It’s not that you hate your job (OK, maybe you do), but you still can’t help thinking about what it would be like to chuck it all and do something a bit more interesting. Perhaps open a restaurant. (“My lasagna runs rings around that awful stuff they serve up the street.”) Run a bed and breakfast. (“Everyone says I have a great eye for home decor.”) Do something creative. (“I’ve got to get out from behind this desk!”)
Lots of people fantasize about such adventures, but only a few of us actually make the leap from dreaming to doing. What holds us back is often a lack of knowledge. We don’t know where to begin or what to expect and the thought of betting a big chunk of our life savings on the unknown is terrifying.
Some of that fear is justified. Statistics Canada estimates that 40% of new restaurants or B&Bs fail within their first two years of operation. But those dismal stats can be deceptive. If you subtract the folks who rush unprepared into a new business, then further remove the people who confuse a dream job with semi-retirement, the odds of success for hard-working, well-prepared entrepreneurs rocket upward.
When we interviewed people who’ve successfully translated their dreams into reality, we were struck by some recurring themes. Time and time again, we were told that you must work hard, be flexible and do your homework. If you do, you stand an excellent chance of being able to turn your fantasy job into a moneyspinning reality. So join us as we take a look behind the scenes at what it takes to chart your own destiny as a B&B operator, an artisan or a restaurateur. You just may be inspired to follow your own dream.
If you can’t take the heat…
Why do people open restaurants? Consider Simone Sterio-Risk. Nine years ago, she was a single mother, working as an ad salesperson in Toronto, when she decided she was tired of the big city’s hectic pace and relentless pursuit of money. So she moved back to her hometown of Thornbury, Ont., with her young daughter Arielle and opened a casual yet elegant dining spot, SiSi on Main. While establishing her new eatery took a lot of hard work, she found the time to fall in love with and marry a local man, and have a second child.
These days, Sterio-Risk starts work at SiSi at 4 p.m., after spending the day with her five-year-old son Ethan and looking after all the household chores — picking up the dry cleaning, paying the phone bill — that most wage slaves can’t help but neglect in the course of a nine-to-five workday. With half a dozen ski hills and hiking trails practically on her doorstep, she sometimes manages to sneak in a little skiing or hiking as well.
Once Sterio-Risk is at the restaurant, her job is a lot like hosting the perfect dinner party. She makes sure that each customer is greeted and his or her coat properly hung up. As people eat, she circulates, adjusting the music and the lighting to suit the crowd’s mood. When diners get up to leave, Sterio-Risk is quick to thank them for their patronage and wish them a good evening. “I enjoy taking care of people,” she says. And she enjoys the social swirl around her. “Whether the restaurant is busy or it’s quiet, it’s always a chance to meet new people.”
So there you have it — running a restaurant really can be a glamorous way to build a whole new life for yourself. But before you rush off to resign from your current job, let us offer a few words of caution. Operating a restaurant is not likely to be particularly profitable — in fact, the average restaurant makes a scant $33,750 a year in profit, according to the Canadian Restaurant and Foodservices Association. And there’s next to no growth in the industry: for every new restaurant that opens, another one closes. Even if you’re a successful restaurateur, you have to count on working 70- or even 100-hour weeks, especially in the crucial early years. “I’ve eaten my dinner under an infrared light [in the restaurant’s kitchen], standing up, for nine years,” Sterio-Risk says. And while her evening work schedule has made it possible for her to be a stay-at-home parent during the day, it also means that she doesn’t see much of her husband, Darrin. Most nights, she doesn’t get home until 11 p.m. or midnight. “Darrin stays with the kids at night — he comes home, I leave,” she says. “It’s not easy.”
No, but you can avoid many common pitfalls by following some simple advice. For starters, be picky when picking your location. No other factor is as important to your success. You ideally want to be in a spot with a lot of traffic and as little competition as possible, but rarely will you be able to find both features in the same space. In most cases, a new restaurant has to count on taking business away from existing establishments. To do that, you must offer something — a concept or a price level — that no other restaurant in the area has.
