The struggles of owning a small business in a college town

From chains to independent businesses, UC Santa Barbara students can shop for clothes, grab a bite to eat and order a coffee without ever leaving their backyard — known as Isla Vista. At the start of each academic year, new students discover what Isla Vista has to offer while returning students flock back to their favorite spots.

However, returning students may notice the constant changes I.V. undergoes every year: new businesses move in, old businesses move out and a “for lease” sign may be posted in a building where a restaurant stood the previous year.

Entrepreneurship can be difficult no matter where one establishes their business, even more so in a community where a majority of residents leave for periods of time throughout the year. According to the United States Bureau of Labor Statistics, roughly half of private businesses in California close in their first five years.

Many factors contribute to this low survival rate, and operating in I.V. brings its own unique challenges, particularly for businesses whose customers’ presence in I.V. largely follows UC Santa Barbara’s academic calendar. Despite this, some businesses manage to stand the test of time, while others may not.

The IV Bagel Cafe has been a longstanding establishment in I.V. since 1991. Owner Doron Friedman came to the community with the purpose of bringing East Coast university bagel culture to a West Coast audience. After doing extensive research, he and his previous business partner set their sights on I.V.

“I was 21 years old when I moved there,” Friedman said. “I scrounged up all the money I had — worked all my life through high school and borrowed a little bit from my siblings here and there … and I’ll never forget the day that I was pulling up tile, and the owner of Sam’s To Go comes by my shop and he says, ‘Good luck, six businesses went out of business here in the past two years.’”

Friedman described Bagel Cafe’s first year as “particularly difficult.” At the time, he had been dealing with issues from his business partner and her father. Friedman explained that she was originally meant to fund the business, however, disagreements led to changes in their deal and threats of legal action.

According to Friedman, his business partner and her father threatened to bankrupt him if he was unable to buy her out and pay double her prior investment.

“[Her father] is a very rich, sophisticated business guy, and here they [were] sitting with me and I was just floored,” Friedman said. “I didn’t know what to do. I was scared, and I walked out and he was like, ‘You have 24 hours.’”

Friedman explained that with the help of his own father, he was able to buy his partner out for what she invested, and soon after the business “started to take off because that negative energy was no longer [there].”

Friedman later purchased what became IV Pizza Pub after the original restaurant, Pizza My Heart, was going out of business. Rather than watch I.V. lose another restaurant, he chose to help save it.

“I was … so tired watching restaurants just go out of business in Isla Vista,” Friedman said. “I don’t want another business to go out of business. I want to save this business. People love this place.”

Businesses established in I.V. are heavily reliant on UCSB students, and each year brings periods where a large portion of their customer base leaves.

Friedman described summer as one of the greatest challenges of operating in I.V., as businesses lose customers during summer, winter and spring breaks while many of their expenses remain the same. During slower periods, Friedman said he reduces labor if possible but avoids cutting hours for longtime full-time employees such as his bakers.

“I’ve written checks for years to cover payroll,” Friedman said. “People don’t realize that it’s personal — you’re sending your personal money. People put their life savings on the line, and they lose everything. [A] majority [of] businesses go out of business.”

Pete Smith, one of three owners of Best Coffee., formerly operating under the KOZY Coffee name, took over the business on March 5. Smith works most of the summer hours himself, allowing the business to cut back on labor costs until students return.

During the academic year, Smith said rent accounts for around 8% of the business’s revenue. During summer, that figure increases to around 30% as the shop operates at approximately 25% to 30% of its normal sales volume.

“It’s impossible to be anything other than negative in the summer,” Smith said. “We’re just flat out losing money.”

The seasonal slowdown is not limited to restaurants and coffee shops. Rozzana Lirio, the owner of Babes, a clothing store that recently took over ownership of Escobar’s Little Things, said she caters largely to the student population by shaping the store’s hours and inventory around their habits.

Lirio said students tend to shop at different times throughout the day, including later at night, requiring the business to adjust its schedule around its primary customers. During slower periods, particularly summer, Babes reduces its hours to account for fewer customers.

Lirio said part of the goal behind Babes is to give students access to vintage and seasonal clothing within walking distance, especially for those without cars.

The seasonal difficulty also affects community-owned businesses. The I.V. Food Cooperative has been a part of I.V. for over 50 years, and it still looks for ways to combat these slow periods.

The I.V. Food Co-op previously established another location in Santa Barbara, which later closed in December 2025. According to Grocery Manager Tyler White, the expansion was partially an attempt to gain more consistent revenue outside of I.V. during slow periods.

White described I.V. as an “ever-changing, dynamic environment,” where businesses must not only prepare for students leaving during breaks but attempt to establish a connection with the new cohort of students each year brings.

“We have to rebuild our relationship with every new wave of students,” White said. “And that also means because we’re a co-op and we serve the community, we have to also respond to the needs of that ever-changing community.”

Despite the difficulties the academic schedule creates for businesses through I.V.’s seasonality, students are what many of the businesses attribute their connection to the community to.

Around 70% of IV Bagel Cafe’s employees are students, according to Friedman. He said one of his favorite parts of owning the business has been watching student employees grow, eventually placing them into management positions and giving them experience they can take into their careers.

“I created so many jobs and helped people pay through college and pay for their rent,” Friedman said. “It’s a great feeling.”

Smith similarly wants Best Coffee to eventually become primarily student-centered. During summer, he is regularly behind the counter himself, but said he plans to become less customer-facing as students return and begin working at the business.

At the Food Co-op, the relationship extends beyond a consumer-employment connection. White said the co-op primarily serves students and hopes to function as a “third space” where student organizations and community members can gather. The co-op also works with the Associated Students Food Bank and has partnered with university organizations to provide bulk orders and catering.

The relationship between local businesses and the student population can become especially important during large community events. Soltopia, the Isla Vista Community Services District (IVCSD) sanctioned Deltopia alternative, featured partnerships with many local businesses such as Yetz’s Bagels, IV Bagel Cafe and I.V. Food Co-op, among others.

Friedman said the original Deltopia provided IV Bagel Cafe and IV Pizza Pub with one of their most profitable weekends of the year, helping compensate for losses during breaks when students leave the area. While Friedman praised efforts to support businesses through Soltopia, he said the event did not generate the same revenue as Deltopia.

“[IVCSD] really made a good effort,” Friedman said. “But I would be lying if I didn’t say that … it just didn’t match Deltopia.”

Apart from Soltopia, Friedman said future community events could better support I.V. businesses by directing attendees toward them rather than bringing in outside food vendors.

“That just destroys business. It doesn’t help us at all,” Friedman said.

Smith raised a similar concern, arguing that food trucks and temporary vendors can compete with brick-and-mortar businesses without carrying the same rent and overhead.

Businesses depend on students to shop, eat and work, while students depend on the businesses to provide goods, gathering spaces and employment within walking distance of campus.

For a business to survive in I.V., it means more than having the right product or sufficient funding. Each year requires preparation for thousands of customers to leave and come back for a community whose tastes and needs may have changed in the meantime.

White said that constant change is simultaneously one of the most difficult and rewarding parts of working in I.V.

“[It’s a] dynamic community that’s always shifting,” White said. “But also still holds on to a lot of that core essence of Isla Vista.”