The second installment of a three-part series that
examines the current health of North Liberty’s business economy, the ins and outs of small business ownership, and the future of doing business in North Liberty.
NORTH LIBERTY– No matter the size, business is the heartbeat of any community. The business sector drives the local economy, provides jobs and supports area nonprofits when they are in need of capital to carry out their missions for the greater good. Businesses pay a major portion of a city’s property taxes, helping to provide libraries, streets, water treatment plants, police officers and fire protection for its residents. A thriving business district can define a town’s very identity.
The demise of one can, too.
But the lack of a cohesive business district has not slowed North Liberty’s vitals a bit.
Settled in the late 1800s and officially incorporated in 1913, North Liberty hasn’t ever really identified a downtown, though in its early years, businesses were concentrated on the east end of Cherry Street. As development occurred, most rapidly in the last 10 years, cornfields gave way to concrete and the city now boasts approximately 20 distinct areas zoned for commercial development, with four different classifications within those zoned areas spread throughout the 7.76 square miles of the city limits.
Regardless of their locations, local entrepreneurs continue to make a living– and a life– in this community. It is the people inside the storefronts that keep North Liberty’s heartbeat strong and steady.
In North Liberty, those that have managed to achieve vitality and longevity, and even those who eventually gave up the ghost, are able to offer valuable insights about business ownership here, lessons that can be passed on to those eager to give it a shot in this still-young boomtown.
Naomi’s Kitchen: making more than meals
It’s a bit of irony that Troy and Lora Miller established one of Iowa’s newest business concepts in one of the city’s oldest buildings. Naomi’s Kitchen, at 25 E. Cherry St. in the 100-plus year old historic landmark, Koser’s grocery store, was the first in the area to offer a site where meals could be pre-assembled with fresh ingredients, carried home and frozen for future use. Their business was conceived as a way to make ends meet while making time for their own children, Naomi, Isaac and, later, Ruby. After nearly eight years in business, Naomi’s Kitchen is the last existing take-it-and-bake-it-meals operations in the state, according to Lora. In 2007, the Millers also expanded their facility to include Isaac’s Creamery, selling locally-made, hard scoop ice cream, seasonally.
Any entrepreneur’s dream can be good, but the Millers found ways to make theirs last.
“Great ideas are very common,” said Troy. “It’s execution of the great ideas that is critical.”
First and foremost, said Troy, do everything with integrity.
“You are known by your fruit,” he said. “You could become wealthy in your first year of running a business, but if people find out you’ve done that in ways that are not respectable, you’re done.” Quality of service and product run a close second, in that word-of-mouth about a company’s goods and customer service can make it or break it.
Demographics can dictate whether or not your goods or services will be in demand. North Liberty has great demographics for a business like Naomi’s Kitchen, catering to busy professionals, through-town commuters and double-income families on the go. The Millers gauged North Liberty’s demand for their service through market research –“Troy had spreadsheets coming out the nose,” said Lora– but a good business person must also be somewhat intuitive.
“For our business, I knew how valuable the service would be to me, as a busy parent,” she said. “I knew people all around me were talking about needing more time and being tired of having to eat out.”
Combining that sense of what people need with a scrutiny of every detail– a comprehensive business plan– is what all professionals and business counselors recommend.
“A business plan is good; it shows that you’ve though through all the aspects of the business, like how much capital you’ll need, who are your customers, what you are willing to bend on and what will you not compromise? You have to be smart. You can’t just have a great idea and not have worked out the details,” said Lora. “Figure out your numbers. Then, triple your costs and double your time.”
And always be prepared for change, she added.
“Most of the time your plan works into something else along the way,” she said. For Naomi’s Kitchen, a light menu was added, the ice cream shop came online to supplement the slower summer seasons and they stopped offering make-it sessions for customers, instead having staff assemble all meals.
“The business model flip-flopped from when we opened, and we found ways to do things that are far more economical,” Lora said.
Red’s Alehouse: a new point of separation
Restaurant start-ups have a particularly dismal outlook in the business world. According to data compiled in a 2005 Cornell University study, about 27 percent of new independent restaurants close or change hands within the first year, and a little over 60 percent will fail by year three. Chain restaurants were not far behind in their failure rates, with 24 percent closing in year one and 57 percent closing by year three.
Those that defy statistics, like Red’s Alehouse in North Liberty, obviously have a winning combination, mixing sound experience with great food, good service and maybe a little something extra.
Restaurant experience is one thing owner Matt Swift has plenty of. He started out at Sluggers in Coralville, a popular Hawkeye sports fan hangout and eatery owned by his mother, Faye Swift. Matt worked through various jobs there until becoming general manager, then helped opened Iowa City’s Blackstone in 2007. When Sluggers flooded in 2008, the owners chose to close it down rather than rebuild.
With a little bit of fate for the Swifts and a lot of good luck for North Liberty, the restaurant building at 405 N. Dubuque St. opened up and Red’s Alehouse opened its doors on February, 2009.
Three years later, the restaurant continues to draw steady customers from throughout the Corridor, with weekend crowds standing in line inside and outside, waiting for a taste off the urban-eclectic menu or a cold draft from their huge selection of specialty beers.
Matt Swift has a business education background, but it’s been the on-the-job training he finds most valuable.
“School is more conceptual, and it’s hard to relate to all the jobs necessary in running a good restaurant unless you have done most of them,” he said. To learn the ins and outs of service, he spent time hosting and waiting and busing tables. To check out diverse menus, he visited restaurants in cities like Chicago and San Diego. To remain committed to his own enterprise, he is on-site as much as possible.