Each location has unique features. For instance, an eatery in a tourist hot spot will enjoy a constant stream of new people who are away from home and therefore have no choice but to eat out. Problem is, many tourist destinations are seasonal attractions and you have to be prepared to slog it out through the down months. Take Sterio-Risk’s situation. Thornbury is primarily a ski community, and her business drops off when the snow melts. Fortunately, her husband’s landscaping business is busy in spring and summer, and provides the family with a second income when the restaurant’s cash flow slows.
If there’s one misconception that’s common among wouldbe restaurateurs, it’s the notion that your dazzling culinary skills will guarantee you customers. Think again. While decent, reliable food is a necessity for a restaurant, great food doesn’t ensure you of a crowd or a profit. Doug Fisher, a former restaurateur who’s hired as a consultant by such foodservice heavyweights as McDonald’s Canada and Mandarin Chinese restaurants, says slicing and dicing vegetables is far less important than knowing how to trim the financial fat. “A chef may be a good cook,” Fisher says, “but being a good cook doesn’t mean you know how to deal with food costs and labor costs and wastage or how to deal with staff. Accountants make better restaurant operators than chefs.” Fisher’s advice? Concentrate on creating a pleasing atmosphere and offering good service. Those two selling points will go a lot further in attracting customers than a long list of elaborate entrées.
Speaking of customers, it pays to remember that it often takes months if not years to build a loyal clientele. So leave yourself a financial safety cushion. Fisher has seen many cases of people who borrowed heavily to start their dream restaurant, only to find themselves unable to keep up with the loan payments when the first few months of operation didn’t prove as lucrative as they hoped. To protect yourself, he advises scrimping and saving until you have at least 50% of your estimated startup costs. That means if your business plan estimates first-year costs of $300,000, you should have at least $150,000 in cash before you start. For help with your plan, get the Canadian Restaurant and Foodservices Association’s startup kit. For $60 (order online at crfa.ca), you get a directory of suppliers, a rundown of the costs associated with running a restaurant, a reference guide and more.
If this all sounds like a lot of preparation before you serve your first meal, you’re quite right. But keep your long-term goals in mind. Opening a restaurant isn’t likely to make you a millionaire or even close. It will involve endless hours of hard work. But it can allow you an independence that few other businesses can.
While Sterio-Risk doesn’t want to boast about her profits or her critical success — SiSi on Main has made the pages of the foodies’ bible Where to Eat in Canada for the past two years — she credits the restaurant with allowing her to live in a place that she loves, in a style that suits her and her family. “I’m giving myself a reason to be here and to be able to make a living,” she says. “When I walked Arielle to school, I could walk through a beautiful small town, through orchards. Now it’s exactly the same with Ethan. It’s 10 years later, and I’m so happy that I’m in the same scenario that allows me to do that with him.”
A financial planner would probably say that Christopher Huck was insane for giving up a lucrative white-collar career to engage in something as uncertain as peddling his own art. And it’s true that Huck, a stockbroker turned blacksmith, is financially poorer than in his previous life. But the 53-year-old would never consider going back.
Huck, an American, began selling stocks and bonds more than 25 years ago in Colorado. “I started with the idea that I’d do it for three years and make enough money that I could buy a sailboat and go sail around the world,” he recalls. But, to paraphrase a cliché, the road to dull is paved with good intentions. “I never did sail around the world because I bought a big house, then I bought an expensive car, then I bought a summer cottage. I got completely sucked into the whole thing and I couldn’t just walk away from it.” That is, until 1987 when Huck’s dad died suddenly of an aneurysm. “That really shocked me out of my stupor,” he says.
The tragedy prompted Huck to “try and figure out what it was that I really wanted to do. I knew I wanted to do something creative, to work with my hands, to not have to sit in an office full of suits. And one day I read an article in the newspaper about an old marine blacksmith in Nova Scotia. The story had a picture of him standing by his forge, and just seeing that article really clicked for me. I thought, that’s it, I’m going to become a blacksmith. That really fits all my criteria.”
