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By Robert Struckman
Missoulian
Friday, September 02, 2005
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The big junk-iron grizzly outside the new MacKenzie River Pizza Co. on North Reserve Street looks like it's sniffing for a meal. Steve Shuel patted the flank of the sculpture. He likes it. "I don't have any artistic talent at all," Shuel said, which isn't true if running a restaurant is an art form.
Over the past 12 years, Shuel has grown one avant garde pizzeria in Bozeman into a 16-business chain with 650 employees, $16 million in consolidated sales and a payroll of some $4 million.
"The MacKenzie River restaurants are riding a wave or helped to create one. The restaurant scene in Montana has changed dramatically in the past 15 years," said Brad Griffin of the Montana Restaurant Association.
"It's getting more diverse. I remember in Billings, it used to be that breaded shrimp and steak was the fanciest meal you could get," Griffin said.
That's not the case anymore. Basil, chicken and artichoke-heart pizzas don't cause Montana customers to do a double take. Entrepreneurs across the state have learned to cater to a more adventurous public that's willing to spend more and more on eating out.
The Montana restaurant industry is growing at a rate of about 15 percent per decade, according to figures from the National Restaurant Association. Receipts from the 3,373 eating-and-drinking establishments in Montana may total $1.1 billion in 2005.
"With the increase in dollars being spent at restaurants, more of them can take a chance with creative and niche menus," Griffin said.
But each business has its own trajectory, and it didn't always seem rosy at MacKenzie.
Ten years ago, the first expansion store opened in downtown Missoula in a brick building on Front Street and lost money hand over fist.
"We were losing money because we didn't have a clue," Shuel said.
At the time, the 2-year-old store in Bozeman had made success seem simple. Shuel, who had formerly owned an advertising agency in Indiana, bought into the original store because he loved the product. Don MacKenzie, who founded the store, was his partner.
The two had picked the Front Street location because they thought they needed to be downtown to be successful. "The building was a money pit with all kinds of hidden costs," Shuel said.
"Plus, the staffing situation was out of whack. Business at the store was great, but food prices were out of control. It's very common in the restaurant business. We were failing not because of volume, but because the cost of operation was killing us," Shuel said.
As the Missoula store struggled, another store opened in Great Falls. Shuel worked to correct the mistakes in Missoula while the Great Falls store did splendidly. "It helped us financially," he said.
That learning experience was valuable for Shuel and the fledgling chain of restaurants. One of the most important lessons, he said, was that a learning curve was great, if customers weren't alienated during the process. "Customers will overlook the occasional off-night if the service is great," he said.
"That's the goal," Shuel said, and to achieve it, he has searched the ranks of employees in order to promote from within. It's important that some employees at the restaurants find a career with the chain, he said.
That's one reason MacKenzie River offers health insurance to its 35 salaried employees. Taking care of the staff is one way Shuel can promote good service, he said.
As MacKenzie has grown, the business model has changed. On the financial side, Shuel purchased his partner's share of the company in about 2000. In the early days, the company also had some passive investors.
But the company has grown by pouring its revenues into expansion. And when the company had a proven track record, Shuel was able to take his model to his bankers, he said.
Lately, MacKenzie has expanded its pasta menu. "That has brought new challenges, but that's what makes the business fun," he said.
The new North Reserve digs weren't easy to pull off. The restaurant purchased a beer and wine license from a downtown bistro and moved out of a bar a few blocks south on Reserve. MacKenzie had been a tenant there for several years.
"We feel we have creative food. The execution is challenging. That's what gets us going," Shuel said |
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