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Ben Arnold calls Corporate Caterers' growth through this year's economic turmoil "driving through all the smoke on the racetrack."
"You know, if you're racing and there's a wreck in front of you, a lot of people would slow down and stay behind the smoke," said the founder of the local catering firm. "Not me. I step on the gas pedal and blow through it."
In a year when many food and restaurant providers are struggling, Arnold is competing for Wichita business as his company celebrates its 10th anniversary by growing.
He has a deal for Cafe 151, replacing the Piccadilly Express at Cargill's downtown headquarters, landed the restaurant and catering at the Broadview Hotel, has regained the contract to cater special events at McConnell Air Force Base and will move in January to the former Olive Tree space on Rock Road, doubling the company's size.
It's heady stuff for an entrepreneur whose first expansion ended in its own brand of economic turmoil.
Low-debt growth is Arnold's game plan to expand his catering operation in the midst of a recession.
"Maybe a year out, in 2007, I saw the economy going south and I hit the gas pedal," Arnold said. "I had a gut check, a feeling that the climate was changing. It's my chance to grow while other people are pulling back."
The fall
Corporate Caterers did very well in its first three years — until Arnold bought Ray Party Rental to operate with it.
"In 2003, Corporate Caterers was doing extremely well, and it seemed natural that if you had a catering business with a business that provided a dance floor, linens, chairs and the like, it would be a natural fit," he said.
Instead, the party rental company's obsolete inventory dragged the firm down.
"Business was strong, but the inventory was in such bad shape that you had to rebuild the inventory from the ground up," Arnold said. "I didn't make it."
The party rental business lost $250,000 in two years, dragging Arnold behind in his state taxes.
"I got behind on a lot of things, actually, but I got everybody paid," he said. "But I didn't have the state taxes paid, and the uneducated side of me didn't realize that they can come after everything, including the furniture in your house, if you're behind on taxes.
"I got the IRS paid, but the state didn't get paid, and they didn't like it."
The solution? Unload the party rental company.
"I wrote a check at closing to the people who bought the company," Arnold said, chuckling.
"Now, that's selling a business at a loss."
The rise
The first step toward Arnold's fast-forward was slashing the company's debt load, which he estimated at more than $300,000 three years ago.
"Something I felt like I absolutely had to do," Arnold said. "There are less numbers of caterings to get, so I had to make sure that I maintained our numbers."
With debt drastically reduced, Arnold began plowing that money into an avenue many businesses run from in a recession: advertising, including print, radio, television, billboards.
"Catering, like a painter or a plumber, you need us when you need us," he said. "You'll find us when the sink springs a leak. So my goal is to be top of mind.
"When it's time to open the Yellow Pages because Susie wants to get married, there's a big luncheon Friday at work or there's something going on at church, I want Corporate Caterers on your mind: 'Oh, yeah. I know them.' "
Many food providers struggle — or close — because of debt load, said Don Sayler, president of the Kansas Restaurant & Hospitality Association.
"It's a big issue," Sayler said. "On the national average, an operator makes 3 percent net profit, so if you have to pay debt service it doesn't leave much for you."
Debt isn't an epidemic in food service, but it strains many operators, Sayler said.
"Margins are always small," he said. "So when sales go down, as they have, it's not uncommon to find that it's not enough to cover a company's debt, let alone enough for an owner to live on."
But cutting debt is a fine line for a business, said David Harris, president of Wichita's RelianzBank.
"When we see someone with a minimal amount of debt related to their business, it's as good as no debt in our eyes," Harris said. "It tells us it's a pretty solid company."
In January, Corporate Caterers will move to the 400-seat Olive Tree banquet facility, doubling its capacity to host and cook for events.
In the next two years, Arnold expects to double the company's 11 full-time employees and add up to 50 part-timers to his 118-member staff.
Growing up with food
Arnold began his food career at age 12. So much for child labor laws.
"Washing dishes in a saloon in Texarkana, Ark.," he said, laughing. "They hid me behind a painted window so nobody could see that they had a little kid washing dishes from 10 p.m. to 4 a.m. every Friday and Saturday during the summer."
That was the start of a largely transient restaurant career as a troubleshooter: for Houston's, Spaghetti Warehouse, California Dreaming and Amarillo Grill, the last of which brought Arnold to Wichita in 1995.
"My job was generally to go unit to unit, fix it, build it and then walk away from it," he said.
In 2000, Arnold and some partners had opened Black Canyon Grille in Wichita and were operating it when he had an "epiphany."
"It was my day of reckoning," he said. "I wanted stability. I had been constantly moving, constantly changing."
So he put the plans in place for the catering operation and hasn't looked back.
But Arnold retains some strong opinions on the state of the food industry.
"My advice to anyone who wants to get into the food industry is don't," he said. "This isn't a hobby. Anyone who wants to start a restaurant, I tell them, 'Write me a check for $50,000, and I'll disappear. I promise you the loss and frustration will be smaller that way.' "
Arnold rejects the notion that Wichita has too many restaurants.
"Wichita has too many poorly operated restaurants. That's the key," he said.
"All the problems that exist at a restaurant exist inside that restaurant. It's not the economy. It's not the construction. It's not the competition three doors down. It's your business model, and you'd better face that."
