Montero’s Restaurant, Elizabeth City, NC
Montero’s is a family owned and operated restaurant located in Elizabeth City, NC. I have known the Montero’s since 2002. My first encounter with him was as “the Muffin Man.” He would come to the bank with a basket of fresh-baked goods every two weeks offering not only delicious baked goods but kindness and community. I chose to interview Andy because of my Reflections book assignment, The Four Stages of Epiphany: Successful Strategies for Startups that Win by Steve Blanks. The stages are Customer Discovery, Customer Validation, Customer Creation and Company Building.
Stage 1-Customer Discovery starts with locating customers that buy into your solution for their problem. And I need to say here that sometimes consumers don’t know they have a problem until they are given an answer. It’s time to hit the streets and identify your repeat buyers. That does not just consist of surveying the land to see it there is an interest, but “Instead [being] out in the field listening, discovering how [the] customers worked and what their key problems were.” How often is the product shopped instead of shopping the problem and learning consumer behaviors? (Blank, 2013, pg. 28) Montero’s came to mind. I first remember him as the Muffin Man delivering baked goods to businesses door-to-door. So the story begins…
How did the Muffin Man business come about; did the Muffin Man feed into Montero’s?
“The concept of Montero’s and owning our own restaurant came first. We left Jonson and Wales quitting after our third year. Karin and I had plans to go to Charleston together for Bachelor’s degree in culinary arts. We decided that ‘oh we got this,’ let’s move to Elizabeth City, get married and open a restaurant. There weren’t many restaurants here. If we are going to open our own restaurant, we don’t need a college degree. We missed out on a lot of the business classes we would have received and could have benefited greatly from. We had not planned on something this big originally. I didn’t have a job and didn’t know anyone. Basically we were looking to start in-home catering and private dinner parties.”
“I introduced himself to the Chamber of Commerce. Audra Marks overhead the conversation with then Director Rhonda Twiddy. She said that she was getting ready to open up a coffee shop called “Muddy Waters” and ‘would be interested in baking for me?’ I agreed and was thinking steady income. I was baking fresh every day and delivering 6:30 AM for the first two months. Everything was great until her business plateaued. She did not need as much product because of a decrease in the previous day’s sales. The only other company I did business with was State Farm for auto insurance. So I literally drove around the corner and said ‘hey I have all this stuff from Muddy’s. You can have it because I don’t know anybody else in town. It’s a gift. Someone in the back chimed up and said ‘you should sell these; I would by them every week.’ BING! Literally just like that the light bulb went off, I went home and told his wife, this is what I am going to do for now. She said okay. The next day I baked for Muddy’s. I visited Coastal Office Equipment, which was right down the street. I visited 4 or 5 more businesses and introduced myself and gave free product on his first visit. This is who I am, what I’m doing, this is where else I am baking or selling to; your day is going to be this day of the week around this time if you would like. Everybody said ‘absolutely come back.’ The second week I sold and continued to find new businesses until I hit about all the businesses I could. I only sold from 8AM-10AM-scheduling business in that time frame. So that’s how I got into that and was hitting over 100 locations a week. Some places I went twice a week or every other week depending on size and sales.”
Stage 2-Customer Validation is the GPS for sales and marketing. “The sales roadmap is the playbook of proven and repeatable sales process that has been field-tested by successfully selling the product early to customers.” (pg. 29)
“So it [selling muffins] was by accident and ended up becoming the business plan. I did it for about four years almost full-time M-F. I would deliver to Muddy’s, then hang-out and talk to people until about 7:30AM. I got to know most people by name or by what they like to eat, which is like in the restaurant. I can tell them by what they like to eat and where they sit.”
Step 3 – Customer Creation is the foundation for your first sales. “Its goal is to create end-user demand and drive that demand into the company’s sales channel.” (pg. 29) Marketing comes on the scene being mindful that the type of branding depends on the unique start-up. Marketing is not a cookie-cutter generic fit. It is determined by what type of market you are entering.
“The Muffin Man gave people an introduction to me as a person; an introduction as a quality product and then from there it parlayed into in-home caterings to office parties to Christmas parties then wedding receptions then bigger events. We slowly grew as we were able to meet new people show them new products and keep them happy. We did that while we were working on this [the restaurant] and working other jobs (teacher of culinary arts, chef and odd jobs around town).”
Step 4 – Company Building is where you move out of the “discovery-oriented team” into the “formal departments with VPs of Sales, Marketing and Business Development…with a focus on building mission-oriented department exploiting the company’s early market success.” (pg. 29) You have a firm footing and understanding of your niche.
