Catalina is a landmark Sydney restaurant which has developed over the years into an icon of the Sydney dining scene. The restaurant’s location on Sydney Harbour has certainly formed part of its success, however there is much more to it than that.

Operating for 23 years, the McMahon family consisting of owners Judy and Michael McMahon, and their children, managers James McMahon and Kate Dalgairns have built Catalina Rose Bay as one of the more recognisable and celebrated high-end restaurants on Sydney Harbour.

Catalina Rose Bay is a restaurant, bar, relaxed fine diner, ‘canteen’ for the locals, tourist venue, place where ladies lunch, and where business is done over a meal. It’s also a special occasion restaurant, a place to get engaged, have a wedding, host an event, throw a party and celebrate any occasion.

We chat with the delightful McMahon family about what it really takes to not only build a successful brand, but to establish and maintain a business in this competitive space. We openly discuss some of the biggest challenges faced during their extensive entrepreneurial journey and how this enterprising family continues to successfully overcome obstacles.

Catalina – The Business

Judy – In short, we have carved out a rather large niche for ourselves in the crowded Sydney restaurant market, where we have pretty much become all things to all people. And that is our target audience – everyone who likes to dine out.

In a city where restaurants come and go, we are a reliable constant. – Judy

Catalina is also a ‘stayer’. This means that we have a huge number of regular and loyal clientele (local, interstate and international) who have been coming to the restaurant for years, who we love and who love us.

We’ve seen their families grow up and become our customers too, and they’ve seen our children grow up and become part of the family business. They are a part of our success, and this success is transgenerational and ongoing – it spans the generation of diners before us, baby boomers (Michael’s and my generation), Gen X, Gen Y (our children’s generation), and Gen Z .

People know what they are going to get at Catalina Rose Bay. And, none of us at Catalina underestimates the importance of consistency and customer recognition in the success of our restaurant.

Michael and I have been involved in the running of the restaurant from day one, giving it our entire attention and expertise, working in and on the business every day, and remaining true to our core values for 23 years. We both still oversee the restaurant operations with a rare level of attention to detail; working with our Executive Chef and Head Chef, our son James and daughter Kate, along with our Floor Managers to ensure nothing is left to chance.

Catalina is known for its excellent wine list, great food and top service. It’s a meeting place, venue to celebrate, hot spot to dress up, sit back and enjoy a cocktail to two.

We continue to research and develop new dishes, bar food, cocktails, products, techniques, and embrace fresh ideas whilst working hard to retain the high standards of service for which we have become renowned.

Business Ambition

The ambition initially was all Michael’s. He had a burning desire to have a ‘grown up’ restaurant of his own after having owned a few smaller restaurants, and having worked for other people. Michael acquired the site, found investors, built the restaurant and developed the business.

Michael – It’s very hard, and most people don’t realise how hard it is. I started as a waiter with ambition, I knew what I wanted to do, worked hard at it, made a few mistakes, gained experience working for others, found the ideal site and pushed and pushed until I got it, and found someone to finance it.

I felt no fear. I knew it would work, even though people told me ‘that’ site has never worked. – Michael

Judy – It has taken a lot of time and hard work to get to where we are today, so it means a lot to both of us to have a successful restaurant and to have achieved recognition as stayers in the restaurant industry. In 2011, Michael was awarded the ‘Vittoria Legend Award’ at the Sydney Morning Herald Good Food Awards, and was very proud to be recognised for his longevity in the hospitality business.

Having young children, our roles were more traditional back in 1994, I juggled family obligations and worked in the business when I could, concentrating mainly on developing the events and wedding reception arm of the business. I spent more and more time in the business as the children grew older.

Brand Positioning

Judy We are right at the forefront of popular Sydney fine dining. We would be one of the busiest, most enduring high-end restaurants in Sydney. There isn’t a comparable restaurant in Sydney, we are in a class of our own, and we have popular appeal. In the past couple of years, we have been voted: Winner, ‘People’s Award – Australian Financial Review Top 100 Restaurants 2015’ and Winner, ‘People’s Choice Award – Sydney Morning Herald Good Food Guide 2016’.

