“I like the independence of choosing my clients, of choosing my projects, of becoming totally involved in what I do.”

Interview by Mike Sullivan

Jerry Prendergast is the founder of Prendergast and Associates, and has been an adviser and consultant on every type of restaurant project, from creative mall and shopping center restaurants to high profile, large budget operations around the world.

MO:
What is it that Prendergast and Associates actually does as a business?

Jerry:
Prendergast and Associates I founded about 20 years ago, and what we do is we produce restaurants for restaurateurs, whether it be a chef looking to do their first project, a manager looking to get into the business, or even someone who has two or three restaurants, but doesn’t have the infrastructure set up to project manage their own new opening. We take you from finding locations, putting your business plan together, hiring your contractors and designers, overseeing the permitting process, and take you from concept to turnkey restaurant.

MO:
How many full-time employees do you have?

Jerry:
Well, permanent employees I have three, other than myself. But what we do is we set up project teams for each restaurant. So the project team, like a producer for a movie, probably only has one or two, maybe four or five full-time people. They will be doing two or three movies that may have 20, 30, 40 people on each movie on the production team. It’s the same thing with us. An example is I’m doing a project in Pasadena at the moment where we have contracted a team. We have designers, architects, engineers, kitchen designers, interior design teams, a general contracting company, and a permit expediter that all make up the team that works through us on that project.

MO:
What influences led you to where you are today?

Jerry:
I created my life in a roundabout way. My father was in the construction business, my grandfather in the hotel business. So I went back and forth from working in hotels and in construction and an undergraduate degree in corporate finance. I found myself in New York waiting to take a test to become a stock broker, but took a job managing a restaurant while I waited to take it and it wasn’t open yet. I realized I could get it open faster and better than the people who were doing it themselves. I started from one project to another, to another, and never ended up going to take that stock brokers test.

MO:
What makes your rate of success so much greater than the national average?

Jerry:
Most restaurants open without really planning their project well. One thing that makes national chains more successful is they have a project management team that makes sure that any new location is well thought out. The budgets are put in place long ahead of time, and a plan is followed. Independents tend not to have that ability. That’s where we come in. We come in and do the same project planning that a development team would do for a national restaurant chain. We make sure that the leases are done correctly, that the financial plan is in place from day one. We make sure we’re not wasting money on changing the plan in the course of the development. We make sure that a lot of the questions that are answered after opening by most independents are answered well before we open.

Most new restaurant projects that are opening have a high rate of profitability in the first year, if they control their costs. That’s when they are hot. That is when the press is writing about them. That’s when new people are coming in to experience the new restaurant. We try to make sure that that becomes a profitable period of time by having defined our costs before opening and not try fixing it after opening.

MO:
What led you to the decision to become a business owner?

Jerry:
First of all, I’m a terrible employee, so therefore I almost have to work for myself. I don’t mind working 16 hours a day. I want them to be my 16 hours a day. I like the independence of choosing my clients, of choosing my projects, of becoming totally involved in what I do. It’s hard to do. I worked for a company in New York where I was a project manager, and I would be just given projects to do. I did them very well, but they weren’t the ones that I chose to do. So I like the independence, and the people I have working for me are also the same way. I run a virtual company. We don’t keep an office going, I don’t make come people come to an office at 9:00 in the morning. They have stuff to do. They report to me in the course of the day as to what they’re doing. We run everyone’s calendars on a Google calendar system so I know what the different people working for me are doing at any moment during the day. And they know what I’m doing, and they can access my schedule to make sure that I’m available for meetings or appointments or conference calls at any time.

MO:
What is the largest roadblock for those starting in the restaurant industry?

Jerry:
The largest road block is funding for my clients. Venture capital for restaurants is a difficult process. You start out with friends and family for startups. You go to the next level of investor, which are the people who have come to the restaurants you have worked at. People who invest in restaurants invest in restaurants almost like they are investing in art. They want to support somebody to create their dream. So they are angel investors, like investors on Broadway plays or investors for artists who are trying to create large pieces. The hardest obstacle for a startup in the restaurant industry is putting together the financing necessary to get their first project off the ground.

MO:
What is the most rewarding part of being an entrepreneur?

Jerry:
The most rewarding experience for what I do is going back 20 years later after I’ve opened a restaurant and seeing it’s successful, and sitting down and having the owner appreciate what I did for him, 20 years later. There’s a restaurant in New York I worked on 20 years ago. I still walk in the door and whether the owner is there or not, my name is on the maitre d’ stand, and my check is picked up.

MO:
What words of wisdom can you share with others wanting to start a business?

Jerry:
You have to love what you do, and you have to have a passion for what you do. I just said to someone the other day who asked me what would be the perfect client for me. And a perfect client is someone who so wants to make their project successful that nothing else in their lives gets in the way of it. That they wake up in the morning, they think about it. They go to sleep at night, they are thinking about it. I said to a friend of mine that I went to high school with the other day, who’s retiring very shortly and turned to me and said, “You’ve done very well. When are you going to retire?” I said, “I don’t work.” And I don’t. I get up every day and want to go do what I do. And that is what I say to any entrepreneur starting a business, it can’t be work. It has to be fun. It has to be your passion.