The F Word with Tim Smallwood, Tropical Smoothie Cafe

[TRANSCRIPTION]

Tim:    We were all in panic mode. How do we keep this thing afloat? I refuse to lose. I hate losing.

Lauren:    This week on "The F Word".

Tim:    It was scary there for a while. I didn't take a salary for two and a half years.

Lauren:    Tim Smallwood, Oklahoma's first Tropical Smoothie Cafe franchisee.

Tim:    I went to a national convention. You probably thought I was running for mayor. I talked to everybody I could find. "Hey, what you got going? How do you do this? If I do this ..." I mean, I'm asking questions.

Lauren:    Tropical Smoothie Cafe is a national franchise that sells amazing sandwiches, smoothies, wraps, breakfast, and more. Tim Smallwood was the first one to bring one to Tulsa. He launched his first location at Tulsa Hills in 2011 and had added two locations since in both midtown and North Tulsa. Tim, I'm sure establishing this brand in Tulsa has been a fun and, probably, crazy ride. Thanks for coming in to share your story and the roadblocks you've overcome to get to where you are today.

Tim:    Thanks for having me.

Lauren:    You actually discovered Tropical Smoothie on a family trip to Fayetteville, Arkansas. Tell us a little bit about the very beginning.

Tim:    Yes. I coached my oldest son's AU basketball team. He's an adult now. He's 24. I was coaching his AU team and my wife and I were smoothie ... We love smoothies. We would do Smoothie King once a week. You spend $16 for the little 16 ounce smoothies, but that's all we had here in Tulsa. In Fayetteville, basketball tournament, didn't really want to eat dinner yet, it's kind of early, so I said, "Let's get a smoothie." There was no Smoothie Kings, no Jamba Juices, and this popped up. We went to try it and it was like, "You gotta be kidding me. It can't be this cheap and this good. Okay, it's not real." That was my first thought, "It's not real fruits. Can't be real fruit." Sure enough, it is real fruit. They had food that the other smoothie locations didn't have. It was just something that I thought would go really well in Tulsa. There was 10 kids on the ball team. I told them, I said, "Let's go eat at Tropical Smoothie Cafe." They were like, "What?" Said, "Hey, I'm going to pay for everybody's meal, but everyone has to get something different." You get 10 kids, I think they were like 15 then, to say they liked every single thing and they wanted to go back the next day. I said, "That's going to work here. If that many kids ..." Usually, there's going to be someone, "I don't really like this." Every smoothie they had, every food item they had, they loved it. I just felt like if that many kids liked it, those odds that it was going to work in Tulsa's going to be really good.

Lauren:    Something people may not know, you're also a Tulsa fire fighter. Were you already thinking about starting a business on the side or did this just kind of come out of nowhere?

Tim:    I always had interest in business. I'm a business major with an accounting background. I was an auditor for Williams Company and American Airlines before I became a fireman. I know my mom thought I was nuts when I told her I was going to be a fireman. I always the business background. My dad was an entrepreneur. He owned the garage and worked at American Airlines. I think I got that bug from him.
Lauren:    That's usually how it works, I feel like-

Tim:    But believe it or not, I didn't want to open Tropical Smoothie. I was trying to get ... I knew the guy that owned the Wingstops here in Tulsa and the guy that owned like six Subways. I told both those guys about it. I said, "I'm telling you, I would come once a week for sure, maybe twice a week. It's good." It was such a new franchise that they both were kind of afraid for it. I said, "You know what? Let's just give it a shot."

Lauren:    How did you actually get the ball rolling?

Tim:    Just reached out. The manager at that particular location thought I was probably crazy. I know my wife did. I said, "Hey, can I see what you guys are doing? What are you guys actually doing?" I started asking questions there. We were at the Fayetteville area tournament for two days, so I actually went back. I talked to the owner. He said, "Come on back. I want to show you all this." They were really actually pushing the brand. It was still pretty new. There's like over a thousand stores now. I think I was number 221 or something like that.

Lauren:    Oh, wow.

