she opened two restaurants and one bar in the same building, but had to find a way to maintain their separate identities. and then two chefs with their lessens on small businesses. that's coming up next on "your business."

♪ hi, there, everyone. i am j.j. ramberg. welcome to a special edition of "your business" where we give you tips and advice to help your business grow. today our entire business is devoted to so many lessons to share with small business owners. the entrepreneur jumped at a chance to set up a business in a building she always admired. she found three different c concepts existing side by side in one space. >> i am pretty crazy, but not

crazy enough to just want to open up three business that close together. i like the idea of having three smaller concepts. >> she had always admired the building at the corner of south wilmington in downtown rally. >> i went to school here in north carolina state. this was a building i always noticed. >> when the space opened up, the wheels started to turn. >> i think about food all the time and restaurants all the time and hospitality, and entertaining and sharing things within my community. >> christensen already owned a restaurant, poole's diner just blocks away. but she was itching for more. >> when things are going well i get antsy and think about what needs to happen next. >> the land lord suggested it be divided into three spaces.

>> within two weeks, we decided that i would take the whole first floor, and within four weeks, we decided i would take the whole building. >> as a result, three businesses were born. there's beasley's chicken and honey. >> i knew i wanted to do a fried chicken joint. >> next door is chuck's. >> i am a big fan of wonderful hamburger, and most people are. >> and then downstairs, bob's liquor bar. >> i wanted to create a space where people could count on having a great cocktail and count on having a unique selection. >> one key component of the business model is on paper these three concepts exist as one. >> we can track sales and what goes on in the different profit centers. >> we would not have the ability to open up three concepts independent of each other.

when it comes to the services you invest in, you are doing it once as to doing it once. >> shared phones, a sale system, a keg room, and storage for food. the most dynamic part of the structure is the shared kitchen. the staff simultaneously prepares meals for two restaurants with ease. >> the pos system will ring to the kitchen, and the food is different, so it's hard to confuse chicken and burgers -- well, most chefs shouldn't, anyway. >> it does pose a unique challenge. when customers ask to eat burgers at beasley, and chicken the chuck's, the response is no. >> if we allow people to come over on the burger side, and have fried chicken or come over on the fried chicken side and order burgers, it's just one big restaurant, and that's not what we wanted. >> these are two different restaurants and two concepts.

you have to draw the line somewhere. >> while there's an emergency exit that links beasley's and chuck's, customers can't use it. they have to go outside to get to the other two. >> just like if you wanted to go to another restaurant, you have to exit that restaurant. >> while fox liquor bar largely has its own staff, the employees at the restaurants are interchangeable. people move around to meet customer demand. >> there are subtle differences to meet demand. >> i am not personally a fan, nor do i feel like i -- that it's one of my strengths to open up a large restaurant. it's not something that i enjoy. i like to be able to see everything that is happening. >> and her sense of order with three businesses in one space,

christensen staggered each opening. >> i think it would have been physically impossible to open all three at one time. i know emotionally, it would have absolutely destroyed me to do it all at one time. in the location, you have the ability to find the faults in that indication. >> even bow beasley's, chuck's and foxes are a few feet away. >> i think most people are aware of it. if we can start to establish a clientele through the first concept and get comfortable, it only serves us well to then associate that with the next concept. >> since the experiences are different, christensen says they're not dependant on each other. if one concept hits hard times, retooling can happen fast. >> what makes it simple is i am my only partner. if i have to make a move, i can make it quickly. we swallowed our pride and had

something else work in its place. >> she has high hopes and seems to have struck a balance, and so far her customers are happy. >> i think that they are really comfort-driven concepts. starting up a restaurant can be exhilarating and rewarding, but remember, restaurants are businesses first. food is merely the product for sale. successful restaurants are generally not the result of pure luck. you need to know how to run a company. john tapper is chairman of a business that consults with major restaurants. he host spike tv's bar rescue, which returns for the second season this summer. and then we have steve summer. frank is a cofounder and

