This is the first of three chef/ownership scenarios drawn from last week’s initial article on that “OWNERSHIP THING”.
Jeremy’s Southern Cuisine:
Jeremy has paid his dues. He started as a dishwasher, worked his way through prep, breakfast cook, line cook and sous chef, and for the past two years has thrived as the chef at a trendy French Bistro in downtown Charlotte. Since his entire career in the kitchen has been in the Carolina’s, Jeremy has developed a real passion for southern-style cooking. Even though he has substantial training with French cooking, it is an authentic southern that floats his boat. Whenever he has an opportunity he has volunteered to work with local advocates for regional cooking, constantly devours books by the likes of Edna Lewis, Travis Grimes, and Sean Brock of Husk and McCrady’s restaurants in Charleston, and Anthony Dibernado – the pitmaster at Swig and Swine in Charleston.
Last year, an avid enthusiast for his cooking stopped in to pay the chef a visit. After a few glowing remarks about this food, the individual introduced himself as an angel investor with a real passion for restaurants and up and coming chefs. He wanted to invest in Jeremy and offered an open book to do whatever he wanted with the menu; the money necessary to build the right type of restaurant, and sufficient capital to keep the business running while the chef built a reputation. He would have no interest in telling the chef how to run the business and only had two caveats: first he wanted to be able to use the restaurant as a place where he could entertain other clients with whom he intended to invest, and the restaurant had to be located in his hometown of Watertown, New York.
Jeremy didn’t have to think very long – this was a once in a lifetime opportunity to have his own restaurant and only worry about putting in the sweat equity. He gave it 24 hours to sink in and then contacted his partner with a resounding: “YES!”
Jeremy had always lived in the south, he knew the people, was part of the culture and relished the excitement for food that was evident in Charlotte and Charleston. This was his home, but he felt that his passion for the food of the south would be enough to keep him energized no matter where he located. Jeremy was single and not currently in any relationship, nor did he have any other commitments that would keep him from making the move. This was his moment.
He moved – lock, stock, and barrel to Watertown only to find a much different atmosphere than he was accustomed to in Charlotte. Watertown was a sleepy community with almost no real food culture, not much industry, a lower than average family income base than the tourist regions of the south, and a labor pool that would need to be trained from ground zero. This was going to be tougher than he thought. In essence, Jeremy would need to create a food culture, not fit into an existing one. Still, he was convinced that southern style cooking would win the day.
His partner came through with the funds to build his restaurant and helped to identify a location that took advantage of the traffic flow through town. It would be located in close proximity to Fort Drum – home to the Second Army division that trained in mountainous regions with inclement weather conditions. There would be thousands of soldiers and many with families who could be perfect candidates for steady customer flow.
The restaurant went up rather quickly with groundbreaking in early May and completion of the 70-seat operation by September of that same year. Jeremy designed the kitchen and offered input on the aesthetics of the dining room. He built a menu based on his love of southern cooking, but was a bit concerned when he discovered that regional vendors would have difficulty getting some of the ingredients that he required. He also discovered that there weren’t any artisan bread bakers in the immediate area so he would need to re-think his bread program or find a way to bake on-premise. Oh well, he knew he could find a solution.
After trial and error with menu design, hiring inexperienced cooks and servers, teaching them about the culture of the south and demonstrating exactly how the food was to be cooked and presented, Jeremy opened the doors in early November. Then came the snow, lots of snow – something he was only vaguely familiar with and temperatures that rarely moved about 10 degrees. This was different.
After pretty positive reviews during his first few weeks, and reasonably busy days and nights, business began to taper off a bit, then dramatically, and finally very slow when the snow was three feet deep and people hunkered down in their homes for the long winter season around Watertown. Even the military folks kept close to base.
The fresh regional produce that he was used to in the south came from regional food hubs from thousands of miles away. Everything had to be adjusted – menus, recipes, staffing, pricing, hours of operation, etc. Although his angel investor was very supportive in the beginning, when he saw the drop in customer counts and failed to receive ROI payments as scheduled, he decided to get involved. He began to first suggest, and later demand that Jeremy cut back on portion sizes, seek less expensive ingredients to save money, and reduce the amount of labor that Jeremy felt was necessary to build the restaurant’s reputation. The stress of these pressures began to show and the reputation of the restaurant went from very strong to sketchy. The bottom was beginning to fall out by early February and he discovered that winter was likely to carry on for another 2-3 months. Jeremy panicked – he had visions of a very short life as a restaurateur in a community he did not understand, with an investor who went from friend to foe. He wondered- where did it go wrong?
LESSONS TO BE LEARNED AND RESOLUTION:
- A SENSE OF PLACE
Realized success is often a result of being engaged in the history of a community, understanding, and networking with local vendors, having a network of established supporters, and feeling as if you belong. Jeremy had none of this going for him in Watertown.
- WHAT DRIVES A CONCEPT
It is true that there are numerous examples of a restaurateur pushing a concept on an area and realizing success, but more often than not this is either a result of obvious demand or plain old luck. From a business perspective, the most successful concepts, especially in a limited market, are developed by asking people what they want and then providing it at a very high level. Jeremy’s concept may have been perfect in Charlotte but it was unproven in the northeast.
- DUE DILIGENCE – KNOW YOUR MARKET
It is very dangerous to jump into a business model before you study the area where it will reside. Demographic studies that include: age, educational background, mean incomes, number of family members, ethnicity, and gender are absolutely essential before a decision is made. Jeremy allowed the emotion of ownership to cloud due diligence.
- LOOK BEFORE YOU LEAP
If moving to an unknown market, it might make sense to actually move there, rent an apartment, study the economy, meet typical residents, work with the Chamber of Commerce, friend other local business owners, and even try a pop-up restaurant concept to measure reactions. An investment of 3-6 months before the final decision is made is worth the time and expense, even if it results in a decision NOT TO OPEN in that community. Jeremy and his angel investor really needed to exercise this option.
- MAKE SURE THE CONCEPT SUPPORT STRUCTURE IS THERE
Are there appropriate vendors, farmers, and producers in close proximity to support the needs of the concept? What is the employee pool like? How much established talent is available – the staff will become more important than the actual concept. Jeremy was starting off from a position of disadvantage because he did not research these important factors.
- PROFITABILITY TAKES TIME AND MONEY
Give your planning 2-3 years before any expectation of profit is realized. After 6 months, Jeremy was already in trouble.
- DON’T SABOTAGE QUALITY
The knee jerk reaction to poor financial performance is far too often a decision to cut portions, address the cost of quality, and cut back on services or the labor to provide it. You can feel it in the air when a restaurant is starting to fall into that downward spiral. Once you cut quality and service it is hard to recover.
- IF THE POTENTIAL IS THERE THEN STAY THE COURSE
This is the time for Jeremy and his partner to have a serious talk, to conduct the research that should have taken place before deciding to move with the concept, and let the facts speak for themselves. If it simply means adjusting menus, moving the concept in a different direction, and giving up on the original idea to save the business then stay the course – if not……..
- DON’T BE AFRAID TO ADMIT YOUR MISTAKES – SOMETIMES FAILURE IS THE BEST EDUCATOR
Sometimes the best decision is to accept failure, assess what went wrong, cut your losses, and use it as a tough learning experience. So you fell off the horse – get up and ride again with a different outlook, and a greater level of understanding.
Originally by PLAN BETTER – TRAIN HARDER
The Rules are there for a reason.
Harvest America Ventures, LLC
Restaurant Consulting and Training