We are high-end but approachable; fine dining, but relaxed; we offer professional but also very friendly service; the food is beautiful but also somehow familiar. – McMahon Family

Business Location

Why this spot? We didn’t decide on it because of location alone, or necessarily just because of access. The site had been an established restaurant site since 1957 and it had lots going for it.

catalina rose bay heels agency demi karanThe beauty of the location, being on Sydney Harbour, was certainly a factor. Another factor was that we knew that the footprint of the existing building would allow us to build a restaurant of a good size (seating 150 people) with an orientation that would provide an almost cinematic wide angle view of Rose Bay from every table. It had parking and, it was located in an affluent, densely populated area of Sydney. It ticked all our boxes, it was the perfect location for what we wanted to create.

If you can get a decent sized site with great views, nearby parking and a good local customer base, it’s a great start for any business.

Business Start-Up

Michael We had a few ‘goes’ at owning and operating smaller restaurants in the 1980’s. We owned Barrenjoey House at Palm Beach and Perry’s (with Neil Perry) in Woollahra. Neither restaurant was anywhere near as ambitious (or successful) as Catalina, but they provided invaluable experience, particularly about what pitfalls to avoid. Catalina started as an idea in my head that wouldn’t go away, I went for it, found partners who believed in the project, and more importantly funded it.

Judy Don’t go into any new restaurant venture undercapitalized. And, don’t let your heart rule your head in any decision you make. Be very sure that the decisions you make are based on sound financial principles, otherwise walk away from the deal. And, before signing anything, get your lawyer to read the contract very carefully. Follow his advice and also your accountant’s advice.

In hindsight, I wouldn’t change a thing. My advice is the same as Judy’s – never go in undercapitalised. – Michael

Business Challenges

Our daily challenge is ‘people’, those who work for us and those who we come into contact with each and every day.

It’s an ongoing challenge to find, employ, train, nurture and retain the right staff, aswell as to ensure they understand and adopt the same high standards of service you possess and expect.

This is as true for kitchen staff as it is for service staff. You can’t take for granted that your employees will behave the way you expect them to, so the challenge is to encourage staff to feel a sense of ownership and pride in the restaurant.

Our biggest challenge was… Little or no growth in Catalina for many years culminating in a downturn after the global financial crisis in 2008. The challenge was to find a way to improve our market share, and increase Catalina’s popularity and relevance, given we had been on the scene for 15 years.

It’s incredibly challenging staying relevant and to keep fulfilling the expectations of your customers, particularly having been in business for as long as we have. – Michael

We overcame that challenge by… Modernising our approach, shifting our focus to digital marketing, we started a customer database, communicated regularly with our clients, offering our loyal friends generous gifts on birthdays and priority bookings for special promotions and events.

We now have over 55,000 people on our database, and many would consider themselves ‘regulars’. On the back of that we have experienced double digit growth every year for the past 5 years and expect to continue to do so.

catalina rose bay heels agency demi karanRecently we also employed Sweaty Betty PR to create a ‘buzz’ for Catalina’s 20th birthday; to develop our Instagram (we now have over 25,000 followers, up from 4,000 – 3 years ago); and to increase our visibility via digital influencers and lifestyle bloggers.

Business Advice

Keep your figure on the pulse – you have to know whether you are making money, breaking even, or losing money every week.

Look after your staff – make sure your staff know you care about them and their welfare, you won’t get the best out of them if you don’t, and they won’t look after your business.

Never forget the business you’re in –  the ‘hospitality’ business. Your customers are there to be looked after and to have a good time. That’s what they’re paying for, and if you forget that, you’re in the wrong business.

Business Tips

Regardless of how passionate you are about what you’re doing, you must always run your restaurant as a business. Ensuring you:

  • Have really good hands on management along with happy, engaged and involved staff.
  • Supply what your customers want and the quality must be there in all areas.
  • Create and grow your database, reward loyal followers regularly with special offers, news, etc. This helps retain customers and turn first timers into regular loyal diners.
  • Embrace new technology and be fully-engaged in the digital arena.
  • Offer a user friendly website, mobile website and online booking system as busy people expect to be able to make bookings on the move.
  • Offer an interesting digital experience for your customers with useful and appealing Instagram, Facebook etc content.
  • And, employ a good PR company.

Business Team

Judy I enjoy my staff and I know they enjoy me back. I respect all our team members and we all care about one another. I make sure I show appreciation and encouragement on a regular basis. I believe great work ethics include:

 Honesty, kindness and fairness. Treat people as you would like to be treated in return. – Judy

Business Partnership

I would personally recommend going into a business partnership, but that’s purely from our own experience with Catalina.

