As San Marcos sees a wave of business closures, experts weigh in on a question: What does it take to build and sustain a successful business in this city?
Hastings Books, Torchy’s Tacos, Planet K, Half-Prices Books and Orangetheory Fitness are only some of the businesses that have closed in San Marcos over the past nine years.
Earth Burger, which was located on East Hopkins Street, announced its closure in January 2024 after six years of operating in San Marcos.
In a Feb. 1, 2024 interview with The Star, Ellen Evans, director of Community Love at Earth Burger, said the decision was influenced by the need to adapt to the evolving market dynamic in San Marcos and to open up the market for future franchises.
“It was time for us to take a look at where our strengths are and where we were putting our efforts in and focusing more on our corporate stores here in San Antonio,” Evans said.
According to Page Michel, president and CEO of the San Marcos Area Chamber of Commerce, with San Marcos being a high-growth region, local businesses are experiencing supply chain issues, increases in inflated prices and difficulty finding enough employees.
According to the United States Department of Agriculture (USDA) Consumer Price Index (CPI), overall food prices are expected to rise in 2025, and restaurant purchases increased by 0.2% in January 2025, marking a 3.4% increase compared to January 2024.
As of Jan. 1, 2025, the San Marcos population estimate is 90,988, with the average population projection for the year 2035 at approximately 142,000.
Michel said the student population shapes the business market in San Marcos.
“When the students are here, [businesses] have to have a successful plan in place to be able to make it through the low months, low population months, so that kind of sets the stage for San Marcos,” Michel said.
Businesses like Valentino’s are adapting to the students. The pizza spot is open until 3 a.m. Thursday-Saturday. After midnight on Saturday night, Cody Taylor, owner of Valentino’s Pizza and new owner of Grins said Valentino’s is filled with music and the city’s student population and that’s when he sees an increase in sales.
Leonardo Pozzobon, entrepreneurship specialist for Business & Community Lenders of Texas Business , said while reasons for business closures vary, some of the most common reasons are bad planning and over-leveraging or general market changes.
“A healthy economy also includes a lot of closing businesses just because not everybody is ready for that. Either some people just retire, some people want to move or some people just start without the proper planning and resources,” Pozzobon said.
Michel said it is essential for any business to develop a well-rounded business plan that details their financial and marketing moves.
“It takes time and effort, and so a lot of people plow ahead and start a business without plans in place,” Michel said. “If you fail to plan, plan to fail.”
While businesses have closed their doors, San Marcos continues to be home to thriving local businesses.
Kyle Mylius, founder, chief visionary officer and majority owner of the Taproot Restaurant Collective, which includes The Coffee Bar, The Root Cellar and Rhea’s Ice Cream, said there is support for locally-owned businesses in San Marcos.
“There’s a lot of people [who appreciate] the creative spirit that is in the DNA of some markets and the local business more than a lot of other towns would, so that definitely helps,” Mylius said.
Mylius said one of the challenges they have faced is San Marcos’ low median income level. According to the U.S. Census Bureau, San Marcos’ median household income was $51,030 in 2023, while the national median household income was $80,610.
With the cost of goods and ingredients increasing, Mylius said it is important to make sure customers get the experience they are paying for.
“I think that’s something that gets glossed over in this town a lot because we have a very big successful university,” Mylius said.
Mylius said he adopts changes based on customer demands to provide a more efficient workflow. Root Cellar discontinued its dinner service on Feb. 14 and now offers only breakfast and lunch.
“It’s part of why we’re excited to focus on brunch because it allows us to do more and provide a higher level of brunch service than when we were trying to do three separate meals a day,” Mylius said.
Taylor said after reopening Valentino’s in 2022, there is extensive growth in popularity and business.
“I think that’s a competitive advantage when it comes to the restaurant business in general,” Taylor said. “Being able to bring back a staple of the community and then at that point you definitely have the job of doing a good job and hoping people enjoy the food and service.”
Taylor said minor changes in Valentino’s have helped the flow of the restaurant and brought a new environment while maintaining the restaurant’s history.
“I think we put out a stellar product, and it’s been received really well, and we’re gaining new regulars every day,” Taylor said.
Michel said as the population increases in San Marcos and Hays County, more business opportunities are expected to arise with the future of the city’s business market looking “nothing but bright.”
“A lot of people have an idea of what they want to sell, and then go out in the world to try to find a place to sell it, but what you actually want to do is find a location and find out what do these people need and want,” Michel said.
The University Star reached out to businesses in San Marcos that shut down but received no response.
