Although she does not come from an entrepreneurial background, Karen Reedman successfully founded KRonHR, a local human resources (HR) consulting firm, as well as co-founded Trio Bistro and Lounge. Both businesses are based in Ottawa.
Growing up in downtown Toronto, Karen attended Seneca College to study law and criminal detection. Upon graduating, she took on a job responding to 911 calls in Toronto. She left that position after two years in favor of moving to Newfoundland, and two years after that moved again, this time to Halifax, where she returned to school as a mature student and completed a commerce degree specializing in HR and marketing at St Mary’s University. Many years later, after a career in Human Resources, Karen moved to Ottawa and took on a permanent job in HR.
Trio Bistro and Lounge
Karen’s sister was already living in Ottawa and this was the first time in a while that they would be living in the same place, as there is a ten year difference in their age. This was a new opportunity for them to get to know each other, and it became increasingly clear that they wanted to build something together. Their challenge was finding a business that would complement both of their skills.
She suggests that “there are two different types of entrepreneurs. There are the ‘I have a passion and I’m going to make a career out of it’ group and others who hold the view that ‘I don’t want to work for somebody else, so I’m going to do my own thing’.” She and her sister belonged to the latter group.
Karen’s brother-in-law, John, was working at a small restaurant when it suddenly went up for sale. John had spent his entire life working in the food service industry and had experience in every aspect of the business except ownership. Since John could manage day-to-day operations on his own, buying the restaurant seemed like a no-brainer. “When this place came up for sale, my sister came to me and said Karen, ‘I think I found the thing’.” After a meeting with the previous owners – with whom had been there for over 15 years and demonstrated that it was a very stable venue – they made the decision to purchase the restaurant. For this business, “the key was looking for opportunities, essentially being at the right place at the right time.”
They assumed responsibility for Trio. The small bistro provides a comfortable place for small gatherings of people to grab a bite to eat and a drink while indulging in the energetic atmosphere the restaurant has to offer. An aspect of their business model involves contributing to the local community. All the artwork in the restaurant is made by local artists and Trio does not take any commission from the sales. Karen explained that “This way we have beautiful art on our walls without a cost, and since [the artists] are entrepreneurs themselves, we get to support local entrepreneurship.” The business also tries to buy local, organically-grown food when they can do it without harming the company’s bottom line.
That introduces one of the underlying challenges in the food service industry - it's very low margin. Most of the money they make is on cocktail sales since the cost of purchasing ingredients nearly outweighs the revenues they make on food. Karen observed that “Even on our busiest nights, the kitchen is not a source of profitability." This is one of the reasons why the restaurant is only open in the afternoon. The shorter operating hours also reflect consideration for limited storage capacity to expand their menu and the fact that the evening hours offer a more “atmospheric” dining experience to draw in clients.
Karen’s focus in the business is on handling contracts, compensation analysis, and other activities that align with her HR training and experience. With a background in marketing, her sister oversees the company’s social media presence and other marketing initiatives. While the sisters focus on the behind-the-scenes running of the business, John and a fourth member of the team, Dan, use their extensive experience in restaurant operations to manage the day-to-day business of the restaurant.
The group of four have been running Trio for the past two and a half years. Over this time, they have observed seasonal patterns in the business which require operational adjustments. The business peaks in sales during the winter, when more people are looking for a cozy place to have a drink. The summer is often their down season since more people are out doing other activities in the evening. As Karen explained, “we definitely have peak seasons and to adjust, we have to change our staffing, our menus, and our art to feed [the fluctuations in demand].”
Since Karen’s role in running Trio was largely behind-the-scenes, she had time to continue working in HR consulting. Being somewhat risk-averse, she still wanted a level of income security. “I’ve been in core HR for probably 25 years and 8 of those years with a huge international firm, [Hay Group],” she mentions, “But after doing HR for 25 years, and then having worked as a consultant for an international firm, I’ve got the confidence that I could meet client needs without all the infrastructure.”
