South by Southwest

For small businesses in Austin, SXSW is like a second Christmas

Laura Aidan in front of her shop, Prohibition Creamery.
Photo courtesy Robert Jacob Lerma

Hatbox: A Modern Haberdashery in downtown Austin usually has 500 guests a week coming through the store. During the South by Southwest conference, commonly referred to as SXSW, the shop gets more than 1200 guests a day.

For small-business owners in Austin, March, when SXSW attendees flood the city, is a second December: Another chance to make record profits for the year.

Starting Friday and running through March 18, the SXSW Conference and Festivals draws music lovers, movie buffs and technophiles from across the world. 2017 will be the 31st anniversary of the festival, which last year drew a record 87,971 registrants.

For a city with just shy of a million residents, that's a lot of visitors. And many of them come ready to spend.

In 2016, the conference brought $325.3 million into the Austin economy, according to SXSW organizers.

Hatbox looks to do about an eighth of its annual revenue in the week of SXSW, says Lauri Turner, who founded the haberdashery in Houston in 1974 and moved it to Austin in 1979.

"Each year is a different kind of blur in hindsight," says Turner. "You gotta be kinda tough to roll with the insanity but dang this is seriously fun!" This year, Turner expects berets, fedoras, Western style hats and fascinators to sell well.

Jessica Galindo Winters, the co-founder of Mellizoz Tacos & Catering, is a fourth generation resident, which she says makes her a rarity. The taco truck opened in December, 2008, so this will be Winters' ninth SXSW.

"It is one of the busiest times of the year. It can get crazy busy, with long days, but it can be very rewarding," says Winters, who hopes to bring in about a tenth of annual revenues during the week. "My best memory was meeting Jimmy Fallon!"

To get ready, Winters stocks up the pantry. "I just make a call to our local produce company, Segovia Produce, to deliver more product ... they are awesome. We then kick it into high gear, prep and keep on rockin'."

She also has to prep her team members to be ready for anything.

"We have people from all over the world visiting Austin, Texas. We tell our crew not to be surprised if someone asks 'How do you eat a taco?' or 'What is a tortilla?' Yes, we have had those questions before," she says.

"We staff up, prepare larger quantities of food for our main location as well as off site events for which we are contracted. As far as keeping our staff on point, there's plenty of coffee, energy drinks and family meals brought in."

Photo courtesy Mellizoz Tacos and Catering

While Mellizoz Tacos has years of SXSW experience under its belt, this year will be Laura Aidan's first year as an Austin business owner. She founded Prohibition Creamery in July 2016. The ice cream shop serves flavors infused with alcohol, like "mezcal vanilla" and "sangria sorbet."

"We make all of our ice creams from scratch (the old-fashioned way), which is time consuming. We increased production a couple weeks ago and have been working around the clock to ensure that we will have enough ice cream to get us through the entire ten days of the festival," says Aidan.

The founder is hoping to get ten percent of her annual revenue from the week of SXSW and in future years as much as 20 percent.

"When I was developing my business, SXSW was a constant consideration in selecting our location, in partnering with other businesses and in driving better profits on an annual basis," says Aidan. "I think 95% of SXSW is great. It can certainly get crazy; there are so many extra people roaming around and discovering what Austin has to offer."

"I think whenever you get large concentrations of people there are always a few bad apples," she says, "but SXSW staff and law enforcement typically do an amazing job to help ensure that everyone has a good time."

We tell our crew not to be surprised if someone asks 'How do you eat a taco?' or 'What is a tortilla?'
Jessica Galindo Winters
Mellizoz Tacos & Catering

Businesses with extra space often rent it out to visiting companies. That provides a welcome extra revenue for places like CRAFT, which is located in a converted warehouse with 15-to-25 foot ceilings.

"The studio makes a beautiful venue for off site meetings and other gatherings," says founder Eli Winkelman. "CLIF Bar's team is all coming into town for SXSW, so they're spending two days in our space. That means we have to close to the public for our main offering of walk-in crafting — but that's what we do occasionally to keep the crafting so affordable the rest of the time."

The SXSW effect tends to be strongest within walking distance of the conference. For businesses further away, the week may actually be a bit slower than normal. That's the case for Jeremy Leo, owner of Sweet Caroline's Snow Shack.

"My two locations are located in North West and South. I don't have a location close to downtown, where all the action is during SXSW," says Leo. He considered getting a trailer right downtown, but he doesn't think he is equipped to handle such large crowds. Anyway, he prefers to focus on serving his year-round clientele.

Sweet Caroline's Snow Shack
Photo courtesy Sweet Caroline's Snow Shack

"I like being available on my permanent location for my regular customers. I don't like to move around to try and chase the money; I like being open for my customers because they're the reason I have been around for six years," says Leo.

Leo is loyal to his customers because they are loyal to him. "The residents of Austin love to support small businesses," he says. And so, thankfully, do the visitors.

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