Katie: This is the BusinessMakers Show heard here and online at theBusinessMakers.com. I'm Katie Laird and I am sitting in one of the most beautiful bits of paradise that I've been in in quite awhile with a fellow named Mike Micallef on the CF Ranch. Mike, welcome to The Overtime Show.
Mike: Thank you for having me, Katie.
Katie: Yeah, so we have just been fed a sumptuous feast (Laughter) and we've been hearing stories of hunters, of business, and many, many other things. Can you tell me a little bit about what it is that you do? I think you are maybe one of the most multi-faceted people that I've ever gotten to speak with.
Mike: Well I'm pretty lucky. My dad's kind of an entrepreneur. So after I graduated college, I worked for a hedge fund for a couple years and then kinda came back to the family business. The first business I went and worked at was a plastics company up in Chicago and then I've kinda come back to Texas and I'm in charge of all the non-manufacturing businesses right now. So we've got the Reata Restaurant. It's located in Fort Worth and Alpine. We've got the CF Ranch located here in Alpine. We've got a development here in Alpine called Sierra la Rana and that's where, primarily, I spend most of my time.
Katie: Excellent. Okay, so we went from hedge fund management to plastics to ranching to restaurant. (Laughter) That is awesome.
Mike: It's all managing.
Katie: It's true. It's all business. It's all business. So let's talk a little bit about what we're sitting in the middle of right now. What happens here? I mean you have cattle but what else are you guys doing here?
Mike: Yeah, I mean cattle's the biggest source of revenue for the ranch. The second biggest one would be hunting, which we kind of do a kinda full service hunting operation where we guide people. We feed 'em; we house 'em here on the ranch. So we take it through all those different steps. We also do some pinhooking of race horses and pinhooking's what's called is when you either buy a weanling and then sell it as a yearling or buy a yearling and sell it as a two-year-old.
Katie: Uh huh.
Mike: And we've also got some mares. And then you'll sell those babies as weanlings.
Katie: Oh wow. So I mean are you actually doing training on the premises as well? Or you're just helping -
Mike: It's not so much training because the training really happens between their a yearling and a two-year-old.
Katie: Okay, okay.
Mike: So - but you are prepping the horses and - which means that you're actually even swimming 'em. You're taking 'em out on the track because you're really building those muscles and getting 'em ready for that next step.
Katie: Okay. Now your family hasn't been in the ranching business for generations and generations. How did this all come about?
Mike: No, my dad was really from Detroit and -
Katie: Detroit where there's not a lot of ranching is there? (Laughter)
Mike: Yeah, there isn't a lot of ranching. I think he used to listen to like Wolfman Jack and some of the pirate radio stations that were, I guess, across the border from Del Rio when he was a kid.
Mike: And always had this dream of coming to Texas. And the original business was silicon manufacturing which was primarily for the auto industry, like spark plug boots -
Mike: - gasket seals for cars and also, you know, a lot of your appliances you'll have a silicon seal because they can handle that temperature variation. So he moved that manufacturing company down to Texas in 1975. I think when I was six we bought a small place between Ft. Worth and Weatherford and that's really where I got to grow up. And then we bought this first ranch, we call it our headquarters ranch - it used to be the old Pollard Ranch between Alpine and Ft. Davis back in 1993.
Katie: And then how did you make the transition into the restaurant business from there?
Mike: The restaurant business is 'cause my dad had the ranch out here and he loves food and he didn't have a good place to eat.
Katie: Okay. That is a good reason. (Laughter)
Mike: And then, you know, we've got the small restaurant here in Alpine. We've got a really big restaurant in Ft. Worth and how that happened was Bob Semple, who was President of Bank One at the time came out and had actually brought somebody out hunting at the ranch and he ate at the restaurant. At that time there was a private club in the top of the Bank One Building that had gone out of business and he said, "Why don't you think about opening up a restaurant here?" So that's what kinda brought us to Ft. Worth. It was a cool location, 35th Floor of the Bank One Building.
Mike: We were eventually had to leave that building in January of 2001 and then have - open up a couple blocks away in Sundance Square in Ft. Worth.
Katie: Okay. And so I've heard you speak a little bit about the new Ft. Worth restaurant.
Katie: And tell us a little bit about that. I mean how big are we talkin'? What's big?