principle of landmark hospitality. great to see you all. >> great to be here. >> i talked to you guys a little bit about this before, but you must get the question, i want to open a restaurant. how do i do this? it's a passion for so many people. food. what do you tell them, frank? >> usually you try to gauge their passion, because it's a difficult business. but if you love what you are doing, obviously, you know it helps a lot and you tend to be successful. so i tell them that they should really build a good team around them. i think that's important. and an accountant, if it's your first time in the restaurant business, i always advice somebody to do a break even analysis to really know what you are getting into. >> not just what it takes to make good food. john, you go in and revamp a lot

of bars for your show that are having troubles. what do you see the most, what is the problem most people have? >> i step into a lot of failures, as you know, and so when i walk in all the serious mistakes have been made. a lot of people open the restaurant and they have a passion for the front of the house, the social experience, almost a showbiz aspect, and i find the problem in accounting and controls. most people get into the envisioning the fun part of the numbers, but they don't do the numbers, and as frank said, do their performers and all the numbers there. >> i would tell the person something different. >> okay. >> because proformas and accountants and all that, i would first tell them to make

sure your idea is aus awesome, and the way i did it, because i didn't know what a proforma was, i would vet my idea and analyze it and pick it apart and take the notion of what this concept is, and beat it up and come up with a list of why it wouldn't work, and if in the end the list was greater for the pros, i would attack it. i believe, and this goes against what you think i would say to you, if you build it and it's fantastic, they will come and you will figure out the accounting stuff later, just make sure you budget it right in your construction cost. >> we put this question out to facebook. our facebook fans, and we told them about this show and we got a few questions. this came from dennis who wrote i want to open a restaurant and want to have everything down, and he has a question concerning pricing. is there one formula to figure out the retail price of a dish plus account for over head such

as utilities and facilities and so forth? what do you think, john? >> typically, food costs 30%, and you are not going to get a food cost to run much better than that typically. but there's also an issue of value. guests have perceived value. when a plate hits the table, what it's worth to them in perception, and then there's absolute value. if the restaurant across the street is selling a hamburger for $8, it's going to be hard to sell it for $12 if you don't have a perceived experience. >> this is about brand, too, right? >> yes. >> to answer his question, the facebook question, your pricing is based upon what the food costs, not your adding money in for air-conditioning, and for uniforms. that comes out of your gross sales. when you price something, you price it based upon what the

hamburger cost, and the piece of lettuce cost, and like your expert said, it should be anywhere from between 26% and 30% food costs. >> linda wrote does offering local foods give a competitive advantage or is it the taste and pricing people look for? >> i think customers want to patronize a facility or restaurant that they feel represents them. i think in today's world, i think it does help. but more importantly than that, i think if you are sourcing locally, you are forced to use in-season ingredients. it keeps the kitchen team motivated. it constantly changes. there's a lot of importance to it. we actually, at one of our facilities have a forum where all of our staff participates in helping to maintain and grow and

it gives them so many talking poibts with the customer. >> john, if somebody is thinking of starting a restaurant right now, is there a resource that you send them to? >> there are a lot of resources. retired executives could be helpful. there's great chef consultants that help build menus, and bar consulants help you put together beverage programs. and the guys agree with me, when we look at the piece on the triple concept, and every restaurant successful is known for something. she had one restaurant known for hamburgers and one known for chicken and another for liquor. when you have an identity like that you better have good chicken. if you are not passionate about what you are selling, the whole thing falls apart from the get go. >> how important is location? >> i think it's very important.

i mean, i have been in locations where we have had rent of 40%, you know, more of a concession, and you are generating the volume. obviously you are pricing adjusting for that type of rent. i find that i typically look for now unique sites. i am more into waterfront locations or conversions of the states and to restaurants. i think others look for high visibility, and high traffic, and i think that it's very important. >> my instinct and my heart is to find locations that are off kilter, a little off the beaten path. now that's not always intelligent. i have been wrong about that sometimes. but i like things that are not on the corner of main and main. a little off so that you feel a little different, a little special about where you are going. >> what do you think? you have started so many restaurants, stephen, so if you had to say one thing that the

successful ones have had, what do you think it is? >> incredible concepts, and unbelievable persevere yuns on our part. a lot of people come up with great ideas and open it and then they have to maintain it, and maintaining the food quality is the most daunting thing any of us have to face. >> what about you, frank? >> i would say consistency in staff. i think customers like the fact that, you know, they will recognize the same faces in a restaurant. if you could buildconsistency, it shows that in your food. >> if you had to give one warping out there, for something interested in starting a bar or restaurant, what would it be? >> capitalize yourself well. if it's your first time, you will make a few mistakes along the way and they cost money.

