Folks, step right up and hear about our mistakes galore, such as renting our first space on 10th Street in 2002 because it came with a fully built-out kitchen with ovens, dish machine, hoods, etc…only to discover that none of it was up to code. Cha-ching: $92,000.
Which led to the next big mistake, since it decimated our cash even before we opened. Keep in mind we self-financed by downsizing our house rather than joining up with deep pocketed investors, so we then signed up for a too-good-to-be-true offer from our credit card provider: they’d give us $25,000 on the spot in exchange for future credit card receipts. “Here's the money now; we'll just deduct what you owe from future credit card receipts." So we immediately signed up, and voila! a check for $25k arrived. Unfortunately, it turned out that 97% of our future sales were in credit cards vs cash, so for the next 4 months, our end-of-day bank cash deposits were laughable –sometimes just a few dollars– and rendered us penniless once again. The only way to keep the doors open was to sell Mitch’s Jeep.
The tomahawk “misteak” was one of our most painful experiences. Long story short, we offered a 5-course, prix fixe Valentine’s Day meal in 2016 featuring a gorgeous 3-lb Tomahawk Steak. Reservations sold out in a heartbeat, but what started out as a beautiful candlelit evening for the 6pm seating quickly veered off the tracks. The gorgeous steaks were so thick that they took forever to cook, then also needed additional time to “rest” for the best flavor. This of course forced our guests to wait excruciatingly long times for their meals, which then held up the next reservation for that table, which then backed up the next seating… hell, our 8pm guests weren’t even seated until past 10:30, making the tomahawk “misteak” one of our worst nightmares.
But these mistakes pale in comparison to the multi-million dollar losses we incurred when we opened a second restaurant in Duluth. Co-founders Cyn and Mitch loved Duluth so much that they naively assumed our success in downtown Minneapolis would automatically translate into another winner. Our Canal Park Hell’s Kitchen was balls-to-the-wall busy during tourist season, but we struggled the rest of the year. We were prepared for a huge influx of cash during high season to carry us the rest of the year. Unfortunately, the tourist season didn’t hit its stride until the July 4th weekend, and worse, everyone vanished after Labor Day. Two months of cash flow wasn’t nearly enough to last through winter, so after 3 years, we licked our wounds, paid our vendors in full with our own money, and used our Minneapolis profits to pay off our remaining $817,000 bank loan. Combined with 3 years of massive losses, the amount of money we lost was staggering.
Wait, you thought we were perfect and never made mistakes?? Yeah, we didn't think so. We’re rolling our eyes as well.