Mike: It is about 22,000 square feet. It's spread out over four floors.
Katie: Twenty-two thousand square feet? (Laughter)
Mike: It's a big restaurant. It's a monster to manage but it's a cool restaurant. We also have a really big catering department at the restaurant and then when the Ft. Worth Stock Show and Rodeo is running, we actually have three restaurants there. We've got the Reata at the Rodeo. We started it in 2002 when we really - between when we had to move out of the Bank One Building and before we had the other restaurant. So we tried to keep our staff employed, so that's really when we got into the catering business.
Mike: So we had that Reata at the Rodeo since 2002 and then we started - we took over the Back Stage Club three years ago so it's Reata at the Back Stage Club and then this year they asked us to do another restaurant which we did, a Mexican restaurant for 'em called La Espuela.
Katie: Excellent. And so I mean any future restaurant expansion plans, or -
Mike: I think we're always lookin' for locations. I think we're primarily gonna stay in Texas.
Mike: There's a couple markets that look interesting to us.
Katie: So no Michigan steakhouses, is that what's - (Laughter)
Mike: I don't think so. You know, I think - and I think part of that is where we have our core base, you know?
Mike: I'm a big numbers guy. If you look at our website analytics, there's a lotta people from Texas that are comin' to our website. I think that's where we need to stick.
Katie: Good for you. Now what are you doing as far as marketing to get people - whether to your restaurant or to the ranch? I mean what happens?
Mike: You know, the restaurant we do some marketing. We don't do it a lot. More of it's along the PR line where we're really working with people. We do some ads but not a whole lot. But part of that, you know, we've been in a really lucky position when we first went to Ft. Worth. Ft. Worth was in need of restaurants and things just worked and fit really well and you know, I think we're incredibly lucky because the team that we have at our restaurants and our different businesses. They do an excellent job of managing the day-to-day business which allows me to do a lot of different things.
Katie: And so I know some of those other different things you talked about that I think are pretty awesome. I mean you actually have a movie set on the ranch, on CF Ranch, right?
Mike: Yeah, we've got a couple movie sets and we've done everything from, like, you know, Cowboy U which was a show about - well, one of these reality shows about people wanting to become a cowboy. We've done some movies. We've done both prequels and sequel to Lonesome Dove, Dead Man's Walk and Streets of Laredo.
Katie: Oh my gosh. (Laughter)
Mike: Rough Riders, so it's an exciting thing but it's one of those other revenue sources for the ranch. I mean, and I think that goes back to my dad's entrepreneurial attitude. He's always looking for those different revenue centers. You know, there's a lotta ranches - almost all the ranches in Texas - you know, they think about cattle. They think about hunting. But you know how many people really try to go out there and get the movie business and that kinda stuff? And one thing with the movie business, they come here, they film and then they leave and -
Mike: - you know, they don't take anything with them.
Katie: Okay. Yeah. And hopefully they clean up nicely after themselves. (Laughter)
Katie: Now, I mean is it a challenge to get Hollywood to come out to, sorry, but sort of the middle of nowhere, kind of?
Mike: I think the bigger challenge has really been related to almost, I think 48 out of the 50 states have got movie incentives, and I think Texas was kind of slow to the game with movie incentives. And basically what that allow us to do is - it's almost like a sales tax rebate where the movie says, "Okay, I'm spending you know, $20 million in your state," and then that state will say, "Okay, $20 million we're gonna give you back $15 million or $10 million."
Mike: So Texas was kinda really late to the game and I think that's really hurt it.
Mike: You know, the first person that really started doing this was Canada and even movies like the Texas Rangers was filmed up and around Calgary.
Katie: Oh, come on! (Laughter)
Mike: I know it. It's awful but it's kind of the business.
Katie: Bring it home. Okay, yeah.
Mike: So I, so I think that you know, I think people have to be cognizant of that fact. But if you look at a couple years ago, I mean, There Will Be Blood was filmed out in Marfa, not on the ranch but in the area.
Katie: So they're comin'. (Laughter)
Mike: They're comin' and you know, I think when you're looking for this type of scenery and scenic - Texas is a good place to film.