the most important part of a restaurant is connect. connect with your marketplace. connect through your employees. connect through your products. connect through your marteting and branding. if you connect, you will be successful. >> congratulations to awful you guys on your success. it's a tough industry. you have all done very well in it. thank you for joining us. no matter what your business is, knowing who your customers are and what they want is essential for success. two restaurant owner learned this the hard way. when they changed things up, they ended up with empty seats and thousands of dollars down the drain. >> i hate the way you made your restaurant. it used to be great. we don't like it anymore. we're never coming back. i hate your restaurant. those are pretty harsh words. >> they knew they made a mistake when they upscaled their

massachusetts restaurant, but they never thought they would get a response like this. >> why did you mess with it? you should have left it alone. we don't think you are intelligent. why did you do this? a beautiful piece of hate mail. >> what made it spark such negative feedback. >> flowers on the tables and new candles, and we went to linen napkins and brought in a chef and general manager. >> that was not all. >> we made it to a nicer, and larger format. the food changed a little bit, seafood and stakes. >> dupuis said it was simply economic. after serving burgers and plenty of fried stuff, the first time they saw something what they thought was an opportunity to bring in more cash >> we tried to make it nicer.

there was nothing else in the area, so we took a chance. >> taking that chance resulted in significant losses. their $40,000 investment actually translated into a 15% drop in revenue. customers weren't shy in their upset, either. to some, it seemed like the restaurant was having an identity crisis. >> some were angry and some frustrated and some sincere, and a little everything, but definitely honest and blunt. >> both men were dedicated to letting the experiment run its course, but nine months into it, there were simply too many empty seats. >> the flowers came off the tables, went back to the old salt and pepper shakers, and made it look nicer, and we slowly decreased the menu a little bit. >> the decision to scale back meant letting go to the chef and general manager hired to

supervise the change in the first place. it's been a project to get it back to where it was, but everybody has one group in mind, the customers. >> it took a month to two to put out specials and making sure those were the things people wanted on the menu. it's a loyal crowd, and you don't have the transient crowd like you do in other locations. >> the lesson is clear. >> do the research and get information before you make a drastic change. asking your existing patrons what they like and don't like, and go from there. >> it could take as long as two years for them to recoup their losses, but a customer loyalty program has helped people get back in the door.

while one takes the blame for the experience, he says he will never underestimate the customers again. >> they are the most important thing to the business, not me. that was something that i really learned from that, that was very valuable. >> there's not one perfect formula for managing a success if restaurant but there are some clear ways to increase your profits. here now are five management tips for restaurant owners courtesy of inc.com. number one, stay close to your staff. ask them to help with brain storming ideas and listen to their opinions. two, focus on your guests' moods. making your priority to do whatever it takes to make every diner leave your restaurant happier than when they came in. number lee, make sure you have room to expand. pay attention to local building codes and zoning laws. not doing so could be a costly mistake down the road. four, push yourself to understand your profit and loss. good food and atmosphere does

not equal the successful restaurant. the business side is equally important. so make sure you spend just as much time balancing your books as you do picking up the menu. and number five, learn to delegate. as owner figure out what your best students do and stick with those tasks. delegate everything else to others who are better equipped to carry out those jobs. when we come back on this super bowl sunday food show, we catch up with former nfl great tony siragusa who went from the gridiron to the griddle with his new jersey based tiffany's restaurants. super chefs like wolfgang puck and bobby pick up wisdom for small business owners as we learn from the pros. sam: i'm sam chernin. owner of sammy's fish box. i opened the first sammy's back in 1966.

