Some of Brooklyn’s hippest restaurateurs rely on business tips from Goldman Sachs
Foodie culture may be easy to ridicule, but it demands more than just a gentrifying neighborhood and an appreciation for the finer things: It requires business savvy.
This may not be apparent to those who misunderstand the direction the economy is taking, but when the robots come for our jobs, there will be real economic value in the ability to poach the perfect egg. (Watson may be good at devising recipes but it has yet to hit that sweet spot between a runny yolk and a crumbly one.)
Quartz recently sat down with the owners of three successful businesses in Brooklyn, New York City’s notoriously hip borough: Carolyn Bane, who opened the restaurant Pies ‘n’ Thighs with partner Sarah Sanneh; George Weld, the founding chef and owner of the restaurant Egg; and Beth Lewand, who operates the craft beer and fine-foods store Eastern District with her husband.
All three started as self-taught foodies with backgrounds in digital media production, public relations, and academia, and learned as they went along. “We were tired of having to go to Manhattan for our favorite things,” Lewand said.
But they also possess slightly more knowledge than the average small business operator: They are all graduates of a program called 10,000 Small Businesses, funded by the investment bank Goldman Sachs, that since 2009 has put 4,700 business owners through a 100-hour practical mini-MBA.
Here’s some of what they learned:
Learn from coworkers—even if you have to pay for it
“I had to hire all these people who are much better cooks than I was, and they’d come in ready to learn from me, and I’d teach them everything I knew in two days, and I’d spend the rest of the time they were there trying to learn from them,” Weld says of his education as a chef.
Egg founding chef and owner George Weld. (George Weld)
But that method doesn’t always work for everything a business-owner needs to know.
“For financial guidance and education, you have to pay for that,” Lewand says. “Everyone is happy to share their opinions about beer and cheese and fried chicken… [but] people aren’t coming over and being like, yeah, hey, let’s have some beers and I’ll teach you QuickBooks.”
“All due respect, cooks are more fun to be around than bookkeepers,” Weld says.
Gain situational awareness
Even when the day-to-business is running well, figuring out how to make choices for the future is a big challenge
“We didn’t have books in the first two years, our food cost was like 50%—that was a disaster—and we literally kept our money in a ceramic mug,” Bane said of the early days of Pies ‘n Thighs, which started off in the backroom of a bar and was briefly shut down for operating an illegal smoker. “Five years ago, when we re-opened, it was more official, and we had this book-keeper, [but] sometimes my partner is looking at me like, what do you think, can we afford this? And I’m like…” She shrugs.
Outside Pies ‘n’ Thighs’ second location. (Pies 'n' Thighs/Winnie Au)
But Bane and her partner figured out the financial nuts and bolts of what makes their restaurant run, which allowed them to open a second location in downtown Manhattan this year.
Be a tough negotiator
One thing that doesn’t come naturally to many entrepreneurs is the art of the deal, and few things are a bigger negotiation for a small business than their location.
“Negotiation was something I was terrified of when I came to this business—if I didn’t agree with someone, what then?” Lewand says. “We had a very, very tough renegotiation for our lease last year, and I was worried, I was getting ready to shut down, I was preparing all these alternate plans.”
While Goldman itself is playing a role in the gentrification lifting Brooklyn rent, Lewand credits the skills she developed in the bank’s curriculum for the confidence that she could re-locate successfully if she had to, allowing her to “negotiate my lease with some intelligence, and work out five more years of lease.”
“When we were opening the new place, we had a lot of occasions to negotiate and people look at us, and we’re relatively young and we’re women, and they have been negotiating real estate deals and contractor agreements all year long for years and years,” Bane says of her experience. “That advice was really helpful—anchor low, put your foot down, and be ready to walk away.”
Have an exit strategy
The entrepreneurs started their businesses and worked to make them profitable, but beyond that, they didn’t have a big-picture goal. They say coming up with an “exit strategy”—an idea of how to make their business attractive to outside investors—was a helpful form of discipline.
Carolyn Bane, co-owner of Pies ‘n’ Thighs. (Pies 'n' Thighs)
“Something we learned in the first week of class after we sort of set our exit strategies,” Bane says, “that all of your decisions have to be informed by heading towards that exit strategy. And that to me really clarified everything. How can this place run itself? How can it become attractive to a buyer? Not that I have any intention of selling it for at least five years.”
Don’t fear growth
“Until probably three and half years into our business, we were only open six days a week, because I was scared to hire more people,” Lewand says.
Eastern District owners Beth Lewand and Chris Gray. (Eastern District)
“This is one of the changes that I made sort of in the middle of the class once I started learning a few things about looking at the bigger picture, looking at our larger goals, and doing a little financial analysis—I finally faced the fact that we could make more money if we were open seven days a week and if my husband and I were not there every day.”
So she hired two part-time workers and found that, as she had hoped, it helped her business grow.
“It was immediately something that, you know, within a couple weeks, ‘Why was I so scared of taking that little leap?'” Lewand says. “It was just unfamiliar to me, I hesitated for a really long time.”
Go global?
With New York restraunteur Danny Meyer launching a $745 million public offering for his burger spot and San Francisco coffee-shops taking venture capital funding, I had to ask the group if they saw themselves as shepherds of future global mega-brands.
“I’m always thinking about Danny Meyer,” Bane says, laughing. “On the Union Square Hospitality Group’s website, if you look at the senior staff, it’s really impressive, and a lot of them come from financial backgrounds. I feel far away from becoming a global mega-brand when I think, how could I get a person like that to come work for us? What would it mean? And would I have to cede my ownership or how much of my ownership would I have to give away to get someone who could be this adviser? I think I’m still missing the board of advisers. That’s going to be key in becoming a global enterprise. I think about it!”
In the meantime, the owners are appreciative of the fact that Brooklyn and New York helps expose their work to a global audience, estimating that perhaps 30% of their customers are out-of-town visitors.
“I’ve seen people come in with Japanese magazines with pictures of the products on our shelves and picking those exact products off,” Lewand says.
Screw the haters: Brooklyn rules
One thing that all three shared was an appreciation for the culture that created their businesses: While Brooklynites may be the butt of hipster jokes, the three businesses found ample resources and dedicated supply chains in the borough.
“Yeah, I definitely have seen some articles which treat artisanal food production as a joke, as something that’s like a little fun hobby for rich artsy kids, and it’s not like that at all,” Lewand says. “Everyone that I know who is in this—and I work with a lot of vendors and food producers, we sell their products—everyone is working their butts off. The food producers who last longer than a year, you can be sure that they are smart and sophisticated and thinking hard and working hard.”
A platter of fine cheese and charcuterie from Eastern District. (Eastern District)
And, where would the world be without businesses that combine dedication with profit-seeking?
“The alternative is so terrible, it’s easy to make fun of us, and I can do it, just as well,” Weld says. “But you know, what would you want instead? A bunch of cynical business people coming in and dropping in chain restaurants? Maybe it’s goofy and maybe our heads are in the clouds sometimes, and it’s hard to think of ourselves in terms of global mega-brands because we are so rooted in the small business culture of Brooklyn, but it’s a great culture to be part of.”
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