Katie: I mean just such, yeah, biodiversity. It's almost like in one five minute period it feels like you're in one state, one country. A different state, a different country -
Katie: - I mean it's -
Mike: Well and you've driven around a little bit while you've been out here. You've gone down to the Rio Grande River, you know and just the topography change from Alpine, which you've got 4,500 feet. You drop down to the river, you drop that elevation, you get a dramatic decrease in the amount of rainfall - it almost looks like the moon.
Katie: Hello, desert. Yes, exactly, exactly. (Laughter) So yeah, next on the plate, maybe it's like lunar, you know, filmmaking. (Laughter)
Katie: Guys in space suits, hopefully not in the middle of summer.
Katie: So now can you speak a little bit, too, some of the challenges that you guys have seen given the diversity in, I mean, your service offerings and even just not being located in - I mean you're in one state but I mean, you're probably covering a lotta miles every month.
Mike: Yeah, you know, I think my truck's what, are five years old and it's got 270,000 miles on it. (Laughter)
Mike: So -
Katie: Quality time.
Mike: - exactly. A lot of time to listen to some podcasts. But I think one of the difficulties this is that you start a lotta businesses - do all of 'em work? No. You know, I don't know if our statistics are any better than anybody else's but I think, you know, focusing on the things that work, making those decisions and then I think really looking at things with that entrepreneurial attitude but then, you know, also kinda reflecting back and seeing what's worked and financially, you know, how do the numbers look? I mean I think that's important, you know, I mean, doing break evens and things like that, you know, cash flow break evens, they're important things and I don't think a lotta people really kinda learn how to pencil that out.
Katie: Okay. Absolutely. Now any tips that you could offer any aspiring - whether they're rancher entrepreneurs or - I mean you do so many things. The food industry. Like anything in between, what would you suggest to someone?
Mike: You know, one of the biggest things that I think you see in Texas, and I think it crosses over, you know, a little bit into the food market is that there's a ton of people that buy ranches and they're buyin' ranches because they want a place to get away, you know? And you know, if their ranch is a ranch that's - or however you wanna describe 'em - but a lot of those cattle - a lot of those ranches they still have cattle on 'em.
Katie: Oh dear.
Mike: You know?
Katie: And they don't just take care of themselves.
Mike: Well, they do kinda take care of themselves but what you have to remember is all that meat gets into the food supply. So I think one of the reasons why, sometimes, when you go to a restaurant and you have a great piece of meat and then you go back a month later and you have a piece of meat that's not so great is because of this diversity in the amount of cattle that we have in the United States. Nobody gets into the chicken business for fun, right?
Katie: Okay, yeah. (Laughter)
Mike: You know? But there's a lotta people that have ranches for fun.
Mike: So I think the thing is when you're lookin' at those ranches, is really managing those things. It's not difficult. There's a ton of resources with the NRCS and some of the different state agencies. In Texas, it's the Texas A&M, you know, Ag Extension Service. But they offer support for, you know, how to build a tank, you know, how to build a fence, breeds of cattle, and really how to manage things. Because you've got so many people that aren't ranchers that are becoming ranchers because they've bought these places. On the flip side is even in Texas, you can actually get your ag exemption through just managing your wildlife. So that'll save you a little bit in some property taxes.
Katie: Excellent. Excellent advice. (Laughter) Well, from city slicker to - I don't wanna say urban cowboy, but cowboy cowboy. (Laughter) You are doing amazing things. Lovely piece of property. Lovely steak that we just had and you know, best wishes in all that you do in the future. Thank you so much.
Mike: Thank you very much.
Esther: Well Katie that was awesome.
Katie: Isn't Mike amazing?
Esther: He really is. He's kind of a Jack of all trades.
Katie: He is and I thought that I was a good multitasker but yeah, he - I can't even hold a candle to him. (Laughter)
Esther: I think it's that fresh Texas, central Texas air.
Katie: And the grass-fed beef. That's exactly what it is. (Laughter)
Esther: Yeah, it's the grass-fed beef. That's the secret to life. Well, let's get ready for Chapter 3, shall we?
Katie: Yes, let's do it.
Esther: You're listening to The BusinessMakers Overtime Show, heard here and online at theBusinessMakers.com/overtime. I'm Esther Steinfeld.
Katie: And I'm Katie Laird.
Esther: And we'll be right back with Chapter 3.