For Horizons Owner Mark Melikian, the Sky’s the Limit
Mark Melikian has seen a lot of changes come to Wilbraham Road (Route 20) since he opened Horizons Restaurant & Bar on that thoroughfare 22 years ago.
There was much less here then, he said, referring to the stretches both east and west of his establishment and gazing skyward as he tried to recall the landscape in 1988. There was a tennis club back then; now its a soccer center of some kind. There was just one auto dealership; now theres several. And of course Post Office Park (the elaborate business center a mile or so west of Horizons) hadnt been built.
Its getting pretty developed now theres a lot of new businesses, and a lot of new chain restaurants, he continued, noting that the former has helped his enterprise, while the latter he could definitely do without, although he has stood up well to the groundswell of competition.
Thats rather obvious if hes been witness to more than two decades of change and progress on Wilbraham Road when many businesses, not to mention restaurants, have come and gone in that span.
Melikian says he owes his feats of longevity (something fairly rare in this sector) to some basic business principles and some strategic approaches specific to the restaurant industry and the niche he serves. He tries to keep things simple, for example, and focus on what the customers say they want, not what he believes they might want. He keeps his prices reasonable and puts the accent squarely on value.
This approach has kept regulars coming back and a steady stream of newcomers coming to the door, he told BusinessWest, adding that over roughly three decades in the business hes seen a number of business cycles, and the current downturn has been particularly challenging.
This has been going on for two years now, really, he said of what has evolved into what some have dubbed the Great Recession. Its been challenging; were talking about disposable income, and everyone has less of it these days.
In this environment, restaurant owners and managers have to control their spending, become even leaner (restaurants always run lean), and look to create new business opportunities, he said, adding that hes doing all of the above.
For our annual Restaurant Guide, BusinessWest talked with Melikian about Horizons, the restaurant business, surviving a recession, and, in general, what it takes to achieve longevity in this ultra-challenging business.
Melikian said he took what would have to be considered the road most taken when it comes to restaurant ownership.
He started (where else?) washing dishes at the old Willow Glenn House in East Longmeadow, a restaurant and banquet facility owned by his father and two uncles. He graduated to other kitchen duties involving food preparation, developed that requisite passion for the business, and went to school to hone his skills.
I dont know what possessed me to do it, but I applied to the Culinary Institute of America and got accepted, he joked. I took a sabbatical from college and went off to pursue this; I guess I really knew early on that this is what I wanted to do with my life.
After working as a chef in a number of restaurants, including a few in Florida and New York, Melikian, like most others who start down this road, wanted to run his own restaurant. Actually, this was a dream also shared by his brother, Jeff, so they pursued it together.
With some financial backing from their father, the brothers Melikian acquired the then-closed Top of the Hill Restaurant, a long-time, if at times troubled, fixture on Boston Road in Wilbraham in 1987. They renovated it, renamed it Horizons, and a few years after opening it put on a large expansion (the current bar area).
Jeff, now with Mohegan Sun in Connecticut, left the business several years ago, leaving Mark, now playing the role of chef/owner I supervise everything to cope with the changing scene on Route 20 and an ever-more-competitive business landscape.
Hes fared well by catering to a broad constituency that includes everything from retirees to business professionals living in Wilbraham, East Longmeadow, Longmeadow, Belchertown, Ludlow, and other affluent suburbs east of Springfield.
The former is the bread and butter, if you will, for the luncheon business, while the latter dominates the dinner clientele. Meanwhile, younger audiences find the bar area an attractive spot for watching a ballgame, listening to live music (now featured regularly), and enjoying a good meal.
Such well-roundedness helps Horizons at all times, but especially when the economy is soft, said Melikian, adding that he relies on a steady diet of regulars, but also a constant stream of newcomers. He draws both by keeping the menu, which he described as Creative American, varied, but also dominated by staples such as prime rib cooked on the bone as well as steaks, seafood, and pasta dishes.
And while discussing what has become a recipe for success he almost apologizes for its simplicity.
You just try to do the right thing and treat people right offer quality products at affordable prices, he explained. It sounds mundane, but thats what you have to do; thats what it comes down to.
Elaborating, he said this means listening to customers and responding with what they want. We try to cook the food I think people want to eat, and not necessarily what youd like to do, he explained. Everyone would like to be able to serve a $40 steak, but you have to take what the market gives you.
As for the recession, Melikian speaks for others in the business (actually, they speak for themselves; see related story, page 23) when he says that the key to surviving and thriving is to simply keep an eye on things.