Tim:    So it's really grown. I was able to get in on the grass floor, the bottom floor. I just went out. I started asking questions. I said, "Hey, you know what? This is something I could do." I knew I needed help, so I had to convince my wife, who'd ran a law firm for years, and years, and years, to retire early so she can help me and take this on while I was still working as a fire fighter.

Lauren:    What was your biggest fear as you signed the dotted line?

Tim:    Losing the $300,000 plus and having to work another 10 years to pay that debt off. It was the monetary deal. If it doesn't work, what's going to happen? If I don't get the right location, what's going to happen? Besides the money end, that was it. That was the biggest scare. I mean, you know, and entrepreneurs will tell you, "If it didn't work, it didn't work. I can bankrupt and move on." Well, I've never done that. I'm from ... My dad ... I'm one of 12. There's seven boys. We all worked. I'm from a working family where we actually work. You know what I mean? We just get after it. He taught all of us, "This is how you do it and this is how you make it," so we work. I knew I was going to work hard at it, and I was going to give it everything I had, and if it didn't work, it wasn't meant to happen. That's the kind of philosophy I had. I'm going to give everything I've got to make it work and if it doesn't work, then it just wasn't meant to happen.

Lauren:    So you start the first one in 2011.

Tim:    In 2011, we started the first one. First day, great. Second day, great. It was nice the whole summer. But what corporate failed to tell me, being a new franchise in a new market, that you're probably going to have a drop off. Well, they said we'd have a little drop off because of weather. It was massive. I mean, it was like half, more than half. I'm like panicking big time. It's like sales are really, really bad. I did the marketing. Our market ... This is what I can tell everyone. When you start something new, you're going to make mistakes. I made a ton of mistakes.

Lauren:    Like what?

Tim:    Spending $30,000 for a billboard for a year. No one knew what Tropical Smoothie was. I'm thinking, "A billboard. Everyone's going to see us. They're going to come into Tulsa Hills and see us." Waste of money. Doing a lot of different advertising things that were a waste of money. Having too much staff early, thinking, "Okay, gonna have all these people here and we're going to do it this way." You just don't need that many people. It's better to have less people and have them really trained, that way they won't be running into each other. Just a lot of little things that you just don't know until you do it. As far as monetarily, made a lot of mistakes. Labor, made a lot of mistakes. It's just a learning process.

Lauren:    You've obviously got your feet under you now. You've grown and learned.

Tim:    We've grown. We've learned. Opened up two more locations, so we had to do something right. Even have another guy to come to the market whose brought another four locations, and soon to be a fifth location, in a suburb right outside of Tulsa, in Bixby, so it's a growing brand. It really is growing. We finally hit the Texas market and it's just taking off big time. I think we got in on the ground floor. Our value is really gone up as franchise owners, which is a great deal.

Lauren:    I love that. Let's talk about those other two locations. You opened one in Tulsa Hills and then you went to Pine and Peoria.

Tim:    Right.

Lauren:    Seems like a totally different customer base.

Tim:    Totally different, but originally, that was going to be my first location.

Lauren:    Really?

Tim:    I consider ... I know a lot of people say North Tulsa's kind of like a food desert. There's nothing there and definitely nothing healthy. I mean, there's a Subway, but you can only eat so much Subway. Tropical Smoothie's a little bit ... Not putting Subway down, because they market better than anybody out there, even more than McDonald's. We have a different quality of product. Our sandwiches are made with Dietz & Watson meats. Go to Reasor's and price the Dietz & Watson meats. It's not the cheapest product out there. And we're still able to give it at a decent cost with everything, comparable to the Subways, or the Quizno's, or other food establishments like that. We use just a higher end quality product. I think that's what makes us a little different.

Lauren:    Did people push back at all to the idea of building up north?

Tim:    Oh, yes.

Lauren:    I know a lot of entrepreneurs would be like, "Oh, I don't know about that." You have such heart for North Tulsa. I know that.

Tim:    I'm a North Tulsa kid.

Lauren:    Really? Okay.