At the age of 42, Huck threw himself into learning the smithy’s trade. First stop: a course at the Nova Scotia College of Art & Design. Then came menial labor for the blacksmith whose story had inspired him initially. “I kind of fumbled around in his shop for a little while as an unpaid apprentice,” he says. “As I learned more and more about the blacksmithing community throughout North America, I went down to the States and took courses from some great, great artist-blacksmiths.” Helped by his background in finance, Huck drew up a business plan for a place where he could both work and sell his wares. Less than two years after first picking up a hammer, he opened Lunenburg Forge. It’s located on the south shore of Nova Scotia, not far from where the famous Bluenose schooner was built. Huck chose a spot in a seaside area so he could cater to boat owners in search of new marine fittings. But the more he blacksmithed, the more his interest in decorative ironwork grew. Huck calls it “serendipity,” but more likely he’s too modest to take credit for recognizing that the many tourists who come through Lunenburg would be an ideal market for his candelabras, sculptures and furnishings for the home.
As Huck’s example demonstrates, a successful artisan has to keep an eye on business as well as on his craft. If you’re not lucky enough to have Huck’s background in finance, you can reap big benefits from learning a few simple business skills. Taking a night course at your local community college or getting your hands on some literature can help you avoid many pitfalls. For instance, the Cultural Human Resources Council offers a business-basics guide called The Art of Managing Your Career ($20; log on to culturalhrc.ca and click on HR Tools & Resources to order). Written by a group of successful visual, literary and dramatic artists, the guide covers self-promotion, money management and legal issues, in everyday language. You should also check out the Royal Bank’s Definitive Guides, 12 small-business information leaflets covering topics from cash management to marketing. They’re available at no charge from royalbank.com/business/resources or at any branch.
To get hands-on experience in the business of art, try working with a mentor, just like Huck did with his blacksmithing role model. Finding a mentor can be as simple as calling up an artist in your field whom you admire and offering to volunteer in his or her studio. You may be stuck cleaning or filing, but you will get the opportunity to learn from an established pro.
It may surprise you how much marketing and promotion an artist has to do to survive. While making art can be exhilarating, it won’t pay the bills unless you can induce people to actually buy it. “If you make art and shove it under your bed and never show it to anybody, it’s rare that a career’s ever going to develop,” says Barbara Astman, a photographer and professor at Ontario College of Art and Design in Toronto. “You’ve got to keep showing it to people.” If you can’t afford to set up your own studio, band together in a collective with other artists or craftspeople so you can split the expenses and offer each other encouragement. In her almost 30 years of teaching, Astman has found that students who joined a collective stay engaged in their careers much longer than those who try to go solo.
You may be able to underwrite your dream by selling other people’s art alongside yours. Craig Urquhart and his furnituremaking partner Etsuko Amano had originally planned to sell only their own handmade furnishings in their Toronto shop, Artifex, which they opened in May 2003. But as their business took off, they had a hard time keeping their 2,500-square-foot retail space fully stocked. So they filled the holes with inexpensive items, such as handmade soaps and jewelry boxes created by other craftspeople. Surprise — the small stuff sold well enough to pay an employee’s entire salary. Urquhart saw that success and went with the flow. “A business is like an organic thing,” he says. “You’re growing and changing all the time.”
It helps to remember that success doesn’t come overnight. Before making furniture, Urquhart earned a comfortable income as a technical writer. But he hated the corporate environment and longed to strike out on his own. Now he earns 40% less than his employees, but looks forward to the day when he’ll be able to enjoy a much better standard of living.
Even if money isn’t plentiful, you will have other compensations. After 11 years as a self-employed blacksmith, Huck’s motto is earn less, live better. He drives a 1983 truck, but “I haven’t gone hungry yet.” In fact, he’s doing well enough to open a studio in Mexico, where he’ll spend winters starting this year. He wouldn’t trade his freedom for a bigger income. “I live in a tiny house, but it’s on an island outside of Lunenburg, a beautiful spot. I could have a brand-new truck, but if I had a brand-new truck I couldn’t go to Mexico. It’s a matter of choices.”
