September 9, 2025 • 31 mins
Chris Smith is the co-founder and co-owner of Sonoma Pizza Co., an artisan pizzeria in Forestville, California, which he launched in 2022 with his wife, Eda Atasoy.
After three decades in San Francisco’s nightlife and hospitality world… running spots like The Pawn Shop, Monarch, The Great Northern, and even the record label Om Records… Chris shifted his focus from nightlife to culinary craft.
He trained with renowned pizzaiolo Tony Gemignani and, together with executive chef Carl Shelton, developed a signature dough rooted in Michelin-level technique.
Sonoma Pizza Co. is known for its naturally leavened sourdough crust, cold-fermented for 72 hours, and made with organic, locally sourced ingredients.
In just two years, the restaurant has been named one of Yelp Elite’s "Top 50 places to eat in the Bay Area" and was voted "Best Pizza in Sonoma County" by Visit Sonoma.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Anne McGinty (00:00):
Welcome to How I Built my Small Business.
I'm Anne McGinty.
I live in Northern Californiaand today's guest is someone who
built a beloved spot just 15minutes from my home.
Chris Smith is co-founder andco-owner of Sonoma Pizza Co, an
artisan pizzeria in the tinywine country town of Forestville
, California.
(00:22):
Chris launched Sonoma Pizza Coin 2022 with his wife Eda, after
spending over three decades inSan Francisco's nightlife and
hospitality scene, runningwell-known venues like the Pawn
Shop, monarch, the GreatNorthern and even the iconic
record label Ohm Records.
But after years in nightlife,Chris felt the pull towards
(00:42):
something different.
He had trained with legendarypizzaiolo Tony Gemignani and,
alongside executive chef CarlShelton, developed a sourdough
pizza dough rooted inMichelin-level technique.
Sonoma Pizza Co is now knownfor its naturally leavened
sourdough crust, cold-fermentedfor 72 hours and crafted with
(01:04):
organic, locally sourcedingredients.
In just two years, therestaurant was named one of Yelp
Elite's top 50 places to eat inthe Bay Area and voted best
pizza in Sonoma County by VisitSonoma.
In this episode, Chris is verytransparent about what it's
really like running a restaurantin wine country transparent
(01:29):
about what it's really likerunning a restaurant in wine
country.
Chris Smith (01:35):
My background is in the music industry in San
Francisco, so I did that for 30years and I just kind of was
ready for a change.
But I had become reallyinterested in pizza about 20
years ago.
I was living in Oakland and Iwas going to Zachary's all the
time a Chicago deep dish placeand it really just something
just resonated with me.
I got really excited aboutmaking this amazing product and
(01:55):
just seeing how the business ranand it just intrigued me.
So I started studying the pizzabusiness and the craft of pizza
about 20 years ago and then in2019, I kind of got more serious
about it.
I had known Tony Gemignani,who's like one of the world's
best pizza makers.
He just happened to be in SanFrancisco and he would come to
(02:17):
some of the music venues that weoperated and so he had a little
class that he would do aninternational pizza school and
so I did his school and then hekind of helped me get going.
He taught me the basics him andanother woman, laura Meyer.
You know I got the crash coursein making Neapolitan wood fire
pizza, so learned that andbought an oven and just started
(02:43):
kind of practicing the craft andthen meanwhile, I had bought a
house in Forestville a few yearsbefore and I was coming to
Forestville all the time and Iwas Airbnb-ing the house on the
weekends.
And then my wife and I were justlike we want to move up here.
We got to get out of SanFrancisco, you know.
So we started looking for aplace to do this idea back in
2018.
And then COVID hit and we justmoved up here.
(03:07):
We were already in the process,but we just moved up here.
And then the building inForestville came up for sale and
I was like that's the place,this is the place We've got to
do it, even though it was not arestaurant previously.
So it was a major redevelopmentof the property.
It didn't have any of theservices it needed Gas, didn't
have correct water lines orpower.
(03:28):
It took a year just to switchthe use of the property.
It was a whole thing.
It was a huge project andextremely expensive.
The budget that we originallyenvisioned for it it was not
even close to enough to do whatwe needed to do to get this
thing off the ground.
Anne McGinty (03:45):
Forestville is a pretty small wine country town.
Chris Smith (03:50):
Like, yeah, you know, that was, you know, when
we originally were thinking wewere thinking, oh, we'll do this
in Healdsburg or we'll dosomewhere with some more people
in Sonoma County.
So that's where we were looking.
But when the building came upfor sale, you know, I realized
Forestville is really kind of inthe middle of nowhere, but it's
right in the middle ofeverything.
So it's a 15 minute drive fromall these other communities.
(04:12):
So my gamble was, if we madethe place and we made it awesome
and just put a ton of love intoit, that people would drive
from all over the county to comein and the tourists who are
visiting on the weekends wouldcome, and that definitely, it
definitely worked.
Anne McGinty (04:26):
It definitely worked.
I feel like it's always busy.
Can you walk us through yourplanning process of like what
that was like from idea toopening day?
I mean you had mentioned ittook at least a year just to
repurpose the property for whatyou intended to use it for.
Like what was that wholeprocess like, going from idea to
opening day?
Chris Smith (04:47):
Yeah, it was pretty wild.
I mean, we had a vision of whatwe wanted the whole property to
be, but we didn't have anymoney.
So my wife is my businesspartner, so we did this entire
project together Her name's Edaand so we were like we want to
buy that property, we want tostart this new business.
I made a pitch deck and I wentout to like friends and family
(05:29):
and started raising money andpeople miraculously gave us
money and we were just blownaway.
We remember when we got ourfirst check we were like no way.
And then a couple more came inand we're like this is going to
happen, we're going to get thismoney.
So it was really just like goingaround and kind of talking to
everyone I knew and begging formoney.
(05:49):
So there was that aspect of it.
And then we found an architectand he helped us kind of draft
up the basic plan of thedivision and the space has a
huge backyard area.
But we were like, well, we'llsave that for phase two and
we'll just do the restaurant,we'll just do the main
restaurant area.
But then as we kept going, wekept getting a little bit more
(06:12):
money and a little bit moremoney and we're like, okay,
let's do that now, let's do thatnow.
And we were, we kind of justtried to get almost all of it
done at once and we're stillactually still kind of working
on it.
There's still littleimprovements we're doing.
But so, yeah, it was reallylike oh, we got some more money,
cool, we can do this now.
Well, we can buy those chairs.
So when we look back on it,you're like, wow, like how would
(06:33):
anyone even do that withnothing?
We pulled it all togethersomehow.
You know what I mean.
Anne McGinty (06:39):
Well, and you didn't just pull it together.
I mean the places it's.
It's like you thought abouteverything.
At least that is how it feelsas a consumer.
I've never worked inhospitality.
Chris Smith (06:49):
We did think about everything.
We had time to think abouteverything because it took so
damn long to to get even to thepermits or this or that.
So we had, you know, year and ahalf in before we even broke
ground on it.
So we did.
We did put a lot of thoughtinto it.
My wife is a really greatdesigner.
She's got a great eye.
We did the court design conceptfor the property and then
worked with our architect torealize that.
(07:09):
And then we did all theinterior design ourselves.
We picked out all the finishesand kind of just did the whole
thing.
