We caught up with the brilliant and insightful Laura, Tara, Sean Sanfilippo, Heffernon, Kelley a few weeks ago and have shared our conversation below.
Laura, Tara, Sean, appreciate you joining us today. It’s easy to look at a business or industry as an outsider and assume it’s super profitable – but we’ve seen over and over again in our conversation with folks that most industries have factors that make profitability a challenge. What’s biggest challenge to profitability in your industry?
As a restaurant and bar, labor is our biggest expense and high labor is the biggest challenge to our profitability. We are in California wine country in an area where the costs of labor on top of wages like payroll tax and workers comp insurance is very high. On the other side, cost of living is some of the highest in the nation and as owners who have worked our way up for 25 years in this industry, we know the struggle of making ends meet as employees. For that reason, paying a living wage and providing health care for our employees is very important to us. We also know that taking care of your employees greatly reduces turnover which in the restaurant industry can be a killer. By choosing to do the right thing for our employees we do sacrifice profitability. The challenge is finding the balance between making sure your staff can pay their bills and having to cut people when it’s slow and work ourselves to save on labor. It is hard to balance but worth the work in our experience. Happy staff equals happy guests and happy guests return and tell their friends.
Laura, Tara, Sean, before we move on to more of these sorts of questions, can you take some time to bring our readers up to speed on you and what you do?
After serving the town of Healdsburg at other establishments for 13 years, we opened our own spot, Lo & Behold in January of 2022 with the goal to bring a warm and welcoming space that caters to everyone in our community. Our vibe is casual, lively and handmade. Our silverware doesn’t match. We don’t make our staff wear uniforms. We did all the design of the space ourselves and sourced from antique and second hand stores. We view this as an extension of our homes and we treat our guests like friends and family coming to dine and drink with us. Owners are Laura Sanfilippo, Tara Heffernon and Sean Kelley, our Chef. We each have 25 year of experience in the restaurant industry and owning our own place has been a shared dream. We are stoked to finally achieve that dream!
We call Sean’s food global comfort food. He loves to travel and learn about those unique dishes that are common comfort foods in other countries. He is a graduate of Tante Marie’s cooking school in SF and has cooked all over Sonoma County, most notably as the Chef at Underwood Bar & Bistro in Graton for 10 years
Tara and Laura have been making cocktails together for 13 years after meeting at Spoonbar in 2010. Our cocktail style is very culinary and often inspired by what’s growing in Tara’s 1/2 acre farm in Forestville. We don’t fancy ourselves mixologists. It’s all about making delicious balanced drinks that make people happy.
Can you talk to us about how your funded your business?
We funded our business in a hurry and not having ever raised money for a business before. We had recently walked away from a bar we open and ran for five years but had a bad owner situation with no contract. We were gutted and had no idea what we were going to do but we knew we wanted to do it differently the next time around and own our next business ourselves.
Then as if by fate the perfect restaurant space with a full bar and the only liquor license in the county became available but we had no money and had no experience raising money or finding investors. However, we had no jobs so we spent all of our time reading and reaching out to other friends and contacts in the industry to figure out how the process works. We also utilized our local Small Business Development Department and took advantage of their free mentoring program. We drained our savings accounts to pay for a lawyer who was referred to us by other friends opening their own wine bar. The lawyer specialized in investor contracts and went over the whole process with us. We had a pro forma put together so we could make sure our business would be successful and show investors when they would get their return on investment. While working on our model, we put together a pitch deck and business plan and set out to raise the $750,000 we needed to buy the business and liquor license, remodel the space and have $200K in the bank for operating expenses when we opened. We needed to hurry because there were two other interested parties and the landlord wanted to see us fully funded before she would decide on who would get the space.
Per our lawyers recommendation we sold 30% of our company in 1% units for $25,000/unit to raise the money. We offered a 15% ROI on their investment with a 90% of profits repaid to them until they were fully paid back including the ROI. We have been very fortunate to establish a stellar reputation in our industry and create lasting loyal regulars over our years serving our community. When we lost our other bar people reached out to us to say if we ever opened something else they would like to invest. We reached out to them first as well as our family and friends, local regulars and community members and presented them with our pitch deck and business plan. We ended up with 17 investors and were able to get fully funded, sign the lease and get the keys to our new place in 3 months!
How do you keep your team’s morale high?
We have three owners in our business and each of us has 25+ years experience in our industry working in all aspects of the restaurant industry. We are very hands on and work alongside our staff to support them and make sure that we understand all their positions and duties so that we can help make things efficient and set them up for success. Having that experience in their shoes helps us be able to relate to them and we encourage them to offer feedback and be a part of the decision making process. Making sure your staff feel heard and supported is very important to keeping morale high. We try to not micro manage and we give guidelines and expectations of how we want the business to run but give them freedom to be themselves and trust that they can make the right call.
Contact Info:
- Website: https://loandbeholdca.com/
- Instagram: @loandbeholdhealdsburg
- Facebook: Lo & Behold Healdsburg
Image Credits
Kim Carroll, Anna Wick