EAST LANSING, Michigan – 2017 had been a busy year for Shangdong Li, a Chinese student who just graduated from MSU’s hospitality business school. After a year-long preparation, his Cajun style seafood restaurant, Crab Hero, finally opened in November.
It all started when one of his friends recommended The Angry Crab, a chain restaurant that features Cajun-style seafood in Chicago.
“It was delicious, and they had many customers,” Li recalled. “Then I traveled to Las Vegas, New York and Orlando. All of them have the same type of the restaurants. So I started to think, ‘Oh, I like this kind of flavor and it matches my major. Why can’t I just open a restaurant like this in East Lansing?’”
That proved easier said than done. The biggest problem that he encountered was the sauce. In Li’s mind, the sauce is the core of Cajun food, and good sauce can elevate the taste.
“I was originally thinking about ordering the sauce from those restaurants or join the franchises, but their answers are no,” Li said.
So Li did plenty of research based on cookbooks, articles and videos. He experimented with various combinations, adjusted the proportions of the ingredients and developed his own secret sauce after five months.
Then he faced the second problem: finding the location for his restaurant.
“Location is very important,” said Li. “We have to find somewhere that customers can easily get access to, so we talked to several landlords and finally decided on Albert Avenue, right next to the MSU campus.”
Location is a big factor in starting a successful business, local entrepreneurs agree. Ruohong Zhao, a Chinese engineering graduate from MSU and the co-founder of Bashu, a Chinese hot pot restaurant that opened in June, chose Hannah Boulevard on the east side of the MSU campus.
The location is good, Zhao said, because of the large number of Chinese students who live in the nearby Hannah Lofts and Townhomes.
Zhao was inspired to start his restaurant after seeing a post on social media and decided to invest in August 2016. When he spoke of the business preparation period, he laughed and said: “There are problems everywhere.”
For starters, he couldn’t afford a renovation team, so he had to decorate by himself.
“I remember that we were installing the chimney outside and it was snowing. We were frozen after 20 minutes and had to go indoors to get warm. Then the same process repeated,” said Zhao.
He and his partner sold everything they could, including their cars. When they started the trial opening, their bank accounts combined had less than $300.
But it all became worthwhile when Zhao saw the steady sales increase every month. Now over 80 percent of his customers are returning customers, and they continue to bring new customers upon recommendation.
“A good product can speak for itself.” Zhao said. He thought the best way to promote is the word of mouth.
“I don’t trust in digital promotion because those comments and recommendations can be faked. It will be a huge disappointment if the tastes of the food don’t live up to the recommendations,” said Zhao.
Crab Hero did otherwise. Li divides his promotion strategy between online and offline. By establishing homepages on Facebook, Instagram, Yelp, Tripadvisor and WeChat (the most popular Chinese social media), he interacted and gathered feedback from customers. Li also adopted social advertising that can target specific groups of people to get maximum exposure.
As for offline promotion, he pinned flyers on the billboards of campus dorms and sponsored Chinese student organizations.
Both Li and Zhao have a long-term plan of opening franchises in other cities.
“Every week we have customers from Ann Arbor that drive an hour to here just for our hotpot,” Zhao said proudly. He planned to open two franchises later this year or in the next year.
As for Crab Hero, Li is considering opening a franchise in a large city like Boston or Chicago this year.
“The competition will sure be fierce, but we can’t be afraid of it and stay in the small city forever,” said Li. “There are so many possibilities. We can even extend our business to China.”
Li said networking and connections are keys to make the business thrive.
“The major connection of international students here is the international students,” Li said. “But you will need connections outside of school to start a business. For example, you will need lawyers and accountants.”
Thomas Fehrenbach is the community and economic development administrator from the city of East Lansing. His office serves as a liaison between the city, the Michigan State Foundation and the Lansing Economic Area Partnership.
Fehrenbach recommended the MSU Innovation Center as entrepreneurs’ go-to place to find resources for financing, structuring businesses, and marketing for start-ups. These services are free.
“We give service to everybody and try to make businesses successful. East Lansing has always been diverse because of Michigan State,” Fahrenbach said.