Overcoming roadblocks on the way to success

The dearth of qualified help here at the beach continues to take its toll. One of our newer Rehoboth restaurants went out of business last year because the stress of keeping the doors open was too much when other issues befell the owners’ family. Laptop warriors can proselytize all they want, but things can get up close and personal when misfortune comes to our friends and neighbors who are doing their best just to stay afloat.

My email boxes have been busier than at any other time in my 16 years of promoting Cape Region dining. The great majority lamented closings with hollow platitudes like, “Oh, we will miss them! I thought they were doing so well!” Why hollow? Because a significant number of these comments come from the very same people who proudly proclaim that they never go to downtown Lewes, Rehoboth or Dewey because of the few bucks it costs to park, or worse yet, the prospect of having to walk a block or two. That sort of pretense isn’t the point of this article, but it is a recurring theme in my email boxes.

The truth of the matter is that restaurants close for all sorts of reasons. Downtown rents are notoriously high – and going higher. After all, there’s only so much space a block or two from the Atlantic. If inexperienced owners lack a well-thought-out financial plan (i.e., working capital), they can end up pricing themselves out of the market just to make it through the off-season. Compound that with huffy online commentary yelping about “pricy” and “greedy” restaurants being “more expensive than the restaurants at home,” and even the bravest downtown restaurateur can be tempted to turn the key and walk away.

Those who are financially strong enough can choose to buy the property. But many landlords wouldn’t dream of selling. In a Facebook post from several years ago, Richard Krick, the former co-owner of Summer House, stated, “…I can tell you that the [downtown] rent is out of control, and had I not been lucky enough to buy my property, I too would have had to call it quits.” Purple Parrot owner Hugh Fuller, a wise businessman and property owner, responded, “Absolutely. That’s the only way [to do it] downtown. I feel like I was one of the lucky ones.”

Restaurant Business Magazine quoted Bill Post, restaurant consultant and co-founder of the Chicago-based Roti Mediterranean Grill chain: “As landlords continue to raise rent at an alarmingly fast clip, it’s becoming more difficult for operators to abide by the Golden Rule of 10: Never let rent exceed 10 percent of your gross profit. So if negotiation is out of the question, the remaining options are to close, relocate or eat the cost.” A bit of math proves that choosing the latter option will inevitably result in one of the first two coming to pass.

The vagaries of small-town regulation, inspections and the like can cost an entrepreneur thousands of dollars as he or she waits for a signature on an approval for this, that or the other thing. Sadly, some politicians and regulators go through the motions of finding “solutions” for the very problems they create.

And the issue of getting and keeping help is worse than ever. The simple fact is that a significant percentage of those who apply for jobs are not qualified, while others either move to cities for a year-round income, or seek non-restaurant employment.

So how do restaurants stay in business? Those that are fortified with working capital can afford the time to build a reputation with consistently good food and service. And that can bring longevity. And out of longevity grows credibility. People will even go downtown, pay to park and even … walk! … to enjoy quality food and service.

Another option is to carve out a niche with a particular concept, a one-of-a-kind ambiance, or even a particular style of ethnic food. If done well enough and properly advertised, happy guests will return time after time.

Now more than ever, restauranting is a labor of love, with equal parts of both applied day in and day out, in steadfast opposition to today’s forces working against success. It has to be a labor of love – why the heck else would anyone do it?