Here is a transcript of Wil’s conversation with Scott Maitland, owner at Top of the Hill Restaurant and Brewery in Chapel Hill NC. Aspiring restaurateurs can really learn a lot from Scott and his journey as a successful restaurant owner.
[WIL BRAWLEY:] Good morning. It’s Wil with Schedulefly and this is another in our series of conversations with restaurant owners. And I’m really excited today to be talking to Scott Maitland. Scott owns Top of the Hill, which is a very famous spot in Chapel Hill. If you’ve ever been to Chapel Hill, North Carolina, home to the University of North Carolina Tar Heels, you have most likely heard of Top of the Hill, been there, and had fun there. Top of the Hill was Scott’s idea. He started it out of law school. Scott, I’ll let you take it from there. Tell us how you got started with Top of the Hill, and whatever you’d like to say about your place.
[SCOTT MAITLAND:] Yeah. Well I was in my second year in law school back in 1994 and my now landlord was building the building on the main corner of Chapel Hill, and he announced he was going to put a TGI Friday’s up where Top of the Hill is located now. And Chapel Hill is kind of progressive, anti-chain place, and the whole town was upset about that. To be frank, I was upset about a chain restaurant dominating downtown Chapel Hill. So I was perfectly suited to do this. I had absolutely no experience and no money, but I decided that I would stop a chain restaurant from dominating downtown Chapel Hill.
[WIL BRAWLEY:] Wow! That’s cool. So you were in law school, so that was in ’96. So you guys have been humming along for close to 15 years now.
[SCOTT MAITLAND:] Yeah. It’ll be 14 years this September. Like I said, it took me two years to raise the money, and half a year to build the restaurant. So we opened in September of 1996, and that was literally the day that Hurricane Fran hit Chapel Hill. My opening night, I’m on the third floor of my opening night, I honestly thought that the restaurant was going to be flooded because we had so much rain coming in that the outdoor patio drains couldn’t handle it and we literally getting inches of water inside the restaurant on the third floor.
[WIL BRAWLEY:] Nice way to start with a bang. I remember that storm and that was a big one. Tell me more about this. This is fascinating. So you’re in law school. You’ve got no experience running a business, no experience owning a restaurant. You got this idea. It took you two years to raise the money. Tell me about that. How did you go about raising money to get this place started?
[SCOTT MAITLAND:] Well I’ll tell you, that’s a book in and of itself. You just put together a business plan and you start making pitches and you get feedback from your pitches and you revise your business plan. I look back at my original concept which was I was going to get ten investors to each give me $100,000, and realize how naive that was. I ended up migrating to a model that we were going to be using an SBA loan and using obviously equity investment from investors yet to be found. The big breakthrough was ultimately getting a SBA loan contingent upon me raising equity money. And not to make this a long story, but there were 18 banks in the triangle, which is our geographic area. Obviously Chapel Hill, Raleigh, and Durham. There are 18 different banks here at the time. All of them said “No” to me. I was at bank number 18, and he finally said that he would give me $50,000 dollars if I would raise $1.15 million in equity. I asked him to put that in writing, and I went back to bank 17, who I had just seen four days earlier. I said “These guys gave me $50,000, but I like you better, and I really want to do business with you, what do you have for me?” And they gave me $75,000, and by the time I worked back up to bank number five, they gave me a full half million dollar loan.
[WIL BRAWLEY:] That’s great.
[SCOTT MAITLAND:] Contingent upon me raising the rest of the money. But once I got that SBA loan that established some credibility and that allowed me to start getting some investors.
[WIL BRAWLEY:] That’s fascinating. That reminds me of that Lending Tree’s tag line, “When banks compete you win.” You really got them competing. You went from $50,000 to $500,000. Is that right?