And by that, he means everything from the prices he pays for food and other items to controlling waste to keeping any and all other expenses in check.
Its like any business; you cant control what comes in, he said, referring to the volume of business for a given day, week, or month. But you can control what you spend.
Such steps are necessary, he said, because this recession is more challenging than any hes seen previously (and he lived though the downturn in the early 90s), and people simply dont eat out as much when they have less disposable income or if they are uncertain about the economy and until recently, that meant just about everyone.
People still come in, just not as often, he said. If you used to see them once a week, maybe youll see them once a month now.
To compensate, Horizons is doing more off-site catering, said Melikian, noting that it recently handled a wedding at the Barney Estate in Springfield, one of many such assignments in recent months, and, in general, it is stretching its imagination when it comes to ways to generate additional revenue and reduce expenses.
And thats a challenge, because your fixed expenses have gone up, and you can only charge so much for what you do, he said. You cant say, this steak used to be $15, but now Im going to charge $25 to cover my expenses. Well, you could do that, but no one would eat it.
Instead, you have to find ways to cut back, but not sacrifice quality, the things that make people come to your restaurant in the first place, he continued. Its not complicated, really. You just keep an eye on everything.
Returning to the matter of chain restaurants proliferating on and around Boston Road, Melikian said hes seen many come and a good number go.
There have been other observations, as well. When one of them opens, you always notice some drop-off in business as people go to check it out, he said. Then, things gradually return to normal, and after their good start, some of the chains slow down, and before long you see their people coming to your door looking for work. Theres a pattern there.
Melikian has stitched his own pattern, one of success and longevity that has made Horizons a true landmark and enabled its owner to be a witness to 22 years of evolution on Route 20 and counting.
George OBrien can be reached at[email protected]
With the possible exception of the bill-collection business, virtually every sector of the economy has been negatively impacted by the current recession. But perhaps none more than the hospitality industry, and especially the restaurant business.
It is a simple truth that, when money is tight, people (even current generations) will splurge less and stay home more. In reaction to this fact of life, area restaurateurs have responded with determination and imagination, necessary ingredients if one is to not merely survive but somehow thrive in these challenging times.
As outlined in a piece in BusinessWests annual Restaurant Guide (page 23), steps taken have been as varied as the items on a typical dinner menu; from reducing lighting and energy costs to expanding the menu with lower-priced items; from cutting down on printing costs to staying visible through aggressive, targeted marketing.
Restaurateurs typically run a tight ship they have to because margins are so low to being with but these days, that ship is much tighter.
The hospitality sector is certainly not alone in its creative, determined response to the softened economy and its ongoing implications, but its actions serve as strong testimony to the fact that, while this recession is in all ways painful, there are practical lessons to be learned from it, and ones that could help this region become more competitive in the long run.
The biggest lesson, clearly, is that companies shouldnt wait until the storm is upon them to look at their operations and devise ways for them to run more efficiently and creatively. This mentality should prevail 24/7/365, regardless of whats happening with the economy.
But as everyone knows, reality is different. Companies and the people who manage them tend to become complacent when times are better. Theyre less concerned with how long the air conditioning is on and what the thermostat reads when people go home for the night. Theyre not as likely, perhaps, to market themselves aggressively and remain visible because they believe the business will find them. And theyre not as willing to look at a department or a division and wonder whether it is properly staffed and if the same amount of work can be done with fewer people.
It is when times are tough that people turn over every rock in search of ways to cut expenses and increase revenues. As one restaurateur put it, this is the time for everyone in an operation to think like an owner.
Hes right, of course, but the time for such thinking, for such a mindset, is all the time.
And if area business owners and managers can learn this lesson, then maybe there will be something actually gained from whats being called the Great Recession.
Indeed, newspapers and business magazines often run collections of stories on businesses large and small surviving a recession. They are replete with tales of business leaders being daring and entrepreneurial as they blueprint ways to do what they do better, to reach new audiences, and cultivate new groups of customers.
Add it all up, and it seems that people in business do their best, most creative, thinking when their backs are up against the wall and their survival is quite possibly at stake.
What we hope people take away from these troubling times is that they dont have to wait until trouble strikes to be entrepreneurial or to really think like an owner. If they act in such a manner during all economic seasons, then this region will have better, stronger small businesses and, overall, a much more resilient economic base.
Transforming Young Minds
The Electrical/Robotics Technology Department at Springfield Technical Community recently staged its annual summer robotics camp. Eleven middle-school students from Springfield took part in the two-week camp, which gave them an opportunity to learn about the field and build their own robot. At left, Kamari Long displays his robot, while below, Aailyah Gordon (left) and Daryen Ramsey-Thomas show what their creation can do. Sponsors for the camp again this year included the Hampden County Regional Employment Board and the Black Men of Greater Springfield.