We had a business partner for many years who invested in Catalina right at the beginning, and who always allowed us to run the restaurant the way we saw fit. And, of course Michael and I have been business partners in Catalina for 23 years!

In our case, we complement one another, each bringing different ideas and skill sets to our business. We divide the work between us and each work to our strengths, and although we often disagree about the way things should be done, we both benefit from the success of the restaurant. Neither of us is a chef – instead we concentrate on knowing and loving our customers and ensuring they get what they expect.

Just remember: a business partnership is like a marriage. Sometimes it works, and sometimes it ends in divorce!

There are many benefits of having a business partnership, but there are also pitfalls, and sometimes it comes down to what each partner expects to gain from it.

If you’re going into business with someone, best to be very clear from the outset about ‘your’ and ‘their’ expectations. If they’re purely the money partner, what return do they expect? If you’re both putting money in and both working in the business together, do you trust each other? Will you both be working as hard as each other, and again, what monetary return do you each expect?

Balancing It All

The line between the two was never very clear, we brought the children to work with us, and did a lot of socialising at Catalina, mainly because we had to be there regardless.

The restaurant was all-consuming, and our social lives were entwined with the restaurant. A lot of our customers became our friends. Our children spent many days, nights and weekends at Catalina playing outside in the park with our friends children whilst we all enjoyed a meal or a few drinks inside.

We never managed a work/life balance when the children were young. I’m not sure we even have it these days! – Judy & Michael

I don’t think they would say it was a bad life, and now they’re both involved in Catalina as well.

The Family

Catalina was ‘home’ to all of the family, and to many of our children’s friends. Nearly all of our family occasions have been and continue to be celebrated at Catalina – Birthdays, Weddings, Christmas, New Year’s Eve etc.

Also, for 16 years we actually lived across the road from Catalina in Rose Bay, so work and home were never far away from each other. I think that’s one of the reasons James and Kate continue to love working at Catalina so much, it has always played such a big part in their lives.

Keeping It In The Family

We never really thought about that, it just happened. It was natural for all three of our children to fall into hospitality. Michael’s son Paul worked at Catalina too for many years. He worked his way up from cook to chef to Head Chef over a number of years at Catalina, and left to open his own restaurant in 2011.

catalina rose bay heels agency demi karan

Michael & Judy McMahon with daughter Kate & son James.

With James and Kate, my aim was for them both to go to University, but neither of them were interested. They both started working in restaurants and/or nightclubs as soon as they left school. So while we didn’t plan for James and Kate to come into the business, it has been a natural progression over the past 10 or so years, and I couldn’t be happier about it.

After all, it is our life’s achievement, we own 100%, and now we have them to look after it and take it in a new direction as we get older. With their youth, they bring a new energy and a new perspective, but they are also mindful of the core values which have made Catalina so successful for so many years.

They have hospitality in their blood, as do we.

Working With Family

It is very rewarding working with family. Both James and Kate understand the business better than any employee could, partly because they’ve absorbed it during their childhood; they are also totally trustworthy, love it like we do, and best of all we get to see each other every day! That’s a real gift.

But it also has its difficulties, the usual employer/employee relationship isn’t there. It’s very hard to be your child’s ‘boss’, when your child is 30! The lines are blurred and there is very little in the way of a filter when we have disagreements. However, the plusses by far outweigh any negatives.

Staying on Trend

Judy You have to be prepared to adopt new ideas.

You know that old saying: If you keep doing what you’ve always done, you’ll keep getting what you’ve always got.

It’s true – if you want your business to evolve and grow you have to be prepared to try new things – maybe it’s new technology, maybe it’s new marketing ideas, maybe it’s new trends in food – whatever it is, you can’t just keep doing the same old things and expect to thrive.

I will always look at a new idea, and will often try it out to see whether it can benefit us. If you’re not prepared to do that you probably won’t stay ahead of everyone else.

Business Resources

We use ‘Dimmi’ for our electronic booking system, which allows our customers to book whenever they like, wherever they are. The 2017 diner has all the information they could want right at their fingertips and we believe our online presence here has been a huge part of our continual growth.

And, Instagram is an amazing tool. Sweaty Betty have built our Instagram following to over 25,000. Visually we have so much to work with at Catalina. We are blessed with one of the most stunning harbours in our world, coupled with our gorgeous seasonal dishes and delicious cocktails; it’s a match made in graphic heaven!