Tim:    I grew up deep north. They used to call it "Early Turley" back in the '70s and 80's. 56th Street North. I've seen the demographics change. I was one of four black families in a neighborhood and by the time I got to high school, there was almost all black families. So I've seen the cultural change. I remember when there was everything up north, from eateries to movie theaters, bowling alleys. There was ... You name it. If there was anything in South Tulsa, it was in North Tulsa, as well, back in the 70's. Shopping centers. It was all there. I kind of was ... I'm a little old enough now that I can see everything that happened before and realize it can happen again, or it should happen again. I had to go against the grain, especially when I went north. I had family members, friends, "Are you nuts? You're going to put a ... That area's not going to support a healthy food option. It's just not going to happen. If it's not chicken, or barbecue, or a liquor store, it's not going to work." Day one, that store's been great. It's just great for the city. I know the mayor sees that. Tax dollars are tax dollars, no matter where they come from. You can only grow so far south before you run into things being Broken Arrow and the Jinx area. North Tulsa's kind of like the undeveloped area right now. And West Tulsa. West Tulsa's needs a little bit more development as well.

Lauren:    So what would you say to other entrepreneurs who might have hesitation about going up north?

Tim:    I would say, "Money is green and it spends no matter where." I would say, "Do your research and look at the amount of money that leaves that community." I think it was estimated over $60 million a few years ago that leaves the North Tulsa community. I think most people don't realize how big North Tulsa is, when you go East to West and North. When you have that kind of dollars leaving an area, and I know Owasso's getting a lot of it through shopping because there's nothing up north for a lot of people. A lot of people still go to South Tulsa. It's a lot of opportunity that hasn't been tapped. If you go to North Tulsa now, believe it or not, the demographic's changing again. Just drive through North Tulsa and look who's ... It's just a big ... The demographics is changing. Especially where I live. I still live north. I moved south when I was younger. I moved back north, built a house in the Gilgrease Hills / Pine and Cincinnati area, well, MLK now, area. Those demographics is really changing.

Lauren:    And like you said, untapped opportunity. That's an entrepreneur's playground, man.

Tim:    It should be. When we were there, opened up out north in 20 early 13. Was it '12? I forget. Taco Bell, they're out in north now. They came in, and sat down, and talked with me. They sat, and watched the traffic, was like, "Okay, maybe it is going to work." It's kind of hard to judge off of McDonald's. McDonald's is going to be prosperous wherever they are. Kind of like Chik-Fil-A. Chik-Fil-A, McDonald's, Starbucks, no matter where they go, they're going to do well.

Lauren:    You're going to get customers.

Tim:    You're going to get a lot of customers. I guess they wanted to see how we were doing. It's working. For us, it's working. That north location has been profitable from day one. I didn't have the same challenges I had out in Tulsa Hills. Tulsa Hills was like a year and a half before I started seeing any type of, "Okay, this is going to work." Seemed like when I opened up that north location, Tulsa Hills kind of kicked in. It was scary there for a while. I didn't take salary for two and a half years.

Lauren:    No way.

Tim:    Yeah, and my wife's salary really wasn't a salary from what she was used to making, so we sacrificed. We worked. Put in a lot of hours. You had mentioned earlier most people talk about the glitz and glamour. It's work. You have to ... Unless someone's just lucky and got all the answers, and I haven't seen anybody like that yet, you're going to work. You're going to put the time in. I still wash the dishes. I take out trash. I make smoothies. I make food when I'm there. I'm not there a lot anymore, but I make sure I stop in. If I can't do it daily, every other day I'm at one of the locations just so they can see me. I let those employees know that, "If I'm doing it, I expect you to do it." We've been blessed, blessed. I have really good employees. I've had some that's been around five years, four years. But we pay a little bit better than most food establishments, too.

Lauren:    I like that you inspire your employees by action rather than just telling them what to do.

Tim:    That and I try to make it a family atmosphere. We have our company Christmas parties. We do barbecues. We celebrate anniversaries, birthdays. I'm smart enough to know ... I hope I'm smart enough to know, because I've got a good wife, I'm smart enough to know that we can't do this alone and you've got to have good people to work for you. There was a gentleman named Bartmann, Bill Bartmann. Owned a company called Commercial Financial Services. My wife was a supervisor for him, years ago, and watched how he did with his company and the way he treated his employees. I said if I ever owned a company, I'm going to kind of emulate him on rewarding them. If you're good, I'm going to reward you. It works. It's been successful for us.