my employees are like family. and, i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card. so we can accumulate as many points as possible. i pass on these points to my employees to go on trips with their families. when my employees are happy, my customers are happy. vo: earn points for the things you're already buying. call 1-800-now-open to find out how the gold card can serve your business. whether you are tailgating or going to sports bar this sunday we thought we would visit

tony siragusa. he took when he learned from the nfl to become a successful business own er. like many entrepreneurs this restaurant owner is hands-on. he spends his days checking in at each of his six new jersey restaurants. >> how are you doing? don't steal the ketchup. >> i lead buy example. i have no problem going back and doing dishes. >> like many entrepreneur this is his second career. but that is where the similar y similarities stop. his first career was super bowl champ. this entrepreneur is tony siragusa. who for 12 seasons played defensive tackle in the nfl winning the championship with the baltimore ravens in 2001. >> tough thing about getting into the business world as a professional athlete is you have

to sort of -- big change. huge change. >> though you can still catch siragusa any given sound fox sports' onfield analyst -- >> explosive offense that need to feed off of big play. >> most days he's here at tiffany's. >> i take care of the things and i want it to be good. when people talk about tiffany's or, you know, any one of our restaurants, it is a reflection on me. i make sure that i visit them all and they are up to my standards. >> siragusa says the nfl gave them the discipline to run his own company. >> i refer everything to almost football. you know, you need to be -- if you are a head coach and surround yourself with smart people, people smarter than you. >> he doesn't discount the edge his famous has given him. vinos and the restaurant business as in football the competition is fierce. he will use everything he has to make sure his business is a success. >> we do "monday night football" shows and radio shows from here and, you know, we do at a lot of stuff. we are always changing, moving,

trying to keep up to date. >> as we have seen today, operating successful restaurant takes hard work and innovation. that combination has been ayres piece for success for many of the country's highest profile chefs and owners. here's a sample platter of some of the wisdom and secrets that we have heard over the years in this learning from the pros. >> for us our motto is quality. you know. we don't try to sell out. we don't try to keep our brand. so everybody who is with me basically has the same vision. you know. we want to open restaurants but we only open restaurants when we have really good people running them. if wry -- have a wonderful chef who i feel is talented and i feel can handle the pressure, who is not only good chef but good businessman, i wouldn't

open it just because somebody gives ghee deal. it has to be made positive for our organization. ♪ ♪ moving on up ♪ nothing can stop me zbloet promoting from within is really important. that's a phrase you hear a lot. what we really utilize as much as possible. and, you know, promoting from within, obviously the person who you are promoting already knows the philosophies of your company. very, very important. and i think even more importantly it lets other people just started who have been around a while know that there is going to be opportunity down the line not just going to be the assistant manager for the next 12 years if they are doing a great job. we want them to be able to look forward and know that we are going to true to create opportunities as we grow our businesses well. ♪ all i'm asking is for a little respect ♪ >> management style, one on one, person to person. i believe in talking to the chefs in the kitchen. talking to the bus boys.

talking to each of the employees who are here. joking, being serious, telling them what they do right because you have to tell people that they are doing a great job for you. i treat everybody with respect and i expect to be treated with respect. i love what i do. i love people. i have fun with my customers. it doesn't always go well. i mean, there's always something that can happen. but i try to work that situation and work with, you know, whether it is an employee or whether it is a guest and i believe that -- in great service. ♪ >> people are coming in because they are hungry and coming to experience so much of what we are drying is based on experience. and creating memories. guess what i did last night. i went to harlem. i had an incredible meal and

jazz experience. whatever state or country you come from. creating unique experiences. that gives tuesday highest chance for return of customers. we have to be good story tellers and be authentic and value for money. >> do you wish there were a more efficient way to get customers in and out of your restaurant? if so, check out our website of the week. tabbed out a mobile payment app that lets consumers open a tab, view their bill in real-time whenever they are ready. tabbed out is available to iphone and android smartphone users. you can find information about the app at tabbedout.com. to learn more about today's show click on our website. openforum.com/yourbusiness. you will find web exclusive information to help your business grow. don't for get to back fan of the show on facebook.

you follow us on twitter, too. next week, when big box stores come to town, it doesn't always have to be bad news for local small businesses. >> when we buy something, we are buying it at x amount. i have no idea what the guy down the street is buying it for but there is no way you can buy it for what i'm buying it for. >> find out how this independent carpet dealer has used a cooperative to keep her competitive edge even though she is surrounded by national chains and getting hammered by the recession. until then, remember, we make your business our business. shazi: seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections.