Change Your Life: Opening a Restaurant

Donna Hammond had been making her living by making food for decades, but it wasn't until she was 52 and couldn't find a chef job that she realized the dream of owning her own place. Here's how she opened a successful restaurant in the depths of the recession.

"In my twenties, I was working on my masters in psychology and had no idea what to write my thesis about. I went to visit friends in Jackson, Wyoming and got hooked on cooking," Hammond says. Instead of pursing psychology, she moved to New York to attend the Culinary Institute of America in Hyde Park.

Learning From Alice Waters

With her credentials as a chef, Hammond landed a job working with famed chef Alice Waters at Chez Panisse in Oakland, California. "She and Julia Child and James Beard defined American cooking. Alice set my philosophy of farm to table," Hammond says. She remembers farmers bringing pigs to the back door of the restaurant, and vegetables warm from the earth.

Hammond stayed in California for five years, then headed back east to New York, chef-ing at various places over the years. When catering business at the Westchester restaurant where Hammond was catering director vanished in the recession, she couldn't find another job. "I put out hundreds of resumes but no one wanted to hire a 52-year-old chef," Hammond says. So she opened a cafe in the village where she lives, Cornwall-on-Hudson, New York. "I always dreamed of owning my own place. Finally I had to," she says laughing.

Her Business Plan: The Price Is Right

"People thought I was crazy opening in the middle of the recession." But she knew if she assessed the market correctly and got her price-points right, she could make it work. "I knew the village needed a place with good quality food that doesn't cost an arm and a leg. Four people can have dinner here for under $100. They can afford that twice a week, and that's what keeps us going."

She rented a space with a dozen tables inside plus streetside seating under a generous striped awning. "The cafe is like a block party. Everybody knows each other. As we struggle through our ups and downs, that part has always been a success." In mid June, the Hudson Street Cafe turned two.

Hammond made another strategic decision: She didn't apply for a liquor license. "If I had one, I'd feel obligated to be open six to seven nights a week. People bring their own wine and beer, and I don't have the liability of selling liquor. I don't have to worry about the kids who work for me slipping a bottle of vodka in their back pocket and getting in trouble. But the main reason is I wanted people to come for the food."

Early Success, Then The Worst Winter Ever

The cafe was an out-of-the-box success. "The first year we were where I thought we'd be in three," Hammond says. Then in year two the winter from hell struck, with snowstorm after snowstorm. "We were off 60 percent. People had to pay so much for plowing they couldn't afford to eat out." Through the tough months, Hammond kept her staff. "They have families," she says. With better weather, business picked back up.

What's Next: Bringing Her Food To a Wider Audience

Hammond has a few ideas for the future: "I may do a special harvest dinner this fall. And we're having a Cuban pig roast on Saturday night to celebrate our second anniversary. My partner Anne can make her fabulous Cuban rice and beans." Hammond just contacted a farm-to-table organization to package her signature corn and oat bran pancake mix, which she'll sell at the restaurant and at local farmers' markets. "The goal would be to have Whole Foods pick it up. Maybe I'll package other things down the road."

Even in the dark days of the snowiest winter in decades, Hammond had no regrets. The hours are no worse than when she cooked for someone else. "There's satisfaction in knowing that good or bad, all the decisions are mine."

To others who dream of owning a restaurant, Donna says this: "Know that it's not a cash cow. You can make a living but you won't get wealthy. Know your location and your customers," adding with a laugh, "And have a lot of money. Our second week, the compressor blew on the walk-in freezer. It cost $2,500 to repair and we lost everything in it — shrimp, calamari, ice cream, french fries."

"I get up every morning and I'm happy about what I do," Hammond says. "That means a lot more than money to me.

Learn More Secrets To Launching a Successful Business

• Turning a Hobby Into a Business
• Working for a Cause