Gavin McMichael's strategy to survive the recession began about two years ago. Its premise was adaptability.

“The economy, just like a river, has the ability and want to change its course from time to time,” said McMichael, 42, who owns The Blacksmith Restaurant in Bend. “Sometimes as business owners, you need to go and meet the river again.”

Most recently, McMichael adapted by bringing another restaurant to Bend: Bourbon Street Sea and Soul Food, which is opening this week in downtown Bend. Located in the former Staccato space, Bourbon Street is what McMichael said marks the midway point of his diversification plan to survive the recession.

Economically, Bourbon Street is a second leg to stand on. His first leg, The Blacksmith, opened in 2003.

“It's very easy to get knocked off that one leg,” McMichael said.

Like any businessperson, McMichael is investing in more than one industry, too. Besides restaurants, he has begun consulting others on how to stabilize their businesses and operate more efficiently in a down economy.

Systems he developed for The Blacksmith, such as sales tracking and bookkeeping, he now shares with other business owners, ranging from restaurants to retail to medical offices. He has one employee and three clients for this side business, called Sherpath, and expects those numbers to grow by the end of this year.

“As the economy fades, a lot more people are looking for answers,” McMichael said. “You find efficiencies that you never thought you could find.”

Cross-training staff at The Blacksmith is one way he was able to become more efficient. People working in the host position also serve cocktails, earning them more tips — thus making the job higher-paying and more attractive, and saving on the number of personnel he needs to hire.

That comes back to McMichael's belief that adaptability is key to not only survival, but also success. Since he reopened The Blacksmith in early 2008 after adding a dance floor, lounge and remodeled bar to the fine-dining restaurant, the establishment is as much known for its nightlife as its long-standing focus: cuisine.

“People were really wanting something like that,” McMichael said. “People just love it.”

McMichael is diversifying in other ways, too. He has started selling food products locally through a company he named Tamarack Foods, with plans to expand. And as a part of his long-term planning, he is considering another restaurant and some kind of event center in the coming months or years.

Creativity is what made McMichael successful, said Chuck Arnold, the executive director of the Downtown Bend Business Association and a candidate for Bend City Council. Arnold said McMichael has successfully created an atmosphere at The Blacksmith that people are attracted to, and is working on creating something similar for Bourbon Street.

“His creative spirit that he is going to bring to Bourbon Street is really going to make that a unique place,” Arnold said. “It all comes down to creating a positive atmosphere.”

Bourbon Street is themed after New Orleans, both in ambiance and cuisine, and McMichael wanted the restaurant to have a rugged, Southern feel. Earthy tones and brick walls are part of that, but he honed in on small details too, like dents and scuffs he had beaten into the corners of tables he inherited from Staccato.

While The Blacksmith is focused on dinner, Bourbon Street will serve all day long. Bourbon Street is an economic move, as much as anything else, because it's another draw to the community, McMichael said.

“We need to have more diversity in our dining,” he said. “Everyone wants to go to an area with great cuisine.”

With dozens of people put the finishing touches on Bourbon Street, McMichael answered the following questions:

Q: Through Sherpath, what do you look for to advise other business owners on saving money?

A: It's just key performance indicators. What are the most important things to your business that you need to make sure are actually telling you most about how your business is doing? Focus in on those. ... There are things that really are just the bread and butter of their business.

Q: Before the recession, did you pay less attention to that bread and butter?

A: I was not managing things nearly as closely. I think I was managing closer than some. But (the Sherpath system) really forces you to look at your business with a lot more scrutiny. You find holes you really weren't looking at. You're able to cross-utilize in areas and lower your operating expenses and maximize your revenues.

Q: It seems like when one restaurant in Bend closes, another opens in its place. Why?

A: Restaurants are a hell of a seductive thing. Everyone has that restaurant fantasy. ... It seems like it's an easy business to get into — it certainly is an easy business to get into, (but) it's not an easy business to stay in, as a lot of people have found out.

Q: You've mentioned possibly opening an event center.

A: I want to be able to do more weddings, more events, kind of a small confectionery business. One of my other approaches is that I want to get a commissary kitchen. ... Again, it's part of my (long-term) strategy that I would like to get a commissary kitchen that's centrally located, where I can do a lot of the baseline prep and things for all of the restaurants, where it has a lot more economic value and I can have a central drop point for a lot of my buying, so I can get better deals on my stuff, so I lower the overall cost.

Q: That's an interesting idea, a commissary kitchen. It's almost a corporate idea.

A: It is kind of a corporate idea. Not all things about corporate are bad. They're very good at finding economies of scale.