Anne McGinty (07:16):
You had mentioned that your budget completely blew
out of the water.
Yeah, can you give us an idea?
So was it like twice as much aswhat you were expecting?
Chris Smith (07:24):
It was three times as much, but it was also because
we decided to do more.
We were like, well, we think wecan get more money, so let's do
the backyard development now,because that's really we really
wanted that.
That's a huge part of it.
So that was not in the originalbudget because we didn't think
we would ever even come close togetting what we needed to do it
.
Original budget because wedidn't think we would ever even
(07:46):
come close to getting what weneeded to do it.
But we actually got a grant fromthe restaurant revitalization
fund for covid because we landedright in the middle of we
weren't open yet but we weregoing to open and we could apply
to get a grant for money tobuild outdoor dining space.
And we we did, and so we got$300,000 from that Sweet and so
(08:07):
just like little things likethat, just like kept happening
to make, we were like theuniverse wants this project to
happen.
You know, I feel like with anyproject, if you want to do it,
bad enough to where you justtake the first step and you keep
taking steps and keep takingsteps, it will probably come
together for you.
I'm not saying it will for sure, but I think most likely it
(08:28):
will, if you're at the pointwhere, like, we're going to do
it, we're going to do this we'regoing to do this.
That kind of energy behind it, Ithink, really carries it.
Anne McGinty (08:36):
Yeah, I think you're right.
It's like just like the nextlittle step.
So again, like with Forestvillebeing such a small town, like
staffing and sourcing, did thisconcern you at all or how did
you address the need for that?
Chris Smith (08:49):
Yes.
So this was a huge, hugeproblem.
We really wanted really coolpeople working there, and by
cool I mean people that arehospitality focused, people who
care about hospitality or theycare about the craft of making
pizza and brand new restaurantForestville.
No one was interested.
Like it was really really hardto find people.
(09:12):
I have two really good friendsof mine from San Francisco,
reagan and Matthias, who arerestaurant veterans.
They came up here and helped meget the restaurant open and
lived at my house for a year tohelp build the team and build
all the systems and likebasically everything, and if we
didn't have them we would begone, we would never have made
(09:33):
it.
They basically helped us createthe blueprint for this entire
thing to make it run at thelevel we wanted to run it up.
Anne McGinty (09:41):
And then, how did you handle the development of
the menu between, like yourtaste and market demand, like
how did you find the balancethere?
Chris Smith (09:51):
Well, so I'm not a chef but I I had studied pizza a
lot at this point and had madea lot of pizza, but I realized I
need to go out and hire a realchef to make this what it needs
to be.
And so we hired an executivechef, carl Shelton, who came on
board, you know, about sixmonths before we opened, and he
(10:12):
and I are indeed all the doughand all the sauces.
It's just kind of like we made.
We made cheese pizzas for liketwo months straight, just
testing different hydrationlevels on the dough and
different fermentationtechniques and different sauces
and cheese blends and whatnot.
So there was a pretty extensiveprocess to come up with what is
(10:32):
our signature dough.
That was kind of that.
And then we didn't reallyconsider market demand for our
menu.
We just kind of made the menuthat we thought was awesome.
We wanted to use primarily alllocal Sonoma County ingredients.
Yeah, we just thought let'sjust make this awesome and
everyone else will love it thatseemed to work.
Anne McGinty (10:55):
Was there a first moment when you thought, okay,
we made it like.
This one's gonna do great, it'sgonna survive, it's gonna be
awesome.
Chris Smith (11:03):
You mean the restaurant as a whole.
Anne McGinty (11:04):
Yeah, yeah.
Chris Smith (11:06):
I'm still waiting for that moment, actually.
Anne McGinty (11:08):
Really.
Chris Smith (11:09):
I mean, it's so hard to run a restaurant and
even like we are really reallydoing well and we're barely
making a profit now, and it'sbecause it's so expensive to
operate.
The labor in California isinsane All the taxes, you know.
It's so expensive to operate.
The labor in California isinsane All the taxes, you know.
It's a brand new property, soeverything is being taxed at the
(11:30):
highest property tax level.
And then you know we're in avery fire danger area, so our
fire insurance goes up, you know, by $5,000 every year, you know
.
So it's just like it's really,really tough.
So I don't think we've made ityet, to be honest.
I think we're.
We're still here and we'regoing to be here.
We're not going anywhere, butI'm not sitting back going.
(11:50):
Oh yeah, okay, we're.
We're making a 10% profitmargin now and cashflow is just
rolling in.
It's not like that.
It's a constant cashflowstruggle, constantly moving
money around, trying to keepeverything working.
And that's with a restaurantthat's doing really well, you
know.
And we're not a cheaprestaurant.
Our prices are high, but theyreflect what it costs to be here
(12:12):
, to exist as a restaurant.
Anne McGinty (12:18):
So what are healthy margins in the
restaurant business?
Because I hear numbers all overthe place.
Some people have said theirmargins are as low as 3% and
others have said they're making25%.
So what would be comfortable?
Chris Smith (12:25):
I think for us, when we hit the 10% margin mark,
that's the first benchmark ofokay, we're on our way.
We obviously want to be at 20%.
That's really where you shouldbe as a business, but we're not
there yet and we're going tokeep working our way there.
This year is our firstprofitable year.
(12:46):
So you know, I think we'regoing to get probably close to
the 10 margin, somewhere nearthere hopefully.
But it's a really reallychallenging environment to
operate in, and just also whatyou have to pay people.
You know the cost of living incalifornia is so insane.
I mean, we pay our cooks andour servers very well and I see
(13:07):
what they all make and I'm like,wow, that isn't even that much
to live on, but we're payingmore than anyone is paying.
And it's like you have to haveenough servers and enough cooks
to make the thing hum andprovide the service that you
want to provide.
But when you have exactly theteam that you need, you're
spending too much money.
So that's that's kind of the um, the challenge of the
(13:30):
restaurant.
Anne McGinty (13:31):
So that's a that's a big predicament.
So what are the solutions?
Chris Smith (13:36):
You have to become more efficient, tighten your
systems up, become moreefficient with your scheduling
and you have to have the qualityof people working there.
You have to have very highquality people.
So the quality of our team isgetting better and better and
better and better.
So it's allowing us to becomemore efficient.
We're tightening our cost ofsales.
You know we were running at 35%cost of sales, Now we're down
(13:56):
to 27%.
So we're doing all the rightthings, but it takes time.
The kind of playbook for arestaurant is generally you want
to be running 30% labor costand that's all in salaries,
hourly employees, taxes,insurance.
You want to be running a 30%labor cost.
You want to be running a 30% orless cost of sales for your
(14:19):
product, so your food andbeverage costs, and then you
want to be running a 20%operation costs, which then
leaves you with 20% profit.
That is a recipe for successfinancially Very difficult to do
in California, just because thecost of everything is so
expensive here.
So we have another layer ofchallenge being in California,
(14:40):
because we're you know what ourminimum wage is, what we have to
pay people because it's soexpensive to live here.
So that's the sort of blue book.
So you're really trying to hita prime cost.
A prime cost is your labor plusyour cost of sales and you want
to try to hit a 60% prime cost.
65 be the top end.
Anything above that you wouldlook at the business and go.
This business is not reallyprofitable.
(15:01):
So that's what you're workingfor.