Also, our database is probably the most significant resource we have and regularly use to communicate with our customers.  It can take years to build, but it’s a great way to promote any upcoming events, news or offers.

My main tip would be to build your database and to communicate regularly with your existing clientele.

I also believe in rewarding loyal customers on their birthday or special occasion throughout the year, as this not only boosts trade but also makes your customers feel special.

What’s Next

We’re planning a major rebuild next winter, building a more sizeable bar over the water, adding an expansive private dining room, a bigger kitchen, additional office space and staff amenities, more storage – the works! It’s very exciting!

Sum It Up

Self-belief is the most important thing to keep in mind, along with educating yourself in your chosen field. – Judy

We recommend extensive research into the industry you’re embarking upon. Understand the marketplace and what your business purpose is within the space. Then make a decision as to whether the dream is actually attainable and/or sustainable.

Hope you enjoy the following inspirational insights from The McMahon family.

I love what I do because… It doesn’t feel like work.

Never be afraid of… Adopting new ideas.

My greatest talent is… Having an open mind.

I’ve loved… Working in hospitality my entire working life. I’ve never considered doing anything else.

I never go to work without… A big bottle of filtered alkaline water (I’m a bit of a health nut).

Never underestimate… The power of a smile.

On perfection… Strive for it every day in your work, yourself and your relationships, but don’t sweat it if you fall short. There’s always tomorrow.

On the look… Well-groomed does the trick.

On every day… Never leave the house without your makeup on – sounds shallow but it works for me.

On styling… It’s all down to personal taste – mine is all about classic, pared back design, whether we’re talking about fashion or our restaurant. Nothing too fussy, cluttered or over the top.

On attitude… Always be positive – better to see the glass as half full.

On purpose… You always have to have a reason to get up in the morning.

On living… Enjoy every day and be kind to others.

I absolutely love… My grandchildren – Matilda, Will, Ethan and Isobel.

Happiness is… Having your family around you every day.

Living the dream means… Doing what I’m doing now – it doesn’t get any better than this.

In my spare time I like to… Read, do yoga and spend time with family – yes I know – I’m with them every day! But we all like each other enough to hang out together in our leisure time too.

I hope to one day… Slow down a bit and let James and Kate take over – hard to loosen the reins though!

Success means… Waking up happy with your achievement every day and not regretting a thing.

Being a business owner means…  Success and financial stability. – Michael

When starting a business one must… Have a huge amount of passion and commitment, but at the same time have a well-researched, achievable business plan.

Most rewarding career moment so far… Meeting a perfect stranger on a beautiful yacht on the Amalfi coast, who, unprompted, when he learned that we were Australian and were from Sydney, said that his favourite restaurant in the whole world was in Sydney. When we asked what it was, he said it was called Catalina! That was a very special moment for us both.

Best gig… A huge fundraising dinner for over 700 people we put on for Queensland and NSW Flood victims back in 2011, along the Rose Bay promenade. Michael’s aim was to raise $1,000,000 (1000 people @ $1000 per person) dinner. In the end we seated over 700 people and managed to hand over more than $700,000 direct to The Salvos. I was so proud of that achievement.

Must try on Catalina menu… That’s a hard one, but for me it would have to be our oysters. We’re very particular about them and they’re 4-year-old, single seed Sydney Rocks, shucked to order. They’re absolutely the best in Sydney as far as I’m concerned.

But if you’re not an oyster lover, or a seafood lover, you would have to try our roasted suckling pig at least once in your life – it’s incredible – it’s the best suckling pig you’ll ever eat – deliciously rich, with paper thin crispy skin.

Must attend Catalina events … Kate’s New Year’s Day party. It’s an absolute must-go-to event on Sydney’s social calendar. One of those incredible days of music, fabulous cocktails, great food and company. People fall over themselves to get tickets.

What’s next… Making Catalina even better with a rebuild and extensions happening next year. We can’t wait!


CONTACT US

LYNE PARK – ROSE BAY, SYDNEY NSW 2029

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Thank you Michael, Judy, James & Kate for wholeheartedly sharing your magnificent journey with us and our readers. You are a truly admirable family and a wonderful inspiration for others, absolute devotion to family, business and everything you do. Love it! –  Demi Karan – CEO/Founder, Heels Agency

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