“I started selling muffins in 1999. We bought this building in 2000 and moved in 2005. We accepted it was going to take longer than we thought. All remodeling occurred at the same time in long stages. We waited a year out to buckle down. Six months out we hired a general manger and a sous-chef. Collectively, the four of us really developed the manual and employee handbooks. We interviewed in September; hired and trained in October and opened in November.”
How was the grand opening?
“Extremely chaotic, you would have thought in five years’ time, we would have been able to develop that stuff but what we learned quickly. We started with one week of soft openings, invitation only dinner service for five nights. Everything was 30% off because we knew we were going to be horrible. First Friday night it was packed and computer system crashed but we were prepared with crash kits (carbon copy). I literally lost his voice had to verbalize every order to every station over and over again because of having only two copies. No one knew how to do their job efficiently. We hired 115 employees with 55-60 working that night. Ticket time was long; recipes wrong; if it could have happened, it did. But it was a great learning experience. We should have finished the last year of school. We kind of knew what to expect, but didn’t know what to expect. The first month was really hard. The first two years was a really expensive way to learn all this stuff. It would have been cheaper to pay college tuition and learn all this stuff. Wouldn’t change it and it makes us who we are. That was the crazy process. I lost about 60 pounds in the first month we were open; stress and work from 5:30AM until 2AM for months.”
When did you decide you wanted to own a restaurant?
“It was something I have always wanted to do since fifteen and a half and have not worked a day outside of this food industry. (25 years) My first job was a bus boy in a small restaurant in Chesapeake that is still open today. I fell in love with it. I took culinary class in high school and knew I wanted to go to college. I knew I wanted to be a chef and after working in the industry, I knew I wanted to own my own place. I wanted the responsibility and have the role of making decisions. My wife went to culinary school and she wanted to own a Bread & Breakfast Inn or run a hotel. Her concept for what her future held changed when we met.
The original plan was to never be this big. The first place we looked at was a very small old home. But once we spent time in the building, we realized it wasn’t going to work. We look at the old Shoney’s building. It was sold to Pizza Inn before we could put a bid in. We had the plans in our head. Again it was all circumstances. I taught at Northeastern High School. They called two weeks before school started and offered me the position of the new culinary arts program. When the building was sold right from under us, I went to school complaining. My boss then is now a real estate agent. I told him. He said that he was thinking about me the day before and he knew the perfect place that wasn’t on the market yet. The owners were friends of his. He called and this building was their home. We walked through and immediately had a vision for what would work and what we wanted to do. This journey has been multiple steps that became flukes in our favor.”
When did you decided to no longer offer lunch?
By year four we had a decent grasp on things, but in the middle of economic slump which made it difficult. So we had to do what good business people would have always done. Looked to see where they were losing moving money. [This would be the pivoting point.] The style of service, pace of service and menu worked against us at lunch time. We were not in walking distance, not a quick drive, and when seated, you were guaranteed at least 30 minutes to receive food and 45minutes -1 hour for the dining experience with us. The first thing was to revamp lunch menu. We decided on items that we kept prepared and hot that we could heat up like lasagna and pot roast; which reduced order-to-table time to about 5 minutes. That helped some, but our reputation was spoiled for lunch because people knew they could not come there unless they had time; a scheduled lunch meeting, not rushed to get in or out or they were off that day. We had a lot of retirees who were on budget, and we couldn’t continue to raise prices to fill the gap.”
“We didn’t want to change our philosophy and change to the staff for the way we handled lunch service versus dinner service. Everyone is cross-trained. It was really hard for us and we lose our identity. A superfast lunch place, but you go to dinner and it feels like it takes forever. We didn’t want that confusion amongst the clients.”
We made a hard and scary decision at the time to stop lunch. Another adjustment was made to the dinner menu. So that’s when we started adding half portions of most dinner entrees, appetizers and desserts. We had only done it for desserts in the past. At the time no one was doing that on a national level. The chains weren’t doing it. [Innovation] It worked out. We changed the menu to accommodate pricing and I have all the exact same items and you have dinner at the exact same price point you had lunch. People aren’t generally rushing at dinner. We changed our hours for a short period opening on Monday nights (horrible) and dinner on Sunday. We got burned out trying to do seven days a week so we gave up Mondays. What we found, we cut cost by more than a quarter; dropped labor, food cost and waste, and increase sales. We lost no sales at all. Sales grew within the first year of being dinner and we cut our expenses back. It ended up being a big win-win! The bottom line is the bottom line, but what it showed us is that we have a really loyal customer base. For us that was huge. We were doing something right; the philosophies that we had of how we treat our employees; how we collectively treat our guests, those things were paying off. That was huge because we were scared to death that we were shooting ourselves by not doing lunch. It was also a good blessing that we can’t do everything.