Anne McGinty (15:04):
It's really interesting to me because, well
again, I don't have anyexperience in the hospitality
industry and when we go there Ijust think, wow, this place is
humming right.
So to hear what's reallyhappening behind the scenes is
just, it's, very eye-opening.
Well, yeah, it is.
Chris Smith (15:21):
I mean and it is humming and it's pretty
fine-tuned machine at this pointbut it needs to be even more
finely is.
I mean, and it is humming andit's a pretty fine tuned machine
at this point, but it needs tobe even more finely tuned.
I mean, I'm sure you've seenlots of restaurants that have
been humming and doing great andsuper busy and awesome and they
go out of business.
Anne McGinty (15:34):
Yeah.
Chris Smith (15:34):
They're not making any money, so it's like you have
to really be all over thefinances and micromanaging them
in this industry.
Anne McGinty (15:50):
You have to be good at a lot of things to run a
restaurant.
I can definitely see that Iwouldn't have the first clue how
to do it.
So, from the very beginningjust acquiring the property to
opening, to going through COVIDand now trying to get your
margins better what have beenthe hardest moments for you as a
business owner?
Chris Smith (16:09):
for you as a business owner God, there's so
many.
I think that the hardest thinggenerally has always been around
access to capital and money and, as a new business starting out
, your options are limited.
We did get a loan from a bank,but I was able to leverage
property that I already owned ascollateral.
We were able to get an SBA loan.
It took a year to get the loandone.
(16:31):
It was an arduous, insaneprocess, but we were able to get
an SBA loan.
So that part of it just tryingto get money to bring your
vision to life is always, Ithink, the most challenging
thing as an entrepreneur, anddefinitely for us for this
project.
Beyond that, the second mostchallenging thing is you have a
(16:51):
standard that you want to upholdfor your food, your hospitality
standard and training andmotivating your team to uphold
that standard, and then when yousee it not being upheld and
dealing with those situations,it can be disheartening and
draining, but it's kind of thejob that's.
(17:13):
The culture that you create atyour company is what is the
standard that you aspire to anddo you uphold it and how do you
uphold it?
So we have been really lucky inthat we haven't had the
challenge of oh, we have tofigure out how to get people in
the door.
We were kind of like if webuild it, they will come.
That was our model and itworked.
A lot of other restaurants havethe additional challenge of
(17:37):
we're not busy enough, we'redying, we need more people, we
need more people.
We haven't even had to dealwith that yet.
Anne McGinty (17:42):
With your standards not being held, for
example, or with the turnover inthe industry that it's it's
kind of known for like.
What is your approach to hiringand keeping your staff there,
like beyond payment?
Chris Smith (17:55):
Our approach is to try to hire slow, fire, fast,
really try to find the rightpeople, that kind of buy into
the vision of what we're tryingto do, of buy into the vision
that what we're trying to do andthen people that we actually
really connect with and that wewe want to work with and we
think are going to be a good fitfor the team, you know, because
(18:17):
you could have you got one badapple in the crew it really can.
It can really throw things off.
So it's like we definitely wentthrough some bad apples.
We've had some great apples too, but, uh, we went through some
bad apples.
We've had some great apples too, but we went through some bad
apples.
And now we really try to besuper careful about who we hire
and I always tell this toeveryone that works there this
is a really, really hard job.
(18:42):
If you're a cook, it is a very,very difficult job.
People that never worked at arestaurant don't really
understand how hard it is.
It is a grind that people workextremely hard.
And then if you're a server,you know you're talking to
people and really engaging andyou're giving a lot of yourself
all day long.
It's a tough job.
So I know I always tell people.
You know you have to reallylove it.
You got to really enjoy it andif you don't, that's why I told
myself if you're not, if youdon't feel that, go do something
else.
I'll support you in yourtransition, help you find
(19:05):
something else.
But life is short, so you gotto really enjoy this work if you
want to do it.
Anne McGinty (19:12):
Well, and that's part of the success, right, it's
like it's not all financially,it's really you're like a
community center at this point,like the place where people
gather, and I imagine that thereward comes from more places
than just the money just themoney.
Chris Smith (19:29):
Well, we are a community center and we also
this is another thing I alwaystell my staff we think about
people coming to the restaurantfor dinner or for lunch.
Most people's lives are prettychallenging and pretty stressful
and exhausting.
They're making a choice to takewhat limited free time they
have and come to our place tohave dinner.
They're not just coming forfood, they're coming to have an
experience, to have a littleescape, have some fun, and we
(19:52):
need to really think about that.
That's the service that we'reproviding and it's important,
you know.
So when someone walks in thedoor, we need to really treat
them well, because they'regiving us their time and their
money and we really respect that.
So we try to embody thathospitality all the time.
We don't hit the market everytime, but that's the goal and
that's that's that's where it'scoming from, anyway.
Anne McGinty (20:12):
Well, I think I read in your bio that you've
been in the hospitality industryfor a quite a long time.
Right Like you, you've ownedbars in the city.
Chris Smith (20:20):
Yeah Well, I, I own a record label called own
records, which is a dance musiclabel that became pretty big in
the 90s and 2000s and from therewe did hundreds of events and
tours and festivals, so a lot ofproduction.
Then I became partners in SanFrancisco in a group.
We own a couple of nightclubsand a catering company, a
(20:42):
restaurant in San Francisco.
So I was a partner in that for10 years.
Before I was like, okay, I'mready to kind of transition out
of the city now and move up tothe country and I thought, oh,
you know, it'll be nice, we'llmove up to the wine country,
it'll be relaxing, we'll have a,you know, open a little
restaurant, it'll be quaint,easy.
This is way harder than any ofthe other things I'd done.
I also had a.
(21:03):
My wife and I had a baby prettymuch right when the restaurant
opened, so we have athree-year-old.
So that's was just an extralayer of complete insanity.
Anne McGinty (21:13):
Is there any sort of like game changing advisory
that you learned from thatexperience of just running all
of those different businesses inthe?
I mean, you've got music andthen you've got a bar club like?
What did you learn from thoseparts of your journey?
Chris Smith (21:30):
Don't do it.
Anne McGinty (21:31):
Don't do it Serious.
Chris Smith (21:35):
You know, the nightclub bar business is
another thing that you need tobe really passionate about.
It's a grind and I just reallybecame burnt out on it, you know
before I even had the bars.
I was doing events like musicfestivals, club events in San
Francisco and all over the worldfor 20 years before that.
(21:57):
So if I had to go back in time,I probably would have skipped
the owning the music venuesportion of my career, because
it's a really not a greatbusiness.
Venues portion of my careerbecause it's a really not a
great business, and it was morealmost like a hobby, passion
thing that I just wanted to dowith with some friends of mine.
That turned into like a wholeyou know 10 year aspect of my
career.
But you know, I feel like onepiece of advice I would have is
(22:20):
I feel like one thing I've donein the past is I've done too
many things, tried to do toomany things at once instead of
focusing, and focus is important, and right now I have up here
with this, with Sonoma PizzaCompany.
This is all I'm doing and it'slike it's my focus.
Raising my son and doing therestaurant is my focus, so I
(22:41):
don't have four other businessesgoing simultaneously now.
