Founder of Liquid Art House
Interviewed on September 29, 2017
Liquid Art House, founded by former lawyer and investment banker Ruta Laukien in Boston in 2014, is a restaurant and art gallery. The menu changes every season and features fusion cuisines of Asia, Latin America, and most notably Lithuania, where the founder Ruta Laukien is originally from. A curator organizes monthly exhibitions of contemporary art works, especially by up and coming artists in the New England area, displayed throughout the space and available for purchase.
What is your background before founding Liquid Art House?
I majored in economics and psychology. I originally wanted to become a lawyer, so I worked a little bit and went to law school. While in law school, I did two internships at law firms. Then I learned about investment banking and decided that I wanted to do investment banking, so I ended up getting a JD and MBA dual degree and went straight to investment banking. I thought it would be the best training I could get in the shortest amount of time. I worked at Bear Sterns for 7 years. They failed in 2008, so I moved to Boston for my husband, who was my financé at the time, because he wanted to move to Boston. I worked for a small boutique investment bank. I liked it at first, but then I started losing passion for it. I wanted to do something on my own.
I always had this idea for Liquid Art House, not the name, but the idea, of creating this place that combines food and art. I thought this would be the time. I would either do it or not. I had been talking to my friends forever, and they encouraged me to go for it. I entered Mass Challenge because the hardest thing about starting a business is when to say go. I felt like I needed a deadline, so I entered to give myself a deadline. I had to submit a business plan and make a video to describe my concept, and it pushed myself to get it going.
How did you choose the location?
I spent a year looking for a place with real estate brokers. I looked everywhere in Boston. My first idea was Back Bay. I wanted to be on Newbury street because that’s where the galleries are, but the rent was just way too high. I looked at Boylston area, but the rent was still too high, so I looked at other areas that were more reasonable. I looked at downtown a lot, but it was around 2011 and 2012, and downtown just didn’t feel right. There weren’t many activities back then. Now it’s more developed, but at that time I felt there wouldn’t be enough traffic.
I was actually very close to getting a different location. We negotiated the agreement and were pretty close to being done, but I just thought something didn’t feel right to me. I would go home and couldn’t sleep at night. Right before the deal was done, I happened to be walking by the current space, and I saw a for rent sign. There was just something about the place that spoke to me and felt right. It was an intuition. I called my broker and asked her why she didn’t show this to me. She said they only talked to chains not independent restaurants. She thought they would never talk to me, so she didn’t even mention it. I told her I wanted to see it, and I sent my two-minute Mass Challenge video to the developers. They ended up liking the concept a lot and agreed to work with me.
How did you decide the interior design of the space? How did you design the seating?
I designed most of the it by myself and also worked with an architect who is a friend of mine. The two of us spent almost a year designing. We went to shops and picked everything. At the very end, we did have an interior design company that helped us pick furnitures and brought in samples to look at.
The amount of space dictates the number of seats. I want the restaurant to be spacious so the tables are not next to each other. Since it is also an art gallery, I want people to walk around and see the art.
How did you come up with the menu?
The chef wrote the whole menu. I had the concept, so I gave the guidelines on the type of food and pricing. I tasted everything and gave my opinions on what worked and what didn’t from a consumer’s standpoint. I considered myself a good consumer since I used to dine out almost five nights a week. We change the menu seasonally and have specials.
How did you find the food suppliers?
A lot of them ended up reaching out to me. When I applied for the liquor license, all the liquor distributers started reaching out to me. When you bring in a chef, you also bring in the team that works with the chef. Chefs like certain vendors and have relationships with them, so when I switched chefs, I also switched suppliers. We also try to work with a lot of local farms.
How do you estimate demand and decide how much food to prepare?
It’s very tricky and you never know. It might be a Saturday night, so you expect a lot of people to come in and start preparing the food, but then a snow storm hits and everyone cancels, and the food becomes wastes. There were also times when we ran out of things. It is very important to have a good executive chef. Many people think a chef only needs to cook well, but that’s really only a part of the job. To be successful, the chef needs to have a business sense, can budget, and know how much to order. We order everyday and have deliveries everyday, so we can manage much closer. Liquor companies only deliver on Saturdays, and on Sundays nobody really delivers.
How did you establish the art gallery side of the business?
For the first exhibition, it was very hard to find artists before I found the space and when the concept was still being developed. Some of the artists wouldn’t want to display their works in a restaurant. I tried to tell them it was not just a restaurant. I called it a house for a reason. People had this image of a Starbucks with a couple pictures on the wall. Then we finished renovation, and they saw the possibility and the way the art would be displayed. The big selling point is, as I told the artists, at the end of the day, it is about eye balls. Galleries these days are just not too well attended. But here I have over three hundred people coming through each night, and all it takes is for one of the three hundred people to like the painting. I am able to offer exposure and eye balls that most galleries can’t offer.
How do you work with the artists?
We work like a traditional gallery and earn a commission.
How do you decide the hours?
We only open for dinner. At first we had brunch on weekends, but in the summer, everyone goes away for the weekends, so we normally stop brunch from end of June to Labor Day. We hope to launch lunch quite soon.
BUILDING THE TEAM
Who is the first person you hired and how did you find that person?
