Pie Hole Pizza Joint, a popular Boystown eatery at 3477 N. Broadway St., plans to expand to a second location in the Andersonville neighborhood after asking the community to financially support the project.
Owner Doug Brandt will begin working on a new Pie Hole location at 5001 N. Clark St. now that he’s secured a $30,000 loan through a Chicago-based crowd funding website, a campaign that ended Monday.
Brandt says he’s always intended to grow his brand since purchasing the original eatery at 737 W. Roscoe St. Availability of the proposed storefront became the catalyst for Pie Hole’s unconventional loan request.
A former associate at Nielsen SiteReports — a company that analyzes demographics to help businesses gain customers — Brandt says he’s done his research when it comes to targeting the neighborhood where Andersonville and Uptown meet.
“I’m a fan of the spot and the area because it’s off the beaten path. The area is also slightly more diverse, which is always exciting,” he added.
Based on statistics, Brandt has gone as far as understanding that pizzas would likely be purchased more frequently by area households in the new location, in relation to Lakeview.
Brandt says he’d like to move restaurant prep work to the new site to free up space for more seating. He also expects to expand the menu to include pasta, and open a full bar.
Pie Hole turned to crowd funding for the project because it is easier than getting a bank loan, which is a more traditional route for businesses, he said.
“Regardless of what you read, banks simply are not lending—especially to restaurants. With little security, banks have been burned by them,” he said. “And I’d rather pay interest to friends and fans than to a bank.”
LendSquare, like other crowd funding websites, allow small business owners to post their needs on a page, and allot a period of time to collect pledges from the public. Potential lenders who make a pledge can request a specific rate of interest. After a two-week pledge period, the highest rate of interest among all lenders is guaranteed when they receive their money back.
“If the loan-backers are hyper-local, in the neighborhood I’m gunning for, then I know immediately whether or not that neighborhood is a good candidate for Pie Hole,” he said.
Brandt expressed excitement over the idea of involving the public with the project.
“If members of the community have put up money for the business, then they are more likely to support the business.”
“Pie Hole Pizza was by far our most successful loan in terms of community engagement. This can be attributed to Doug. He already had a social network in place, and he was able to leverage his social media presence to generate buzz and excitement about his project,” said Dayne Poshusta of LendSquare.
Like many small businesses, Pie Hole has suffered its share of setbacks along the way. Earlier this year on Jan. 18, the city closed the eatery for late payment of state taxes and non-renewal of its Chicago restaurant license. After five days, supportive customers and fans paid the business’ obligations, allowing Pie Hole to reopen.
“I’ve learned to pay the city and state first,” he said. “They have no mercy.”
Speaking from his marketing and advertising background, Brandt has advice for aspiring entrepreneurs. First, he recommends saving four times as much as one thinks he or she needs to open a business. Secondly, Brandt believes in testing concepts with lots of people and insisting on getting honest reactions rather than flattery.
“If the ideas are good, go for it!” he said.