Saved a Popular Restaurant from Bankruptcy
Created by its well-traveled founders, this unique market and café – the first establishment of its kind in Richmond – peddled by far the largest selection of cut-to-order cheeses, artisanal meats, and other fine foods in Richmond. Attached to the establishment was a café headed by a well known Richmond chef, at which you could dine on charcuterie or select from a large menu of sandwiches, salads, and daily hot specials. The market also featured hundreds of European wines, beers and imported groceries, prepared rotisserie chickens nightly, and sported a successful catering operation. The business thrived between its founding and 2004 when new ownership took over.
New ownership lacked the business experience of the founders and as a result marketing efforts floundered, the employee count fell, and food quality and selection suffered. By 2007, just three years after taking over, sales had fallen by 50% and continued to decline month over month. By mid-2007, the operation had gone from 10 employees to the owner and one part time employee. The end seemed near for this once thriving establishment.
Filament Business Advisors was recommended to the ownership by a mutual industry connection. Since money was scarce for this client, we agreed to work on an equity basis with a “success fee” if certain goals were met. Filament conducted a full financial and operational analysis of the business. We determined that increasing revenue by 20% and improving the profitability margin to 8% would keep the business afloat and we developed a strategic plan for moving forward toward those goals.
A strategic plan including a “SWOT” analysis was developed and the businesses’ strengths, weaknesses, opportunities, and threats were identified. A “back-to-basics” approach was implemented in which a new chef was hired, food quality was elevated, the menu was modernized, and employees were hired and trained to become experts on the myriad of unique products in the shop. Hours of operation were extended to include a proper dinner service and cosmetic changes brightened up the space while making it feel more neighborhood friendly.
Concurrently, grassroots marketing efforts such as door hanger and postcard programs were put into place along with technology-forward improvements to the web page and social media engagement of the business. Involvement with IDine’s technology partner platform netted the business advertising and much-needed working capital.
Ongoing consulting from Filament Business Advisors led to a full 110% increase in revenues within three years and a profit margin of 17.55%. The business performed so well that Filament made an offer to purchase the business and is now in the process of marketing franchise locations for this concept.
We meet many of our clients in the foodservice industry when they are just about ready to toss the keys to the shop on the bar and call it quits. We lament that if only we could have gotten to them two years, or even a year earlier we could have saved them countless sleepless nights and thousands of dollars. Small business owners often feel that they live on a deserted island, but at the end of the day a restaurant shares 99% of its DNA with Ford, IBM, Microsoft, or any other Fortune 500 company. All businesses need the same things to grow and succeed, the solutions are easier to come by than you think, and while opening a foodservice operation isn’t always the best way to make a buck, it’s very achievable and can be a very rewarding career… with the right guidance!