Anne McGinty (22:46):
If someone came to you for mentorship, like, let's
say, somebody is like in theirmid twenties or thirties or
whatever and they are like Ilove the hospitality space, I
really want to open a bar orrestaurant, what would your
step-by-step playbook look likefor them?
Chris Smith (23:01):
I would probably tell them to first go get a job
at a restaurant and throwthemselves in there and really
see what it is, because, beyondthe romance of it, a lot of
people open restaurants and theyhave no.
Like me, I was involved inrestaurants in san francisco,
but this one, doing it all byyourself, you really learn.
Wow, this is insane.
You know how, how crazy it is,so I know I would.
(23:23):
I would advise them to go workat a restaurant for a while and
then try to articulate wheretheir strengths and weaknesses
are.
Is this a chef-drivenenterprise that you have a food
program that you want to explore, or are you more the kind of
hospitality side of things andyou want to create an experience
and go?
(23:43):
Who do I need to partner withto bring this whole thing to
life?
I don't think you can do it all.
Some people try.
I think you kill yourself.
I realized I was really intomaking pizza and I realized I am
not the chef.
I am the hospitality businessaspect of this and I want to
help drive the food program, butI want to partner with someone
(24:05):
who really has got a Michelinbackground and knows what
they're doing.
So if you do all that andyou're still like, yeah, I've
been working in restaurants foryears, I know the business and I
fucking love it.
I really want to do this.
At that point I'd say, okay,well, then put together your
business plan, put together afinancial model.
For me it always starts withwith Microsoft Excel and coming
(24:27):
up with like here is myconceptual model of what I think
this place can do on a Mondaynight, a Tuesday night, a
Wednesday night, a Thursdaynight, and put that into a
cashflow projection and someexpenses and kind of create a
model of what do I think it'sgonna cost to start it up, what
it's gonna cost to operate, howmuch revenue do we think we can
do and is it really look likethis could work?
(24:51):
And then from there, stillexcited about it, you take the
next step.
Anne McGinty (24:55):
In those conceptual models.
I mean I know a lot of it isreally just sort of
guesstimating.
It's like, well, if I can dothis on a Friday and a Saturday,
then I think I could do this ona Sunday, okay, but then on a
Tuesday and Wednesday, and Ithink I could do this on a
Sunday, okay, but then on aTuesday and Wednesday it may be
extremely slow.
Like, how accurate can youreally get on those numbers?
Chris Smith (25:13):
I have a projection for every day of the year
through the end of next year, soI have like a working model and
it's pretty accurate.
Now my projections were way offI under projected sales and I
under projected expenses, whichI feel like is pretty much what
I do every time.
But you still have to make aprojection.
This is where a lot of peopleget hung up because they're like
(25:34):
, well, I don't know, I don'tknow and like you just got to do
it.
You just got to make up and go.
It's a Sunday night, it'sSeptember, how many people do we
think are going to come in thedoor?
We think it's going to be 65and that's our number and we
think we're getting you know.
And you have to.
You have to take whateverknowledge you have and make the
(25:56):
best possible educated gueststhat you can to create some sort
of a projection for whatever itis that you want to do.
If you want to start asurfboard company like, how many
surfboards can I make?
Where am I going to sell them?
How many doboards can I make?
Where am I going to sell them?
How many do I think I couldsell in a week or a month and
you just have to take that stepof making a model that you
created based on what you thinkyou can do, and then you just
(26:17):
keep tweaking it and keep it.
You know, as you get moreinformation, you keep making it
better and better and better,and for me that's how it works
anyway, and for me that's how itworks anyway.
Anne McGinty (26:26):
So when you see other restaurants that are
opening and you're sort of usingyour restaurateur mind, like in
evaluating how they're doing,like what do you see are the
most common mistakes that yousee over and over again?
Chris Smith (26:39):
Well, I see a lot of really good restaurants
opening and then I see themclosing.
And it's kind of scary,especially when you go to a new
place that opens and you're like, wow, this is like my favorite
place, this is awesome, theservice is great, the food is
perfect.
And then they don't make it,they close.
And it would be one thing ifyou go to a place and you're
like, oh, the food sucked andthe service sucked, you're not
(27:04):
going to make it.
Those are pretty clearindicators that something is
seriously wrong.
You see other places where theyseem to be killing it and then
nope, they're gone.
Part of it is you have to bewilling to really fight.
Once your business is up andrunning, you're going to have to
go to battle over and overagain and if you give up on the
battle, you close.
It could easily fail, but I'mnot letting it fail.
(27:24):
That's the difference, you know.
So it's not like you can justopen it up and we're here, we're
open.
You know it's like.
You know you have to like, youhave to fight to keep it going.
So that's pretty much you havegood times and you have tough
times and then you finally getover the hump.
Anne McGinty (27:40):
Yeah, you're just like constantly putting out
fires, problem solving one thingafter the other.
Chris Smith (27:45):
That's the job in business is solving problems.
You know you have to.
That's that's what it is whenyou're running it.
Anne McGinty (27:53):
When you're running a business, you're going
to solve problems.
Yeah, it's a mindset, though,right?
So okay, I've just got one morequestion for you, which is just
if you could go back and talkwith yourself when you were in
your early twenties, what wouldthat conversation look like?
What would you say Like, whattips would you give yourself or
heads up would you share, andwhat sort of life wisdom?
Wow?
Chris Smith (28:21):
that's a big one.
The number one tip I wouldprobably try to give myself is
don't try.
Been into music production andDJing and music, and then I
started the record label and gotinto that.
Then I started something else.
I just kind of you know, youhave to know what to say no to
and filter things.
And I always look back and I gowell, you know, I could have
probably just DJed and mademusic and probably be making
(28:44):
millions of dollars a year rightnow just from doing that.
The time I was like you want todo a record label, you want to
do this too, and or I could havejust done one thing.
You know, if I go back in timeI'd say, yeah, just focus a
little bit more and try not todo too many things.
Anne McGinty (28:58):
So it's like narrow but deep yes, narrow well
, chris, it's been really greatto chat with you.
Thank you for being so open andjust transparent about
everything.
It's the best way to learn, Ithink, is when people can
actually get the truth aboutlike hey, how hard is it?
And like what's going well andwhat did you do right, what did
(29:19):
you do wrong?
So it's been really wonderfulto hear your story.
Thank you so much.
Chris Smith (29:24):
You're very welcome .
Thank you for talking to me,hear your story, thank you so
much.
Anne McGinty (29:30):
You're very welcome.
Thank you for talking to me.
Today's key takeaways Busydoesn't equal profitable.
Until labor and food costs aredialed, a packed house can still
lose money.
Expenses will usually be higherthan you forecast.
Take your budget and thendouble or even triple it and you
may land at a more accuratenumber to work off of the
(29:50):
culture, the team and theservice.
All comes down to the peopleyou hire.
One toxic person can make itreally hard, so hire slow and
fire fast.
Prime cost, which is labor pluscost of sales, needs to be
around 60% or less.
55% is better.
Any higher than 65% and itcould be extremely difficult to
(30:14):
achieve profitability.
Hospitality can be a constantcashflow struggle.
You have to continuouslyimprove the quality of your team
, get more and more efficient,all while tightening your cost
of sales.
If you want to enterhospitality in the food or
beverage business, whatever yoursector, whether that's a
restaurant or a bar, for exampletry the job first by working in
(30:37):
that type of an establishment.