A place like home
Laurie Mackechnie was working in human resources for a company in London, Ont., when she got that old feeling: time to move on again. “I start to get stagnant, I guess,” says Mackechnie, 32. “I tend to stay in one career for no more than five to eight years.” She and her husband, Todd Finnie, 36, a sales rep, had talked for a long time about opening a bed and breakfast. Why not now? They began looking at properties and only a few months later, in April 2003, threw open the doors to their new business, The Organ Factory Bed and Breakfast. As the name suggests, it’s located in the former family home of organ factory owners and there’s a Victorian-era organ factory on the grounds. Located in St. Joseph, Ont., the B&B has three guest rooms and a private second-floor suite for Laurie and Todd. Guests can enjoy their breakfast on a deck out back while gazing over a stone-edged pond and perennial gardens.
During the week, when Todd’s on the road with his sales job, Laurie presides over the property, preparing blueberry-stuffed French toast and poached eggs, cleaning rooms, answering phone calls and e-mail queries, and greeting guests. Come Saturday, she and Todd work side by side. Slowly but surely, they’re advancing through an ambitious 10-year plan for the property, which includes adding more guest rooms as well as a gift shop.
When their story is told that way, Laurie and Todd’s transformation into business owners sounds effortless. In reality, getting the B&B into shape was, and continues to be, hard work.
First, there was the choice of location. To be successful, a bed and breakfast has to be surrounded by popular tourist attractions. Seems like a no-brainer, but according to Richard Taylor, co-author with his wife Monica of Start & Run a Profitable Bed & Breakfast (Self-Counsel Press), trying to do business where only tumbleweeds roam is one of the biggest mistakes of novice B&B operators. “We know people who bought places along some concession road and they’re starving,” he says.
Having read the Taylors’ book, Laurie and Todd were well aware that location is crucial to success. Their original impulse was to set up in Stratford, Ont., home of a famous theatre festival, or nearby St. Jacobs, Ont., known for its Mennonite quilts, antiques and farmers’ market. Both areas seemed like good choices on paper, but when the couple looked closer, they found that the bylaws weren’t exactly welcoming to new B&B operations. In St. Jacobs, for example, “you aren’t allowed to open a bed and breakfast unless it isn’t in an agricultural zone, is 150 metres from any other house and 23 metres from the centre of the road,” Laurie reports. “It was impossible.”
Laurie and Todd were disappointed, but they had learned an important lesson that any aspiring B&B owner should heed: before you buy any property, no matter how charming, ask the municipal office whether a B&B operation is permitted there. Skip this step and you could be stuck paying the mortgage on a house that will never bring in any revenue.
With a little more research, Laurie and Todd found the perfect place in St. Joseph, close to a summer-stock theatre company, antique shopping and a provincial park — all of which provided that much-needed draw for overnight guests. The property was already being used as a B&B, so they had no huge renovations to undertake, just painting and redecorating. Best of all, the area’s bylaws were relaxed. “It’s pretty much as simple as ensuring you have enough parking for each of your guests,” Laurie says.
Once they had purchased the property, the hard work began. “We shopped for probably two months solid on the weekends, picking up linens and towels and pillows and furniture. I’m a shopper and I was pretty tired of shopping by the end of it,” she recalls. “We also did a lot of eating breakfast for dinner, testing different recipes.” And they signed up for a seminar on how to run a B&B.
Anyone who’s thinking about opening a B&B should look into taking a similar course. If you do nothing else, read the Taylors’ book or talk to a B&B operator. The experience can be an eye-opener. “I don’t think most people realize how labor-intensive running a B&B is,” says Lynn Hainstock, owner and operator of Vancouver’s Penny Farthing Inn. Her own hostelry has been operating for 14 years and has been featured in Fodor’s and Frommer’s travel guides, but she still has to work hard at it. When she teaches continuing education classes through the Vancouver School Board on the realities of operating a B&B, she is forced to shatter many of her students’ illusions. “A lot of people in the course think they can run a B&B and still be on the tennis court by 11 o’clock. My guests don’t get up from the breakfast table until noon sometimes! So out of the 30 people who do the course, by the time I’ve finished with them, usually three or five will actually follow through.”
