This is a business owner who has reached out to Slow Money NC.
Business Owners: Shannon McGaughey & Josiah McGaughey
Location: Candler, NC
Tell us your story. Who are you? What is your business idea?
Salt & Smoke is a husband and wife team cooking up ever changing menus that explore the link between old world European traditions and classic Southern fare. We opened our first location onsite at the popular Asheville brewery, Burial Beer Co, in June of 2016. The operation consists of a full kitchen built inside a non-mobile food trailer that is connected to the brewery. Although Salt & Smoke functions through window service, we aim to offer restaurant caliber service both through guest interaction and our innovative dishes. The streamlined menu utilizes the bountiful products of the region, highlights charcuterie, and promotes honest food that lends excellent pairings to Burial’s innovative brews.
Within the 15 months we’ve been open, we’ve received accolades from multiple publications including Bon Appétit, Beer Advocate, Asheville Citizen Times, Ledbury Magazine, and more. With sales exceeding expectations, and guests constantly asking when we’ll open a brick and mortar location, it’s clear that it’s time to expand.
In order to achieve a successful move to a second location while keeping Salt & Smoke in prime operation, we have developed a plan to shift the content of our menu. The inventive fare we currently offer requires much more labor than our simpler menu items. Beloved items like our hand-crafted sandwiches and comforting appetizers like our hushpuppies are not only in high demand, but also yield lower food and labor costs. Once a second location is acquired, our goal for transitioning Salt & Smoke would be to up the percentage of these more simplistic items, while still providing a taste of our unique, high end fare. By streamlining the menu in this way, we can appease our guests’ tastes, keep up with our current demand, and set up a successful transition team by bringing down the amount of labor required to produce our products. Subsequently, regulars and newcomers alike will be encouraged by the Salt & Smoke team to come try more of our creative and upscale cuisine within the new full-service, sit down dining experience that this food deserves.
The new menu at the second location will continue to push the envelope on evocative European culinary techniques and recipes, combined with the approachable, comforting nature of the Southern cuisine Chef Josiah McGaughey grew up with in Northern Georgia. However, now guests will be able to enjoy these dishes within a casual, yet refined atmosphere fully equipped with a top notch service team and an extensive wine and cocktail program to compliment the cuisine. As a special touch, in addition to delectable local beers, Burial will be providing their rare, unreleased bottles exclusively to us as a show of our continued relationship with the brewery.
We believe our food is something entirely unique to the Asheville restaurant scene; by spreading our menu across an array of starters, small plates, entrees, and desserts, guests will be able to explore this cuisine in any dining experience they desire. The service team will be intensely trained to ensure this experience is realized. With this exciting new beverage program, expanded menu, and first rate hospitality in combination with our preexisting reputation at Salt & Smoke, we feel confident that diners will come to visit us at our new, inviting location.
The location proposition we are currently trying to secure is perhaps the best deal of all. We have been offered the opportunity to take over an existing restaurant that has recently decided to close its doors. The business is doing great, but the owner wants to leave to be able to spend more time with his kids. Unfortunately, we’re bound under very serious Non-Disclosure Agreements to not reveal the name of the restaurant. Once, we have an NDA signed by Slow Money, we’ll be able to openly share all this info and the businesses prior financial documents, etc. To continue, the owner of this location has been searching for a replacement that embodies the local integrity of Asheville who will also respect the space he’s put so much love into. Luckily for us, he believes in our grassroots mission and loves our food.
He is offering us the purchase of everything within the restaurant (all equipment, supplies, furniture, fixtures, etc) for $239,000. This, paired with the low, monthly rent of $2,750 is an irresistible deal in this current market. More than this, the space is perfect for our project. Its located in the River Arts District amongst a popular stroll of local art galleries. Tourists flock to this area not only for the art, but also for the popular breweries of New Belgium and The Wedge. In addition, there is a large residential community that is still growing. Additionally, being slightly tucked away on the outskirts of Downtown will create an intimate and exclusive feel. This atmosphere can be achieved with easy transportation as the location is just a 5 minute drive (or $6 Uber) from Downtown and West Asheville alike. Furthermore, there is a private parking lot available as well as street parking.