A Cut Above
Paul DiGrigoli, owner of DiGrigoli’s Salons, put his talents on display at a recent trade show of the Affiliated Chambers of Commerce of Greater Springfield, providing free haircuts to attendees. Here, he chats with BusinessWest Sales and Marketing Coordinator Melissa Hallock.
Report Touts Green Building as Economic and Environmental Imperative
Investing in the energy efficiency of buildings represents a powerful and strategic energy and climate solution that, combined with other non-transportation initiatives, could reduce the nations energy consumption by 23% by 2020, save the U.S. economy $1.2 trillion, and reduce greenhouse gas emissions by 1.1 gigatons annually, according to a study released recently by McKinsey & Co., a national management-consulting firm.
This confirms a critical path forward that we have long championed, said Rick Fedrizzi, president, CEO, and founding chairman of the U.S. Green Building Council (USGBC), which co-sponsored the report. Harnessing the engine of green, energy-efficient buildings can cost-effectively drive tremendous improvements in our economy and environment.
Green building can stimulate the economy at a level one and a half times larger than the federal stimulus bill, he added. In terms of climate change, a commitment to energy efficiency would be the equivalent to taking the entire U.S. fleet of passenger cars and light trucks more than 200 million vehicles off the road.
The report provides a detailed assessment of how much the nation can increase energy efficiency in buildings and other non-transportation sectors using existing methods and technologies. A targeted investment of $50 billion a year over 10 years, the report finds, would enable the entirety of those potential savings to be realized. Those reductions in energy use would save the U.S. economy $1.2 trillion, a return on investment of more than 2 to 1.
Furthermore, those investments would generate 900,000 jobs and reduce greenhouse gas emissions by 1.1 gigatons, according to the report, Unlocking Energy Efficiency in the U.S. Economy, which was sponsored by 12 organizations from within both the government and private sector.
McKinseys research finds that a comprehensive strategy, executed at scale, could reduce the annual non-transportation end-use energy consumption analyzed in this report from 36.9 quadrillion BTUs in 2008 to 30.8 quadrillion BTUs in 2020 saving 9.1 quadrillion BTUs relative to a business-as-usual baseline.
Increasing our nations energy efficiency is an economic, environmental, and national security imperative that requires bold public policy, Fedrizzi said. As Congress debates climate-change legislation, these findings make an overwhelming case that we must dramatically strengthen provisions that support and scale green building.
The energy-efficiency potential cited in the report is divided across three sectors of the U.S. economy: industrial (40% of the end-use energy-efficiency potential), residential (35%), and commercial (25%).
Solutions, drawn from proven, piloted, and emerging national and international examples, show that maximizing the energy-efficiency potential from any single opportunity weatherizing homes, utilizing efficient air conditioners, or employing combined heat and power generation requires addressing multiple barriers simultaneously.
By leveraging existing green-building approaches, we have the ability and capacity now to address multiple barriers, and thus generate additional resource efficiencies and cost savings, said Fedrizzi.
Call to Action
The report calls for an integrated national plan guided by five principles:
According to the USGBC, buildings in the U.S. are responsible for 39% of carbon dioxide emissions, 40% of energy consumption, 13% of water consumption, and 15% of GDP per year, making green building a source of significant economic and environmental opportunity. The organization claims that greater building efficiency can meet 85% of future U.S. demand for energy, and a national commitment to green building has the potential to generate 2.5 million American jobs.
In addition to USGBC, the McKinsey report was also sponsored by Austin Energy, the U.S. Department of Energy, DTE Energy, the Energy Foundation, the U.S. Environmental Protection Agency, Exelon Corp., the Natural Resources Defense Council, PG&E Corp., Sempra Energy, the Sea Change Foundation, and Southern Co. To download the report, visitwww.mckinsey.com.
Ashley Katz is communications manager for the U.S. Green Building Council.
Casino Jobs Aren’t Enough
Last year, House opposition stopped Gov. Patricks proposal to build three resort casinos in Massachusetts. With a worsening fiscal crisis and Speaker Robert DeLeo taking a more casino-friendly stance than his predecessor, the issue is sure to reemerge this fall.
Proponents argue that casinos will add new tax revenue and much-needed jobs a Greater Boston Chamber of Commerce study estimates that three resort casinos would add between 10,000 and 11,500 temporary construction jobs and 17,000 to 21,000 permanent jobs. Opponents cite the societal costs associated with gambling.
