Monday, December 4, 2023

Finance case study: Goombays Grille & Raw Bar in Kill Devil Hills

Kill Devil Hills on the Outer Banks in Dare County is typical of many oceanfront villages in North Carolina in that most businesses are locally-owned. Except during tourist season, it’s a quiet, oceanfront community where everyone knows everyone.

Tony Sipe, who is in his mid-40s, has lived in Kill Devil Hills his entire life. For the past dozen years, he’s worked at Goombays Grille & Raw Bar on the beach road, Highway 12. Goombays has been established for decades; its undersea murals, Caribbean-style entrees and collage of license plates on the wall create a popular ambiance. Hours extend until midnight, with dinner served until 10 p.m. Last year, longtime owners Charles and Karen Hennigan decided to sell.

“They were great, a married couple who worked all the time, like five or six days a week,” Sipe says. “It was family owned for 32 years.”

Sipe decided to buy.

A friend, Chris Miller, who is in his early 50s and had worked at Goombays in its first few years, joined Sipe in the purchase.

In April 2022, they contacted the Small Business and Technology Development Center at Elizabeth City State University, which referred them to a local branch office and Matt Byrne.

“He helped us so much. I have an economics background, and Chris has managed huge restaurants, but we would have been lost if not for Matt,” Sipe says. “We were prepared for the front side of the business, but it was the other stuff like financing where we were not, and that’s where the SBTDC came in. We could ask questions you wouldn’t be able to ask your friend, or a guy down the street.”

“No one here knew what was going on but Tony and Chris and myself, and the sellers,” Byrne says. “One of the more interesting things was, they [Sipe and Miller] knew who they wanted to bank with so they drove to Wilmington to talk with a branch there, and it became apparent they needed to work with an SBA [Small Business Administration] loan.”

The men’s communication link with Byrne through the financial navigation process was what made the sale possible, Sipe says.

“He kept discretion through the process. We live in a very small town. If you’re in the restaurant business, most people are friends. Discretion is the best advice on the financial side, and he went over every single number with us, answered every email, picked up the phone every time we called,” he says. “It was like he was working with only us.”

Byrne, Sipe says, has been involved in banking and financing in the area and “knew a lot of restaurant owners, including the ones we purchased from. He’s entrenched in the restaurant business.”

When Sipe talked with SBA loan personnel in Wilmington, “Matt knew what they would ask before they even asked, and he got us 100 percent prepared with answers we needed to answer their questions. We met a dozen times in a six-month period, not counting phone calls.

“It’s like getting a home loan, but there’s a lot more to it. They have to know that the business is profitable, that there’s no debt, that it’s a feasible enough business model that would make enough money to handle debt, and it was a lot of the same questions, over and over. A lot of paper. A lot more detailed than a home loan. It was less about our personal finances and more about how the business performed over the last five or seven years.”

Sipe and Miller got a 10-year loan and took over Goombays in April this year.

“They knew it was going to take a while,” Byrne says. “They got a good, early start with it and knew it would take six or eight months. They wanted to close at the end of 2022 — that was our first goal. But when you work with the SBA, you have to factor in some extra time, which for them was April [2023]. So the sellers carried the weight of the downtime during the offseason, and they (Sipe and Miller) didn’t start ownership until we started the
season here.

“Their July was 10 or 13 percent above last year, and last year was a record, so they’re doing very well.”

In August, toward the end of tourist season, business was steady.

“We’re doing OK. We’re doing it exactly the way they thought we would when they gave us the projections,” Sipe says. “We’re really busy in the summer, so we try to save a little for winter when business slows down.” Sipe and Miller have a staff of about 35, 20 in off-season. They open at 11:30 a.m. and have a lunch menu, dinner menu and “linner.” “That’s a concept the previous owner came up with because we wanted some of the lunch items on the dinner menu, like you have to still sell the tacos and you have to sell the burgers, but because of space in the kitchen, we can’t offer the whole lunch menu,” Sipe says.

Much of their seafood is local catch — oysters, clams, shrimp.

When they sold the restaurant, the Hennigans had a request.

“They wanted to make sure it wasn’t going to be someone who would tear it down and put up a condo. And they were very involved in charitable organizations around here, and they wanted someone who would be heavily involved in the community,” Sipe says. “I’ve lived here my whole life, and Chris has been here about 30 years, so if they were involved in a local charity, we will be involved with that local charity. They wanted someone to continue the same model they had. And, of course, we are.”

Goombays Grille & Raw Bar
1608 Virginia Dare Trail, Kill Devil Hills
Open six days a week | Closed on Tuesdays


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