[SCOTT MAITLAND:] Yeah. And I’ve got to tell you, it was one of those classic things. I mean I honestly it was one of those deals where I had nothing else to lose and so I said, “Geez!” I realized at some level everybody’s in competition with each other. So a bank vice president that had denied me a loan, but whose competitor gave me one, might be interested in just outdoing his competitor. I was able to ride that gravy train all the way back up to a full at that time full maximum SBA loan. And it gave me credulity. All I needed was one person to buy in and I was able to leverage that out. Another thing that I tell people all the time is that when you try to raise money, people will say, “I’ll be the last $50,000,” or “I’ll be the last whatever.” So I just ask them to put that in writing. I finally learned. Please put that in writing and they did. On the last day I called up five different people, so I said, “Okay, you are the last $50,000, and “You’re the last $25,000,” and “You’re the last $10,000.” But while we were raising money I was able to show folks those letters and say “Look, I’ve already raised $125,000 from folks who will put it in on the last day.”
[WIL BRAWLEY:] That’s cool. This is good. This is good practical advice for somebody that’s in your shoes. That’s what we’re hoping to do with this series – have people that are…maybe they’re in culinary school or maybe they’re in business school or law school or whatever. They want to start a restaurant, and they’re trying to figure out ways to just get going, which is the hardest part. So two years in, you raise the money. You guys get started the night of Hurricane Fran. What’s happened since then? You guys have been very very successful. As I said, you’re just an extremely well known name in Chapel Hill and the Carolinas and the Southeast. Probably all over. You guys have got some great beers I know that have won a lot of awards. Going into this, what were the things that you focused on that you thought, or knew, or hoped would make you successful?
[SCOTT MAITLAND:] Well I’ll tell you that I’ll always feel like a poser when I’m surrounded by my brethren in the restaurant industry, because the reality is that although I love food and beer and care greatly about our product, what really motivated me was our sense of community and the location of the establishment being where it was and what it can mean from downtown Chapel Hill. Basically two weeks before I had the idea for Top of the Hill I decided I was going to live in Chapel Hill for the rest of my life. Two weeks later this opportunity came up, this idea came up and it was all about trying to live in the apartment at the corner of Franklin Street and Columbia. It’s been about the community ever sense. And I did open up another place in Raleigh called Top of the Hill Grill, and had that for about two years. But what I’ve learned from that experience is that I don’t really like being in the quote-unquote “restaurant business” so much as I really like being in the Chapel Hill business. I love being in Chapel Hill. My place in Raleigh was taking my focus away from that. So I think in some ways, I know this is kind of a weird answer, but in some ways I think what make us special is we are absolutely dedicated to our community and see ourselves as a big part of that community.
[WIL BRAWLEY:] Well I think that’s a really neat point. You’re focused. So I’m assuming that means that you guys, you do a lot in the community. I bet you’re involved in a lot of ways. Tell me about that. What do you guys do in Chapel Hill?
[SCOTT MAITLAND:] We’re about ten yards from campus and basically we’re the front porch of the university. And I think we take great pride in the fact that on any given day we have people making life impacting decisions in Top of the Hill. Should I move to Chapel Hill and become a student. Should I take a faculty position? We get a lot of folks that get engaged and get married because of, again, our location right in downtown. So we just try to create an environment that is going to facilitate all of those things and I think at the end of the day when you say “Hey, we’re about community,” that doesn’t just mean being at charity events and all that. Of course we do all those things. But I think what it really is listening to your customers and creating a product that fits the needs of the community that’s around you. That’s pricing, that’s the type of foods, etc.
[WIL BRAWLEY:] It affects every big decision you make, or even little decisions. I like your focus. You and I talked a little bit offline before we started this about how we’re trying to really have a laser focus here at Schedulefly on independent restaurants. And the main part of that is, and we’ve written about this in our blog, is that it’s what we enjoy, it’s what we like to do, and it helps us not get distracted. It helps us make the right decisions. It’s a neat way to do business. I don’t want this to be about us so I’ll shut up. But I guess my point is I can relate to that. I think a lot of folks like yourself that own independent restaurants tend to have that same mentality. Once you start growing and expanding and new locations – not that that’s wrong – but for some people it can cause them to lose focus. Maybe even lose a little bit of the passion. I suppose did you have as much passion for your restaurant in Raleigh?
