Signature dish

Signature dish

Taqueria La Hacienda focuses on family recipes to boost revenue

by Neil Orman   Some customers push Taqueria La Hacienda, a fast-growing restaurant on East Lake Street in Minneapolis, to broaden its menu of authentic Mexican cuisine to include Tex-Mex fare.

One would think a small business should listen to its customers. Not in this case, according to owners Miguel and Maria Zagal.

The restaurant specializes in tacos al pastor, which are made by slicing strips of spicy barbecued pork from a slab of meat cooking on a vertical rotisserie. The tacos are made with corn, not flour, tortillas, and they don’t come with Tex-Mex toppings like lettuce, cheese and tomatoes.

“Some people look at them and say, ‘Where’s the cheese? Where’s the sour cream?’ ” says Maria. “But when they try it, they like it.”

Others ask why they don’t make Tex-Mex tacos a separate choice on the menu.

“Because then we’d be like everybody else,” Maria says.

The formula of specializing in authentic Mexican tacos, and keeping costs low through a short-order format, has worked well for the couple.

Taqueria La Hacienda opened its first location in the Mercado Central in 1999, as one of the original kitchens inside the Hispanic marketplace at 1515 East Lake Street. It immediately thrived, and in 2003 the Zagals opened a second location at Second Avenue and Lake.

Total revenue passed more than $1.4 million last year, including more than $1 million from La Hacienda No. 2. At press time, the Zagals were set to expand the second restaurant into a new location four times larger.

And beyond its own success, Taqueria La Hacienda has emerged as one of the stars in a growing cluster of Latino businesses on East Lake Street. The Zagals are helping expand that community by mentoring relatives and friends opening their own businesses.

Miguel and Maria, both 33, met when she lived next to his uncle’s house in Anaheim, California, where they lived after emigrating from Mexico. Maria moved to the United States in 1979 from Mexico City, and Miguel came in 1988 from Cuernavaca.

They married in 1993 and moved to the Twin Cities two years later. Miguel’s older sister lived here, and trumpeted the area and its job market. She also mentioned there were few Mexican restaurants or groceries compared to California, which appealed to Miguel, who hoped to open a business.

“I told Maria that if we moved to Minneapolis from California, it was to have our own business,” Miguel says.

But when they got here, they weren’t ready yet.

Their English was still shaky and they didn’t know the area. They worked at a series of blue-collar jobs, since neither of them had graduated from high school. Miguel first assembled computer monitors and later worked as a driver for a pet supply distribution company. Maria had trouble finding a job at all, eventually landing one at Kmart. She had to quit that in 1998, when the couple had a baby. Later, when the baby was old enough to leave with family during the day, Maria couldn’t find work.

“It was frustrating, because I knew I could do the jobs,” Maria says. “So we started to think about opening a business.”

Along with Miguel’s entrepreneurial drive, the couple also had Maria’s culinary savvy. Maria’s family used to run a taqueria in Mexico City, and the taco recipe had been passed on to her.

“My grandmother gave it to my mom, when she was working in the taqueria, and my mom gave it to me,” Maria says. “The first time I did the recipe I was 13. And my dad would say to my mom, ‘You know what? She cooks better than you.’ And every time I would cook, I would do something different to give it a better taste. So they’d always say, ‘Why don’t you do a restaurant?’ And I was like, ‘Oh no.’ But he got me into it,” she says, referring to Miguel. Maria had also worked at a taqueria in Anaheim.

But the couple faced major stumbling blocks raising money, as bankers were cool toward a cash-strapped couple with minimal education or business experience, no matter how tasty their tacos.

“We didn’t have any credit or credit history,” Maria says. “Banks would say they’d think about it, but they’d never call us. Or we’d ask people for help and they wouldn’t, because they thought we were going to compete with them.”

After another discouraging day, Miguel spotted an ad in the newspaper.

It promoted business classes taught in Spanish offered by the Neighborhood Development Center, a St. Paul-based nonprofit that works in low-income communities to help aspiring entrepreneurs develop businesses.

When Miguel showed her the ad, Maria said no, because she expected another dead end. Miguel didn’t listen.

“He was doing his research in back of me,” Maria says. “He filled out the applications and he went for a first interview, and then he told me, ‘I filled out the application. I already went to the first interview, and they want to meet us.’ And I was like, ‘OK.’ “

Getting into the NDC classes was a competitive process, and it was the first of two crucial breakthroughs for the couple. The Zagals knew the nonprofit required interviews, during which it would quiz them on their business concept.

They decided upon a taqueria.

Taquerias, which were scarce in the Twin Cities, are as common in Mexico as coffee shops are here. And in particular, the Twin Cities had a scarcity of restaurants making tacos al pastor, Maria’s specialty.

