Port of Subs, once saved by SBA, honored by agency
John Larsen, the founder of Port of Subs, relaxed a few days ago at a table outside one of the company’s stores in the student union at the University of Nevada, Reno, awaiting a meeting with regional leaders of the Small Business Administration.
A couple of hundred yards south of the Joe Crowley Student Union, counselors worked in the offices of the Nevada Small Business Development Center.
Those counselors, said Larson, often provide the assistance that makes the difference between success and failure for small businesses and Port of Subs is a high-profile example of a near failure that got back on track.
The SBA recognized Port of Subs with inclusion in the SBA 100 a group of 100 small businesses across the nation that created at least 100 jobs as the result of the assistance they received from the federal agency. Port of Subs is the only Nevada company to be recognized.
Larsen credits the Small Business Development Center, which is funded by the SBA, with the very survival of the Reno-based operator of franchised and company-owned sandwich shops.
After development of 10 company-owned stores in the Reno-Sparks market between 1975 and 1985, the company began franchise sales in the mid-1980s.
But the real estate bust of the late 1980s hammered Port of Subs and its franchise owners, and the company’s future was in jeopardy. In 1990, Larsen turned to counselors at the Nevada Small Business Development Center.
As he looked back, Larsen said the counselors asked him a single question “Who is your customer?” that got Port of Subs back on track.
Unable to give a good answer to the question, Larson agreed to work with a team of Small Business Development Center counselors and UNR students to conduct a market study that identified the reasons that some stores thrived while others struggled.
With that information in hand, the Small Business Development Center worked with Larsen to develop a business plan, with special emphasis on advertising and marketing.
“Without that help, I’m not sure we would have made it,” Larsen said. “They made us think about what we were doing.”
The company had lost $250,000 in 1989. In 1991, privately held Port of Subs turned a small profit. In 1992, it began a rapid growth cycle.
Today, the company operates 30 company-owned stores and franchisees run another 120. Along with the counseling provided by the SBA-funded small business center, Port of Subs also has benefited from SBA-guaranteed financing to its franchisees for many of them, the only financing that is available as the recession lingers.
Larson’s involvement with Nevada Small Business Development Center continued even after Port of Subs got back on track.
He served on the board of the center including a stint as chairman and remains close to the center and the College of Business at UNR.
“I’m a businessman, and I don’t want to see anyone fail,” says Larsen, who worked in an accounting firm before he got into the sandwich business. “This is an important way to bring academia together with business.”
Ed Cadena, director of SBA’s Nevada district, said Port of Subs reflects a classic story of entrepreneurial success.
“John realized his timing was bad, not that his idea and business model were bad. So he regrouped, analyzed and improvised,” Cadena said. “Now he is living the American dream.”
The company’s inclusion in the “SBA 100” comes a dozen years after it was recognized by the federal agency as Nevada small business of the year.
The unanimous approvals Wednesday came despite state leaders promising to tighten up requirements for Nevada’s tax abatements and incentives for future companies.