[SCOTT MAITLAND:] That’s what I’m saying. I think I did, but I also think that I realized that what suddenly happened was is that I was a visitor to both restaurants suddenly. No matter how much time you spend in either one, you’re split. My hats are off to people that can run multiple locations. It’s unbelievable to me. I think a lot of that also depends on the format of your business. The whole idea for our brand to begin with was keeping Chapel Hill free of a chain restaurant. I just think the whole idea was rooted in the sense of community. I didn’t feel that in Raleigh. I came back and I think that you’re exactly right. There is a universal truth. Figure out your passion and what’s important to you and make all those decisions that you make in day to day running of your business through that lens. And that can be “Hey, I want to be the finest Asian restaurant.” You have got to figure out a niche. Our niche is being, at least in my mind, the first place at Chapel Hill where all of these weird elements of our community –
students, professors, townies, everybody – can come together and be in one place because that’s what’s what was missing when I was in school.
[WIL BRAWLEY:] Awesome. I love it. So how about this? You mentioned earlier that you went to West Point, and then of course you said you were in law school at Chapel Hill when you had the idea. And I thought it was neat because you had a lot of people telling you that you had to unlearn some of the military discipline and leadership style that you learned at West Point, but maybe that wasn’t the case. Maybe you’ve be able to leverage that. Tell me about that.
[SCOTT MAITLAND:] You know, people said “You can’t run this place like you did in the military, yada yada yada.” And for some reason I took this at face value. I figured these folks know these things. Well you know what I’ve come to realize, is people just don’t understand how the military works. I mean they just have this idea that you give an order and people just jump up and do it. I will tell you, especially when you’re in combat, I’m sorry but you need to be able to motivate and lead people in a way that’s different than relying on just authority, because at some point getting shot by somebody else is going to outweigh whatever authority you have unless that authority comes from true love and belief. And so what’s interesting is that I think that people misunderstood. They thought that a military leadership style was simply: you give orders and people follow it. And what I realized a couple months into it is that any organization benefits from the setting of fair standards and the making sure that everybody lives up to those standards. And that you have to put the organization first, even if you’re the owner. You have to put the organization first. There isn’t some kind of exception that oh, well everyone gets to do that except these three guys. And so people have said, “Well what’s better: a tight ship or a happy ship.” To be honest, I’ve never seen a tight ship that wasn’t a happy ship. That doesn’t mean you need to be Captain Bly to have a tight ship. But you do need to have standards that are fairly applied across the board.
[WIL BRAWLEY:] Yeah. That’s really cool. It’s interesting because I’ve been talking a lot to owners during this series, and everybody has their own way of looking at things. Everybody has their own way of doing things, and they’re very different. Although all of you have been successful. Seems like a lot of it is figuring out what you’re good at. What you know, what you’ve learned, what your passion is and then applying that. So people say you can’t use military leadership style in restaurants. Well that’s because they probably weren’t in the military and before they owned a restaurant. And you went and figured out how to do it, and figured out how it works, because that’s you, that’s who you are. And it seems like that’s a lot of what we’re getting out of this series, is people taking what they’ve learned and what they know and applying it, and there’s many ways to skin a cat. You are all doing it very differently. But I know one thing, Scott, that all of you are doing, and I want to ask you about this. It seems to me that every successful owner I’ve talked to has figured out a way to really get their employees engaged and bought into what they’re doing. They share the passion. How have you been able to do that? That might be expanding what you were just talking about. How do you keep your employees motivated, excited, engaged about what’s going on at Top of the Hill?
[SCOTT MAITLAND:] Well first of all, and this goes for everything that we do at Top of the Hill: It’s sure not the Scott Maitland Show. I’ve got an amazing cast of folks at Top of the Hill, and general manager, Guy Murphy, who has been there for over ten years now. Started off as a bartender and worked his way up. Our chef’s been there for over ten years. It is a group effort. What’s cool is we can proud of our culinary and proud of our beverage program. For example, our grilling staff has been with us…John Libby actually has been with me 15 years, and our head assistant brewer has been there 13 years. We are proud of those things. But we also get to be proud of them within this idea that we are important to both the town and the university in terms of creating this sense of community. And I think that people believe me when I tell them new staff members that it’s not just, “Hey, we’re working at a restaurant in a strip mall.” And I don’t mean any offense to restaurants in strip malls, but if you’re coming to work one day and you’re feeling a little disengaged, you need to recognize that there are folks coming to Top of the Hill that are going to make your decisions about Chapel Hill in general based on the one lunch or dinner they have at our restaurant, because oftentimes that will happen. People visit the university and they go have a bite to eat. Since we’re the closest one to the university they choose us. It’s one of these things that we feel a responsibility to the entire town. And I know that sounds stupid and if you’ve never been to Top of the Hill you wouldn’t really understand. If you have been, you would understand that we are…in many ways we straddle the line of literally geographically and socially between the town and the university.