“There was a lady saying she went to Mexico City and had the tacos al pastor, and she couldn’t find anything like that here,” Maria says. “We wanted to do something different, but also specialize in something we did well.”

The NDC whittled about 100 applicants down to 20 who could take the class, and the Zagals were one of those. Maria credits the breakthrough to her husband. “He won’t give up on something once he starts, he’ll just keep at it until he achieves it,” she says.

The NDC program was 16 weeks, and walked the Zagals through the process of building a business plan and trained them in business basics such as accounting and managing a staff. There were eight classroom sessions, and then after the classes each of the students got eight one-on-one sessions with a business trainer, to help them develop their business plans.

Rachel Dolan of the NDC, who continues to help the Zagals with advice and contacts, was struck by their initiative.

“They’re very self-sufficient,” says Dolan, the NDC’s senior loan officer. “You give them minimal help and they’ll chase things down.”

The Zagals came out of the experience with practical business knowledge, and a certificate that helped lend them credibility with bankers. “They treated us better after that,” Maria says with a laugh.

The NDC connection was helpful in another way, too, as a few months later the opportunity for the Zagals’ second breakthrough appeared.

Dolan told them about plans for a new Latino marketplace known as the Mercado Central.

In the late 1990s, Juan Linares, a community activist, began working with Latino immigrants in a Catholic parish in south Minneapolis. He offered language training and other services. At one point, he began to seek entrepreneurs, and asked them for suggestions on ways to kick-start their dreams. They suggested a building where they could be housed together in a structure that simulated marketplaces in Mexico.

The idea was a facility that served both as an incubator for Hispanic retail businesses, and a gathering place for Latinos in south Minneapolis. It would be set up as a cooperative, with the business tenants as part-owners.

It took two years to get the Mercado off the ground, during which weekly planning meetings were held in the basement of a Catholic church. Several aspiring entrepreneurs, including the Zagals, started participating in the meetings, although some left because of frustration with how long it was taking.

The Zagals were tenacious, and in late 1998 got the chance to apply for one of the five restaurant slots in the Mercado.

They would compete against 20 others, each of which would present their business plan and menu to a panel of about 25 judges, who would also taste the food.

The two were nervous. “My husband said this will determine if the business is going to start, if our dream is going to come true,” Maria says.

The Zagals presented the judges a simple menu with a few items: tacos al pastor, tacos de asada (charbroiled steak), shrimp cocktail and enchiladas. The judges liked them and their food.

“It was not just the quality of the food but their ability to do a presentation and create a complete and clearly defined menu,” Dolan says.

After making the cut, they had eight months to prepare for Mercado’s summer 1999 opening.

A key advantage of the Mercado was much lower startup costs than the Zagals would have opening their own restaurant. For example, the cooperative secured financing for all the leasehold improvements and installed the hood, a ventilation and cooking system that costs at least $30,000.

The businesses needed only provide their own equipment and have working capital. In the Zagals’ case, that equipment included a commercial range, a gyro machine (called a “trompo” in Spanish), a couple of refrigerators, a freezer, two tables and a cash register.

The NDC lent the couple $5,000 and backed a bank loan for another $14,000. Nevertheless, the banker was nervous about giving them the money, the Zagals recalled. “When it was time to give us that check, he didn’t want to let go of it,” Maria says, laughing. The Zagals also pitched in $5,000 of their own savings.

When it came time for the Mercado opening, the Zagals didn’t have all their equipment in place, and could offer only a few items to customers.

“We opened just with tacos al pastor and tacos de asada,” Maria says. “We were like, ‘Oh my God, we have two items. Each taco was $1.50. How are we going to survive?’ The other restaurants had their whole menu.”

However, on opening day, they were pleasantly surprised by the reception. “We were the only ones with a line,” Miguel says.

Their successful debut again reinforced the virtues of specialization and a simple identity. “After that, we decided to take some items from our menu out, because we wanted to focus on tacos,” Maria said.

Although it saved its restaurants in startup costs, the Mercado didn’t shield them from competition. The kitchens competed head-to-head, with short-order counters right next to each other. If you didn’t connect with customers, they’d wander a couple of feet to your neighbor.

Today, from the original five Mercado kitchens, Taqueria La Hacienda and Manny’s Tortas are the only ones that haven’t left and been replaced by other restaurants. Dolan says one reason for their survival is they carved out distinct identities.

“Manny’s Tortas was focused on sandwiches, and didn’t have quesadillas, tacos and everything else,” Dolan says. “And Taqueria La Hacienda had the tight specialty on tacos al pastor, and the very visual gyro-roaster, which is the first thing you see.” Several of their Mercado Central neighbors, on the other hand, had much longer and more generalized Tex-Mex menus.

