The challenges of opening and operating a new restaurant can be huge, as writer Ann Bauer suggests this month in a feature about the opening, rapid decline, and eventual emergence from bankruptcy of Seven, a “coliseum-size” steak house and sushi bar at Seventh Street and Hennepin Avenue in downtown Minneapolis.
Build-out costs, investors’ disagreements, reviewers’ jabs, transient chefs, fickle customers, shifting marketplace trends, and changes in the surrounding neighborhood can all conspire to make the life of a new restaurant short. How short? Conventional wisdom holds that the lifespan is short enough to place restaurants among the riskiest ventures there are. In a 2003 American Express ad, a New York chef averred that “nine out of ten restaurants fail in the first year.”
It’s probably not so. A three-year study of 2,439 Columbus, Ohio–area restaurants conducted by Associate Professor H. G. Parsa of Ohio State University’s Hospitality Management program showed the failure rate to be only 25 percent within the first year of business and about 60 percent within three to five years.
Does that still sound dauntingly high? Maybe it is, but in 2007, two years after an evaluation of Parsa’s study was published in a restaurant-industry trade journal, a Business Week reporter concluded that the 60 percent failure rate was “on par with the cross-industry average” for all new businesses, according to statistics from the U.S. Small Business Administration.
Moreover, it might be that Parsa himself overstated the threat of failure faced by new restaurants: In his study, he counted every turnover of ownership as a failure, including those of restaurants that changed hands while they were still profitable.
I will turn 60 this month. It could be a troubling occasion, were it not for the fact that it reminds me of Mickey Mantle, the great New York Yankees outfielder. Mantle was a three-time American League Most Valuable Player and a four-time home run champion, but he was never paid more than $100,000 a year.
A few years before he died, he was asked by a group of friends at his Manhattan restaurant how much money he thought he might make “if you were playing today.”
Mantle didn’t hesitate. “I’d be making a million dollars a year,” he said.
His friends looked at each other, a little embarrassed. “Mick,” one of them said, “you’re getting out of touch. These days, some average hitters are getting $1 million a year—and out in Minnesota, Kirby Puckett is making $3 million a year.”
“Yeah,” Mantle drawled, “but you have to remember, I’m 60 years old.”
This is the first issue we have produced since our colleague Brian Anderson, who served for 33 years as editor of Mpls.St.Paul magazine, succumbed in mid-March to a particularly virulent form of leukemia. He was 65 and sometimes seemed ageless.
Brian twice did me the favor of recruiting me to Twin Cities Business, in 1993 and again in 2001. He brightened the lives of others in both smaller and bigger ways: with cheerful insights, thoughtful guidance, and daily demonstrations of confidence—a form of faith, really—that one’s effort matters.
It would be comforting, but untrue, to think that he didn’t suffer from his illness and its treatment. He was publicly uncomplaining, however, and his wittiness survived for as long as he did. In blogs and in person, he reminded his friends that hope and realism can exist side by side, and that enthusiasm for life is compatible with acceptance of its finiteness.
The placidness with which he faced his departure reminded me of a Thanksgiving Day prayer that my wife, Jennifer, recited a few years ago, when her father was dying of cancer. It went approximately like this:
This Thanksgiving, we are grateful, as always, for all that we have and all that we are able to become—for our possessions, our friends, our family, and our abilities. We give thanks for the multitude of opportunities that are set before us and for the gifts of this table.
But we are especially grateful at this time for the weakness of that which threatens us.
We are thankful that terrorism cannot kill kindness, that war cannot defeat hope, that nature’s disasters cannot diminish that which inspires us.
We give thanks that illness is unable to end joy or eliminate humor, and that disease cannot erase inspiration, disguise character, or conquer courage.
We are grateful that cancer cannot destroy the human spirit.
Bless us, guide us, protect us—but at all times, we ask that your will, not ours, be done.