When entering the restaurant, guests are greeted by a smiling host within a cozy atmosphere of exposed brick walls, polished concrete floors, and wood paneling creatively intermixed within the dimly lit space. Guests can chose to sit at the artesian crafted bar, under the sun on the outdoor patio, or amidst other diners at specially crafted wooden tables in the dining room. And for the full foodie experience, a chef’s table is available that looks directly onto the action of the kitchen. The kitchen is completely equipped with everything our chef will need including specialty equipment such as a smoker, meat slicer, sausage stuffer, and more. The kitchen team has done and incredible job on the upkeep of all the equipment; so much so, that we wouldn’t have to purchase any new equipment or smallwares to begin business. The same goes for the bar and dining areas. All front of house areas have been artfully designed requiring no extra decor or furniture, the POS system is fully paid off, and all plates and glassware are simple and perfect for our style. Thus, the full ticket price for the space covers practically everything we would need to become operational.
In addition, the owner has offered up his entire staff to transition to work with our team when opening. Of course we would have to vet these employees, but it offers us a huge advantage to not have to scout out an entire workforce. Even better, he has insisted to work with our team for the first few weeks of being open to introduce us to regular diners and aid in promoting our business within his space in whatever way he can. The owner is also open to close the restaurant whenever the transition best for us, making the timeline flexible. A simple exchange of permitting would have to take place, but as a long existing operation we would not have to deal with any of the costs or stresses of city zoning and new permitting.
Please briefly describe your commitment to sustainable food systems in North Carolina. One of the reasons that we moved to Asheville to open a restaurant was specifically because of all the amazing produce and livestock available in the region. Over the years, working at Cucina 24 and The Bull and Beggar we have formed invaluable relationships with farmers in the region. This relationship continued to grow when we opened Salt & Smoke, and we now work with a variety of local farmers. We constantly think about seasonality when we change our menus. We even forage frequently to highlight what is growing around us. When we need to source larger quantities of products that our farmers can’t provide, we are always sure to source produce sustainably through Mountain Foods or find proteins that are hormone/antibiotic free available in larger amounts from co-ops of farmers around the region. We have a great relationship with ASAP, regularly shopping at the tailgate markets. In fact, we recently cooked a French Country Market Dinner at the West Asheville Market where all the proceeds earned when directly to the growth of the market.
What will your sales be? What do you anticipate your profits/your margins will look like? How will you make the money to pay this loan back? I have an array of documents showing our projected P&L, Pro Forma, and Three Year Projections for this project I would be happy to share in entirety–please let me know if you’d like me to send these over. We have projected that we would own a gross annual sales of $975,600 for our brick and mortar project. This number has been carefully calculated by coming up with an estimated average spent by each guest applied to expected covers which is then viewed at annually alongside increases and decreased in volume with seasonality/tourism. Although we believe we can earn even more per head, we have taken this estimate as our base evaluation for save projections. We have estimated our food cost at 30%, our beverage cost at 23%, and our labor at 30%. After all the cost of goods, labor, and all other operational costs are deducted we expect to retain a gross profit of $137,167 before taxes. We plan to take $60,000 annually for our owners draw until all debts are fully paid. This leaves $77,167 annually available for loan repayment.
Have you borrowed money before? How much did you borrow? How long was the term? Is there a balance still due on that loan?: We have borrowed money before, and you will find we have never missed a payment on any of our loans. We take our finances very seriously and always put our bills before any personal expenditures.
We took out a mortgage with First Citizens bank in December of 2013 to purchase our house. We took out the mortgage for $155,000 with a 30 year term and 10% downpayment, the current balance remaining is $127,504. Our recent evaluation of our home was valued at $180,000.