The first person I hired is the chef. I was speaking to some chefs through friends and recommendations. Then I was describing my concept to a PR person, and she told me about the chef, and the chef reached out to me. She had an art background too. I was pretty much ready to sign with a different chef, so I told her I was already too far down the road and committed to someone else, but she insisted to meet me for coffee. The coffee ended up being a two-hour conversation, and I decided to go with her.
Who is on your team now and how did you hire them?
Executive chef, general manager, and director of operations are the key people. We have a curator. We have an event manager because we do a lot of events, including private events as well as our own events. The rests are servers, cooks, dishwashers, etc. It takes a pretty big team since we open seven days a week, but nobody actually works seven days a week, so I need to double the staff. I interviewed all the management level, and my director of operations and executive chef hired all the servers.
How do you know how much to pay them?
I look at industry average and their experience and also see how much they want. I don’t necessarily pay more than the competitors, but I think people want to work here because they like the concept. It’s nice to work at a beautiful place where it is always changing. I think we are also the only kitchen in the city that has windows, because normally kitchens are in the basement or somewhere where they don’t see the light of day.
How did you find the administrative and supportive staff such as HR and accountants?
I talked to everyone and tried to get recommendations. I believe in personal recommendations. I went to a couple restaurant conferences and met a lot of providers as well.
How did you finance the company?
Originally I wanted to bring in investors, but I was struggling with finding someone because I was a first restaurateur and had no track records. It was hard to convince people, and the people who were interested wanted a lot of returns because this was risky. I had lots conversations, but I couldn’t find the right partner and I wouldn’t take my first born with anyone just because I needed the money. So originally I financed it all by myself. Some of it I did as a loan.
How did you come up with the budget?
I had a preliminary budget in mind, and I discussed with the contractors and subcontractors who put the budget together, and we figured if we could cut here and there when we over spent.
How did you market the restaurant?
I have a marketing and PR person. I did a lot of social media, and I grasped towards word of mouth. We did art openings and events. We also partnered with some magazines. For example, we did a Boston Magazine party with around a hundred people. I personally don’t believe in paid advertising. I think word of mouth and social media would be more effective since traditional advertising has become more expensive. I’d rather spend money on treating people free appetizers. I think that would carry more weight.
What social media strategies do you use?
We use a lot of hashtags, follow the right people and engage with the followers. It takes time. We tried to post and tag people in the restaurant, art, and drink world to attract more attention.
How did you do on the first day?
Before we officially opened, we did a pre-opening event for friends and family for two evenings. We pretended that we were actually opening, so we got to practice the service. I got everyone’s feedback. It was very scary on the official opening day because I was concerned that people wouldn’t come, but people came. We built up a lot of buzz ahead of time.
How were sales throughout the year?
For us it is very seasonal. Spring and fall are our best seasons. In July and August most restaurants tend to lose money in Boston, unless you are on the water or a touristy destination. The locals tend to go away, so the usual crowd is not here. Fall is our best season because of holiday parties until the end of December.
How do you manage the competition with other restaurants in Boston?
I think the toughest part of competition is actually about employees. There has been a shortage of employees. It’s hard to find good people and get the right amount of people. Restaurants always need people because there are so many new openings. A lot of those employees like to go to the next best thing, so employees do tend to jump. I try to build loyalty by building culture and personal relationship with them. There are people who are loyal, but there are people who jump around. It really depends. Kitchen is more stable, but servers are mostly students, so they leave and change schedules. We talk to a lot of art students. They prefer here because of the art aspect. We give them a commission if they help us make a sale, so that’s an extra bonus.
The restaurant industry was completely new for me, so I talked to as many people I could such as restaurant owners, managers, and chefs. I knew I still wouldn’t know everything I could, so I made sure to surround myself with a good team. The accountant helped me a lot with finances. The accounting firm that we use works with restaurants around the country so they have the comparables. That’s very helpful to know what’s the normal margin because most restaurants are privately owned without public information.
One of the biggest challenges is when my first chef left. I build the concept a lot around her, so it was pretty challenging to find a new one especially since I was under time constraints and have a short period to find a new person. The chef is the key member of the team. We changed the menu when the new chef came. The timing wasn’t ideal because it was right in the middle of the holiday season. Initially we didn’t change the menu because all the parties were pre-booked and the menus were picked, so we ran the existing menu until the end of the year and launched a new menu in January.
I think for every entrepreneur you think you would do well and better than you anticipated, but that’s not always the case. For example, I think I would be good at finance because of my background, but my projections are always wrong. I expected this amount of growth so I staffed according to how much I thought I would make, but in the end we came short and had more costs. So I learned to adjust the size of the team and expenses to match the revenues.
You will make mistakes. Everybody does. You need to make decisions and make them quickly. Ultimately you are the decision maker but you don’t know the right answer. I was used to having a boss. Originally I didn’t know what the right decision would be, so I would wait and try to figure out the answer, but time is essential. There are no perfect timing or perfect information or perfect answers. Another key is to recognize when you make the wrong decision. Admit it early. Make changes and move forward instead of being stuck with the mistakes.
Do as much research as you can. Have a deadline and just go for it. Don’t wait for the perfect time and the perfect opportunity. Just go for it and keep moving forward. Don’t be afraid of failures.