Our organizations havent taken a position on casinos. But we believe the much bigger issue is that, while the country added about 25 million jobs over the last two decades, the number of jobs in Massachusetts stayed the same.
Flat job growth is not a strategy for long-term success. Skilled workers have made Massachusetts a leading destination for high-paying jobs. But focusing only on high-end employment is a recipe for disaster, creating a society of haves and have-nots. Broader job growth creates social mobility, encourages affordability, and enhances the regions ability to attract the best talent.
Creating a level playing field should be the foundation of an overall vision for long-term job growth. It begins with streamlining the process for starting a business. Massachusetts must be a destination that holds opportunity for new immigrants and other start-up entrepreneurs, not just the established and affluent. And while Massachusetts will never be inexpensive, costs matter, and there is much that can be done to reduce them.
A 2006 study prepared by Global Insight for Pioneer Institute found that the cost of land was the source of the states high residential and commercial rents, wages, and overall cost of living. The problem often stems from rigid local zoning ordinances that discourage development. In the midst of a deep recession, its easy to lose sight of problems such as the supply of affordable commercial space not keeping up with demand. But over time, this has been a main driver of rising costs, making each new job more expensive to create.
The cost of employer-provided health insurance continues to rise much faster than inflation. The Commonwealths 2006 health care reform law was a first step toward addressing the problem. It has successfully expanded access to health insurance, but a laser-like focus on cost containment will be necessary if it is ultimately to succeed.
Massachusetts cost of electricity, one of the highest in the nation, is also hindering economic growth. With the states reliance on expensive fuels to generate power, escalating costs to replace an aging infrastructure, and the willingness to constantly add surcharges to customer bills to fund unproven renewable technologies and other costly experimental programs, further double-digit rate increases are certain.
Massachusetts employers also pay more than $1.5 billion annually in unemployment insurance taxes double the national average on a per-employee basis. The taxes support a system that offers the richest benefits in the country, and one in which its easier to qualify for benefits and recipients can collect for longer than in other states.
With people hurting across the state, this isnt the time to cut unemployment benefits. But a set of reforms proposed last year by Associated Industries of Massachusetts would have saved $366 million without slashing benefits.
Today, businesses in seasonal industries like construction and tourism routinely lay off the same employees every year, using unemployment benefits as kind of a payroll subsidy. Some small-business owners take advantage of this loophole by laying themselves off and collecting for part of each year. Charging those companies much higher unemployment insurance tax rates would provide a disincentive for bad behavior and lighten the load for companies that arent abusing the system.
Whether to build casinos in Massachusetts is an issue that merits spirited debate. But casinos alone arent nearly enough to make up for the Commonwealths failure to grow jobs. Regardless of how the casino debate turns out, state policymakers should spend far more time and effort on reforms that will spur substantial long-term job growth.
Rick Lord is president and CEO of Associated Industries of Massachusetts. Jim Stergios is executive director of Pioneer Institute.
The Employment Picture Is Improving, but It Remains Fuzzy
The July unemployment numbers released by the U.S. Department of Labor were lower than expected. Thats the good news.
However, the difference between the projected figure and the 9.4% unemployment statistic for that month was a tenth of a percent. Thats not too bad for news these days.
Across the nation in July, employers trimmed 247,000 jobs, in contrast to the staggering January losses of 741,000. On the day the unemployment numbers were released, President Obama said that the worst may be behind us, and that we are pointed in the right direction.
The Bay State posted a seasonally adjusted 8.6% unemployment rate for the month of June, and while there were other Mass. communities that spiked into double digits, Hampden County edged below, at 9.8%.
Thats still a large number, and its reflected in what Rexene Picard, executive director of FutureWorks in Springfield, one of 37 statewide career centers, observes every day. The big thing that were seeing is increased traffic for job seekers. Theres a line out the door when we open. At the same time, we are seeing fewer job opportunities. Our job postings have gone down from this time last year about 38%. Thats a significant drop.
At United Personnel in Springfield, owner Mary Ellen Scott and Executive Vice President Christine Phillips took a positive look at the local job market. Talking about the manufacturing sector, historically one of the backbones of the local economy, Scott said that our business has definitely been picking up over the last few months.
Joe Ascioti, owner of Reliable Temps Inc. in Agawam, feels less buoyant about the governments predictions. While the latest statistics are better than feared, he said, lets face it, we arent creating a lot of new jobs yet. Theres still too much uncertainty out there right now.
