Small business tries to expand in a struggling economy
Three college-age kids were finishing their lunches, and Elton John's "Rocket Man" played in the background. The pub's owner, Christ Christon, sat at a wooden table by window that overlooks Cravath Lake. He took off his glasses and rubbed the bridge of his nose.
Christon, 32, was seven hours into a 14-hour workday at the new bar and grill, which is attached to his family restaurant at 111 Whitewater St. He was listening to his meat deliveryman describe the current demand.
"Everybody is saying, you know, now that we've passed into March ..." The deliveryman paused to whistle through his teeth and swirl his finger in the air, mimicking a bottle rocket taking off.
It's a metaphor Christon was glad to hear. Over the last two years, the Whitewater native has spent tens of thousands of dollars renovating his family eatery, Whitewater Street Restaurant, to add on a brew pub with an ambiance he believes is unique to his downtown.
"There aren't a lot of places in Whitewater where you can go to have a quiet meal and a drink and just talk," Christon said.
Sounds like a simple idea. But for Christon, who opened the Lakefront Pub two months ago, it's been tough to get there.
His business expansion involved buying out his father's longstanding restaurant in 2010—the belly of the recession—pitching his plans to lenders and skeptical family members, running the existing restaurant while part of the building was torn up with construction, adding a new menu for the brew pub and hiring a dozen part-time employees.
All of that while he and his wife, Beth, juggled the duties of parenthood for the first time.
For Christon, there's more at stake than whether Lakefront Pub's signature gyros nachos catch on in Whitewater.
He's one of a few local small- business owners testing the strength of their livelihoods by expanding in an economy some business experts say is shaky at best.
'Extremely difficult time'
If there's an economic recovery, it hasn't shown itself everywhere.
Construction, service and retail industries, the main drivers in local economies, continue to struggle as the housing sector and consumer spending remain tepid, said Bud Gayhart, director of the UW-Whitewater Small Business Development Center.
Gayhart said he's seeing small industries sit on cash, holding off on hiring or expanding because of political turmoil at the state and federal level, tight lending standards or fears that the recession hasn't truly ended.
"It remains an extremely difficult time," Gayhart said.
That's doubly true for small businesses that need to or want to expand, Gayhart said.
"Growth sucks up money rapidly. You've got to add employees, pay for physical building expansions and upgrades and advertising to create awareness of new products or services," Gayhart said.
"You can't grow on revenue from customers because they don't front the cost of expansions. So, you're going to have to lay some money out and hope that revenues accelerate. It's a timing thing," he said.
One area that has had glimmers of activity is small business, particularly in the restaurant and retail industries. Those businesses were hit as hard as any during the recession, but Gayhart said they've shown an unusual resiliency because their owners are more able—or more willing—to adapt.
Complement what works
The Whitewater Street Restaurant has been in the same location for 20 years. It has an established breakfast and lunch clientele that Christon's father, George Christon, built up starting in the mid-1980s at various downtown restaurant locations.
A few years ago, when Christon was planning to buy the restaurant from his father, he read a study that estimated $40 million in food spending leaves Whitewater each year.
"I thought that was amazing," he said.
Christon, who earned a college degree in geography specializing in demographic analysis and business site location, believed he could keep some people from leaving town to eat by offering adults something new that he says Whitewater doesn't have a lot of—quiet, contemporary dining.
He wanted to offer microbrew beers, specialty sandwiches and appetizers that nobody else in the area serves.
Christon decided to split his business into two restaurants by turning a large private banquet room on the south end of the restaurant into the Lakefront Pub. The transformation took more than a year, punctuated by a hiatus in the fall of 2010, when Christon's son, George, was born.
The restaurant side remains a mom and pop breakfast and lunch spot, and the Lakefront Pub, which opened Dec. 14, is a contemporary night spot with terrazzo floors, exposed brickwork, a hardwood bar and a separate menu. The pub has specialties such as Cuban sandwiches and Poutine, a French-Canadian comfort food that includes French fries topped with gravy and cheese curds.
The two places play off each other, which Gayhart says is an effective strategy in small-business expansion right now.
"In a lot of cases, it's finding another instrument or another appeal that complements what you're already doing," Gayhart said. "Customers are looking for something that's different, and if you're just a 'Me, too,' place, oftentimes it comes down to price."
Christon said it would be difficult for an upstart entrepreneur to do what he did because lending standards are so tight. He said he was fortunate that his family provided advice and financial assistance for his expansion. And for the renovation, he dealt with a lender who knew his family.
"I was lucky I had the restaurant as an existing business and to have a bank who knew my family's history. They knew we're hard-working people, and they believed in what I was doing," Christon said.
The restaurant and Lakefront Pub so far have met profit goals, and with spring approaching, business is picking up, Christon said. He's fine tuning his menu, experimenting with advertising and trying to learn how to attract a lunch crowd at the pub. This summer, he plans to add outdoor dining that overlooks Cravath Lake.
In the short term, Christon's days are stretching. He's in and out of the kitchen, and he tends bar at the pub. He picks up his son from day care every afternoon and when he can responds to emergency calls as a volunteer with the Whitewater Fire Department.
Christon's wife, Beth, who works full time in the Milton School District, has jumped in to help with the restaurants' books, and the family eats together at the restaurant on nights when Christon can't make it home for dinner.
Christon said his biggest worry is not having enough time with his family. He's worked in restaurants most of his life, and he's seen relatives stuck in front of stoves while their children grew up. He's looking forward to a time when he can step back from the business a little.
"There's still a lot of stress, but every week it's getting a little easier," Christon said.
He said broad concerns playing in the media about things such as gas prices, the European debt crisis and the state recall elections always weigh on his mind. In business, everything's linked.
Yet there's one consistent comment he's heard lately from customers who come into his pub and his restaurant. He said it gives him hope about what's happening on Main Street.
"People say they're just sick of worrying," Christon said. "You can only be scared so long."