We were lucky to catch up with Matias Gutknecht recently and have shared our conversation below.

Matias, looking forward to hearing all of your stories today. Let’s jump right into the heart of things. Outsiders often think businesses or industries have much larger profit margins than they actually do – the reason is that outsiders are often unaware of the biggest challenges to profitability in various industries – what’s the biggest challenge to profitability in your industry?

The restaurant industry faces significant challenges, making profitability harder to achieve, especially in cities like Denver, where the convergence of numerous factors severely strains restaurants. The average profit margin in the restaurant industry hovers around just 5%. This means that for every dollar a restaurant makes, only 5 cents is profit. This slim margin leaves little room for error or unexpected costs, and even slight increases in operating expenses can push a restaurant from profitability into the red. Maintaining profitability has become even more challenging with rising costs in nearly every category.

Two of the largest costs for any restaurant are labor and cost of goods sold. In Denver, these prime costs are especially high. Rising costs of food—driven by inflation, supply chain disruptions, and global commodity prices—add pressure to restaurant budgets. Many consumers have noticed increases in grocery store prices, but for some reason, the connection isn’t always being made that restaurants are also paying higher prices for their ingredients.

Denver’s minimum wage is set to increase to nearly $19 per hour in January 2025, which includes all entry-level positions. While all employees need to be able to afford to live in the cities where they live and work, tying minimum wage increases to the consumer price index puts a massive strain on small businesses, especially restaurants. It seems like new restaurant closures are being announced every few weeks, including some very high-profile restauranteurs, sometimes opting to relocate to other cities. The pivot to fast-casual restaurant models that leverage technology and reduce staff is inevitable, and full-service restaurants could slowly disappear if things don’t change. Keeping labor costs under control while ensuring adequate staffing has been an ongoing balancing act.

In addition to higher prime costs, other operating costs, such as rent in an expensive city like Denver, make things even more challenging. Lastly, with an uncertain economic outlook, inflationary pressures have reduced consumer behavior. People are understandably becoming more selective about where and how often they dine out. The convergence of all of these factors makes it an extremely difficult landscape for restaurants. Every establishment is always looking to cut costs and increase sales, and some changes like raising prices or adding service fees can be considered, but there is only so much consumers are willing and able to pay.

We ask that you please support small businesses and restaurants like Taco Uprising as much or as often as you can because profitability is challenging even in the best of circumstances, but right now, it’s getting close to impossible.

Matias, love having you share your insights with us. Before we ask you more questions, maybe you can take a moment to introduce yourself to our readers who might have missed our earlier conversations?

Taco Uprising is a Mexican-inspired taqueria y cocteleria offering top-notch Breakfast and Day tacos, coffee, and memorable agave-forward cocktails and mocktails. We’re committed to putting people, communities, and our planet first. We’re located in the historic Five Points neighborhood, close to downtown Denver, and have been open for almost 1.5 years. We have a small team of passionate Taconistas, our term for team members, and we wake up every day to make mouthwatering tacos for our Uprisers, our term for guests. We serve breakfast, lunch, and dinner at Taco Uprising, with takeout, delivery, and catering options available.

Both owners have lengthy ties to the restaurant and food industry. We love providing food and beverages, an environment, and an overall experience that sparks genuine human interaction. In a world that is more disconnected and reliant on technology than ever, we cherish shared meals with family, friends, and other patrons.

Have you ever had to pivot?

The previously discussed challenging landscape for restaurant profitability in Denver has forced us to be flexible, adaptive, and inventive. We originally planned Taco Uprising to be a full-service breakfast/brunch concept. We recognized that we needed to be open longer to increase sales and survive, so we added lunch and dinner before opening our doors in June 2023. We’ve since pivoted multiple times to make adjustments, starting with a move to a fast-casual approach for breakfast and lunch, which allowed us to keep our labor in check. More recently, we switched to a fast-casual approach for dinner service, which eliminated the ability to make reservations. We’ve leaned further into technology to help us keep our labor down while providing faster and more efficient service during busy times. Despite the fast-casual model, we do our best to deliver high levels of customer interaction and service. We want everyone to feel welcome and appreciated during every visit to Taco Uprising.

What do you think helped you build your reputation within your market?

We care deeply about using quality ingredients and putting in the time, effort, and passion to make the best tacos we can. We strive to make every Taco Uprising visit a welcoming and memorable experience through genuine and attentive customer service, even with a fast-casual model. We make mistakes but are committed to learning and improving every day. We focus on our Taconistas (AKA team members), Uprisers (AKA customers), and our brand and try to partner with other local businesses whenever possible. Now that we’ve been around for almost 1.5 years, our Google and Yelp reviews speak volumes, and word of mouth is extremely powerful. We’re beyond grateful to have tremendous support from surrounding businesses and neighborhoods. We continue to focus on making positive strides daily and look forward to introducing new Uprisers to our restaurant and welcoming back our amazing regulars.

Contact Info:

• Website: https://www.tacouprising.com
• Instagram: https://www.instagram.com/tacouprising/
• Facebook: https://www.facebook.com/TacoUprising
• Linkedin: https://www.linkedin.com/company/taco-uprising
• Yelp: https://www.yelp.com/biz/taco-uprising-denver

Image Credits

Image: ‘Matias_Taco_Uprising_Bar.jpg’ | Credit: CU Denver Business School
Image: ‘Taqueria_Cocteleria_with_Plates.jpg’ | Credit: Noel Media House
Image: ‘Bienvenidos_Entryway.jpg’ | Credit: Rosy Heart Photo
Image: ‘MEXpresso-Cocktail_Cinnamon_Flame_3.jpg’ | Credit: Rosy Heart Photo
Image: ‘Cocktail_Lineup.jpg’ | Credit: Rosy Heart Photo
Image: ‘BF_Early_Bird_Taco.jpg’ | Credit: Rosy Heart Photo
Image: ‘Chips_and_Guac_2.jpg’ | Credit: Rosy Heart Photo
Image: ‘Birria_Taco_with_Consomme_2.jpg’ | Credit: Rosy Heart Photo