Figure out your skill set.
Are you a chef?
Do you thrive in hospitality?
Then figure out who you need topartner with to bring your
vision to life.
Don't try to do it all alonewhen it comes to hospitality.
Do it because you love it, notbecause you want to make tons of
money.
And finally, focus.
(30:59):
Don't try and do too manythings at once.
Instead, keep your focus narrowbut deep, and learn how to say
no.
That's it for today.
I release episodes once a week,so come back and check it out.
Have a great day.
Welcome to How I Built my Small Business.
I'm Anne McGinty.
I live in Northern Californiaand today's guest is someone who
built a beloved spot just 15minutes from my home.
Chris Smith is co-founder andco-owner of Sonoma Pizza Co, an
artisan pizzeria in the tinywine country town of Forestville
, California.
(00:22):
Chris launched Sonoma Pizza Coin 2022 with his wife Eda, after
spending over three decades inSan Francisco's nightlife and
hospitality scene, runningwell-known venues like the Pawn
Shop, monarch, the GreatNorthern and even the iconic
record label Ohm Records.
But after years in nightlife,Chris felt the pull towards
(00:42):
something different.
He had trained with legendarypizzaiolo Tony Gemignani and,
alongside executive chef CarlShelton, developed a sourdough
pizza dough rooted inMichelin-level technique.
Sonoma Pizza Co is now knownfor its naturally leavened
sourdough crust, cold-fermentedfor 72 hours and crafted with
(01:04):
organic, locally sourcedingredients.
In just two years, therestaurant was named one of Yelp
Elite's top 50 places to eat inthe Bay Area and voted best
pizza in Sonoma County by VisitSonoma.
In this episode, Chris is verytransparent about what it's
really like running a restaurantin wine country transparent
(01:29):
about what it's really likerunning a restaurant in wine
country.
Chris Smith (01:35):
My background is in the music industry in San
Francisco, so I did that for 30years and I just kind of was
ready for a change.
But I had become reallyinterested in pizza about 20
years ago.
I was living in Oakland and Iwas going to Zachary's all the
time a Chicago deep dish placeand it really just something
just resonated with me.
I got really excited aboutmaking this amazing product and
(01:55):
just seeing how the business ranand it just intrigued me.
So I started studying the pizzabusiness and the craft of pizza
about 20 years ago and then in2019, I kind of got more serious
about it.
I had known Tony Gemignani,who's like one of the world's
best pizza makers.
He just happened to be in SanFrancisco and he would come to
(02:17):
some of the music venues that weoperated and so he had a little
class that he would do aninternational pizza school and
so I did his school and then hekind of helped me get going.
He taught me the basics him andanother woman, laura Meyer.
You know I got the crash coursein making Neapolitan wood fire
pizza, so learned that andbought an oven and just started
(02:43):
kind of practicing the craft andthen meanwhile, I had bought a
house in Forestville a few yearsbefore and I was coming to
Forestville all the time and Iwas Airbnb-ing the house on the
weekends.
And then my wife and I were justlike we want to move up here.
We got to get out of SanFrancisco, you know.
So we started looking for aplace to do this idea back in
2018.
And then COVID hit and we justmoved up here.
(03:07):
We were already in the process,but we just moved up here.
And then the building inForestville came up for sale and
I was like that's the place,this is the place We've got to
do it, even though it was not arestaurant previously.
So it was a major redevelopmentof the property.
It didn't have any of theservices it needed Gas, didn't
have correct water lines orpower.
(03:28):
It took a year just to switchthe use of the property.
It was a whole thing.
It was a huge project andextremely expensive.
The budget that we originallyenvisioned for it it was not
even close to enough to do whatwe needed to do to get this
thing off the ground.
Anne McGinty (03:45):
Forestville is a pretty small wine country town.
Chris Smith (03:50):
Like, yeah, you know, that was, you know, when
we originally were thinking wewere thinking, oh, we'll do this
in Healdsburg or we'll dosomewhere with some more people
in Sonoma County.
So that's where we were looking.
But when the building came upfor sale, you know, I realized
Forestville is really kind of inthe middle of nowhere, but it's
right in the middle ofeverything.
So it's a 15 minute drive fromall these other communities.
(04:12):
So my gamble was, if we madethe place and we made it awesome
and just put a ton of love intoit, that people would drive
from all over the county to comein and the tourists who are
visiting on the weekends wouldcome, and that definitely, it
definitely worked.
Anne McGinty (04:26):
It definitely worked.
I feel like it's always busy.
Can you walk us through yourplanning process of like what
that was like from idea toopening day?
I mean you had mentioned ittook at least a year just to
repurpose the property for whatyou intended to use it for.
Like what was that wholeprocess like, going from idea to
opening day?
Chris Smith (04:47):
Yeah, it was pretty wild.
I mean, we had a vision of whatwe wanted the whole property to
be, but we didn't have anymoney.
So my wife is my businesspartner, so we did this entire
project together Her name's Edaand so we were like we want to
buy that property, we want tostart this new business.
I made a pitch deck and I wentout to like friends and family
(05:29):
and started raising money andpeople miraculously gave us
money and we were just blownaway.
We remember when we got ourfirst check we were like no way.
And then a couple more came inand we're like this is going to
happen, we're going to get thismoney.
So it was really just like goingaround and kind of talking to
everyone I knew and begging formoney.
(05:49):
So there was that aspect of it.
And then we found an architectand he helped us kind of draft
up the basic plan of thedivision and the space has a
huge backyard area.
But we were like, well, we'llsave that for phase two and
we'll just do the restaurant,we'll just do the main
restaurant area.
But then as we kept going, wekept getting a little bit more
(06:12):
money and a little bit moremoney and we're like, okay,
let's do that now, let's do thatnow.
And we were, we kind of justtried to get almost all of it
done at once and we're stillactually still kind of working
on it.
There's still littleimprovements we're doing.
But so, yeah, it was reallylike oh, we got some more money,
cool, we can do this now.
Well, we can buy those chairs.
So when we look back on it,you're like, wow, like how would
(06:33):
anyone even do that withnothing?
We pulled it all togethersomehow.
You know what I mean.
Anne McGinty (06:39):
Well, and you didn't just pull it together.
I mean the places it's.
It's like you thought abouteverything.
At least that is how it feelsas a consumer.
I've never worked inhospitality.
Chris Smith (06:49):
We did think about everything.
We had time to think abouteverything because it took so
damn long to to get even to thepermits or this or that.
So we had, you know, year and ahalf in before we even broke
ground on it.
So we did.
We did put a lot of thoughtinto it.
My wife is a really greatdesigner.
She's got a great eye.
We did the court design conceptfor the property and then
worked with our architect torealize that.
(07:09):
And then we did all theinterior design ourselves.
We picked out all the finishesand kind of just did the whole
thing.
Anne McGinty (07:16):
You had mentioned that your budget completely blew
out of the water.
Yeah, can you give us an idea?
So was it like twice as much aswhat you were expecting?
Chris Smith (07:24):
It was three times as much, but it was also because
we decided to do more.
We were like, well, we think wecan get more money, so let's do
the backyard development now,because that's really we really
wanted that.
That's a huge part of it.
So that was not in the originalbudget because we didn't think
we would ever even come close togetting what we needed to do it
.