Deciding that she wanted a change of scenery, she opened her own HR consulting firm, KRonHR, where she is the sole consultant. “I needed a little more security and that’s why I came to entrepreneurship a little later in life. I already had a reputation, and I kind of knew what I was doing – and knew what I didn’t know. Now I felt confident to do it on my own.”
Today, Karen runs Trio for fun and out of interest for the industry and operates KRonHR to ensure a steady stream of income and to fuel her passion for working in HR consulting.
I asked Karen what she thought were the most important qualities/skills that attributed to her success and that she would advise other up-and-coming entrepreneurs to follow. She responded with:
- Comfort with risk
As an entrepreneur, you must be comfortable taking financial risks to further the development of your business and be able to keep your head when things don’t necessarily go to plan. “It’s not always going to be feast, sometimes there’s going to be famine, and you have to be able to ride it out.”
- Internally driven
In entrepreneurship, there won’t be anyone telling you what to do or how hard you should be working. It is up to you to pave your own path to success. “I'm sure that some entrepreneurs make it because they are financially driven, but you have to be internally driven to work hard, and for good results.”
- Able to balance priorities
It’s important to balance priorities when launching a company because you can’t have everything. “It’s like when you purchase your first house; it’s not going to be your dream home. [The same applies to starting] a business. You’re going to have to let some things go in the beginning.” This might involve finding new ways to reduce expenses without impacting the overall quality of your product/service.
- Able to juggle a lot of demands
“When I was doing my MBA at Carleton University, and there was a young man there, very successful entrepreneur, and he sold his business for a lot of money,” she recalls. “At the time I was working for a company and said to him ‘I would love to be you and not have a boss’. He just laughed and said, ‘I do have a boss, and it’s not good’.” In entrepreneurship, any stakeholder in your business essentially acts as your boss. They have expectations that you will deliver to certain standards and consistently rely on you to provide a high-quality product. To meet their expectations, you will end up being your own worst boss, since you will probably be harder on yourself than anyone else.
- Creative and innovative
You will find that running a business is very cyclical, and you have to be constantly feeding the pipeline with new ideas. “That's the stressful part, you’re always hunting and working at the same time. If you’re an entrepreneur, taking a break might be your downfall because it’s a 24-hour job,” Karen mentions.
I also asked Karen what she thought were the most common mistakes made in today’s entrepreneurial practices. She answered with:
- Not selling something people need
“A common mistake is saying ‘I have a passion, and [I built a great product out of that passion], therefore it will sell’. That's not necessarily the case.” Your product must fulfill some sort of need or people will not buy it.
- Not recognizing everyone is a potential client
You have to go about your day as though everyone you meet could possibly become a future client. “In other words, never say anything negative to anybody, always be positive, and constantly network.” A lot of entrepreneurs don’t realize this however and drive away potential customers or investors as a result.
- Overextending yourself
It’s easy to overextend in terms of trying to grow a business too quickly. As an entrepreneur, you should be careful and ensure that you’re not expanding beyond your own reach. “It’s very tempting to get new stuff, and you want to overextend yourself not just financially, but also in terms of your work.” Learning to live within your means is not only an important skill in entrepreneurship, but also useful in daily life.
- Having the wrong attitude
Entrepreneurship should appeal to you because it’s what you want to do it, not because you don’t want to do something else. “What I’m saying is that if [your mindset is] ‘I don’t want to work for the big guy, I want to be my own boss’, that’s running away from something [you don’t want].”
- Not doing adequate research
Our economy is shifting so quickly that in order to stay competitive in today’s market you need to do substantial research on changes in consumer behaviour, market trends, what your competitors are doing, and anything else that may impact your business. This will help you avoid mistakes like releasing new product lines that nobody wants. When your product doesn't sell, you could end up losing a large investment of both time and money which could have been avoided by doing some research ahead of time.