We Are On Track To Gross Over $1M This Year With Our Denver Food Tour Business [Update]
This is a follow up story for Delicious Denver Food Tours. If you're interested in reading how they got started, published over 5 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
My name is Jessica Baumgart, and in 2017, after traveling the world for a year and disrupting my stable communications career, I started Delicious Denver Food Tours in Denver, CO.
Here’s my original Starter Story interview.
Initially, I started my business as a side hustle, but my flagship tour, the Downtown Denver Food Tour, took off, and by the sixth month, I hired my first part-time tour guide.
From there I launched new tours (Cocktails + Tastes, the RiNo Arts District Food Tour, the Denver Wine Walk, and a dinner and drinks tour for corporate groups), hired more staff, and of course battled a worldwide pandemic.
Specifically for tour operators, I always advise new entrepreneurs to focus on growing their customer base over their products.
Tell us about what you’ve been up to. Has the business been growing?
From 2017 to 2020 we grew steadily, increasing the number of tours we offered, the staff we employed, and of course our customer base. By 2019 we were hosting about 500 guests per month.
This of course all came to a halt in 2020 when both tourism and dining out (the two main pillars of our business) stopped. We scaled down, temporarily laid off staff, and waited things out. After several starts and stops, we re-opened and began rebuilding.
As painful as a setback can be, it does often push you to look outside of the box at other options, some of which can be better than the original idea.
In 2021 we started to see revenge travel boost our business, and we re-entered growth mode, increasing our average guest count per month to 600. That year my husband came to work in the business full-time and took over corporate tours, which made up about 20% of our total revenue at the time.
He rebuilt products to be more efficient, brought on new restaurant partners, and did more SEO and web work to attract more corporate clients. Now in 2023, that side of our business is closer to 30% and a big revenue driver.
In 2022 we decided to hire our first full-time employee, one of our stellar guides who stepped into a Tour Manager role. That allowed us to offload a lot of the administrative tasks that were eating up time and freed us up to focus on marketing the business and building strategic partnerships.
As we’ve grown, we’ve decided to hire for other areas that are challenging for us - namely SEO, blogging, and web development. All of this squeezes our profit margin but allows us to grow more sustainably.
Today we’re averaging about 750 guests on tours each month and are on track to gross $1 million this year.
What have been your biggest challenges in the last year?
Over the last year, our challenges continued to be operational. How do we hire, train and retain good staff? How do we pivot when important restaurant partners close permanently or are no longer viable stops for food tours?
Because ours is a service business in the live events arena, we are always juggling, reacting, and putting out small fires. It keeps things interesting!
As an owner, knowing how much of my time to spend in reactive mode vs. proactive mode is also always a challenge.
What have been your biggest lessons learned in the last year?
I’ve always heard that challenges can present opportunities, but I’ve learned that more acutely over this past year. We lost a pivotal restaurant partner that made one of our most profitable and in-demand tours functional.
It was scary and initiated some important team discussions around how to fill the gap to meet the demand we continue to get from corporate clients wanting to book large-scale food tours (a challenge for anyone working with restaurants that have limited capacities).
That change, however, pushed us to look at a new product that would allow us to host even larger groups at a lower cost for the customer, opening up a new field of business that we hadn’t been able to address before.
Now we’re looking at booking some very large groups with restaurant partners more suited to the size and set up to handle the volume right as we go into the summer months.
As painful as a setback can be, it does often push you to look outside of the box at other options, some of which can be better than the original idea.
What’s in the plans for the upcoming year, and the next 5 years?
Moving forward in the next year we’re looking at what additional hiring needs to happen to support our growth. Likely that will look at some more administrative help to support the operational challenges that inevitably come with hosting more and more guests each month and year.
We just finished a round of tour guide hiring which will set us up well for this coming high season (summer months for us).
Additionally, largely because of articles like these, I have been getting approached often by other people wanting help launching their food tours. As a result, I’ve started doing hourly business consulting, which I enjoy.
The big question for us is what’s next in the big picture. Do we keep growing in Denver or look at additional cities to expand to? Do we offer new and different products or focus on growing our existing profitable products to their maximums (and what are those maximums)? There are a lot of exciting opportunities ahead!
Ultimately we discuss getting to a point financially where we can run the business passively and step away to travel with our family.
What’s the best thing you read in the last year?
I’ve gotten connected with two main tourism educational groups that have been a wealth of information to me in the last year: Tourpreneur (podcast + Facebook community) and Arival, a semi-annual conference for tour operators.
Advice for other entrepreneurs who might be struggling to grow their businesses?
Specifically for tour operators, I always advise new entrepreneurs to focus on growing their customer base over their products. More often than not people have a great idea for a tour and spend all of their time and energy perfecting the experience. When no one books it, you don’t have a tour.
Focus that time and energy on attracting the right customers to fill the seats. What specific value are you creating? Who will be interested in that experience and where are they currently looking for it? How can you best get in front of them and position yourself well to compete with the other options in the space?
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
If anyone reading this wants to start their food tour, feel free to reach out to book business consulting.
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