Lauren:    Let's go back to what it's like running a franchise. What has surprised you most in this whole process about being a franchisee?

Tim:    The biggest surprise has been, I guess, the public. I never would expect some of the things that I've seen from people in a food establishment. I guess I'm just naïve on how certain people act sometimes. Then I praised about how good a work force we have and then, workforce. We have some employees, even though we try to do the best job we can in choosing people, that people just don't want to work. But dealing with the public has been the biggest surprise.

Lauren:    So it's not even dealing with corporate that's been difficult?

Tim:    No. Even though it's an upstart, Tropical Smoothie is kind of still pretty new. You kind of expect certain things from corporate. I think the biggest deal was public. What you'll find, most franchises, if they're worth anything, they're going to have a pretty good plan for you, so it's up to you just to find your location and put the time and effort in. I didn't really have any issues with corporate, per se.

Lauren:    You felt pretty supported, it sounds like.

Tim:    Yeah.

Lauren:    You've been serving the Tulsa Fire Department for over 20 years now.

Tim:    Yes.

Lauren:    And Tropical Smoothie, you've had under your belt for about seven years.

Tim:    Mm-hmm

Lauren:    How have you found balance between the two, so that you're not neglecting something important with one or the other?

Tim:    I am a fire fighter. That is my career. Tropical Smoothie is my hobby. Plus, my wife is phenomenal. I have a really smart, educated, hold your feet to the fire type of wife. If I get lax, she's always on it. She pretty much runs the day to day operation. She is HR. I always tease everybody, she's the CEO, I'm the CFO. I'm the one to write the checks, but she's running the shop right now. Nicole does a really good job. But you know, running the law firm for years, she had the experience already, so it was just a easy transition. Well, I shouldn't say easy. It's never easy. It was not easy. I don't want to get ... But for her, to be able to step into a thing she's done, it's been great to have a partner. Working with my wife has been challenging, because sometimes you bring Tropical Smoothie home, but we try our best not to.

Lauren:    How do you turn off the business side you can tend to your marriage and not always be tending to your business?

Tim:    The first year, it was all about Tropical Smoothie, because we were all in panic mode. How do we keep this thing afloat? I refuse to lose. I hate losing and I refuse to lose. But after that first year it's, man, the most important thing to me is her. I've got kids, but they're adult men now. They adults, 24 and 21, so-

Lauren:    They can take care of themselves now.

Tim:    That's my thought. When they were in high school, "Okay, you guys are pretty much grown. You know what you need to do. You've been raised right." My wife is my priority and I'm pretty sure I'm hers. Got my fingers crossed. No, I'm pretty sure I'm hers. I've just got to make sure ... If she's happy, and I tell her this all the time, "If you're happy, the whole household goes great." Seriously, even my boys knew that if mom was happy, everything seemed to be just easy keel. I got lucky. I got a good girl.

Lauren:    Are there any practical steps that you take to shutting work off so that you can focus on home life?

Tim:    I just do it now. We've done this long enough that it's not a big, "Oh, what's going to happen next?" Man, if I'm not at the shops, I'm not at work. If no one doesn't call me, I'm not thinking Tropical Smoothie if no one's calling me. We've got people to handle that. Like I said, I've got a really good staff.

Lauren:    I guess that's the importance of hiring well.

Tim:    That is. I would tell anybody that's doing business, the number one goal is to have good people. If you're got good people, it's easy. We've had times when we didn't have it. When you open up that many stores, it's 55, 60 employees. It gets difficult sometimes. If you don't have good staff, it shows, because you're in the cafe. Now you're actually there, because you're helping out, making sure ... We don't rely on just management or other employees to train all the time. We actually get in there and train ourselves. Now, when both my boys were working in the shops quite a bit, it was easy, but one doesn't live here anyone, one works for the airline industry. He kind of helps out when he can. It's just me and Nicole and we depend on our staff to take care of business now. To be able to shut off, when you leave the shop, it's our time. We try to ... We go a bunch. We're older, don't have kids at home, so we travel. That's her deal. She likes to travel. She likes to go to concerts. Once a month, we go somewhere.

