Secret ingredient to catering business – a good lease agreement

RENTON, Wash.— You might think delicious and beautifully prepared food is key to a successful catering company, and you would be right. But Kenneth Rogers, co-owner and general manager of Rain City Catering, will tell you the secret to his recent success is a good lease.

Rain City Catering co-owner and Executive Chef Jeremy Bryant was chosen to cater meals for the Seattle Mariners home locker room in 1999 and in 2002 the visiting locker room also became a client. In addition to catering those 81 home stands, Rain City Catering handles hundreds of weddings, banquets, anniversaries, business meetings and special events each year. Proof of their delicious and beautifully prepared food is lodged in sensory memories across the Puget Sound.

Feast or famine

Still, the feast or famine nature of running a catering business was taking a toll. Before the recession, they opened a café. During the recession, they closed it. In 2010 they had to declare bankruptcy.

In 2011, a couple things happened. Business picked up, Rogers had an opportunity to bid on a lease for the Renton Pavilion Events Center and he began working with Steve Burke, a certified business advisor with the Washington SBDC.

Every SBDC advisor comes to the organization with experience in small business and then completes a six-month certification process to ensure that he or she is qualified to address a comprehensive range of business issues. Burke can do all that, but he is also the Washington SBDC go-to expert on commercial leases.

Leases are tricky

Leases are tricky, Burke said, because they can say whatever the parties want them to say and there are few protections for a small business owner who unwittingly signs a disadvantageous lease. When the recession hit, Burke said, small business owners holding long-term leases with fixed fees got hammered.

In Rogers’ case, he was able to negotiate a lease with the City of Renton that included a low base payment plus a percentage of profits each month. Some months he ends up paying more than he would have with the original lease, Rogers said, but on slow months he doesn’t end up with a cash flow nightmare.

With a manageable lease in place, the Renton Pavilion Events Center, with 10,000 square feet and a large commercial kitchen, provides year-round stability, with seven to 10 events each month, to complement their seasonal work with the Mariners and various off-site events.

24/7 struggle to stability

When Rogers first started working with Burke, he and his partner had one employee and were working 24/7 and struggling with cash flow. Five years later, they had six full-time employees, 15 on-call employees and revenue of $1.6 million.

The difference has been “night and day,” Rogers said.

The first day Rogers met with Burke, he said, Burke asked him, “Do you want to be a chef or a businessman?” His partner was the executive chef, so he answered, “Businessman.” “Okay then,” Burke replied, “tell me your story.”

Three hours later he walked out of office feeling that he had just caught a lifeline.

Childhood friends to partners

Rogers and his partner Bryant have been friends since early childhood, growing up in and out of each other’s homes. They started to cook together when they were barely teenagers, but didn’t become partners in a catering business until they were in their late 20s.

Catering is stressful, demanding work, Rogers said, but it must be in their blood. Nearly all of their employees are family members, friends of family members or family members of friends. “Everyone’s connected in one way or another,” Rogers said.

Which is why, when Rogers first went to talk with Burke, he felt an extra burden. With so many people depending on the success of Rain City Catering, he needed to figure out how to stabilize cash flow, move the company forward and make long-range plans. Fortunately, he said, Burke was able to deliver.

Most importantly, Rogers said, Burke helped him better understand how to set up business systems and monitor his financial statements. Troubling trends can be addressed before they become disasters, and opportunities can be exploited before they disappear. “I learned that from Steve,” he said. “Once you have systems in place, the business runs itself, as long as you stay on top of things.”

Managing resources a tough challenge

Making money is only half the battle, Rogers said, and it’s not even the most difficult part. The hard part, he said, is managing your resources wisely to support the growth and development of your business. Burke and the Washington SBDC help him do that.

“I just think it’s important that anybody new to business should seek SBDC assistance,” he said. “Get a check on your business to see if you are where you should be, or if you need to tune things up.”

Rogers said he’s learned to appreciate the good times, but to always have a plan B “because the phones can stop ringing at any time.” That realization informed his lease negotiation with the City of Renton, but it is also driving his effort to purchase a commercial kitchen and expand into food trucks and possibly even container kitchens.

“You have to plan ahead,” Rogers said. “Steve taught me that.”

By Hope Belli Tinney

Media Contacts:
Kenneth Rogers, Kenneth@raincitycatering.com;  206-579-9007
Steve Burke, steve.burke@wsbdc.org; 206-246-4445