Since the Mercado opening, the Zagals have added to their menu, but strived to keep it simple. Today, their main menu categories are tacos, burritos, platillos (combination plates), tortas, quesadillas and alambres (Mexican-style kabobs). Still, a simple and differentiated menu wouldn’t matter if the food wasn’t good.

Dolan, for one, said she loves their tacos al pastor.

“When I was pregnant, I had cravings for only two things: tacos al pastor from Taqueria La Hacienda and tortas from Manny’s Tortas,” she says.

“Many Latinos consider them to be one of the best taquerias on Lake Street,” says John Flory, special projects director for the Latino Economic Development Center, and another mentor to the Zagals.

Maria zealously protects the family recipes on which their menu is based. “I have to call [my family] for help with recipes sometimes,” Maria says. “But they keep saying, ‘Don’t give it to nobody. Not even your husband.’ And I say, ‘Don’t worry. We’ll just keep it in the family. We’re not going to lose the recipe.’”

Along with the spicy pork, their tacos also come with other meats such as lengua (tongue), ceso (brains) or tripa (fried intestine). These are meats common to tacos in Mexico.

Along with Maria’s family recipes, the Zagals also credit their success to preparing food the way it is in Mexico. “Authentic Mexican cuisine” is a near-ubiquitous phrase on the menus of Mexican restaurants, but Maria says it’s rarely true.

“There are a lot of dishes we see that aren’t prepared the way they are in Mexico,” she says. That “authentic” identity isn’t important to everyone, but it is for many Mexican immigrants living on East Lake Street, and for some people who have traveled to Mexico and eaten “real” Mexican food.

The Zagals said their customer base is about 80 percent Latino, the Twin Cities’ fastest-growing ethnic group with about 70,000 people in the metro area. But interest from non-Latinos is rising, due in part to recent publicity for the restaurant.

Helping generate press, the NDC chose the Zagals as its 2005 entrepreneurs of the year. They were picked from about a dozen business people nominated, due to factors such as revenue growth, job creation and community impact.

Maria manages the kitchens, while Miguel, the president, handles the business side and paperwork. “They’re truly equal partners in the business,” Dolan says. “They’re good at paying attention to details, and they’re not distracted by other ideas out there.”

In addition, they’re good at keeping food costs low, the “Achilles’ heel of many small restaurants,” Dolan says.

Another person integral to their success is Miguel’s younger brother Renato. Miguel was still driving pet supplies around when their restaurant opened, and Maria leaned heavily on her brother-in-law to help run the restaurant.

“I had to teach him how to cook,” Maria says. “I trained him how to do salsa, fry rice and do other things. What I used to do before we opened the restaurant was, on a weekend, I’d say, ‘Why don’t you do a rice’ and I would time him. ‘Now’s the time you have to put in the tomato sauce,’ and so on. Now he’s really good.” Today Renato runs the Mercado’s kitchen.

After proving their concept at the Mercado, the Zagals began expanding their business in 2003. They rented an 800-square-foot location at 211 East Lake Street, just 13 blocks from the Mercado, that’s painted with an eye-catching mural of images from Mexican folk-life.

The Zagals secured a $60,000 loan for the expansion, and this time their bankers didn’t hesitate to let go of the check.

By 2005, they had outgrown the second location, and at press time, were set to expand it into a 3,300-square-foot space two blocks away at Fourth Avenue and Lake. This time, they opted to buy the space, and they secured a $1 million loan from Wells Fargo for that purpose.

John Thwing, an SBA lending specialist for Wells Fargo, says Taqueria La Hacienda was one of four loans he did last year (the Zagals’ loan closed in December) from about 50 businesses that applied. He says it was “obvious they had something dialed in” from the amount of revenue they were wringing from a small space.

The Zagals, who want to later add a location in St. Paul, says their business has been profitable “from day one.”

“The bankers said it would take three to five years,” Maria says. “It didn’t for us.”

The Zagals said they’ve tried to be more forthcoming with peers seeking help and advice, than they say other Latino entrepreneurs were with them.

Helping other entrepreneurs is important to them, the Zagals say.

“If you’re confident in your identity, you shouldn’t be afraid to help others,” Maria says.

[contact] Miguel and Maria Zagal, Taqueria La Hacienda: 612.822.2715; ta******************@*sn.com. Rachel Dolan, Neighborhood Development Center: 651.379.8434,****@****mn.org“> rd****@****mn.org. John Flory, Latino Economic Development Center: 612.724.5338; jk****@*ol.com. John Thwing, Wells Fargo: 612.316.2501;****@********go.com“> sb****@********go.com.