Q&A with John Schmitt
Tell us about your background and the experience you’ve had as a business owner, SBDC consultant and in the restaurant industry.
Growing up in an entrepreneurial family, I realized pretty quickly that I wanted to own my own business. After graduating from WMU with a degree in industrial marketing, I went to work selling roof trusses for another company. A few years later, I started my first business, selling solar energy retrofits to the older homes in Kalamazoo. This was in the early 1980s when the country was first beginning to grapple with high energy costs. My first business was a total failure. I learned that owners of historic houses didn’t want an ugly solar system ruining the aesthetics of their house, they just wanted their house to be more energy efficient. That realization led to my next business. I became a licensed residential and commercial energy auditor and specialized in older buildings, eventually becoming director of the Kalamazoo Energy Office.
A few years later, I inherited a partially completed self-storage facility in Canton, Michigan. My father had the idea and had started building the facility. When he passed away, I completed his vision and spent the next couple of years getting 90,000 square feet of storage space leased out. I was commuting from Kalamazoo to Canton, and after a few years, I was looking for a business to start in Kalamazoo. A friend connected me with someone who wanted to start a restaurant in downtown Kalamazoo. She had food experience, but was looking for a partner to handle the business side of things. I agreed and this led to the start of Food Dance Café in Kalamazoo.
After nine years, I moved on from that partnership and purchased a building in downtown Kalamazoo that housed a sandwich shop, Sandwich Express, which I also purchased. After operating Sandwich Express for a few years, I sold the restaurant and renovated the building for fine dining. The result was Rustica which was owned by people I had known for years. I had transitioned to the role of landlord.
Three years later, an opportunity arose to become a business consultant for the Michigan Small Business Development Center. I was hired in 2007 and have worked with SBDC ever since.
We have seen many businesses shift their models during the pandemic; perhaps none more so than those in the restaurant industry. Tell us about some of the strategies you think have been the most creative and successful.
Restaurants have done their best to be agile and resilient as they face circumstances they never could have planned for. One of the shining examples I use is Presidential Brewing. The owners celebrated their one year anniversary in February 2020 and then the pandemic hit. Presidential Brewing didn’t have a canning line, so the owners shifted their business model when they discovered they could deliver beer under COVID-19 rules enacted by the Michigan Liquor Control Commission. They started offering this service and gradually grew their customer base by offering the convenience of delivered beer!
Do you think the pivot to more online ordering, outdoor dining, takeout and delivery will continue even once dine-in service resumes?
Absolutely. This trend was already happening before COVID-19 and the pandemic just accelerated the process. COVID-19 has reinforced consumers’ desire for convenience, and I think the flexibility that we are seeing in restaurants now is here to stay.
What are some of the resources that the SBDC has for assisting restaurants in Southwest Michigan?
Through the CARES Act, SBDC has been able to offer subscriptions to RestaurantOwner.com, a leading industry trade site for restaurants. The center was also able to offer some limited services helping restaurants put their menus online, as well as some bookkeeping and marketing assistance. As always, the SBDC is here to help new businesses begin and existing businesses thrive.
Where do you think the biggest opportunities lie for restaurants once indoor dining resumes? The biggest challenges?
There will be a pent-up demand as consumers begin to resume a semblance of ‘normal’ pre-COVID life. Unfortunately, COVID-19 will force a number of restaurants to close, thus narrowing competition. There will also be a lot more kitchen talent available. Pre-COVID, finding enough employees was one of the most common problems, but now there will likely be more employees looking restaurant positions.
Among the challenges will be convincing consumers that dining indoors is safe again. Restaurants will also see much higher packaging costs due to the demand for take-out and higher food costs as well. There may also be an overall recession to the economy to contend with, leading to less discretionary income.
The reality is that many restaurants are struggling and unsure of what the future holds. How can community members support restaurants during this time?
The best way the community can support their restaurants is simply by being a customer. When ordering carry-out, if you are taking the food home, let the restaurant know you don’t need napkins, silverware, condiments etc. These seemingly small costs add up significantly for a restaurant. Of course, tipping higher than you normally do is always appreciated by the staff. Also, be patient and understand that not all restaurants are really designed to be a primarily carry-out restaurant. Remember that the owners and their staff are trying their hardest.
What do you expect to see from the industry as we emerge from the pandemic? What do the next six months to one year look like based on your projections?
I am cautiously optimistic that by next January, vaccines will help life return to some semblance of what it looked like before COVID-19, and we are able to eat and meet friends at restaurants again.
Spring of 2021 will bring weather much more conducive to eating outdoors. Right now, the focus for many restaurants is to just try and stay in business until spring and then maximize any outdoor space they have.
Is there anything else you would like to add?
One of the positive things I have seen in the restaurant world throughout the pandemic is how so many different entities are working together to help the industry survive. In my more than 30 years experience in the food business, I haven’t seen this level of teamwork between distributors, janitorial services, marketing companies, point of sales companies and other competitors before.