In these days of economic turmoil, a reduction in bad news is good news, most would agree. Massachusetts has consistently been at the lower end of the nations unemployment rates, but in talking with area employment professionals, the big question is, when does the good news get good?
While the number of job-seekers and the dearth of jobs Picard sees everyday are both somewhat historic, she is confident in programs that are available for area workers.
Western Mass. is better in some ways than the Boston area because we dont see the highs nor the lows that they do, she said.
Some new growth in the job market comes from familiar sources, she continued. Health care is, and continues to be, the leading source of employment for this area and the state.
Our largest employer in the area is Baystate Medical Center, she continued. They are reaching out to us now, because we know that there is going to be a need to hire around 1,000 people a year for the next several years. Anybody thats thinking about a new career, or switching gears, I encourage them to look at that field.
In the manufacturing and construction sectors, new claims for unemployment in Hampden County totaled more than 3,000, and Picard agreed that the bulk of her June numbers comprised those industries. But with funds from the American Recovery and Reinvestment Act, one of the largest stimulus packages in history, funds have come through the pipeline to address those losses. Picard said shes pleased to see substantial money going into both new training and retraining for the manufacturing base of the area.
But its difficult, she continued, because this money essentially is going to replacement jobs. Not a lot of new companies are moving to the area.
Manufacturing continues to be an important facet to the regional workforce, despite decades of offshore attrition. Picard said that the Regional Employment Board of Hampden County is involved with numerous initiatives to keep people in those positions.
The manufacturing industry constitutes 17% of the area workforce, and those generally are jobs that are well-paying positions, she said. The REB is doing a lot of work in the area with manufacturers, asking where the need is for new employees and what they can do to successfully build pipelines into those industries. Its an aging workforce in many cases.
Phillips and Scott say there are signs of some light at the end of the tunnel for the manufacturing sector, and theyre seeing it in the growing number of positions theyre being hired to help fill.
I dont think we were expecting manufacturing to be doing as well as we have seen already this year, said Scott. Phillips agreed. It has picked up, and it is definitely where we have seen the biggest trend change. We were not anticipating certain clients to have needs this year; our analysis was that we werent planning on having any orders.
The improving picture can be attributed in part to what appears to be greater consumer confidence, as reflected in some of the numbers being posted by retailers, said Phillips.
I think that if you look at certain other sectors, lets say retail, their numbers began the year pretty low, she said. What they predicted for this quarter has been completely surpassed. There was a real concern about what kind of money would be spent. What retailers are seeing is that people are still spending. Thus, analysts look from this time last year to now, and their orders are far greater than they had anticipated.
Phillips and Scott agreed that the numbers these days are not as good as they would like them to be. While some clients are hiring more than they anticipated, many employers are, by and large, holding out for more assurance that the economy will strengthen.
Frankly, said Phillips, Id be more nervous if we were making giant leaps in gains in the economy. It is more-steady gains that build peoples confidence. If it goes up in a sharp increase, people think that it could similarly go down in a sharp decline.
Ascioti told BusinessWest that he sees government forces sometimes playing a contradictory role with regard to the employment picture. Unemployment taxes can be punishing to small business, and that size employer is one that needs to be given more consideration, he maintained.
What Im worried about right now, he said, is where are we going with all this? As the saying goes, Wall Street doesnt like uncertainty; well, neither does small business. Unemployment costs for many businesses are going to go up 30%. For politicians in Boston to think that they can just raise the sales tax, raise the meals tax, raise this, mandate that, and that businesses are just going to sit there and say, oh yeah, no problem. Well just raise our prices well, its not an elastic environment. You cant just do that.
In this area, he said, a lot of what he hears is that business is still off 25% to 30%. We have a couple of clients that are doing better than normal, he said. Are they where they were a year and a half ago? No. Are they better than 80% of what their competition is doing? Yes. But can I pick one specific industry? Unfortunately, no.
Looking at the larger forces of federal and state regulation, Ascioti said, what we need to do right now is bring our costs in line. I wish the government would understand that its small business that creates the jobs in America. If the climate isnt positive for them, its going to be impossible to hire people.
The day after the newest unemployment figures were released, the New York Times reported that employers are no longer in a panic, and the pressure they felt to get rid of workers in a hurry is diminishing. That seems to be the sentiment in the Pioneer Valley, but the overall employment picture remains fuzzy because there are too many variables to make a clear assessment.
One thing is fairly certain, however: until the economy gains both momentum and sustained stability enough for employers to take on more workers, the only real good news is that the bad news is getting better.