New Restaurants Face Long Odds Strong Demand Lures Entrepreneurs, But Prospects For Neophytes Are Grim

Paul Nguyen, who emigrated from Vietnam 15 years ago, hopes to achieve the American dream via Thai, Korean and Vietnamese delicacies.

But it’s tough to make the dream a reality, especially in the restaurant industry.

“For the first few months, business was slow. Now, more people are getting to know us, but we’re still not as full as we want to be,” said Nguyen, who last November opened the Lotus Garden, 14415 E. Sprague.

Nguyen isn’t alone. Restaurant competition is fierce.

In fact, area diners have never had so many restaurateurs vying for their taste buds and dollars.

A Spokesman-Review survey last April asked locals to suggest which new businesses Spokane and Coeur d’Alene needed. The overwhelming response: more restaurants.

In the past year, about 20 new independent eateries have opened. Some burst on the scene successfully; some fizzled out of business, casualties of the exceedingly risky venture of restaurant ownership.

As for the Lotus Garden, Nguyen said he isn’t going to let a slow start dampen his entrepreneurial verve. The restaurant - complete with banquet facilities, tatami room, full bar and pool table - debuted a new menu last week, and Nguyen is going to start advertising.

“We believe in our food; it’s very health conscious. Thai and Vietnamese food is tasty and has less fat and more vegetables than other foods,” a svelte Nguyen said.

Rookie restaurateurs have helped quiet the grumbling stomachs of residents who bemoan the lack of culinary adventure in the Inland Northwest. But the region’s clamoring for restaurants might give entrepreneurs indigestion.

Restaurant ownership is one of the riskiest business ventures. And the likelihood of failure increases for independent restaurant owners and those without extensive experience in the food service industry.

Within 5 years, 90 percent of new restaurants fail, said Pat Diaz, assistant professor and program developer in the Hotel and Restaurant Administration program at Washington State University.

“Many people jump into the restaurant business and don’t know the first thing about running it. When you’re up against the national chains and people who do know about ownership, it’s extraordinarily difficult to make a go of it,” Diaz said.

Her advice to would-be restaurateurs: Don’t get into the industry on a whim. Just because you’re a good cook or your great-grandmother left a recipe for killer meat loaf does not mean you’ll turn a profit as a restaurant owner.

Also, consider becoming a franchise owner, Diaz advised.

A national chain offers the security of successful advertising and a wellknown menu. Independent-minded business owners can also get the “entrepreneurial spirit” of running their own business along with the security of a tested restaurant concept, she said.

Some local entrepreneurs have taken that advice. Within the past year, Kenny Rogers Roasters opened its first franchise in Spokane. Applebee’s and Shari’s will open franchises soon in the Valley.

But some would-be restaurant owners can’t bear to own a cookiecutter franchise. Others simply can’t afford to pay for the franchise rights, which can exceed $100,000.

For those without franchise support, Diaz recommended talking to consultants and restaurateurs (both successful and unsuccessful) before investing.

“You need to get educated real fast,” she said. “You can hire a manager and get expert advice, but they can’t run the restaurant entirely. You can’t be an absentee owner.”

For those who brave the odds and open their own restaurant, the key to success is customer service.

“Making the customer know that someone really cares that they’re there and exceeds all the guests’ expectations is the most important thing,” Diaz said.

At the Anaconda Grill, which opened in November at 510 S. Freya, co-owners Kevin Gilmore and Gina Lanza serve the customers themselves. Meeting the customers and checking on their experience is important because dining is intimate and shouldn’t be fouled by long waits or rude help, Gilmore said.

“A restaurant is a sensual experience. It’s carnal,” Gilmore said over background opera music. “People take restaurants very seriously. We want to give people the right impressions.”

That’s especially important in Spokane.

Local diners, who are skeptical of new eateries, tend to pick their favorite restaurant and stick to it, Diaz said.

New restaurateurs have to penetrate a cadre of loyal diners who might not want to experiment with new menus, cuisines or atmospheres. At the same time, restaurateurs must ensure that their diners don’t get bored with a traditional menu.

“I think we have great restaurants here, but a lot keep the same menu year after year, and people get bored with that,” said Terri Adolfson, who owns Cafe Grand with her husband, Jim. Cafe Grand, a 6-month-old restaurant at 1228 S. Grand, specializes in Northwest cuisine.

“People get bored with what’s out there. They want new food items and exciting new things,” said Terri, who changes the menu every two to three months.

Jim’s grandmother owned Dusault’s, a diner on North Monroe, in the 1950s, and Terri and Jim have worked at restaurants for more than 20 years each. That’s why they’re confident Cafe Grand can beat the grim restaurant odds.

“That’s all we’ve ever done,” Terri said. “This is our dream. We’re going to stick it out and do whatever it takes.”

MEMO: This sidebar appeared with the story: WHAT’S MISSING? Each April, The Spokesman-Review offers readers an opportunity to suggest types of small businesses they would like to see in the Spokane-Coeur d’Alene area. Entrepreneurs notice the suggestions. In the past two years, aspiring business owners have used your responses in loan applications and business plans. Restaurants dominated last year’s poll and are always a popular suggestion, so we’re especially interested in other business ideas. To make a suggestion, call Cityline at 458-8800 in Spokane or 765-8811 in Coeur d’Alene, and enter category 9891 to give your idea. Also leave your name and telephone number. A reporter might call you for a future story. You must have a TouchTone phone.