"POVERTY BREEDS CREATIVITY"
by Gerald Ensley
Tallahassee Democrat
Wednesday, April 17, 1996
"Don't think bucks, think people." A '60s philosophy of good karma, mixed with the possibilities of capitalism and imagination, have spelled success for Cabo's Tacos. All the equipment is second-hand, from the Pizza Hut oven hood to the booths to the sink rescued from the side of the road. All the construction was done by friends and acquaintances late at night, in exchange for beer, food and, on one occasion, a sailboat. And the atmosphere at Cabo's Tacos is pure laid-back, from the "No Ties After 5 p.m." sign at the door to owner Mike Ferrara walking around in shorts topping off patrons' beer mugs for free. Well, basic '60s philosophy grossed $700,000 last year. With a recently acquired liquor license, it should rake in $1 million this year. All of which is a heart-warming testimony to the profit of good karma and the possibilities of American capitalism.
Cabo's, which just passed its second birthday at its current location, used to be a dark neighborhood bar called the Peanut Barrel Pub. Now, it is a brightly colored vision of its namesake, the Mexican seaside village of Cabo San Lucas. Murals cover three walls and the ceiling. Televisions play surfing and snow skiing videos. One of Ferrara's old surfboards adorns the wall, as do group photos of the nine annual community parties thrown by Ferrara. The menu is an interesting melange of Mexican dishes, fresh seafood and vegetarian creations, whose prices run from 99 cents to $13. Cabo's 156 seats are filled at lunch and dinner by a clientele that ranges from high-powered lobbyists and legislators to aging hippie carpenters to middle class families. But while much can be said for the food, atmosphere and prices of Cabo's, its success is a tribute to attitude. Because it is Ferrara's surf-bum charisma and enthusiasm - balanced by Staerker's common sense and restaurant experience - that has made Cabo's an advertisement for small business. "This restaurant was built on the goodwill of local people helping local people. With all the chain restaurants, it's neat to know we can compete."
Cabo's is Ferrara's third successful business -- and serves as proof that ambition can arrive late. Ferrara, 44, is a lifetime surfing addict, who left Jacksonville for California shortly after high school graduation. For 14 years, he ambled from wave to job to wave. He tended bar in Colorado, served in the Merchant Marines, worked for charter sailboats and diving shops in the Caribbean and repaired surfboards in Hawaii and California.
In 1983, at age 32, Ferrara decided it was time to get a career. Ferrara invested his savings of $13,000 in Speed Wash, a down-at-the-heels Laundromat. Armed with a couple of repair manuals and a ton of personality, Ferrara transformed Speed Wash into a roaring success. He served pizzas on Wednesday nights and doughnuts on Sunday mornings. He sold T-shirts that read, "I Dropped My Drawers At Speed Wash." In 1987, he held the first of his now-annual street parties that attract hundreds with free bands, beer and nachos.
Visiting old friends in San Diego and surfing across the Mexican border at Cabo San Lucas, Ferrara ate lunch one day at a San Diego taco stand called "Juanita's." It was just a little shack, with a small menu. But the food was great and the operation seemed simple. Ferrara returned to Tallahassee inspired to become a restaurateur. In 1989, he opened Cabo's Tacos in a tiny corner of the Parkway Shopping Center about 100 yards east of his current location. Ferrara went to Thompson at Capital City Bank for a loan. Thompson raised an eyebrow at financing a first-time restaurateur. Ferrara, with his then-long hair tied back in a ponytail, wearing shorts and flip flops, picked up a piece of paper, balled it up and lit a lighter under it. "I said, 'Dale, you'd loan $23,000 to one of your friends to buy a Beamer. All I want to do is start a business,'" Ferrara said. "I said, 'Even if I was to burn your money right in front of you like this paper, I'd still pay you back.'" That little bit of theater charmed Thompson, and he approved the loan. And fueled by the word-of-mouth advertising by former Speed Wash customers, Cabo's was an overnight success. Within two years, he paid off the loan.
Ferrara wanted something bigger and better than Cabo's Tacos - even though he had no money and no clue about running a real restaurant. One key was enlisting Bobby Staerker, as a partner. A friend of Ferrara's for years, Staerker had been a waiter at two Tallahassee restaurants, and an assistant chef at the Radisson. He runs the kitchen at Cabo's and cooks. Another key, of course, was getting Thompson to approve another loan. Staerker had $15,000 to invest. Ferrara was asking for a loan of only $33,000 -- claiming he and friends would do all the labor. "The more Mike described what he wanted to do, the more I thought, 'Oh no!'" Thompson recalls. "But he had done well on his other loans. I figured for $33,000, we'll take the gamble."
The gamble worked because of people like carpenter Russell White, plumber John Hoover, contractor Jerry McFarland, electrician Miles Kennedy, artist Cindy Rios and dozens of Ferrara friends who pitched in to build Cabo's. The bulk of the work was done by the skilled friends who came in every night for four months, after putting in long days at their real jobs. All of them worked for a fraction of their normal pay. "This place was built on sweat equity," Ferrara said. "Poverty breeds creativity." Some people pitched in because they were charmed by Ferrara's enthusiasm. Such energy was necessary after the current Cabo's opened Jan. 31, 1994. Ferrara had never managed a staff of 34, never faced a Friday night rush, never dealt with the demands of a full-scale restaurant. The inexperience showed. As with the previous Cabo's, the patrons came in hordes -- then endured long waits and menu outages as Ferrara and Staerker learned to tame their new beast. Under Staerker's calm hand, the operation smoothed out. The menu expanded and remains home to constant experimentation. Cabo's expanded from 130 to 156 seats. By last fall, Ferrara and Staerker had paid back all but $4,000 of the $33,000 loan. They then borrowed $15,000, but expect to have their entire debt paid off by the end of this year.
Such success is gratifying to Thompson, who credits the low overhead Ferrara and Staerker created for themselves. Thompson said it costs an average $1 million to buy land, equipment and inventory for a restaurant in Leon County. "Mike and Bobby are making a good living because they haven't strapped themselves with a big debt," Thompson said. Such trust was never a gamble to Ferrara, the eternal flower child. He is fond of saying, "We don't make a killing, we make a living." He believes in channeling profits to employee raises, and boasts "No one in the kitchen makes less than $6 an hour." Mainly, he is proud of creating a restaurant for "people like me." "I've never had a business plan, never thought, "Do this and you'll make that much money,'" Ferrara said. "If you take care of people, they'll take care of you."
Parkway Shopping Center
1221 Apalachee Parkway
Tallahassee, Florida 32301
Phone: 850-878-7707
http://www.cabosgrill.com/
:-) - $
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