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Monday, March 29, 1999
 
Financing

Expanding your business can have its own risk and rewards

by Tyrone Beason
Seattle Times staff reporter

At 40, Wade Weigel is part owner of six barber shops, a restaurant, two Capitol Hill night spots and a hotel in Belltown.

Weigel co-founded the hip but laid-back Rudy's Barber Shop chain, with its trademark dark-green storefronts, six years ago. And he's been expanding his little empire at a frenzied pace since then.

For Weigel, growing his businesses has become a way of life: He expands into new ventures for the joy of it.

By contrast, for Celester and Salina Gray, the husband-and-wife duo who own the popular That's Amore Italian restaurant in Seattle's Mount Baker neighborhood and the recently opened Razorback's Smoker, a barbecue restaurant in the Central Area, growing their businesses is about making a better living.

At some point, nearly every successful small-business owner thinks about expanding. Regardless of the reasons, it's a decision that offers the potential for both risk and reward.

All about passion

"All my little projects, I do out of passion," said Weigel, a former flight attendant, adding that he hopes his businesses enhance their neighborhoods.

As a rule, Weigel never takes out loans to fund his ventures. In the early days, that meant lots of sacrifice.

It took him six months of working as a waiter to save up enough money to open the first Rudy's on Capitol Hill with businessman and show promoter Alex Calderwood. He basically ran Rudy's for free, making his living at the other job.

"We put all the money from the first Rudy's into the second Rudy's," he said. Weigel kept waiting tables until the third location opened in 1996.

"I'm always broke, because I'm always putting it back into something else," he joked.

Weigel has made it a practice to find trusted friends to share the cost and responsibility of running the new businesses.

As a result, he has created a small-business family of sorts. At Rudy's for example, Weigel's two business partners are Calderwood and David Petersen.

Calderwood, a well-known local concert promoter, also owns Tasty Shows and the Capitol Hill dance club ARO.space.

Weigel also is a partner in two businesses next door to the Rudy's in the 500 block of East Pine Street, Bimbo's Bitchin Burrito Kitchen and Cha Cha Lounge.

His partner in those two ventures is Jeff Ofelt, who also runs both businesses.

Weigel helped finance the Baltic Room, a more upscale piano bar on Pike Street, with Linda Derschang, owner of nearby Linda's Tavern and the Capitol Club, a Moroccan restaurant and bar.

Weigel, Calderwood and a third partner, Doug Herrick, have teamed up on the Ace Hotel at First Avenue and Wall Street, in Seattle's flourishing Belltown neighborhood. The 35-room hotel, previously a mission, is set to open Thursday. A Rudy's Barber Shop is located on the ground level.

Earlier this month, Weigel took his barber-shop chain on the road. He opened a Rudy's in a new budget hotel in Los Angeles on March 19. It's the first location outside Seattle.

What's next for Weigel?

"There's no plans . . . except a little vacation," he said.

A better life

Celester and Salina Gray also want to own a string of successful businesses one day.

"We want to create a higher standard of living for ourselves," Celester Gray said.

The Grays are off to a promising start with 4-year-old That's Amore, and Razorback's Smoker, which opened in September.

But they have learned that success with one venture doesn't guarantee the same result with another.

The couple pumped $40,000 of their own savings, plus $80,000 in small-business loans, into the Italian eatery on 31st Avenue South.

Contracting problems left the Grays an additional $50,000 in debt before opening day. But the restaurant was an instant hit. They did $25,000 in business in the first two weeks, double what they had expected. Sales in subsequent months also exceeded expectations, and the business is now profitable.

The Grays say owning their own business has improved the quality of their lives. Their combined household income is double what it was when Celester Gray was assistant general manager at a Cucina! Cucina! in Kirkland and Salina sold insurance.

The original plan was to lease the space next door to add on to the restaurant. The Grays did lease the space for a while to prevent another restaurant from opening there, but after making $30,000 in rent payments, they decided that the costs of expanding there would be too high.

Still, they yearned to expand their business and, in the end, decided to open a new restaurant.

"We wanted to have something totally different," Celester Gray said. "We thought a swank little barbecue place would be cool."

The Grays chose a location in the Promenade 23 shopping center at the intersection of 23rd Avenue South and South Jackson Street, an intersection with lots of traffic that for years had failed to spur much commercial development. By the time Razorback's moved in, a Walgreens drug store and a Starbucks had opened across the street.

The location was ideal because the space used to be a restaurant. The kitchen and dining room were more or less already in place. Opening Razorback's cost about $60,000.

But unlike That's Amore, Razorback's, which specializes in wood-smoked chicken and pork smothered in homemade barbecue sauce, didn't take off right way.

"It was like, 'We're open - where is everybody?' " Salina Gray recalled.

"It hasn't been the same," her husband added, comparing business at Razorback's to that at That's Amore.

"Twenty-third and Jackson is a hot corner, but it hasn't translated into higher sales." Razorback's is draining the savings the Grays have accumulated at That's Amore.

The Grays have attempted to boost sales at Razorback's by adding steaks to their menu. They may even change the name from Razorback's Smoker to Razorback's Grill. Business has begun to pick up and the Grays continue to have high hopes for the restaurant.

Their ultimate goal is to open several more restaurants over the next five to 10 years, sell them once they become profitable and settle down comfortably with the proceeds.

But Salina Gray said she has learned a valuable lesson about owning and growing a small business: Save as much money as possible just in case things don't go as planned.

"Whatever you think you might do, don't do it undercapitalized, because it will create hardship for you," she said.

Tyrone Beason's phone message number is 206-464-2251. His e-mail address is: tbeason@seattletimes.com

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