Jun 21, 2010
Every industry has its busy season — for accountants, it’s January through April; same for legislators in Maryland. Likewise, warm-weather months are busy for crabbers and construction crews.
In the restaurant industry, while they may have their busy seasons, there are really three times a year when they hit the cash-flow jackpot — and although we love our dads, Father’s Day isn’t one of them.
I mention this because last week we ran a story on Sir Walter Raleigh Inn, a Maryland restaurant that went through a bankruptcy 15 years ago and is still a successful business. When the owners of the business had to decide when to file for bankruptcy, which requires a lot of cash on hand, they knew they had three opportunities in 1995, and if they missed the holiday blitz, they might not have enough money to do it.
Here’s a little tidbit that didn’t make it into the story of how Jerry Cosker, one of four owners of the business at the time, got his partners to take advantage of the extra holiday cash to file for bankruptcy:
In our business you have three big events from December through May. The first is New Year’s weekend; the second is Valentine’s weekend and the third and the last and the greatest and the best is Mother’s Day. So December came and went with no decisions being made…The end of January, beginning of February came and I said, ‘this is the second train that’s leaving the station. We have a chance to jump on board and make this work, or we’re going to lose this golden opportunity.’ We had a lot of cash. We would get like $75,000 extra just from these busy weekends…
That train left and no decision. April came and I said, ‘this is it; this is the last one,’ because you know Father’s Day doesn’t bring a whole lot, although it’s getting better. They finally decided the third week in April that we had to go find somebody.
Check out the story to see how Jerry and the gang made it through bankruptcy in a very creative way.