[WIL BRAWLEY:] Yeah. You have something that is clear to me that many successful business owners have, which is a very strong and clear passion for what you’re doing and for your vision, and your vision is BIG. I love it! It’s bigger than just owning a restaurant. It is providing a very important icon for your town and your university. You mentioned that people make important decisions about Chapel Hill there. They propose there. They think about important decisions in their life. I think if you didn’t look at it that way…there’s lots of restaurants and lots of good locations, if you will, that come and go. Maybe you wouldn’t be as successful as are if you didn’t look at it that way. Is that fair?
[SCOTT MAITLAND:] Yeah. Right. Exactly. I think that’s the lesson I learned in Raleigh. I think Top of the Hill Raleigh was a fine restaurant. But because of a number of reasons, location, the fact that I didn’t live in the community, etc. It was just going to be that. It was just going to be a place that people could have a bite to eat. Which, again, there’s nothing wrong with that, but for me, I want my organization to be involved in something larger. It’s interesting going back to this idea of figure out what it is that you’re passionate about and then that forms every decision. My decision we tied into the local community was the big reason why I decided to be a brew pub. I loved the idea of having a product, making a product that you could only buy at our place. And it wasn’t some where you could go to every bar in the world and order it. It’s interesting because a lot of folks in the brewery world aspire to be in every bar and all that stuff. I really like the fact that basically other than us being the first micro cannery in the south, a couple years ago more as a promotion than anything else, you could only get our beers inside our restaurant, and I think that’s kind of cool. It’s a unique experience. It really is.
[WIL BRAWLEY:] Yeah. Keeps people coming back. I bet you guys have got unbelievable word of mouth because you’re unique and you’re different and you have that mentality and you can’t get the beer anywhere else. And people come there and they say, “Where should we go grab a bite to eat, or where should we go have a sit down and take a break and have a beer?” And I bet 95 percent of the time anybody there in town will say, “Oh you got to go to Top of the Hill. If you’re going to go to one place, go there.”
[SCOTT MAITLAND:] Well I’m going to put you on my marketing staff. How does that sound? I hope you’re right. I don’t know if you even know this Wil, but we just doubled the size of our restaurant. We ended up actually changing the laws about historical buildings in downtown Chapel Hill and we ended up building a second floor in the old Carolina Theater building that was next to us and we created a special events space that can handle parties with 20 to 300. Then we created another bar which we called the Back Bar. What’s cool about that is, as far as we know, it’s the first establishment in the south that has its own cast conditioned ale program. It’s kind of cool. It’s on the cutting edge of microbreweries right now. We continue to try to expand and do things that are cool. Again, we keep asking, “What does this community need?”
[WIL BRAWLEY:] The first what kind of program?
[SCOTT MAITLAND:] It’s a cast conditioned ale program. So it’s kind of on the cutting edge of microbreweries. What it really is is a throwback to how beer was made from 500 years ago until basically World War II, when commercial refrigeration started getting around. And so this is what we did – when we built the back bar, we had specially designed for us a cooler that basically replicates the English cellar and stays at about 52 to 54 degrees, and when we manually pump the beers through it pumps up into the glass. So it would be the same product. And our brewer is English, and he’s been brewing now for 40 years. He actually has had his own pub where they did this. So this is an authentic cast conditioned ale product that you’re not going to find anywhere in the United States. I guarantee it. It’s a lot fun to do it, and it’s a lot of fun to compare. We’ll often have the same beers on tap as we do on regular tap. And so it’s interesting to compare the flavors of the beers when it’s a cast conditioned product versus traditional using some CO2, all that kind of stuff. I thought it was fascinating, I thought I was going to have to explain this to people what this all about. And I’m going to tell you what. Cast conditioned fans found us like within the first week. It’s crazy. It was amazing how much cast conditioned beer we go through.
