Out of Office

Inspiring interviews with small business owners. We dig into the side hustle experiments and lessons that help independent creatives succeed in designing fulfilling work, beyond the office

Fried Egg I’m In Love – Jace Krause, Food Truck Entrepreneur

A breakfast-only food truck owner in Portland builds an accidentally brilliant brand and learns from other food trucks’ mistakes

 

I spend a lot of time on Instagram. I rarely click through to the website listed on an account profile, but when I stumbled on the lovely account of @friedegglove, a Portland food truck business, I had one burning question I needed answered: How the hell does this guy make a living with a breakfast-only food truck?  I clicked the website link and found the story of Jace Krause, a guy from Montana, and former Expedia employee, who spontaneously moved to Portland with his wife, and opened a food truck business. With no professional background in food production or restaurant management, he’s nonetheless created a solid business around delicious, yet simple, fried egg sandwiches. I imagined one lonely guy waiting for customers at the food truck window, but today he manages a staff of twelve, with two trucks and a separate kitchen facility they use for food prep and catering. Jace shares his fascinating story, and shows the successful result of thorough research, financial projections, and a good sense of humor.

What’s your work background? 

I used to work at Expedia, in Seattle. I used to write hotel descriptions of the fancier hotels. I studied journalism in college, and I have a music minor, but I started as a business major, ironically.

How did you end up in Portland, and running a food truck business?

Portland was always the plan, but my wife and I said we’d move a few years down the road. Then we decided to bump up the Portland idea. She’s a nurse, so she got a job really easily. And I’ve always wanted to start a business, so I thought maybe a food cart would be a good way to get my foot in the door here.

It sounds like a pretty random decision. Did you have any experience working with food?

I grew up in a small town in Montana, and I worked as a cook in a pizza place, but not in any sort of professional sense. Being in Seattle, being exposed to different kinds of foods, I’d go home and teach myself how to cook whatever I was into at the moment. For a while it was Cajun food, then Thai food…

But breakfast sandwiches were something I always made as a teenager. It was something I knew I could do. I thought, if I could come up with a little menu, and a concept, maybe I could just try it out.

 

 

Fried Egg I'm In Love food truck business in Portland

Jace Krause founder of food truck business Fried Egg I'm in Love

The craziest part is that I had just $5000 in my savings account.

Did you come up with the menu before testing anything, or test each menu item first?

I kind of had the menu first. I wanted to have my evenings off, so I thought breakfast would be a good way to go. There were already a couple of carts in town doing exclusively breakfast, and they seemed to be doing well. So I thought I could try that out. But put it in a different spot.

There were multiple food truck businesses in the breakfast niche. But you believed there was room for one more?

Yeah, and one of the other carts was doing a gourmet thing, but we heard there were 45 minute waits for their sandwiches, and we thought, that’s ridiculous! We can make a decent, simple sandwich. It doesn’t have to be all fancy.

The ambition was to be faster and simpler than the other guys?

Yeah, good quality, good customer service, and also to provide a unique Portland experience. We say we try to keep Portland weird amidst all the gentrification.

Do you try to keep your prices low? How do you keep it financially lucrative while avoiding the ‘gentrification’ as you said?

Well, I’ve always worried about our prices being too high, because we wanted to be “food for the people.” We’ve had to raise our prices a few times in 6 years. The plus side of having a food truck is that our overhead is really low, so there’s not as much pressure to raise prices. But we pay our employees $15 an hour, which is pretty high for a food cart. It’s important to me that we take care of our staff.

 

 

Fried Egg food truck on Hawthorne in Portland

We never lost money. We didn’t always make a lot of money, but we didn’t lose any. So we knew we were on to something.

How did you finance starting a business in the first place?

The craziest part is that I had just $5000 in my savings account. But a friend of a friend had a food cart here and was just getting out of the business. They had two carts and were looking to sell one.

My grandma suggested I ask about a lease-to-own deal with them. And they agreed, so I have to thank my grandma for coming up with that! We signed a $500/month agreement – first and last months, plus a security deposit. So about $1500 to secure the cart. Then renting the location required paying first and last month up front, plus security deposit, but even that was like $600 total for the spot.