The ones who succeed have realistic expectations about how much money they can make, especially in the first couple of years, when cash is usually tight. Mackechnie and Finnie, who charge $75 to $165 a night, reckon they’re on target to take in $30,000 to $35,000 before expenses during the coming year. That figure should swell as they add more guest rooms.
What’s the peak of B&B ambition? Well, larger operators in major centres can gross well over $100,000 a year, but how much of that is profit depends upon how hands-on you’re willing to be. If you do all of your own cleaning, cooking and bookkeeping, you can net around $100 for each night you’re able to rent a room at $125, estimates Richard Taylor, the B&B author. But hiring employees to do the dirty work for you will quickly shrink your profit margin.
The upside is that your cost of living is minimal. “You’re not living free,” Hainstock says, “but you’re living very cheaply because a lot of stuff is covered by the B&B.” And running a B&B allows you to live in a bigger, better or just plain different abode than you would working a nine-to-five office gig. “I’ve had people tell me, ‘I’ve always wanted horses, couldn’t afford them, didn’t come from that sort of family,’ ” Hainstock says. “Well, you can buy a ranch in the Cariboo, put some horses on it and run a bunk and breakfast. It allows you to create a dream.”
Making it work
To turn your dream into reality, you need more than a good idea and a bit of derring-do. Whether it’s a bed and breakfast, a restaurant or an art gallery, a successful business doesn’t run on luck; it runs on know-how. But the good news is you don’t need a Harvard MBA to thrive. These tips will get you started:
Draw yourself a roadmap. It might seem overly formal and corporate — after all, this is your dream we’re talking about here — but the first thing you need is a solid business plan. If you’re applying for a small-business loan, the bank will insist on one. But even if you don’t need to borrow money, preparing a proper plan will help you get all the details straight in your own head. Sure, you know what your product or service is. But how will you advertise it? Who will your suppliers be? And, perhaps most importantly, what are your expected revenues versus costs? “People underestimate their expenses and they overestimate how quickly their revenues will come in,” says Rod Hunt, national manager, small business for RBC Financial Group. “Often, that leads to a cash crunch.” Need some help putting your plan together? Check the Starting a Business pages on the Royal Bank’s Web site at royalbank.com/sme, where you’ll find sample plans as well as tons of how-to advice.
Look in the mirror. Before you launch your dream, take an honest inventory of your strengths and weaknesses. Then fill in the blanks. That may mean learning new skills (say, by taking a night course in marketing or buying easy accounting software if you’re not good with numbers). It may also mean hiring people who do have the right abilities — interior designers, accountants, marketing pros. If your money’s tight, remember that your hires don’t have to be full-time or expensive. And they may actually help you make more money by freeing you up to do what you’re best at.
Get a mentor (or two, or three). “Take your business plan to a few other people and have them look at it critically. Ask them to give you feedback on whether your plans are going to work,” Hunt says. This informal sounding board can consist of your banker, your accountant, or other small-businesspeople you know and trust. Check in with your group of advisers from time to time after your business is up and running to make sure you’re still on the right track. If you hit a rough patch, their expertise can be an invaluable resource to help you figure out how to fix things.
Build a safety net. You can count on it — the first year of your new business will be financially rough. A second income can help you ride out the storm. For example, when Laurie Mackechnie and Todd Finnie opened their St. Joseph, Ont., bed and breakfast last year, Todd kept his job in sales to give the couple a financial cushion. “The tourism industry can be very fickle,” says Mackechnie. “Having a second income to draw on is very comforting. We havenÃ¢â‚¬â„¢t had to change our lifestyle at all.”