Original budget because wedidn't think we would ever even
(07:46):
come close to getting what weneeded to do it.
But we actually got a grant fromthe restaurant revitalization
fund for covid because we landedright in the middle of we
weren't open yet but we weregoing to open and we could apply
to get a grant for money tobuild outdoor dining space.
And we we did, and so we got$300,000 from that Sweet and so
(08:07):
just like little things likethat, just like kept happening
to make, we were like theuniverse wants this project to
happen.
You know, I feel like with anyproject, if you want to do it,
bad enough to where you justtake the first step and you keep
taking steps and keep takingsteps, it will probably come
together for you.
I'm not saying it will for sure, but I think most likely it
(08:28):
will, if you're at the pointwhere, like, we're going to do
it, we're going to do this we'regoing to do this.
That kind of energy behind it, Ithink, really carries it.
Anne McGinty (08:36):
Yeah, I think you're right.
It's like just like the nextlittle step.
So again, like with Forestvillebeing such a small town, like
staffing and sourcing, did thisconcern you at all or how did
you address the need for that?
Chris Smith (08:49):
Yes.
So this was a huge, hugeproblem.
We really wanted really coolpeople working there, and by
cool I mean people that arehospitality focused, people who
care about hospitality or theycare about the craft of making
pizza and brand new restaurantForestville.
No one was interested.
Like it was really really hardto find people.
(09:12):
I have two really good friendsof mine from San Francisco,
reagan and Matthias, who arerestaurant veterans.
They came up here and helped meget the restaurant open and
lived at my house for a year tohelp build the team and build
all the systems and likebasically everything, and if we
didn't have them we would begone, we would never have made
(09:33):
it.
They basically helped us createthe blueprint for this entire
thing to make it run at thelevel we wanted to run it up.
Anne McGinty (09:41):
And then, how did you handle the development of
the menu between, like yourtaste and market demand, like
how did you find the balancethere?
Chris Smith (09:51):
Well, so I'm not a chef but I I had studied pizza a
lot at this point and had madea lot of pizza, but I realized I
need to go out and hire a realchef to make this what it needs
to be.
And so we hired an executivechef, carl Shelton, who came on
board, you know, about sixmonths before we opened, and he
(10:12):
and I are indeed all the doughand all the sauces.
It's just kind of like we made.
We made cheese pizzas for liketwo months straight, just
testing different hydrationlevels on the dough and
different fermentationtechniques and different sauces
and cheese blends and whatnot.
So there was a pretty extensiveprocess to come up with what is
(10:32):
our signature dough.
That was kind of that.
And then we didn't reallyconsider market demand for our
menu.
We just kind of made the menuthat we thought was awesome.
We wanted to use primarily alllocal Sonoma County ingredients.
Yeah, we just thought let'sjust make this awesome and
everyone else will love it thatseemed to work.
Anne McGinty (10:55):
Was there a first moment when you thought, okay,
we made it like.
This one's gonna do great, it'sgonna survive, it's gonna be
awesome.
Chris Smith (11:03):
You mean the restaurant as a whole.
Anne McGinty (11:04):
Yeah, yeah.
Chris Smith (11:06):
I'm still waiting for that moment, actually.
Anne McGinty (11:08):
Really.
Chris Smith (11:09):
I mean, it's so hard to run a restaurant and
even like we are really reallydoing well and we're barely
making a profit now, and it'sbecause it's so expensive to
operate.
The labor in California isinsane All the taxes, you know.
It's so expensive to operate.
The labor in California isinsane All the taxes, you know.
It's a brand new property, soeverything is being taxed at the
(11:30):
highest property tax level.
And then you know we're in avery fire danger area, so our
fire insurance goes up, you know, by $5,000 every year, you know
.
So it's just like it's really,really tough.
So I don't think we've made ityet, to be honest.
I think we're.
We're still here and we'regoing to be here.
We're not going anywhere, butI'm not sitting back going.
(11:50):
Oh yeah, okay, we're.
We're making a 10% profitmargin now and cashflow is just
rolling in.
It's not like that.
It's a constant cashflowstruggle, constantly moving
money around, trying to keepeverything working.
And that's with a restaurantthat's doing really well, you
know.
And we're not a cheaprestaurant.
Our prices are high, but theyreflect what it costs to be here
(12:12):
, to exist as a restaurant.
Anne McGinty (12:18):
So what are healthy margins in the
restaurant business?
Because I hear numbers all overthe place.
Some people have said theirmargins are as low as 3% and
others have said they're making25%.
So what would be comfortable?
Chris Smith (12:25):
I think for us, when we hit the 10% margin mark,
that's the first benchmark ofokay, we're on our way.
We obviously want to be at 20%.
That's really where you shouldbe as a business, but we're not
there yet and we're going tokeep working our way there.
This year is our firstprofitable year.
(12:46):
So you know, I think we'regoing to get probably close to
the 10 margin, somewhere nearthere hopefully.
But it's a really reallychallenging environment to
operate in, and just also whatyou have to pay people.
You know the cost of living incalifornia is so insane.
I mean, we pay our cooks andour servers very well and I see
(13:07):
what they all make and I'm like,wow, that isn't even that much
to live on, but we're payingmore than anyone is paying.
And it's like you have to haveenough servers and enough cooks
to make the thing hum andprovide the service that you
want to provide.
But when you have exactly theteam that you need, you're
spending too much money.
So that's that's kind of the um, the challenge of the
(13:30):
restaurant.
Anne McGinty (13:31):
So that's a that's a big predicament.
So what are the solutions?
Chris Smith (13:36):
You have to become more efficient, tighten your
systems up, become moreefficient with your scheduling
and you have to have the qualityof people working there.
You have to have very highquality people.
So the quality of our team isgetting better and better and
better and better.
So it's allowing us to becomemore efficient.
We're tightening our cost ofsales.
You know we were running at 35%cost of sales, Now we're down
(13:56):
to 27%.
So we're doing all the rightthings, but it takes time.
The kind of playbook for arestaurant is generally you want
to be running 30% labor costand that's all in salaries,
hourly employees, taxes,insurance.
You want to be running a 30%labor cost.
You want to be running a 30% orless cost of sales for your
(14:19):
product, so your food andbeverage costs, and then you
want to be running a 20%operation costs, which then
leaves you with 20% profit.
That is a recipe for successfinancially Very difficult to do
in California, just because thecost of everything is so
expensive here.
So we have another layer ofchallenge being in California,
(14:40):
because we're you know what ourminimum wage is, what we have to
pay people because it's soexpensive to live here.
So that's the sort of blue book.
So you're really trying to hita prime cost.
A prime cost is your labor plusyour cost of sales and you want
to try to hit a 60% prime cost.
65 be the top end.
Anything above that you wouldlook at the business and go.
This business is not reallyprofitable.
(15:01):
So that's what you're workingfor.
Anne McGinty (15:04):
It's really interesting to me because, well
again, I don't have anyexperience in the hospitality
industry and when we go there Ijust think, wow, this place is
humming right.
So to hear what's reallyhappening behind the scenes is
just, it's, very eye-opening.
Well, yeah, it is.
Chris Smith (15:21):
I mean and it is humming and it's pretty
fine-tuned machine at this pointbut it needs to be even more
finely is.
I mean, and it is humming andit's a pretty fine tuned machine
at this point, but it needs tobe even more finely tuned.
