Pride can be a wonderful motivator. Chefs and cooks are, by nature, very proud individuals – they choose to enter a demanding field of relentless work because there can be immense amount of pride in creating beautiful, delicious food for a grateful audience. There is also pride in working for a restaurant, or for that matter, any business that is successful in earning a profit. The key, of course, is the distinction between earning and making a profit. Earning infers value is given that equates to prices charged and the manner with which employees and products are treated. When this happens a cook or chef is proud of the business that he or she works for that demands so much passion and energy.
What is ironic is that the pride that one has in their individual work will quickly dissipate if the business doesn’t hit the mark. If the customers aren’t there, the sales are off budget, the costs are not in control, or the vision is lacking then that pride in work seems to be less significant.
We have all witnessed restaurants with the right talent behind the range but the inability to match that talent with solid business sense. Once the bills stack up, the vendors’ start knocking at the door, and the dining room fails to fill on even the best days of the week then individual employees lose sight of their work quality and quickly slip into survival mode. Survival is the enemy of “team” for it fails to understand that any real solution will still come from a group that bands together, merges individual talents into a cohesive strategy, and rises above those bumps in the road. Survival has a smell and a taste that is hard to describe, but easy to identify.
So what are the warning signs of restaurant business failure and how might an operation overcome the challenges that the smell of “survival mode” brings?
- A LACK OF FOCUS
It becomes patently clear that things are going sideways when the property starts to lose sight of the basics of operation: consistency, quality, exceptional service, and a uniquely valuable guest experience. Focus becomes even more important when financial challenges rear up their ugly head. This is the time to double down on what restaurants know how to do best.
- NO CLEAR CUT RECOVERY STRATEGY
Every restaurant can and must prepare for the inevitable slumps in business, change in guest expectations, labor challenges, and competitive curve balls. When things go wrong it is more of a problem when the operator is caught without a fall back plan.
- THE LOOK OF DESPAIR
Picture that deer in the headlights stare – you know what it looks like. That frozen “holy crap” look that says with real clarity – I’m way over my head and I don’t know whether to just lie down in the middle of the road or run like hell. This desperation look is very transparent. Leadership is in the greatest demand when many would assume that there is little chance of recovery. This is when the good become great. Employees will always look towards a leader to guide them through the storm and offer some level of trust and assurance.
- STRETCHING THE LIMIT OF VENDOR PAYMENT TERMS
Ugly, ugly, ugly. When properties begin to leave vendors hanging for payment then the walls start to tighten on everyone. When a chef can’t guarantee a farmer or cheese vendor that the check is truly in the mail, when salespeople catch wind of late payments, and when new vendors will only do a “cash on delivery” basis then everything gets much, much more difficult. This happens in a business that is “cash flow” dependent and susceptible to seasonal differences in volume. The best plan for the operator is to work in advance with vendors so that stretched payments are not a surprise, and if possible, arrange for a short-term line of credit with your bank to help cover those slower months.
- A TOTAL FOCUS ON COST CONTROL WITHOUT A PLAN FOR INCREASING SALES
For a chef, the cooks, and the guest – the smell of failure becomes overwhelming when the property chooses to cut portions, lower quality standards, and place less emphasis on the value of talented labor to deliver the right product with the right level of service orientation. When the answer to bottom line problems is to focus solely on costs then the operation begins to feel as if it is in desperation mode. Operators should always be on top of cost control but must realize that “the top line drives the bottom line”. Restaurant revenue needs to be a unified effort if recovery is to be the prize.
- CUTTING SERVICES TO SAVE MONEY
Eliminating that traditional Sunday Brunch, getting rid of valet parking that has been in place for years, stopping an established practice of customizing catered events rather than always sticking with predetermined menus, or maybe something as simple as eliminating that happy hour that helped to bring in early business may not be bad decisions, but to your guest the perception is that you no longer care about them, but rather are simply looking for ways to save pennies. Be cautious with how your cost cutting measures will be perceived.
- A RESISTENCE TO LOOKING IN THE MIRROR
Chances are if things are not going well – you are probably to blame. The knee jerk reaction, and human nature, is to find someone or something else to point the finger at – but as is often said: “If you point the finger at someone else – remember that there are at least three other fingers point directly back at you.” Admit what the problem is, accept responsibility, and work collectively to make the necessary corrections.
- DOING THINGS THE SAME AND EXPECTING DIFFERENT RESULTS
This is the definition of insanity. If the business is not working then take corrective action and be willing to go in a different direction. AS A POINT OF CONSIDERATION: Ask your employees and your guests how you should do things differently. They might have the best ideas to help turn the business around.
- MORE CONCERN WITH THE COMPETITION THAN YOURSELF
Yes competition makes business more difficult; yes some competitors are ruthless and seem to relish the opportunity to stomp on your success, and yes staying ahead of your competition can be incredibly time consuming, but before you invest all of your waking moments on staying competitive or crushing your neighbor – think about how you do business. Typically if the competition is outperforming you it is because you are underperforming them in some way shape or form. Fix your own house and turn the tide on competitive anxiety.
- INCONSISTENT PRICING STRATEGIES
Instead of getting totally wrapped up in a price war with the competition, or building a program of discounts that leaves your guest wondering what they will pay on any given day – look at two very basic questions:
- What value are you offering for the price (this goers beyond food and service) – what is your experience?
- Are you confident that the pricing structure matches the guest profile in your area
When you know the answers to these two questions then price accordingly and stick with it. Whenever you discount you are saying to a guest: “This discount is what we could really charge and the rest of the time we are charging too much.” Or – “We are not sure that our experience is worth the prices we charge – so try this new price on for size.”
- NOT PAYING ATTENTION TO YOUR EMPLOYEES OBSERVATIONS
Back to this – LET YOUR EMPLOYEES HELP with solutions. Remember your staff members are likely closer to the product, service, and guest perceptions than you –LISTEN TO THEM!
- NOT PAYING ATTENTION TO YOUR GUESTS OBSERVATIONS
OK – just as important – if you are unsure why sales are down or profit is out of whack – then take the time to ask, reflect on, and make decisions based on solid customer feedback. Here’s a side benefit – if guests think that you truly relish their opinions and act on their recommendations they will find even more ways to stay loyal and become ambassadors for your business.
- RESISTING CHANGE AND NOT ADMITTING MISTAKES
Change is tough. Even those people who claim to be in love with change – will likely resist it if it impacts on them. So – change is never easy, but at the same time it will always be a part of running a business. Embrace it and work with change to your advantage.
- GIVING UP
When this happens in a restaurant it is like the lights are dim and flickering, the ceiling is leaking, the employees lose their ability to care, the product is inconsistent at best, and whatever experience the restaurant built initially is now unrecognizable. These are those last days of operation when it is blatantly clear that it’s over and the air is let out of the tire. Giving up is one of the saddest things to witness, a state of mind that is nearly impossible to overcome. Don’t find yourself here – pay attention to the early warning signs, have a plan, and engage your competent staff as problem solvers while there is still plenty of hope. Winning is always in your hands to define and winning is a lot easier to digest.
PLAN BETTER – TRAIN HARDER
Harvest America Ventures, LLC
Restaurant Consulting and Training