More than anything, Margo Provost ached for — in business — the kind of security she rarely experienced in a 1950's childhood that began in an Ohio orphanage. Instead, she got the scare of a lifetime.
Six years ago, Provost jettisoned a long career as a health care executive and poured her savings into renovating and re-opening a famous but bankrupt restaurant outside Salt Lake City. Log Haven's opening on Nov. 7, 1994, defied considerable odds:
• Provost had no prior experience owning or operating a restaurant.
• Her first lender nearly reneged on a promised $400,000 construction loan after work had begun. That loan came through but another for $250,000 did not, forcing Provost to sell her home, max out credit cards and liquidate retirement savings.
• Construction problems led to cost overruns totaling $350,000 — not the $50,000 she had expected on a project originally budgeted at $650,000. "I couldn't breathe," she recalled tearfully in an interview. "I began to hyper ventilate. Had to put my head between my knees."
Provost's story illustrates the pitfalls faced by entrepreneurs who make dramatic career changes — especially when entering an unfamiliar industry with notoriously high failure rates among start-ups. Her tale also shows that seemingly bulletproof business plans can be blown apart by unanticipated events.
Rudy Mick, a hospitality management consultant in Boulder, CO, summarizes the grim bottom line for would-be restaurateurs: "The industry has an 85% mortality rate within the first two years."
Six years after the contractor delivered his devastating news, Provost, 49, has pulled off a remarkable turnaround. She arranged for an 11th-hour loan to cover the mammoth cost overruns, and hired a chef who lent panache to a menu of contemporary cuisine reflecting traditional French, Pacific Rim and California cooking. Revenue is running at $2.2 million a year.
Set in a bucolic canyon offering picture-perfect views, the 225-seat restaurant is regularly included in "best of" lists. Last spring, for example, Salt Lake Magazine named Log Haven tops in a category that included restaurants at Park City and the area's other fashionable ski resorts. "It's considered the best restaurant in the state," says former Salt Lake mayor Deedee Corradini, who held her wedding reception there.
A drive for security
Provost was adopted from a Marietta, OH, orphanage by a Cleveland couple when she was 3-1/2. They were strict disciplinarians: Provost describes her upbringing in harsh terms. |
After an extremely tense start, Margo Provost now feels at home in her Log Haven restaurant. The venture represents a life change for the former health care executive
That early experience has influenced her personal and professional life. "A lot of my energy throughout my career and my life has been to provide safety for myself," she says.
Provost got her first paying job at 14, working in a convenience store. She attended the Ohio State University, where she paid her way by working at burger joints and in nightclubs, playing drums, saxophone and keyboard.
At OSU, she received a bachelor's degree in the mid-1970s in bio-chemistry and nutrition. She got a job as administrator for OSU's out-patient medical clinics — sending her on a path toward health care administration.
Provost eventually landed at Control Data, then FHP International, a health maintenance organization based in Orange County, CA, where she rose to vice president of operations over information technology. Although she was financially successful — a house on the ocean, several cars, extensive world travel — she didn't feel the sense of security she'd been seeking.
The go-go 80's began to bear down on her, as did the long work hours. She recalls her feelings this way: "You're only as good as your last achievement. And at any time the company could be taken over, and you could lose your job. The only people I know who don't feel that way own their own company."
At 38, Provost bought a house in Phoenix, bringing her closer to an FHP colleague. They married in 1992.
After her husband was promoted to a job in Utah, they moved to Salt Lake. Margo tried without success to get a health care job in the city. She was told she wouldn't get as prestigious a position as she'd held at FHP. Then her husband suggested a solution that Provost initially thought was plain nuts.
Log Haven had once had a sterling reputation among locals. The log cabin mansion was built in 1920 as a wedding anniversary gift for the wife of a steel executive. It became a restaurant in 1958. The bankruptcy filing came about a year before the spring day in 1994 when her husband suggested buying the place — not to operate as a business but to serve as the Provosts' home. Margo would oversee its restoration.
Its previous owners had abandoned the site on New Year's Eve, with dirty dishes left on tables, rotting food in a huge, walk-in refrigerator, piles of pastries dumped outside. |
"He brought me up the canyon to Log Haven, and I looked at it, and I thought to myself, 'He is crazy. This man is crazy,'" she says.
With no prospects for a job in the city, and weary of traveling as a consultant, Provost decided to reopen Log Haven as a way of generating income.
Over two months, she developed a business plan by reading everything she could find through the library and trade associations, then applied her previous experience in the health care industry to building a budget. Provost received an oral commitment from a local bank for a $400,000 construction loan, and simultaneously sought a second loan from the same bank, for $250,000 to cover the cost of leasing equipment.
Set in a Utah canyon, the 225-seat restaurant is regularly included in "best-of" lists
Although she didn't have the loans signed, construction started, and Provost paid the first bills out of pocket, expecting the bank to reimburse her. She says she waited and waited after being told paperwork glitches at the bank were the problem. Finally, she says, a loan officer told her privately that the bank wouldn't honor its oral commitment. Now $250,000 in the hole, Margo Provost pushed the issue, and eventually got the construction loan, but was turned down for the lease-loan. (She covered her lease costs by liquidating assets, including her retirement savings.)
Meanwhile, other problems erupted. Her general contractor fell seriously ill, and his supervisor failed to rein in expenses, according to Provost. That led to the $350,000 in cost overruns, she says.
Eventually she persuaded a second, smaller lender in the area, Barnes Banking, to roll up all the debt into a new, permanent loan. Her loan officer, Curtis Harris, says his gut instinct after reviewing her business plan and background was that she had what it would take. "You can tell the people who are going to make it work—do or die. They're going to do everything possible."
Mick, the Boulder, Colo., hospitality consultant, says many restaurant start-ups fail quickly because of poor cash management. Money moves in and out so quickly, and vendors can be merciless in their credit terms.
Relying on her experience in the health care industry, Provost runs income and expense figures daily—something her employees weren't used to in previous jobs. "And they're paid based on meeting those objectives," she says.
Having survived the tumultuous early years, she says Log Haven taught her not to look outward for a sense of security. "It's not the corporation you work for, it's not the small business you create, it's truly within yourself—the belief that you have the ability to generate what you need," she says.
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