Wednesday, January 2, 2008

For Ann Arbor restaurateur, a long-term commitment

Winning a stare down with adversity, restaurant owner Rob Terbush plans to stay in Michigan for the long haul.

In 2006, when sales fell by 55 percent, some expected his Holiday's restaurant to close, but Terbush hung on. Now in his 11th year of business, the 34-year-old Michigan native sustains a long-term vision for his restaurant on Ann Arbor's busy West Stadium Boulevard.

"Our whole goal all along has been to become a long-term staple and buy the property," Terbush said.

Serving breakfast, lunch and dinner at prices families can afford in the current tight economy, Terbush focuses on quality, atmosphere and service to set Holiday's apart from the competition.

"We fall into the category of fast casual. We cook meals to order, so people are willing to slow down for an extra five or 10 minutes for something fresh and hot," he said. He trains new hires in his "ABCD" program -- Above and Beyond the Call of Duty. "People can satisfy their hunger at a lot of restaurants, so we work to create a warm atmosphere with personalized service and attention." He estimates that about 200 other restaurants in Washtenaw County offer similar fare at similar prices.

He strives to balance consistency with novelty to keep regulars coming back while also attracting new customers. "Regulars order 'the usual,' even though they are interested in new things," he said. But bringing in more customers doesn't necessarily add up to increased revenues. Terbush says that customer spending has been flat since 2004 and attributes that to the economy. "We did have growth in the number of people per day. But the average spending dropped and our net dollars went down," he said.

Terbush's experience is consistent with assessments by the Michigan Restaurant Association, which recently forecast 3.2 percent growth for Michigan restaurant sales in 2008 - the slowest of any state. Most states see annual restaurant sales grow by 5 to 7 percent, according to Andy Deloney, vice president of public affairs with the Michigan Restaurant Association.

The biggest challenge for Terbush came in 2006 when a road construction project lasting nearly two years stalled business. Customers had difficulty just pulling into the parking lot and by the end of the project sales were down 55 percent. Expecting business to slow during the road project, Terbush had timed a major exterior building renovation to coincide with the road construction. Although he knew business would decline during construction, he was caught off guard by just how much. With access to credit lines and other financing, Terbush made it through.

Plans for further renovation have been put on hold until the business can stabilize from financing the downturn of 2006. Eventually Terbush wants to renovate the interior, add a patio, obtain a liquor license and purchase the building.

In the meantime, he says people are simply spending less even in Ann Arbor, which has been sheltered from the worst of the state's economic problems. "They don't buy drinks; they have water. They don't order appetizers or desserts," he said. Working within the slim profit margins of the food service industry, Terbush soon will be raising prices to balance customers' lower spending with ever-increasing overhead costs. "The new menus are at the printer."

In spite of the difficult economy, Terbush plans to stay in Michigan, growing his business and raising his three children. "I don't think I would live anywhere but Michigan," he said. "We have the Great Lakes, the Upper Peninsula, beautiful state lands, skiing, good fishing, a decent prevailing wage, and a high quality of life."

Terbush's secret to making it in Michigan is facing difficulty head on and balancing personal life and work. Leave work at work. Slow down and appreciate what you have. Get perspective.

"There are people not doing what you do, not earning what you earn and they're living just fine. You just have to step back, see what is and live."