Still, repairs and boat building are the core of the Knight & Carver business. Brown says that by day three of the war, he was feeling distracted and "downright cranky." There was nothing but bad news coming out of Iraq. Driving into work that day, passing the empty Navy boatyard, he couldn't help but think how "the mess" would affect new business orders, and how the soldiers were faring. His mood was buoyed, though, when he arrived around 7 a.m. that day, at least in terms of business. He walked past the repair yard, where a dozen or so vessels, resting on out-of-the-water blocks, were in for major repairs. The yard was full, jam-packed. "At least we're doing okay out here," Brown says. Repair brings 70% of Knight & Carver's bottom line.
By March 28, a client who was sitting on the fence about refurbishing a vessel finally gave the go-ahead to replace an aging deck. By April 4, several more calls came in for refurbishing jobs, everything from totally rebuilding an Italian vessel to electrical work. Total dollar value: about $1.5 million. "It was as if the war came, and some people said, let's just do something," Brown says, pointing out that Knight & Carver is now working on two new yachts and will begin work on another in May. By April 9, the fall of Baghdad, there were 22 boats in the yard ready to be refurbished, ahead of a "modest plan" for 2003.
What's more, the company was working on 300 wind turbine blades for one energy client alone. The plan, says Brown, is to keep pushing into this more stable source of revenue. "We don't want to be the biggest player in wind energy," he says. "But we do want to be a player."
As U.S. troops marched through Baghdad, Brown heard news of a competitor in the yacht repair and boat building business that had filed for bankruptcy. "Maritime is taking a beating," Brown says. But, he says, he received yet more inquiries for purchases in the week Baghdad fell, and the inquiries are "pretty big-ticket. You don't count that stuff until you get the check. But we have some clients who can pay for a $100,000 repair with a credit card. They don't even blink. I think we're going to be okay."
Getting the Price Right
PROXIMO RESTAURANTS, WASHINGTON, D.C.
Roberto Alvarez and Rob Wilder pride themselves on their timing, and with good reason. Ten years ago, they opened a tapas restaurant in a Washington, D.C., neighborhood that was slated for urban renewal and often resembled Dodge City on a bad day.
Now, more than a decade later, that first restaurant, called Jaleo, has morphed into a mini-empire of Spanish-themed eateries under the umbrella name of Proximo Restaurants. There are two of the low-priced Jaleo restaurants, the second in downtown Bethesda, Md., plus a brand-new moderately priced restaurant that opened in October called Zaytinya, and the upscale Café Atlantico, both of them located in downtown D.C. The restaurants have become D.C. institutions, with combined sales expected to reach more than $18 million this year.
Around mid-March, Alvarez and Wilder figured it was time for a much-needed vacation. And then the war started. "I'm on a French island, Roberto is in Mexico, and the U.S. is at war," says the 43-year-old Wilder. They remembered all too well that their restaurants had suffered revenue losses of almost 15% across the board after September 11. It took more than a month to recover. For restaurateurs, even a slight dip in sales can decimate earnings. "Restaurants are pretty much day-to-day," Wilder says.
D.C.'s Jaleo is usually jam-packed. Diners can wait more than a hour for seats at one of the restaurant's 50 tables, each stacked with small, brightly colored plates to hold the tapas. Its raised bar is usually hopping. On day one of the war, "sales were noticeably down," says Wilder, but in large part that was because an angry tobacco farmer who claimed he had a bomb drove a tractor into Constitution Gardens, paralyzing D.C. for two days. When they returned home on March 31, Wilder and Alvarez discovered that nighttime diners clearly needed a break from the 24-7 barrage of war news. All the restaurants were jammed, with an increase of about 5% over expected sales. One of the main reasons: Customers seek value in a harsh economic climate. The food at all their restaurants is relatively cheap. A diner can get away with about a $20-25 per person tab at the Jaleos and Zaytinya. Even the top-priced Café Atlantico only costs about $35 per person. Compared to a vacation cancelled as a result of war, dining out is inexpensive for D.C. professionals.
The effects of war have become part of a "sad kind of new normal," Wilder says. "Even in Tel Aviv, where people live day-to-day wondering when the next attack will come, restaurants are packed. People want to be together." Adds Alvarez: "I've learned that people continue to enjoy life no matter what. Life does go on and even the most tragic events do pass."
A Key Executive Joins the Fight
DATAWORLD, BETHESDA, MD.
"The biggest mistake I made was trying to do Jeff's job, as opposed to having someone do it," says Dave Doherty, CEO of Dataworld, a 10-person information and engineering service provider based in Bethesda, Md. The Jeff to whom Doherty is referring is Jeff Mcintosh, who used to run Dataworld's computer networks but was now off in the reserves. "That meant I was paying more attention to doing his job instead of what I needed to be doing in product development and marketing. And that had a negative impact on the revenue stream."
After posting a six-figure loss in 2002 and facing the challenges of a recession and looming war, Doherty assumed in January that 2003 would be another year in the red. Almost four months later, Dataworld was "a very profitable company again." Doherty hesitates to put his finger on any one contributing factor, but he believes that finally going to war after months of anticipation took at least some uncertainty out of the economy, propelling nervous customers to move ahead with projects. Revenue in March was about four times what it was in November, providing a cash infusion that put the company on stable ground.