[WIL BRAWLEY:] That’s awesome. That’s very cool. I didn’t know you guys expanded. Congratulations on that. That’s an important thing for your business.
[SCOTT MAITLAND:] We couldn’t have done it without Schedulefly. I’m not joking. It’s very complicated. So you guys have really helped us do that.
[WIL BRAWLEY:] Cool. Well good. So you guys have done a lot of cool things up there. I think this is just awesome. I know you’re real busy. I don’t want to keep you much longer. You’ve been really successful and it’s clear listening to you, the vision you have, and I think it’s very clear why you’ve been successful. It’s cool that you’ve really built a true icon up there in Chapel Hill. To be honest with you, I thought you guys had been around a lot longer than you have. When I think of Chapel Hill, I think Top of the Hill. One more thing I want to ask you about is… again, we were talking off line and you said, I’ll butcher this quote, but you said something to the effect of, “We don’t do marketing, we make news.” Tell me a little bit about that.
[SCOTT MAITLAND:] Well I’d like to say is “I don’t like to buy advertising, I like to make news.” So for example, that in some ways was the heart of my decision to become the south’s first micro cannery back in 2005. So we were the first people in the south to put micro brewed beer in can about fifth in the country to do that. And you know now micro canned beer is the hottest thing. Of course in my infinite wisdom we no longer do it. But it’s just literally we ran out of beer. We had excess beer and we thought, “We can put this in cans, it’ll be a lot of fun.” It was all driven by the fact that I like to golf, and I couldn’t get a micro brewed beer on a golf course, because they’re all in bottles. What all this ended up doing was it ended up this whole program got us into the Wall Street Journal and MSNBC and CNBC. Got us a lot of press in the News and Observer and all of that. And so it really spurred in-house beer sales. The $50,000 it cost me to get into the canning business I think got me hundreds of hundreds of thousands of dollars of media exposure. That’s the kind of thing I like to do as opposed to deciding, “Hey I’m just going to go ahead and buy $20,000 of advertisements.” And so I think whatever you can do to try to make news is good. Along that line and following that same idea of making news and then also following our passion. We’re getting ready to launch North Carolina’s first vodka distillery. We purchased a building off Franklin Street, off the Chapel Hill News building, and we’re putting a distillery in the back. Hopefully this fall or winter you’ll end up seeing top vodka come out on the shelves and in North Carolina liquor stores.
[WIL BRAWLEY:] Nice. That’s great man. You guys are always thinking forward and on the cutting edge and it’s just so cool to hear all the things you’ve done and are doing. Let me ask you this. When you make news like that Scott, are you guys natural or do you guys use PR firms? How does the Wall Street Journal and all these large media organizations find out about this?
[SCOTT MAITLAND:] We have not used a PR firm. I tell you what. We talk about the need to get PR person on there. Honestly one day we looked at ourselves and said, “Well, Jesus, we get a lot of PR. What would happen if we actually had somebody trying to get PR?” We’re maybe looking into the possibilities of that. But my sense is if you do something that’s interesting and then let some people in the press know, they’re going to pick up on it. One of the advantages of Chapel Hill is, for example, I was on the board of visitors at the university with someone that worked for the Wall Street Journal. We just got into the conversation, and decided to do a story on this, and that led to the MSNBC thing. It’s one of those things where it’s kind of an embarrassment of riches here in Chapel Hill. We don’t have to work as hard as maybe some places in other towns to get PR.
[WIL BRAWLEY:] Sure. Cool man. Well hey do you let folks who go to Duke come to your establishment, or any rules against that?
[SCOTT MAITLAND:] It’s funny because you’d be amazed as much of our customer base actually comes over from Duke, although Durham has a lot of neat stuff now with restaurants. I think a lot of kids from Duke still come by. I’ll let anybody in as long as their money’s green.
[WIL BRAWLEY:] I hear you man. That’s cool. All right well good Scott. This is just awesome. I just can’t thank you enough for your time. I’ve just learned so much in the few minutes talking to you. I know anybody that listens to this will just eat up so many of the cool ideas and advice that you have. I really appreciate it.
[SCOTT MAITLAND:] Absolutely man. It’s my pleasure. And like I said, I’m delighted your company is going strong and you provide such great service for us. Thank you very much.