succulents Austin? Yeah. How hard is the keyword difficulty? If we do rank number one on Google and ChatGPT for that search term, how much traffic could we expect? Do you have any sense of what those numbers could look like?

Right after COVID, it was gangbusters. It was amazing.

Everyone was stuck at home. Want their homes to look beautiful during COVID. That's why they buy plants. We need to figure out a way to get this business growing without relying on a global disease. Well, do you have a pitch to me? Mean, do you say, Nathan, I want X amount of money to do Y growth plan. Is there something like that or no?

No, I'm not prepared with numbers like that. No.

Guys on YouTube, any ideas for Eric? Comment below. Well, I don't wanna make up a bad deal here. I love what you've built. I don't think I can invest today, but Eric, I'm rooting for you. Yeah. It'll be great. It's good to meet

Hey. Thanks a lot.

And thanks for this. It'll be right at my dining room table. Yeah. Yeah. Yeah. You guys like that deal, remember new episodes drop every Wednesday. Click here to subscribe so you don't miss out. Also, wanna see more deals like this one? Click here to see the next deal immediately.