Lauren:    Oh, that's so fun.

Tim:    Even if it's just a weekend deal or a two day deal, we're out. If somehow we miss a month, then it's going to be a bigger month the next time. We're going to do something a little bit better. We just try to enjoy life while we're here. I think that changes as you get a little older. You start thinking, "Okay, one of my classmates didn't make it, he just passed. Okay." You start thinking a little bit different than you did when you were in your 30's and 40's.

Lauren:    Let's talk for a second ... You own three of the Tropical Smoothie in Tulsa.

Tim:    Yes.

Lauren:    But there are ... I think online I saw seven locations?

Tim:    There's seven now.

Lauren:    For people who-

Tim:    Soon to be eight.

Lauren:    Soon to be eight. That's exciting. For people who are maybe looking into franchises or are franchisees, what's the importance of networking with the other owners in town? Do you have a relationship with the other owners or do you see them as competition? What's that dynamic like?

Tim:    No. I think they might have saw me as competition at first maybe, until they talked to me, realized I'm all about growing the brand. I got that from Chris, the regional developer. As long as we're not like these Cherry Berries, the yogurt places, how they just oversaturated themselves, then they start falling out, as long as we ... And corporate will make sure this happens, that we stay a decent distance away from each other, then we should all be supporting each other, and I believe we do now. It's been ... You kind of get that idea, when they first come to the market, but I know him well. The guy that's building all the other ones is a pretty big shot within the corporate world of Tropical Smoothie. He has the Arkansas market. He bought the whole market of North Texas.

Lauren:    Oh, wow.

Tim:    Exactly. From east to west, that's massive, massive. You've got the Dallas, the Fort Worth, the Planos, the Lewisville ... You've got all these communities there.

Lauren:    Like a million suburbs there.

Tim:    Yeah. So he's growing, big time. No competition. It's if we grow the brand, we're all going to be successful. That's the good thing, but us being Tropical Smoothie, it's the family concept.

Lauren:    Do you have plans for any new locations for yourself?

Tim:    We are deciding. Bartlesville and Owasso will probably be next. It may not be me, but there's a strong possibility it's going to be me. Or we may get out of the business.

Lauren:    Really?

Tim:    Like I said, at our age ... I'm in my early 50's. I'm not in love with something that I would never let it go, because there's always some kind of transitioning. I would say you always should have an exit plan or an idea of what your exit plan should be, because I'm not going to do this forever. Like I said, we still may grow. I have two more years left in the fire department, here in Tulsa, so after that, who knows what's going to happen. I'm only married to one thing and that's my wife. Anything else is out there for debate. And a lot of it, I'm basing it on what she wants to do, as well. Because I know I'm going to need her to run five, because if we do it, it's going to be two real quick.

Lauren:    Oh, really? Okay.

Tim:    Like in 2018 quick.

Lauren:    Oh. All right. Little sneak peek here.

Tim:    And if we decide to sell a few years, then we'll just let all of them go, maybe, except one.

Lauren:    Which one would you keep?

Tim:    I would probably keep the north store if I could, but that's probably going to be a store that everyone wants if I sell. I've had offers. For the last three years, I've had offers. I've turned them down, said, "No, no." I'm glad I did, because that value has gone up tremendously. It's just kind of play it by ear, because there's other things we want to do and try to get involved in. When I retire, I'm going to retire. I'm not going to be a guy just sits around. I like working. I know that sounds crazy, but I like ... It's just been bred in us. You feel accomplished, or at least I do, when you work. My wife has that same kind of drive. Laying around the house all day long is kind of a slump thing to do more than one day.

Lauren:    I feel you on that. I think most entrepreneurs feel you on that. An itch to keep moving forward.

Tim:    To keep growing. To keep challenging yourself to find new challenges. What's out there that I can do next that someone says I can't do?

Lauren:    This is our last question, that we ask everyone who comes in. How would you encourage an entrepreneur who's in a tough season? You said that first year, you're really gritting your teeth, pushing forward to build something great. How would you encourage other entrepreneurs who are trying really hard to build something great?