Then I partnered up with a bandmate of mine who matched my $5000, so we had $10,000 total, and had a cushion to purchase supplies, food, and give the cart a paint job. But it came equipped with everything we needed.

How did you decide how much food you would need – eggs, for example – if you were totally new to this?

I did a lot of reading and research about how to start a food business like this. And I knew there were certain benchmarks you want to hit. Food costs should be 25% ideally. Some places run higher, some lower. Based on that – whatever you’re paying for your food – you need to charge at least 4x as much for it. 

So I worked backwards and said, what does this sandwich cost to make? Multiple that by 4. And then round it to the nearest quarter. That’s where we started. From there, we said, this sandwich is easy to make, I don’t mind charging $4 or $5 for it, but the other one requires extra labor, and the pesto has pine nuts in it which are expensive. So we raised the price for that one. 

Did you start methodically tracking these things very early on?

I kept a really close eye on our numbers. I kept the books myself, kept all our receipts. I learned how to use Excel at my last job, and I learned later that I wasn’t doing it the best way, but I had an Excel spreadsheet and just tracked. Here’s how much we spent on bread this month, here’s how much we spent on coffee

Everything we spent money on – rent, insurance, eggs – went in that spreadsheet. At the end of the month, me and my partner basically split what was left over. We never lost money. We didn’t always make a lot of money, but we didn’t lose any. So we knew we were on to something.

 

 

 

Fried Egg food truck business in Portland - from an interview with the founder

We got a write up from each weekly…The weekend that one article came out, there was a line when we opened.

You got press coverage early on – did you promote yourselves?

We lucked out. The two weekly newspapers in town here are pretty good about keeping an eye on restaurants and food carts opening. We got a write up from each weekly. And when people see that, you see a bump immediately. The weekend that one article came out, there was a line when we opened. 

Then we started to get the brunch crowds – brunch is a big thing here. People wait at the brunch places around here for 45 minutes or an hour.

It sounds like Portland is probably an easier place to start up a food truck than elsewhere. But it also sounds like there’s a ton of competition. With so many trucks everywhere, how can you stand out?

Yeah you have so many restaurants and food carts. It’s really a food town. There’s 700-800 food carts in the county. And we didn’t really know this at the time, but our concept really helped us stand out. We just thought it was fun. I didn’t think of it as a marketing tactic.

Your concept meaning…only breakfast?

I mean “Fried Egg I’m In Love” [a pun on the song Friday I’m in Love] and the other music puns. Right away, people were walking by and going, “Fried Egg I’m In Love? That’s funny! What is this?” 

My  [former] partner is also a natural sales guy, so he’d give the spiel and talk them into buying a sandwich. And then they’d go, “Holy shit thats the best fried egg sandwich I’ve ever had!” And they’d come back the next day with a friend. Word of mouth was how we got by those first few years, that’s what helps us stand out. You have to get their attention, and then you have to have good food to keep customers coming back.

 

 

 

Food Truck business interview with the founder of Fried Egg I'm in Love

We’re not built to be updating our menu constantly.

Are you constantly updating your menu?

Actually, no. The first couple years we did a special a week. But we were starting to run out of good names and ideas. And with such a small kitchen, when you throw a new sandwich into the mix, it can really slow down your flow, and we want to be as fast as possible. We’re not built to be updating our menu constantly. 

There’s stuff that we’ve dropped from the menu. If it doesn’t sell, it doesn’t stay. Over 6 years, we’ve figured out which items sell, and where to put them on the menu so people see those first. And I can just look at the figures any day and see that it’s the same four or five sandwiches that always sell. We have a couple vegan options also, because I think if you show up with a group of people, and one is vegan, it’s nice to have at least one option.

When did you start employing other people? I actually expected you to be the person working in the truck!

I’m pretty much a general manager at this point. I stopped cooking in the cart last September, right before we opened our second cart. I just knew I can’t be stuck at one cart all day while trying to run two carts. So I was working three days a week, but I realized I didn’t need to be doing that anymore, because we had enough cooks who knew what to do. It was hard for me to do other things like payroll, and scheduling, on top of trying to work at the cart.

