For 10 days every March, nearly 90,000 people converge on Austin for the hugely popular music, film and interactive festival, South by Southwest (SXSW).
Last year, festival organizers estimated that the event injected around $325 million into the city’s economy. For the Texas city’s small businesses, it’s like a second holiday season.
Gearing up for the temporary population increase requires significant preparation for a lot of these businesses – from hiring additional staff, to increasing inventory, to the physical toll. These businesses shared how they got ready for the influx and the lessons they learned for next year.
Mini donuts 24/7 may sound like a beautiful dream, but it’s a reality for patrons of Little Lucy’s during SXSW. The mini donut purveyor’s primary outpost, a converted mail van updated with a lick of bright pink paint, is situated in one of the city’s primary bar districts on Rainey Street, and stays open far past its standard operating hours during the festival.
They’re lucky to not only serve a hungry late-night bar crowd during the festival, they had two other stationary locations as well as a bike that shuttled their o-shaped treats between the locations. During the festival they also had a handful of corporate catering gigs.
Owner, Adam Morgan, describes the week-and-a-half like having their busiest Saturday night rush every day, and then some.
He says since his business opened in 2013, every SXSW gets better in terms of their preparedness, which this year included temporarily tripling their labor force. They began the hiring process a month out, training a bunch of temps to help with the extra workload and round-the-clock donut preparation.
All of the hard work paid off, Adam says in terms of revenue, Little Lucy’s was doing double and even triple what they would on a normal day.
“What we couldn’t do in a good month, we did in 10 days,” Adam says.
Adam explains that Xero plays an important part in preparing for the festival.
“Before the festival, we look at our regular monthly expenses for our materials and then forecast what we’re going to spend,” Adam says.
“Because with Xero Reporting I’m able to separate expenses by category – whether it be sugar or spices or flour, we know how much we should spend.
“We were about $100 out on our forecasting.”
Even companies outside the festival’s downtown hub reap the benefits, albeit on a slightly smaller scale. CRAFT, a space for crafting, workshops, and events about two miles east of downtown Austin hosted some of the team at Clif Bar over two days during the festival.
Founder of CRAFT, Eli Winkelman, said it went really well, and they’ve worked together on several events since Clif Bar initially reached out in the fall – demonstrating the ripple effect the festival generates.
She admits that she’s not quite sure how CRAFT fits into SXSW, since the business isn’t in the heart of the festival madness. Eli says she plans on capitalizing more on the influx of out-of-town companies next year – hoping to host more meetings and team building events and catch some of the last minute requests they experienced this year.
“There’s so much going on at SXSW, but being around the new perspectives, products and innovations is inspiring and makes you think differently about your own business,” Eli says.
For next year, Adam from Little Lucy’s plans on marketing more aggressively and being more proactive about securing catering gigs. He also shared some advice on getting ready mentally for the event.
“Try to keep a level head, even if you go in knowing it’s going to be chaotic, it’s always more chaotic than you prepare yourself for,” Adam says. “Ensure your staff know and you know that you’ll all get through it together.”
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