Turning a Failing Restaurant Around

When Jonathan Rapp left his New York City restaurant to open a new one in rural Connecticut, he forgot to revise his strategy for new customers

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Rapp uses this converted 1955 Ford fire truck for his series of outdoor dinners at local farms. Michelle Parr Paulson

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Michelle Parr Paulson

The Entrepreneur: Jonathan Rapp, 41

Background: After a 10-year run operating the Michelin-starred, critically acclaimed New York City restaurant Etats-Unis with his father, Rapp moved to the small village of Chester (Conn.) seven years ago to strike out on his own.

The Company: River Tavern is a 55-seat restaurant serving a menu that changes daily, sourced with local ingredients. From the outset, Rapp hoped to create a neighborhood spot that was good enough to draw customers from across the whole state.

Revenues: $1.6 million (estimated for 2008)

His Story: When I opened River Tavern in tiny Chester, I knew the path to becoming successful in rural Connecticut would be different than in Manhattan, but I figured that my restaurant experience coupled with my intimate knowledge of the area would give me a big head start. I had a successful concept, a large group of excited supporters, and was opening in a charming, well-to-do town with a reputation for sophistication.

Two difficult years later, with business shrinking and criticism even from supporters impossible to ignore, I was trying to figure out what had gone wrong and how I could fix it. The restaurant was essentially bankrupt, kept alive for the moment with loans from friends and family. It was time to take a hard, unforgiving look at my assumptions, my approach, and our execution.

Taking Stock

I had been cooking since I was 12; my first restaurant job was at 14. My hero was Alice Waters, who had made a religion of cooking careful, simple food from only the freshest, locally produced ingredients. I was a disciple. Etats-Unis was about the food. I spent hours each week at the Union Square Greenmarket, lugging hundreds of pounds of local produce back to the restaurant. Two more mornings a week were spent at the Fulton Fish Market scouring the stalls for the freshest fish.

In the open kitchen, I was driven, uncompromising, and I must admit, a bit of a jerk. Too often, customers could hear and see my dad and me arguing. Our staff likewise endured my occasional profane outbursts. But the food was great and we had a loyal following that appreciated the restaurant for its quality and unique personality. The food press loved us. Of course, we also alienated plenty of customers. But with literally millions of potential customers, great publicity, and 30 seats, it didn't much matter. New York City rewards that kind of obsessive, slightly arrogant focus. Rural Connecticut? Not so much.

By Year Two, the trouble signs were too numerous to miss. Numbers were declining for both customers and revenue. There was a persistent drumbeat of criticism of virtually every aspect of the restaurant, except the food. No matter what we did, we couldn't shake the perception that we were too expensive, too “New York-y” (a nasty epithet here), and on top of that, had inconsistent, aloof service and a menu that was too limited. My staff and I became increasingly demoralized. With losses mounting, I had to go back to my investors and family for more money just to make payroll and pay necessary bills. I was getting desperate.

The bottom came at the end of 2003. With my newborn son in intensive care, I became distracted from the business. Worse, the restaurant now felt like a stone around my neck. My father suggested that I sell and start over. When we took a hard look at the numbers, we discovered that there was nothing to sell. As tempting as it was at that point to just give up, deep down I knew I couldn't allow myself to quit. I was doing what I loved right? I couldn't fail.

Revising the Recipe

I realized that I had had the equation backwards. I was making decisions based on what I wanted. I hadn't been willing to make the compromises (as I saw it) sometimes necessary to create a broad coalition of customers—something absolutely crucial in a town with fewer people than the number that walked by Etats-Unis in a day. In our own minds, we were the best restaurant around—but the fact was, we weren't connecting with our customers.