 

 

 

Fried Egg food truck business in Portland - from an interview with the small business owner

I’m kind of a “we’ll figure it out”-guy in a lot of ways. But I did a lot of legwork…It wasn’t like we just did it on a whim.

But how did you get to the point where you knew you’d have enough revenue to pay other people?

It starts small, and you grow every year. As long as the business is growing, you can learn to take on more employees. Just keep an eye on those numbers. We try to keep our payroll around 30%, since that’s the industry benchmark. And if we’re around that number, we’re good. If it’s less, even better. It’s hard to keep payroll too low, because you need bodies. It’s not like in an office where you can call in sick one day. You need someone here. 

It started with realizing we needed just one extra person on weekends, and we hired a friend. Then we got through that summer, and said, do you think we could hire one person part-time? So we hired one person, and that worked out. And the next summer comes around, and we realized, we probably need another person, so then we have two. Every year we’re adding another person or two.

You also have a great spot, right in front of a bus stop.

Yeah we often get people in like, How fast can you make a sandwich?  We’re like, when’s the bus coming? It arrives in five minutes.  Alright, I can do that.

It’s been six years so it’s good to stop and reflect about it. A lot of time has passed. It’s still going, and I used to worry a lot more about it: Are people gonna show up? Are they gonna stop coming?

 

 

 

We said, no matter what, we have to stay open for our hours until we get going. If we just close willy nilly, people will stop coming.

Did anyone ever tell you that you wouldn’t be able to start a food truck business, given you didn’t have relevant experience?

No one ever told me that, but I could tell that my parents were pretty skeptical. My mom always said stuff like, You’re gonna have to get insurance! And you might have to hire people!

I’m kind of a “we’ll figure it out”-guy in a lot of ways. But I did a lot of legwork. I wrote a business plan. It wasn’t like we just did it on a whim. I was pretty calculated.

Oh you did write a business plan?

I wrote a business plan, I did cost projections, revenue projections. I had no idea what I was really projecting. But a year later, when I looked back, I was actually pretty close. I did a worst case, best case, and middle of the road. I had just said, well, how many sandwiches do you think we’ll sell on like a Wednesday? Let’s say 20 or 30. I’d do the math. That’s like $400 or something. What if we say 50 sandwiches? That would be our best case. 

What was the worst day you’ve had, sales-wise?

Probably $60. But my partner and I would always bring our guitars. So if we weren’t busy, we’d just be making recordings.

We always said, we’re not leaving early. We had our hours posted, and one of the biggest complaints I heard about other food carts was that people would go to this place that said they were open, and they weren’t open. When people would open next door to us, they’d have their hours posted, and they wouldn’t keep their hours. And then they wouldn’t last very long. We said, no matter what, we have to stay open for our hours until we get going.  If we just close willy nilly, people will stop coming.

 

 

 

Now, my big thing is trying to create all the documentation and infrastructure for actually having a real business.

You have two locations now. Are you going to keep opening more food carts?

My goal is to start doing brick and mortar. Because of some of the issues I mentioned, like the small kitchen. We have a big demand and little space to meet that demand. I’d like to see a Fried Egg in every major city. To get there, we’re gonna have to get out of the food carts. 

The regulations are different in every city, and in most cities, you have to be mobile. In Portland, we’re pretty lucky that we can stay in one spot. It’s fun, but it’s got a lot of headaches too. The weather. We’ve gotten broken into multiple times. We’ve been lucky in the last few years though, not much has happened.

You’re the only partner and founder right now. But do you have someone you can discuss things with?

That’s tricky. I have an operations manager, so I bounce a lot of the operations things off of him. I sometimes bounce stuff off my wife to get a different perspective. My partner’s wife who is working with us again is great to bounce things off of, because she’s seen it grow to what it is. I sometimes chat with business coaches and advisors. I’ve had a few talks with business coach type people and they always have a lot of good ideas. I’m trying to read more books. I’d be bored if I didn’t keep learning. 

 

All photos in this story are taken exclusively for Out of Office Stories by Caitlin Delphine and Jonas Klock.

 

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Jace can be found running between busy food carts in Portland, Oregon. Check out the latest news about Jace and Fried Egg I’m In Love on Instagram.

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