Tell me about the catering side of the business?
We always did catering. We’ve never done any marketing for our business. We do more now, traditional marketing, than ever before. But with catering, we did 3-4 events per year in Hampton Roads. My original philosophy was I grew up in Hampton Roads, they are our neighbors and we will offer our Elizabeth City pricing in the Hampton Roads area. I can’t charge more just because of their location. It’s not fair. It’s unethical. What we found though unless people knew us, me, my family or had been to the restaurant, they had no idea who we were. They were looking at paper. And like everything else you throw out the least expensive and most expensive and you work in the middle. We didn’t realize that for the first handful of years.
I have a good relationship with culinary schools. Someone wanted to interview me for a project. I said sure. She also asked to intern with me. The second year she came back and interned on the catering side. The first year was the restaurant side. After graduating, she got a job in sales with a large catering company in Hampton Roads and hated it. She enjoyed the work but hated the company. She approached us with the idea. We had told her that we wanted to do more in that market. She had gotten some leads, gained relationships and she felt she could help us. She enjoyed working for us and felt it was best to work for us. We have been gang buster since! Last year alone we did 49 weddings in Hampton Roads plus other corporate stuff and catering in NC. We have more than doubled the catering business in terms of sales. In 2015, it pushed us above our highest year end of sales which was the first year. So we finally surpassed first year in sales and I know we have surpassed 2016.”
“Restaurant sales have been steady, but catering has surpassed it and we changed our price point. It is not that I don’t feel, we work as ethically as we can as a business, but no one will take my business seriously unless I fit myself into the market profile. Before I was in the profile range of barbeque and fried chicken, mom and pop type places; not what people want for their weddings generally. So I doubled my prices and people took me seriously. That’s when I realized the concept of discarding the cheapest and most expensive. As a business owner it didn’t make any sense for me to do it as cheap as I was doing it here because I had more expense to get up there. I wasn’t factoring in travel time for our staff and expense of operating a vehicle and all the additional expenses. I learned after the fact. We were voted the # 3 Catering in Hampton Roads. It drives them all crazy because we are in Carolina. We have two sales people in the market and the social media person is in Newport News. The majority of the sales, Hampton Roads, is our largest market.
How many employees do you have right now?
Out of fifty employees, at least 7 have been with us since day one. One has been with us 10.5 years, and multiple 7 years. In restaurant business 4 years is the average time employees stick around. We have been very fortunate; they are the ones that make it happen.
If we did not have the family support and backing we would have failed miserably, financially. Our marriage would have failed. That support structure was huge and we don’t forget that so we give that same support structure to our staff. We wouldn’t be here today if it wasn’t for Karin’s mom and dad who were patient and generous. It is such love. They have been our biggest supporter since day one.
How are you able to stay so involved in the community?
Support systems allow us to be so involved in community. Involvement is a community effort. Our employees cover us so we can be at the schools or events to support them. Our employees help us with the prep that we can cart off and donate and do for others. It’s very easy to say I’m too busy and don’t have time to do those things. Our employees also know that I will help you and go through hell and high water with you as long as you are putting in the effort.
Will your daughters inherit the business?
There are two types of restaurant owners: those that open them and run them to make them profitable and sell them; and those that open a restaurant because it gives them a place to be and their financially support. Karin and I never thought let’s get it up and run it to sell it or we would have never put our name on it. What are we going to do in 15 or 20 years and the girls don’t want to run it? Can we sell it as Montero’s and the philosophies and the way we do things and the expectations for our customers stay? Or are we going to sell it to someone who is going to gut it, rename it and turn it into something different or do we care? Hopefully by that time we will be in a position to shut it down if we want to do that. The business side, anyone can come in and do, but it’s the moving parts beyond that which really make if run.
Final Thoughts?
We don’t have small town clicks, we have buy in from all employees, and no traditional marketing, we donate to someone else’s cause. They understand that we need to be here for our community and our community will be here for us. That’s how I think businesses should run.
Resource
Blank, S. G. (2013). The four steps to the epiphany: successful strategies for products that win. California: Steve Blank