We also took out a loan for our 2016 Subaru Crosstrek with Home Trust Bank in August of 2016 for $31,285 with a 6 year term. We currently have balance of $20,129 remaining and our car is valued by Kelly Blue Book at $26,069.
Lastly, we took out a loan with Carolina Small Business in January of 2016 to open Salt & Smoke. The SBA secured loan primarily secured to purchase our custom built food trailer and the construction to connect it to Burial Beer Co. The total loan was for $50,000 with a 42 month term and has a balance of $35,658. Our CPA recently valued our business at $200,000 encompassing the total sale of the food trailer, equipment, and the intellectual property attached.
Do you have people who would vouch for your credit worthiness? Yes, you could speak to a variety of individuals. Any representative at Carolina Small Business could vouch for our professionalism on our loan with them. Owners Doug & Jess Reiser could speak on our credit worthiness on our rent payments and other fiscal partnerships. Certainly you could speak with our mortgage and car loan lender. You could also speak with US Bank (our long term bank in Chicago and current credit card holder), First Citizens Bank (our personal banker), and Asheville Savings Bank (our business banker).
Tell us about your business background. Have you been in business before? Salt & Smoke is the first business that we have independently operated and owned. As mentioned, we have been doing this for a little over one year. We work diligently to maintain our food, labor, and operational costs. We have never gone in the red in our finances and I am please to say that our sales are up nearly 50% more than we originally projected. Josiah works to run the entire kitchen as the Executive Chef. He creates all the menus, maintains inventory and purchasing, and runs as staff of three full time cooks. I act as the General Manager for the business. I manage our full time window server, I also work the window myself. Outside of direct business, I run the entire marketing and social media program, maintain payroll, do all our accounting (our CPA Stewart LeBlanc manages our taxes), manage PR, in addition to foraging, baking desserts for Sundays, and growing produce and herbs for the restaurant.
Outside of Salt & Smoke, Josiah and I both have been working in the restaurant industry all our lives–myself for 17 years and Josiah for 21 years. Josiah has held a variety of managerial roles including a Sous Chef position at Revolution Brewing in Chicago and a high end chef role at The Bull and Beggar. I graduated with honors from Loyola University Chicago for my Bachelor’s and took a variety of classes and programs with SCORE to focus on pursuing business. I have always excelled in math, making accounting and fiscal management a quick learn for our current business. I have worked in front and back of house, including head server and bartender positions, floor management, event planning, and more. My first position in Asheville was as the Assistant Manager at Storm Rhum Bar. After this I worked at Cucina 24 and The Bull and Beggar. At The Bull and Beggar I often managed the floor, assisted with payroll, and programed the POS regularly.
How much money do you need to borrow to make your project work? How long do you think you would need to pay that back? [If you are interested in these details, please contact us – firstname.lastname@example.org. Thanks.
Are there other lenders involved in your project or business? As just mentioned, we are exploring procuring a loan from Carolina Small Business or Asheville Savings Bank, but nothing has been finalized yet. Currently, we are exploring all options.
What is your timeline for this project? Once we have funding, the owner of the restaurant is ready to sell his location immediately. However, he is open to continue running his restaurant within the timeline we need. Our plan would be to secure the sale of his restaurant and then take 1 month to transition Salt & Smoke. This would include the menu changes previously discussed, hiring new employees, and press releases. After this, we would take 1-2 more months to vet the current restaurant team at the second location and hire and fire as necessary. We would then fill and train our remaining team, clean up the kitchen space and reorganize, employee minimal decor changes to the front of house, develop our opening menu, come up with a PR/marketing plan, and transfer all permits with the city. So three months total after funding is secured.
Is there anything else we forgot to ask you? We have a business plan prepared. We would love the opportunity to work with the team at Slow Money. Josiah and I have been able to achieve a great amount starting from nothing. We believe our grassroots mission embodies the spirit of Asheville. We have already become a wonderful part of the city’s community and we want to grow with our guests and farmers even more as we take the next step into owning a full service restaurant! Thank you so much for your time and consideration!