“The most important thing is being there. You need to be present to own and operate a restaurant. You need to be passionate about it. Good beer, good food and good service is what we are passionate about here.”
Swift advises anyone considering opening a business to define what they are passionate about, understand what it is and how to sell it and find a good fit for its location. It’s a bonus to find employees who are in sync with an owner’s zeal, but it’s not always realistic.
Swift said a lot of restaurant owners complain about the difficulty of finding capable help, but he has a different perspective about employees.
“Job satisfaction is very important, so we try to encourage our employees to learn things the right way, and make sure they gain skills while they are here that will carry on to their next position,” he said. “We don’t want them to treat this like a stepping stone, even if they are in college and we know they are eventually moving on. We tell them, use this job to learn something while you are here. You took the time to get dressed, drive all this way and come to work; since you’re here, why not do a good job?”
A low threshold for mediocre service and an absolute zero-tolerance for uninspired food– “If the quality isn’t what the customer is supposed to see on his plate, the chefs will pull it and start over,” he said– are part of what gives a restaurant that desired consistent return-customer base.
What sets it apart is that, and a little more.
“I tell the staff that maintaining is not a recipe for success,” he said. “If you want to be as good as yesterday, then you won’t be here tomorrow. That’s why we will always push to do things different, better, fresher.” Social media has been a powerful tool for Red’s as it targets patrons from young and hip college kids to mature and educated– but still hip– urbanites to families.
So with sights always on a new horizon, Red’s has continued to expand its beer menu, hiring a specialized buyer on staff to acquire unique and unusual beers from around the state and around the country. Now Red’s will be opening its own microbrewery sometime this year.
We’ve solidified our brand,” said Swift. “We helped introduce people to craft beer. Our goal is to be the best craft beer bar in the state, and brewing our own is a new point of separation.”
As Red’s gets ready to build the brewery next to it’s existing bar, Swift offered an additional piece of advise.
“Understand the building permit approval process and licensing procedures,” he said. “The worst thing you can do is build something and have to re-do it.”
Learning from his past may help others look forward
When Matt Zacek ran for North Liberty City Council in November 2011, he talked about his intentions of supporting business in the community.
Most politicians do, but Zacek really means it.
He made no bones about explaining, during a council candidate forum, why he understands what it is like to put your heart and soul into a business and have to let it go.
After 14 years as a consultant in the wireless communications industry, Zacek went out on his own in 2006 to open his own wireless phone store. Banner years in 2006 and 2007 encouraged him to expand in the Cedar Rapids and North Liberty markets. At its peak, his business had 11 locations in the Corridor.
“The North Liberty location was intended as a little mom-and-pop store so people didn’t have to drive to Coralville or Iowa City,” Zacek said. “It was nice to have a store that doesn’t have $12,000 a month mall rent.”
In 2008, though, with an expansion into Waterloo and the beginning of the country’s economic downturn, “that’s where the wheels came off,” he said.
August is typically the wireless industry’s Christmas season, with college students comprising a big part of their market. When August 2008’s numbers came about 25 to 30 percent lower than the year before, and Black Friday registered only a third of the business it had in 2007, Zacek knew something was wrong.
Eventually, when he noticed himself beginning to pull away from the business and curb communications with his employees, Zacek said it was time to cut losses and close.
“I won’t say it’s entirely the economy’s fault. I didn’t slow spending because I was expanding into new markets. Even with a degree in accounting, the day-to-day bookkeeping got away from me,” he said, partly because he was trying to conduct all aspects of the business by himself.
“I think that’s a common downfall for new business owners; they confuse running the business with being the business.” He advises to hire people to do as much of the daily operations as possible, to free owners up to engage in activities that generate new customers and move the bottom line upward.
Now happily an employee once again, Zacek is able to offer the lessons of his business ownership experience to other new and potential business owners. Zacek, like Swift, advises anyone building, renovating or completing an unfinished facility in North Liberty to learn the city’s permit process.
“I have background in the construction business, and just going through the build-out process was more strenuous than I expected,” he said. “There weren’t a lot of up-front guidelines; I kind of found things out as I went along. There’s not a manual the city hands you at the beginning of things you need to do.”
Maybe there could be, Zacek said. He would like to see the city develop a set of take-away guidelines that prospective business owners could access that would provide upfront information on city services, policies and processes all in one place.
Business here is good
Though different in their business backgrounds and types of ventures, the proprietors interviewed for this article all agreed that the positive aspects of owning a business in North Liberty are many, including the inarguable benefits of its location, location, location.
“The Highway 965 corridor is a great place to have a business,” said Zacek, an advocate of the improvements the city has made along the roadway. “There are people who don’t want it to get as commercial as it is getting, but it’s a major thoroughfare with lots of traffic, and if we can catch those people before they get to Coralville, all the better to keep those dollars here in the community.”
Zacek also spoke highly of the clientele.
“North Liberty does a great job of word-of-mouth advertising,” he said. “The business climate from a retail standpoint was great. I think a lot more retail businesses would do well here if they dip their toes in.”
Swift also enjoys the customer base in North Liberty.
“North Liberty is a great place to do business,” said Swift. “It’s very vibrant, with young couples and singles and families that are very social. We love being part of the neighborhood, the city has been good to work with and it means a lot that they like having us here.”
Lora Miller, whose business stands on perhaps the last remnant of anything North Liberty might have once called a downtown, agrees on all points.
“When we moved here and first started the business, I felt like people genuinely wanted to see us succeed, even people who didn’t know us. Through being in the store constantly in the first six months, and sitting down with customers and helping them feed their families, I feel like people really go to know us as owners,” she said.
“I can’t go anywhere in North Liberty without seeing someone I know. And I love that.”