I saw the following article at Business Week's website at http://www.businessweek.com/smallbiz/content/jul2008/sb20080716_250379.htm?chan=top+news_top+news+index_small+business
Success Stories July 16, 2008, 9:15AM EST
From Real Estate Developer to Pizza Man
Jim McGown wanted a career change. So he bought a pub, learned from the locals, and opened a restaurant that does a few simple things well
by Stacy Perman
Wearing shorts, t-shirt, and baseball cap, real estate developer Jim McGown is kneading balls of handmade dough, tossing them in the air, catching them, then shaping them into pizzas. Not long ago, McGown, who holds a degree in pure mathematics from the University of Miami, was buying properties all over Brooklyn. But for the past three years he has tossed his 10-year career in real estate aside and transformed himself into a traditional piazzaiolo.
McGown journey began when the self-described restaurant novice bought P.J. Hanley's, a longtime neighborhood Irish pub in Brooklyn's Carroll Gardens neighborhood, where he had been a customer for years. Believing that the real estate market was on the verge of collapse, McGown, who also lists stockbroker and mortgage broker on his résumé, bought the bar as a way to diversify and change careers.
Happenstance and luck have been McGown's strategy when it comes to the restaurant business—the same approach he used as a successful real estate developer. "When first buying property, I didn't know the good locations from the bad ones, so I bought every location I could," he says. "In five years I would know if I had a good location."
Old World Experts
South Brooklyn Pizza got its start when McGown decided to plow $200,000 into renovating the dark dining area adjacent to P.J.'s, restoring the out-of-use 19th century Neapolitan coal-burning brick oven. He put the word out in the largely Italian neighborhood, once filled with Old-World piazzaiolos, that he wanted to learn the art of pizza-making. He says long-retired guys took him under their wing and showed him their secrets.
McGown says he caught on quickly. "It's like golf. You take to it immediately and then spend a lifetime learning—about the dough, ambient temperature during rising, all these little things,"
The casual restaurant opened in May and earned rave reviews among the locals. Word spread. The New York Times gave the place, which doesn't advertise or even have a street-side sign, a nice write-up. Soon people were traveling from Manhattan, New Jersey, and Connecticut to check it out. McGown estimates South Brooklyn Pizza will bring in $300,000 to $400,000 in revenue in his first year of business.
Focus on What You Do Well
Conventional wisdom holds that opening a restaurant is one of the riskiest ventures for an entrepreneur. Restaurant failure rates are generally pegged at around 90%. But H.G. Parsa, associate professor of hospitality management at Ohio State University, did a study from 1996 to 1999 that found that the failure rate for restaurants is actually closer to 60% (BusinessWeek, 4/16/07).
McGown wasn't always so lucky. Before his success with P.J.'s and South Brooklyn, he purchased Boston's Bulfinch Yacht Club in 2005. Two-and-a-half years later he cut bait after losing about $1 million on the venture. "It was a huge lesson for me," he says. "I thought it was a good location, and I didn't know the market. After six months realized it wasn't a thriving business. [But] what I lost in cash, I gained in knowledge."
McGown has tried to carry those lessons forward. "Everyone thinks they can do it. The fact that you know what you like doesn't always help you. It's simple and complex." For instance, McGown says he realized that a large menu catering to varied tastes doesn't necessarily translate into success. "I decided to make what I do really well."
Keep Expectations Modest
McGown makes only one kind of pizza: classic margherita, served on oak boards. ""I decided not to create toppings the first night of business," says McGown, who is the sole piazzaiolo. (He is training an apprentice.) That decision came about when he realized he wouldn't have to remember which pizza went to which table. He came up with long, thin breadsticks after experimenting with pizza dough and spices such as rosemary.
McGown added oven-baked chocolate-chip cookies after his pregnant girlfriend had a craving one evening (the recipe is from his ex-girlfriend, he admits). "People talk about pizza," he says. "They will go three times a week. In New York, if they hear about good pizza, they will go across town. You need a hook. We got pizza and chocolate-chip cookies. We could do arugula salad, but we make the best pizza and cookies."
Two years ago he bought another old bar, frequented by Irish expats on a bleak stretch in Brooklyn, and turned it into the Cherry Tree, a bar that also serves brick-oven pizza. He plans to open a few more restaurants.
Of all the lessons McGown has learned since entering the restaurant business, he says perhaps the most important is to keep your expectations modest. "When people walk out, I want them to say: 'That was the best pizza and chocolate-chip cookie I ever had.'"
Perman is a staff writer for BusinessWeek.com in New York