Street Vendor Economics 101: Lessons for Nonprofits

March 26, 2013

I work with entrepreneurs.

Mostly, these entrepreneurs are street vendors. Taco engineers. Tamale fabricators. Churro developers. Innovators in the City’s informal economy.

They constantly inspire me with their energy, their ideas, and their refusal to give up under extreme circumstances – chronic unemployment, poverty, obstructionist policy (yes, street vending is illegal in Los Angeles ), and the ever-lurking fear of failing.

My work is focused on helping their businesses grow, connecting them to resources and advocating for better policy; but there are lessons I take from them too. And as community development practitioners and nonprofit leaders, we too can learn from their experiences.

Three lessons come to mind:

Work With What You Got – Like nonprofits, street vendors often have to operate their businesses with limited resources. Street vendors are pros at “making a dollar out of 15 cents.” They dedicate lots of time scouting for the best prices on their ingredients, and they transform barren corners in their communities into lively public spaces where people feel safe. And their equipment? Some street vending equipment can be upwards of 10, 20 and even 50 thousand dollars. How do vendors do it? They network within their own neighborhoods to contract welders who construct equipment that meets their needs. Check out the photo above of this vendor who opted to construct his cart into a form of transportation. Little money, no car; he’s working with what he has.
Listen To Your Customers – Whether or not they know it, street vendors are market experts. They understand their community and their customers better than most statisticians and demographers. But they also listen to their customers and modify their products accordingly. At ELACC’s, Policy con Pan Dulce event a few weeks ago, I was listening to a street vendor recounting the first batches of tamales she made for sale over 10 years ago. By her account, those first batches tasted horribly. She listened to her customers, made modifications, and now has a loyal fan base that loves her tamales.

This vendor wasn’t afraid to fail, she listened to her customers, and she got better. We also have to be fearless in our work, try new things, fail, and try it again. Failure is good if we learn and put our constituents first.

Implement Quality Control Standards – Monitoring the quality of your product or service is important for any business. And since our organizations are tackling issues like poverty, gentrification, disease and crime, it behooves us to make sure that our work is on point and showing results. Street vendors care about quality control too, and I’ve learned how simple measures can ensure that work is being done properly and up to standards. One street vendor’s business has grown so much that she operates several stands at once (at gas stations in Boyle Heights). When I asked her how she ensures that her employees are treating customers appropriately, she informed me that she’s built such solid relationships with some of her customers that they tell her if something is going awry at one of her locations. This “secret shopper” system goes a long way to make sure that her business is offering good products with good service. And whether or not we like the idea, the principle here is that quality control is important, and we have to have a clear channel of communication with our clients.

There are so many lessons that these entrepreneurs impart, and many of these can be directly applied to our organizations; no matter how big or small. They are resilient people who refuse to give up, who care about their work and products, leverage their existing resources, listen to their constituents, and have a firm grip on their measures of success.

What lessons have you learned from the entrepreneurs in your community?

Rudy Espinoza is the co-founder of LURN, a multi-disciplinary nonprofit organization dedicated to building sustainable communities through ideation, advocacy, capital, and advisory services for non-profits and for-profits alike. You can find more information at http://www.lurnnetwork.org/

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