Profitability Didn't Come Soon Enough for Specialty Cafe
Despite improving financials thanks to growing customer acceptance of its concept, Specialty Cafe closed after five months because both partners made false assumptions.
"I had no idea how much capital is involved in starting a restaurant," says Trey Waters, who provided the seed money for Specialty Cafe. "I should have had more cash for the initial investment. If I ever do it again, I'll know how to budget better. My hat goes off to the folks who start them, because there's an awful lot involved in it."
Waters, who took a 51 percent stake in Specialty Cafe and owns Specialty Pharmacy next door on Broad Street in downtown Southern Pines, gave 49 percent to Alisa Sorenson, who provided the sweat equity.
Sorenson's mistake was thinking Waters would keep the cafe afloat financially until it became profitable, which she predicted would have occurred before the end of the year.
"When Trey provided a cash infusion at the end of May, he told me it would be the last one," she says. "My error in judgment was thinking he would change his mind because things were going so well. We probably would have hit break-even in October. He is free to do what he sees fit, but the loss is hard."
The decision to close was simple, according to Waters.
"It's about as black and white as you can get in business," he says. "When you don't have the funds to keep it going, you don't have the funds to keep it going."
Both Waters and Sorenson lament the cafe's demise, especially the seven part- and full-time employees who lost their jobs, but they refuse to point fingers.
"Restaurants have a notoriously slow rate of return," Sorenson says. "I can't begrudge a person for investing their money where they want to. It just wasn't here, which is unfortunate because people were understanding the concept and starting to embrace it.
"This is something I've always wanted to do. I will never have to say, 'What if?' I don't feel like a failure. This place was successful. It was great. It was absolutely fantastic."
Waters agrees that the financial numbers had improved every month since the cafe opened March 15.
"The cafe was not a loser," he says. "It was growing. I was tickled to death. I just didn't have enough capital to keep the thing alive. It's a bummer. I don't like it. I wish I had more money for it."
Randal Moore, a public relations and marketing consultant, believes that the pharmacy and cafe were launched "with a big suite of products" that would inevitably lead to attrition.
"I think they've all been successful, but some have emerged as huge winners," Moore says.
For example, compounding for people and pets has exploded, prompting Waters to decide whether to double or triple the size of the compounding room at Specialty Pharmacy, one of seven pharmacies that he owns in North and South Carolina.
"It's a refocusing of resources on the things that have really taken off," Moore says.
Meanwhile, Sorenson closed the cafe Thursday and spent Friday saying goodbye to loyal customers and employees who came in to pick up their final paycheck.
"I still wholeheartedly believe in the vision," she says. "I sure would like to see it manifest itself somewhere else."
The cafe was viewed as a vehicle to help people make healthy choices. In addition to serving fresh food, Sorenson and head chef Maggie Gartman conducted cooking classes, often with guest chefs showcasing a niche cuisine. The focus was always on proper nutrition.
"I think this town is ready for a cooperative like they have in Pittsboro. They operate, more or less, on a farm-to-fork concept. I would love to see it happen here right like that," Sorenson says. "I've learned that Southern Pines is open, evolved and ready for a concept like this."
Asked what would it take to form a cooperative and make it operational, Sorenson says, "Investors who believe in the vision equally and want to have an adventure."
She and Waters were correct in assuming that customers would embrace the cafe.
"We certainly do appreciate what the area has shown for the concept," he says. "We're grateful for the customers we had."
Sorenson adds that she will miss the daily interaction with like-minded individuals.
"We had a great response from a great community of people. We'll see them again," she says.
As the last person trickled out of the cafe Friday afternoon, Sorenson sighed heavily and closed by saying: "I'm going to go home, take a deep breath and play in my garden for a while.
"Then I'll find a job."
Contact Ted M. Natt Jr. at email@example.com.
More like this story