THE BLOG
08/12/2014 12:54 pm ET Updated Oct 12, 2014

Stay Fresh or Die

Let's say you've worked hard and built up a successful business. My advice to you: Change what you're doing! What!? Why?

Because every business has a shelf life. That's just the way life is -- especially these days, with markets and technology changing faster than ever. If you want to stay in business, you constantly have to update and improve what you're doing. Sometimes, you have to go further and blow the whole thing up.

There's a restaurant in Hamilton, Massachusetts, called the Black Cow that was thriving during the '90s -- packed every night. By the mid-2000s it had lost its mojo. Chef after chef left, then the best servers. The decor was dated and dirty. Other, hipper restaurants opened up in the local community. So what did the owner, Joe Leone, do? He blew it up! One day, he closed it and completely renovated it. Knocked a wall down, creating one huge space. Doubled the bar seats. Installed a fireplace. Hired a new chef and servers. I have to think he spent $500,000 on the renovations. The whole restaurant is different. And now, you can't get into the place again. It's packed night after night.

In 2002, I did something similar and blew up my original Davio's concept. Thank God, too, because it launched us onto a whole new level of success. I had owned my little restaurant on Newbury Street for seventeen years, was running a Davio's in Providence, Rhode Island, and by this time also owned a Davio's in Philly and a fourth in Cambridge. All our restaurants were making money, but sales at Newbury Street had dropped from their peak of $3.5 million to about $2 million a year. Lunches were slow; the place in general had lost excitement. We needed to do something big to refresh the menu, but our options were limited. Our kitchen was cramped, and there was no room in our four-thousand-square foot space to expand it. Wanting to grow our brand into a much bigger company, I didn't feel a small restaurant like this was going to cut it any longer; it wasn't part of our vision.

Our lease was coming up for renewal, and the landlord and I didn't get along very well, so I realized we needed to move. We were fortunate to find a space six blocks away, on Arlington Street. The place was much bigger -- 9,000 square feet -- which would change everything. Our menu would be twice the size and feature steakhouse items as well as the Northern Italian specialties our Newbury Street patrons loved. In fact, we wouldn't be a "Northern Italian Restaurant" any longer -- we would be a "Northern Italian Steakhouse." Our dining room would seat as many as 130 (as compared to 80 at Newbury Street), and we would have private function rooms seating an additional 130. Our bar would seat 28 instead of five. The decor would be sleek, modern, upscale, and sophisticated, with high ceilings, hard- wood floors, and an open kitchen -- a far cry from the brick walls, curtains, and homey feel of the original Davio's. Newbury Street worked great during the 80s; Arlington was a restaurant for the 21st century.

In the weeks leading up to the grand opening, I barely slept or saw my family. I was working as hard as I could to make the new Davio's a success. I felt excited -- but nervous. I had put $2.8 million into the build-out, stretching to afford the investment. I had tried the "Northern Italian Steakhouse" concept out in Philadelphia, and it had worked, but I didn't know if it would succeed in Boston. Our regulars liked the traditional food and the small, intimate space we had on New- bury Street. Would they move with us to Arlington? If they didn't, would we attract a new clientele? And then there were operational questions. How would we handle the new volume?

Turned out I had nothing to worry about. We were packed in Arlington from day one. The Boston Globe gave us a fantastic review, helping us even more. Our Friday and Saturday night seatings were booked weeks in advance. Although we initially had trouble handling the volume (leading to the train wreck of an evening that I described in an earlier chapter), we added more staff and made other adjustments, and that took care of the problem. I worked so hard those first few months, running server stations, helping out at the kitchen, and greeting guests at the door. When some of our old guests asked me if I missed my quaint little restaurant on Newbury Street, I pointed to all the full tables. "What do you think?" Some regulars gradually dwindled away, replaced by a new clientele of people who loved prime steak and were willing to pay for it. The numbers we did were amazing. We were bringing in more sales in one day than we had done in an entire week at Newbury Street! We went from $2 million in sales to $8 million the first year.

A couple of weeks before we reopened, longtime Boston television news anchor Natalie Jacobson dropped by our new location. The place was still a mess; workers were finishing the floor, and we had not yet installed tables or chairs or finished the walls. I was excited to see her and showed her where everything would be when we were done. "Wow, great," she said. "Good luck." She seemed happy for us, but something about the way she reacted was weird. I couldn't quite place it.

A month later, when we were open, she came in for dinner. The place was packed -- absolutely nuts. She gave me a big hug, and tears formed in her eyes. "Natalie, what's wrong?"

She smiled through her tears. "Steve, you have no idea how I felt when I came in here last time. I thought you were going to lose everything. I thought you were out of your mind, building this enormous restaurant." She looked around. "I just can't believe what you've done here. It's such a huge difference from Newbury Street."

I can understand Natalie's initial impression. The fact is that many successful restaurateurs shrink from remaking themselves so dramatically. They are afraid to take that kind of risk, and they don't want to put in that kind of effort. When they see sales stagnating, they grope for some small tactic to save the day. They try an advertising campaign, do a cou- pon promotion, run a two-for-one special, make a few small adjustments to the menu. Maybe they see a short bump, but then sales return to the same disappointing levels. Here's the thing: One good Saturday night is not going to save a stale restaurant. Restaurants go out of business because their owners don't alter the formula when they still have a chance. Have you been to a Bennigan's lately, or a Perkin's pancake restaurant? Didn't think so.

Don't think that what once made you successful will always make you successful. Embrace change. Do what it takes in order to stay fresh. If you don't stay fresh, you will die -- much faster than you ever thought possible.