I mean, I'm sure you've seenlots of restaurants that have
been humming and doing great andsuper busy and awesome and they
go out of business.
Anne McGinty (15:34):
Yeah.
Chris Smith (15:34):
They're not making any money, so it's like you have
to really be all over thefinances and micromanaging them
in this industry.
Anne McGinty (15:50):
You have to be good at a lot of things to run a
restaurant.
I can definitely see that Iwouldn't have the first clue how
to do it.
So, from the very beginningjust acquiring the property to
opening, to going through COVIDand now trying to get your
margins better what have beenthe hardest moments for you as a
business owner?
Chris Smith (16:09):
for you as a business owner God, there's so
many.
I think that the hardest thinggenerally has always been around
access to capital and money and, as a new business starting out
, your options are limited.
We did get a loan from a bank,but I was able to leverage
property that I already owned ascollateral.
We were able to get an SBA loan.
It took a year to get the loandone.
(16:31):
It was an arduous, insaneprocess, but we were able to get
an SBA loan.
So that part of it just tryingto get money to bring your
vision to life is always, Ithink, the most challenging
thing as an entrepreneur, anddefinitely for us for this
project.
Beyond that, the second mostchallenging thing is you have a
(16:51):
standard that you want to upholdfor your food, your hospitality
standard and training andmotivating your team to uphold
that standard, and then when yousee it not being upheld and
dealing with those situations,it can be disheartening and
draining, but it's kind of thejob that's.
(17:13):
The culture that you create atyour company is what is the
standard that you aspire to anddo you uphold it and how do you
uphold it?
So we have been really lucky inthat we haven't had the
challenge of oh, we have tofigure out how to get people in
the door.
We were kind of like if webuild it, they will come.
That was our model and itworked.
A lot of other restaurants havethe additional challenge of
(17:37):
we're not busy enough, we'redying, we need more people, we
need more people.
We haven't even had to dealwith that yet.
Anne McGinty (17:42):
With your standards not being held, for
example, or with the turnover inthe industry that it's it's
kind of known for like.
What is your approach to hiringand keeping your staff there,
like beyond payment?
Chris Smith (17:55):
Our approach is to try to hire slow, fire, fast,
really try to find the rightpeople, that kind of buy into
the vision of what we're tryingto do, of buy into the vision
that what we're trying to do andthen people that we actually
really connect with and that wewe want to work with and we
think are going to be a good fitfor the team, you know, because
(18:17):
you could have you got one badapple in the crew it really can.
It can really throw things off.
So it's like we definitely wentthrough some bad apples.
We've had some great apples too, but, uh, we went through some
bad apples.
We've had some great apples too, but we went through some bad
apples.
And now we really try to besuper careful about who we hire
and I always tell this toeveryone that works there this
is a really, really hard job.
(18:42):
If you're a cook, it is a very,very difficult job.
People that never worked at arestaurant don't really
understand how hard it is.
It is a grind that people workextremely hard.
And then if you're a server,you know you're talking to
people and really engaging andyou're giving a lot of yourself
all day long.
It's a tough job.
So I know I always tell people.
You know you have to reallylove it.
You got to really enjoy it andif you don't, that's why I told
myself if you're not, if youdon't feel that, go do something
else.
I'll support you in yourtransition, help you find
(19:05):
something else.
But life is short, so you gotto really enjoy this work if you
want to do it.
Anne McGinty (19:12):
Well, and that's part of the success, right, it's
like it's not all financially,it's really you're like a
community center at this point,like the place where people
gather, and I imagine that thereward comes from more places
than just the money just themoney.
Chris Smith (19:29):
Well, we are a community center and we also
this is another thing I alwaystell my staff we think about
people coming to the restaurantfor dinner or for lunch.
Most people's lives are prettychallenging and pretty stressful
and exhausting.
They're making a choice to takewhat limited free time they
have and come to our place tohave dinner.
They're not just coming forfood, they're coming to have an
experience, to have a littleescape, have some fun, and we
(19:52):
need to really think about that.
That's the service that we'reproviding and it's important,
you know.
So when someone walks in thedoor, we need to really treat
them well, because they'regiving us their time and their
money and we really respect that.
So we try to embody thathospitality all the time.
We don't hit the market everytime, but that's the goal and
that's that's that's where it'scoming from, anyway.
Anne McGinty (20:12):
Well, I think I read in your bio that you've
been in the hospitality industryfor a quite a long time.
Right Like you, you've ownedbars in the city.
Chris Smith (20:20):
Yeah Well, I, I own a record label called own
records, which is a dance musiclabel that became pretty big in
the 90s and 2000s and from therewe did hundreds of events and
tours and festivals, so a lot ofproduction.
Then I became partners in SanFrancisco in a group.
We own a couple of nightclubsand a catering company, a
(20:42):
restaurant in San Francisco.
So I was a partner in that for10 years.
Before I was like, okay, I'mready to kind of transition out
of the city now and move up tothe country and I thought, oh,
you know, it'll be nice, we'llmove up to the wine country,
it'll be relaxing, we'll have a,you know, open a little
restaurant, it'll be quaint,easy.
This is way harder than any ofthe other things I'd done.
I also had a.
(21:03):
My wife and I had a baby prettymuch right when the restaurant
opened, so we have athree-year-old.
So that's was just an extralayer of complete insanity.
Anne McGinty (21:13):
Is there any sort of like game changing advisory
that you learned from thatexperience of just running all
of those different businesses inthe?
I mean, you've got music andthen you've got a bar club like?
What did you learn from thoseparts of your journey?
Chris Smith (21:30):
Don't do it.
Anne McGinty (21:31):
Don't do it Serious.
Chris Smith (21:35):
You know, the nightclub bar business is
another thing that you need tobe really passionate about.
It's a grind and I just reallybecame burnt out on it, you know
before I even had the bars.
I was doing events like musicfestivals, club events in San
Francisco and all over the worldfor 20 years before that.
(21:57):
So if I had to go back in time,I probably would have skipped
the owning the music venuesportion of my career, because
it's a really not a greatbusiness.
Venues portion of my careerbecause it's a really not a
great business, and it was morealmost like a hobby, passion
thing that I just wanted to dowith with some friends of mine.
That turned into like a wholeyou know 10 year aspect of my
career.
But you know, I feel like onepiece of advice I would have is
(22:20):
I feel like one thing I've donein the past is I've done too
many things, tried to do toomany things at once instead of
focusing, and focus is important, and right now I have up here
with this, with Sonoma PizzaCompany.
This is all I'm doing and it'slike it's my focus.
Raising my son and doing therestaurant is my focus, so I
(22:41):
don't have four other businessesgoing simultaneously now.
Anne McGinty (22:46):
If someone came to you for mentorship, like, let's
say, somebody is like in theirmid twenties or thirties or
whatever and they are like Ilove the hospitality space, I
really want to open a bar orrestaurant, what would your
step-by-step playbook look likefor them?
Chris Smith (23:01):
I would probably tell them to first go get a job
at a restaurant and throwthemselves in there and really
see what it is, because, beyondthe romance of it, a lot of
people open restaurants and theyhave no.
Like me, I was involved inrestaurants in san francisco,
but this one, doing it all byyourself, you really learn.
Wow, this is insane.