Tim:    If it's a franchise that's not doing well, find someone in your family that's doing well with that same brand and ask them what they're doing. We reached out to everybody. I went to a national convention. You probably thought I was running for mayor. I talked to everybody I could find. "Hey, what you got going? How do you do this? If I do this ..." I mean, I'm asking questions. Or, if it's not a franchise, find out what you're doing wrong. From what I've seen, from a few local businesses that may struggle to have gone out, they're not running it like a franchise. What's my food cost? What's my labor going to be? How do I streamline this? I can't go buy this car. I can't go buy that house. How much am I going to have to live on? It's just, look at ... Take a step back and evaluate what you're doing and say, "Okay, if this was someone else, would I recommend this person do what I'm doing?" That's what I see from a lot of entrepreneurs, they kind of go out and spend on themselves and they probably should wait. Wait and save your money. Save it, invest it back in your company. Taking two and a half years of not taking a pay salary ... And, by the way, when I did take a salary, I was only paying myself $10,000 a year that first year.

Lauren:    Not a livable wage.

Tim:    Not a livable wage, but I said, "Okay, I've got to get something back." I pay myself more now, but I've been at it seven years now. But that's what I would do. Just take a step back. And reach out. There's different groups out there, like Tulsa Economic Development Corps, SCORE, different organizations that you can actually call and say, "Hey, I'm having a problem. Can I get someone to come out and do an evaluation and find out what exactly am I doing wrong?" But hopefully, they did a business plan before they got in the business and tried to figure out, "Okay, this is what I must do." I tell a lot of young folk, because I do this sometimes ... I mean, I've gone to businesses, schools, and talked economics or entrepreneurship. Don't get in business just to say you're in business. That's huge. A lot of people love the idea of saying, "Hey, I own a hat shop." Okay, but is that going to be profitable for you? Are you going to be able to sustain it? Those are some of the things you need to look into. Opened up Tropical Smoothie, it was a year and two months process for me, or for us, for Nicole and I. We went over, and over, and over ... Even had a SCORE person tell me, "It won't work."

Lauren:    Really?

Tim:    Yeah. Now, he wasn't in the food business ever, but he just knew how tough the food business was and, "It's not going to work. Tim, I'm telling you, it's not going to work." I said, "But it's working in these markets. It's in Arkansas. It's big in Arkansas and we're bigger than Arkansas." I couldn't understand. You have to have a belief in yourself, the work ethic, and a plan together. You mentioned this, if it's going bad for them now, just step back and look. What am I doing wrong? Get someone else to evaluate for you.

Lauren:    Being open to feedback sounds really-.

Tim:    Most definitely. And not taking it the wrong way. When the SCORE guy kept telling me, "No, no, no," I just had to trust my own gut. I couldn't understand why no here in Tulsa but it's working in a smaller market like Arkansas. As you can see now, there's seven, soon to be eight. Nine and 10, it will be soon. It's in Oklahoma now, all in the western part of the state, Norman, Oklahoma City, Lawton. It stems from what Nicole and I did here in Tulsa, proved to everybody it can work in this market.

Lauren:    Thank you so much for coming in to share your story. I love it.

Tim:    Thanks for having me. I hope I was able to give some insight on-

Lauren:    Oh, absolutely.

Tim:    Tropical Smoothie and what we do and what we've done.

Lauren:    Absolutely. I need to go get a smoothie now. I'm hungry.

Lauren:    Next week on the "The F Word".

Eric:    There's a contingent of people that really don't get what we do and think that we're just out trying to get people drunk and put them on the streets.

Lauren:    The founder of Marshall Brewing, Eric Marshall, talks about blazing the trail for craft brewers in Oklahoma, both socially and politically.

Dustin:    "The F Word" is brought to you by 36 Degrees North, Tulsa's base camp for entrepreneurs. To learn more about our workspace, community, and resources, visit 36n.co. "The F Word" season one is recorded at KOSU studio, hosted by Lauren King and produced by Julie Combs.

‍