Kimpton Hotel & Restaurant Group St

Kimpton Hotel & Restaurant Group Strives for Perfection! FYI
When investment banker Bill Kimpton traveled to Europe, he liked staying in small hotels
with personality and personalized service rather than big hotels owned by big chains.
Adapting the “boutique” hotel idea, he bought and renovated an older San Francisco hotel
with architectural charm and a central location. It reopened in 1981 as the Clarion Bedford
Hotel and featured each room decorated in an individual style rather than all being identical,
as in most hotel chains. It also offered a complimentary wine-tasting hour to bring
guests together in the lobby for a bit of socializing every evening.
Little by little, Kimpton and his investment partners bought and renovated other hotels
on the West Coast and, later, across the country. Now, more than 30 years later, the
company that Kimpton founded has grown to more than 100 boutique hotels and trendy
restaurants in North America. It employs more than 7,200 employees and rings up annual
revenue of more than $700 million.
Kimpton Hotel & Restaurant Group is a limited-liability company (LLC), a form of
business ownership that allows it the financial and management flexibility to work with
different investment partners on different hotel and restaurant properties. The company
also partners with different chefs to create specialty restaurants where the chef, not the
hotel manager, is in charge. This unconventional approach led to Kimpton partnering with
Wolfgang Puck, among other well-known chefs, to open restaurants inside or alongside
Kimpton hotels.
Kimpton’s boutique hotels are always adding special touches to make guests feel
pampered. For example, under the “Guppy Love” program, the hotels will put a fish
bowl stocked with goldfish in a guest room by request. The idea is to “provide little fish
friends to anyone who [wants] a pet companion,” explains Niki Leondakis, Kimpton’s
president. Employees further personalize the hotel experience by helping guests “live like
a local, offering tailored recommendations from staff picks to one-of-a-kind experiences,”
Leondakis adds. Whether they’re talking about a unique historical site or giving directions
to a local art gallery, Kimpton’s employees are “proud to be the cultural ambassadors of
their city.”1

Bill Kimpton started the Kimpton Hotel and Restaurant Group—the company
profiled in the Inside Business feature for this chapter—with one goal in mind:
He wanted customers to have a unique and memorable experience. Over the
next 30 years, with the help of investors and partners, Kimpton created more than
100 boutique hotels and restaurants that ring up annual revenue of more than $700
million and employ more than 7,200 employees. Pretty impressive achievements for a
company that must compete with larger corporate hotel and restaurant chains.
For Bill Kimpton, deciding to start a business was only the first step. It takes hard
work, and there are many decisions that you must make to build a successful business.
For example, you must choose the right type of business ownership. Kimpton chose the
limited liability company (LLC) form of ownership because it allows the financial and
management flexibility to work with different investment partners on different hotels
and restaurant properties. And yet, as you will see in this chapter, there are other popular
forms of ownership including sole proprietorships, partnerships, and corporations.
We begin this chapter by describing the three common forms of business ownership:
sole proprietorships, partnerships, and corporations. We discuss how these types
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of businesses are formed and note the advantages and disadvantages of each. Next,
we consider several types of business ownership usually chosen for special purposes,
including S-corporations, limited-liability companies, not-for-profit corporations,
cooperatives, joint ventures, and syndicates. We conclude the chapter with a discussion
of how businesses can grow through internal expansion or through mergers with other
companies.
Sole Proprietorships
A sole proprietorship is a business that is owned (and usually operated) by one
person. Although a few sole proprietorships are large and have many employees, most
are small. Sole proprietorship is the simplest form of business ownership and the easiest
to start. In most instances, the owner (the sole proprietor) simply decides that he or she
is in business and begins operations. Some of today’s largest corporations, including
Walmart, JCPenney, H.J. Heinz Company, and Procter & Gamble Company, started
out as tiny—and in many cases, struggling—sole proprietorships.
Often entrepreneurs with a promising idea choose the sole proprietorship form
of ownership. Annie Withey, for example, created a cheddar cheese–
flavored popcorn
snack food. Annie’s popcorn, called Smartfood, became one of the fastest-selling snack
foods in U.S. history. After a few years, PepsiCo Inc.’s Frito-Lay division bought the
brand for about $15 million. Ms. Withey, an organic farmer and mother of two children,
went on to develop an all-natural white-cheddar macaroni and cheese product.
This venture was also a success. Today even though her firm, Annie’s Homegrown, has
grown and become part of a larger conglomerate, Annie remains the entrepreneurial
heart of the company and still thinks like a sole proprietor.
As you can see in Figure 4.1, there are approximately 23 million nonfarm sole
proprietorships in the United States. They account for 72 percent of the country’s
business firms. Although the most popular form of ownership when compared with
partnerships and corporations, they rank last in total sales revenues. As shown in
Figure 4.2, sole proprietorships account for about $1.3 trillion, or about 4 percent of
total annual sales.
Sole proprietorships are most common in retailing, service, and agriculture. Thus,
the clothing boutique, corner grocery, television-repair shop down the street, and small,
independent farmers are likely to be sole proprietorships.
Relative Percentages of Nonfarm Sole Proprietorships, Partnerships,
and Corporations in the United States
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