Wednesday, December 29, 2010

I should've gone into the beer biz -- that, or candy.

Thanks to the Mythbuster's show on the spread of cold germs, I can't stand to be around myself. I'm toxic. Stay away! The infrared dye is everywhere!!!!!!

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Congratulations to Deschutes Brewery for their expansion. I always get the sense that they know what they're doing, that they expand in a measured way.

I thought there was an announcement not far back that that space was going to be used for something else, but this makes much more sense.

Good thing we have the parking garage!

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Seemed like everyone who walked in the door this Christmas had one of those distinctive Powell's candy bags.

I knew I went into the wrong business.

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Because Diamond is shipping to us from back east, I can no longer get regular reorders as quickly.

If you remember, I dropped the 2 day direct shipment of product a while back, because of shipping costs. But if I made orders on Mondays, I still got the product about 10 days later.

That is now expanding to something like 15 days later, and that's just too long.

So I'm going back to the 2 day ship, which I always liked better anyway and only dropped when I realized that I could save a couple hundred dollars a month.

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There is an interesting interview in John Gottberg's Blog with Gavin McMichael.
(Owner of The Blacksmith, and Bourbon St., and Marz Bistro.) (I'm sorry, I tried to do a link, but botched it somehow....)

First off, I should say I know nothing about the restaurant business, and have always thought they probably have a completely different set of problems from a retail store.

McMichael makes the case for having multiple restaurants in town:

“Three places are cheaper to run than one.

“This is one of the oldest strategies in the business. It’s so hard for the owner-operator to make any money on just one restaurant. It’s much easier to pull a little from several, and to spread the costs and demands of staff and inventory.”

I had pretty much the exact same reasoning when I opened stores in the Mountain View Mall, Sisters, and Redmond. Unfortunately, for me, it didn't work out that way. Each store took on it's own identity, had it's own needs and requirements -- and most damaging -- each wanted the same first rate material that the other stores needed and there wasn't enough quality resources to go around. (Materials, inventory, employees -- and ultimately, money.)

The thing that damaged me the most was that I was a horrible delegater, and didn't have the systems in place that could make up for that fact.

The quality control of my business -- my hands on making sure everything was working -- spiraled out of my hands. I found running four stores not just four times harder, but sixteen times harder.

My own feeling these days is to either stay small, get bigger in one location, or get really, really big.

I think medium sized chains -- in the three to eight range -- have all the requirements and costs of a bigger chain, but none of the advantages of a smaller store.

The second thing McMichael seems to imply is that Bendites just aren't willing to pay for quality. The high cost of good food.

I don't doubt this. But I also suspect it's pretty much true everywhere. He mentions trying Eugene, but then again Eugene is twice the size metro area, with a big four year university, an interstate, and other metro areas a short distance away.

But, yeah. Bend demands the big city offerings, without in some ways having the population or the demographic or the money to really reward that.

Everyone who opens a business in Bend should be told that "Poverty with a View" isn't just a funny saying. It's true.

3 comments:

Anonymous said...

Interview with Gavin

Anonymous said...

It does seem common for someone who is successful with one restaurant to add 2-4 more, all within the same town.

I don't know if that's the same thing as making money, but I wonder if they know either! Only if you have a really good accountant, I suppose.

It'll be interesting to see what the restaurant scene looks like in 5 years.

I'm willing to bet that Pegasus will be here.

H. Bruce Miller said...

"Congratulations to Deschutes Brewery for their expansion. I always get the sense that they know what they're doing, that they expand in a measured way."

True. I had the pleasure of handling publicity for Deschutes Brewery when I had my PR business. The policy was to always let expansion be market-driven, rather than making big investments in new production capacity based on the expectation (hopes) of opening up new markets.