You know how, how crazy it is,so I know I would.
(23:23):
I would advise them to go workat a restaurant for a while and
then try to articulate wheretheir strengths and weaknesses
are.
Is this a chef-drivenenterprise that you have a food
program that you want to explore, or are you more the kind of
hospitality side of things andyou want to create an experience
and go?
(23:43):
Who do I need to partner withto bring this whole thing to
life?
I don't think you can do it all.
Some people try.
I think you kill yourself.
I realized I was really intomaking pizza and I realized I am
not the chef.
I am the hospitality businessaspect of this and I want to
help drive the food program, butI want to partner with someone
(24:05):
who really has got a Michelinbackground and knows what
they're doing.
So if you do all that andyou're still like, yeah, I've
been working in restaurants foryears, I know the business and I
fucking love it.
I really want to do this.
At that point I'd say, okay,well, then put together your
business plan, put together afinancial model.
For me it always starts withwith Microsoft Excel and coming
(24:27):
up with like here is myconceptual model of what I think
this place can do on a Mondaynight, a Tuesday night, a
Wednesday night, a Thursdaynight, and put that into a
cashflow projection and someexpenses and kind of create a
model of what do I think it'sgonna cost to start it up, what
it's gonna cost to operate, howmuch revenue do we think we can
do and is it really look likethis could work?
(24:51):
And then from there, stillexcited about it, you take the
next step.
Anne McGinty (24:55):
In those conceptual models.
I mean I know a lot of it isreally just sort of
guesstimating.
It's like, well, if I can dothis on a Friday and a Saturday,
then I think I could do this ona Sunday, okay, but then on a
Tuesday and Wednesday, and Ithink I could do this on a
Sunday, okay, but then on aTuesday and Wednesday it may be
extremely slow.
Like, how accurate can youreally get on those numbers?
Chris Smith (25:13):
I have a projection for every day of the year
through the end of next year, soI have like a working model and
it's pretty accurate.
Now my projections were way offI under projected sales and I
under projected expenses, whichI feel like is pretty much what
I do every time.
But you still have to make aprojection.
This is where a lot of peopleget hung up because they're like
(25:34):
, well, I don't know, I don'tknow and like you just got to do
it.
You just got to make up and go.
It's a Sunday night, it'sSeptember, how many people do we
think are going to come in thedoor?
We think it's going to be 65and that's our number and we
think we're getting you know.
And you have to.
You have to take whateverknowledge you have and make the
(25:56):
best possible educated gueststhat you can to create some sort
of a projection for whatever itis that you want to do.
If you want to start asurfboard company like, how many
surfboards can I make?
Where am I going to sell them?
How many doboards can I make?
Where am I going to sell them?
How many do I think I couldsell in a week or a month and
you just have to take that stepof making a model that you
created based on what you thinkyou can do, and then you just
(26:17):
keep tweaking it and keep it.
You know, as you get moreinformation, you keep making it
better and better and better,and for me that's how it works
anyway, and for me that's how itworks anyway.
Anne McGinty (26:26):
So when you see other restaurants that are
opening and you're sort of usingyour restaurateur mind, like in
evaluating how they're doing,like what do you see are the
most common mistakes that yousee over and over again?
Chris Smith (26:39):
Well, I see a lot of really good restaurants
opening and then I see themclosing.
And it's kind of scary,especially when you go to a new
place that opens and you're like, wow, this is like my favorite
place, this is awesome, theservice is great, the food is
perfect.
And then they don't make it,they close.
And it would be one thing ifyou go to a place and you're
like, oh, the food sucked andthe service sucked, you're not
(27:04):
going to make it.
Those are pretty clearindicators that something is
seriously wrong.
You see other places where theyseem to be killing it and then
nope, they're gone.
Part of it is you have to bewilling to really fight.
Once your business is up andrunning, you're going to have to
go to battle over and overagain and if you give up on the
battle, you close.
It could easily fail, but I'mnot letting it fail.
(27:24):
That's the difference, you know.
So it's not like you can justopen it up and we're here, we're
open.
You know it's like.
You know you have to like, youhave to fight to keep it going.
So that's pretty much you havegood times and you have tough
times and then you finally getover the hump.
Anne McGinty (27:40):
Yeah, you're just like constantly putting out
fires, problem solving one thingafter the other.
Chris Smith (27:45):
That's the job in business is solving problems.
You know you have to.
That's that's what it is whenyou're running it.
Anne McGinty (27:53):
When you're running a business, you're going
to solve problems.
Yeah, it's a mindset, though,right?
So okay, I've just got one morequestion for you, which is just
if you could go back and talkwith yourself when you were in
your early twenties, what wouldthat conversation look like?
What would you say Like, whattips would you give yourself or
heads up would you share, andwhat sort of life wisdom?
Wow?
Chris Smith (28:21):
that's a big one.
The number one tip I wouldprobably try to give myself is
don't try.
Been into music production andDJing and music, and then I
started the record label and gotinto that.
Then I started something else.
I just kind of you know, youhave to know what to say no to
and filter things.
And I always look back and I gowell, you know, I could have
probably just DJed and mademusic and probably be making
(28:44):
millions of dollars a year rightnow just from doing that.
The time I was like you want todo a record label, you want to
do this too, and or I could havejust done one thing.
You know, if I go back in timeI'd say, yeah, just focus a
little bit more and try not todo too many things.
Anne McGinty (28:58):
So it's like narrow but deep yes, narrow well
, chris, it's been really greatto chat with you.
Thank you for being so open andjust transparent about
everything.
It's the best way to learn, Ithink, is when people can
actually get the truth aboutlike hey, how hard is it?
And like what's going well andwhat did you do right, what did
(29:19):
you do wrong?
So it's been really wonderfulto hear your story.
Thank you so much.
Chris Smith (29:24):
You're very welcome .
Thank you for talking to me,hear your story, thank you so
much.
Anne McGinty (29:30):
You're very welcome.
Thank you for talking to me.
Today's key takeaways Busydoesn't equal profitable.
Until labor and food costs aredialed, a packed house can still
lose money.
Expenses will usually be higherthan you forecast.
Take your budget and thendouble or even triple it and you
may land at a more accuratenumber to work off of the
(29:50):
culture, the team and theservice.
All comes down to the peopleyou hire.
One toxic person can make itreally hard, so hire slow and
fire fast.
Prime cost, which is labor pluscost of sales, needs to be
around 60% or less.
55% is better.
Any higher than 65% and itcould be extremely difficult to
(30:14):
achieve profitability.
Hospitality can be a constantcashflow struggle.
You have to continuouslyimprove the quality of your team
, get more and more efficient,all while tightening your cost
of sales.
If you want to enterhospitality in the food or
beverage business, whatever yoursector, whether that's a
restaurant or a bar, for exampletry the job first by working in
(30:37):
that type of an establishment.
Figure out your skill set.
Are you a chef?
Do you thrive in hospitality?
Then figure out who you need topartner with to bring your
vision to life.
Don't try to do it all alonewhen it comes to hospitality.
Do it because you love it, notbecause you want to make tons of
money.
And finally, focus.
(30:59):
Don't try and do too manythings at once.
Instead, keep your focus narrowbut deep, and learn how to say
no.
That's it for today.
I release episodes once a week,so come back and check it out.
Have a great day.
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