There are few things in life that vividly define the culture associated with a group of people more than dining out. Food is connected to nearly every aspect of life, family, and the art of living. A culture is a collection of life essentials including art, drama, literature, religion, music, food preparation and traditions, history,…
The restaurant industry has been plagued with problems for decades – this international crisis has brought everything to a head. How many times have restaurateurs and chefs proclaimed that they couldn’t simply stop their current model and re-invent themselves? The challenges of today would always put a halt to significant movement towards long-term problem solving.…
Is it just another one of those cycles with a few new challenges or is it something else? It seems to me, once you start to connect the dots, you will note that the times they are a changing, and the alarm bell is about to ring. I certainly don’t want to be reactionary, in…
The more I travel, experience communities, and try their restaurants – the more I scratch my head and ask the question: “What are they thinking?” The restaurant business is one that is relatively simple in concept, yet enormously complicated to execute. Develop a product that people are willing to buy, prepare it consistently well, make…
So…to fail to change is a surefire way to fail. When everything seems to be against restaurant success – those who strategically stand tall and change direction are the ones who win. Just look at the current picture for restaurants:  THE LABOR POOL: Quite possibly the worst labor situation for restaurants – ever! It…
The other day I witnessed, once again, one of the most gut wrenching events that may go un-noticed to others. I watched as a restaurant closed its doors for the last time, the “for lease” sign take the place of open for business, and the desolation of an empty parking lot. I felt deeply for…
Here it is – the formula for a successful restaurant – almost a guarantee. There still are many people, for some strange reason, who continue to dust off their entrepreneurial suit and turn to restaurant ownership as a way to personal fortune or at least an opportunity for expression and public service. For all who fit this mold this is my best effort at providing a road map to potential (if you are lucky) success:
 IDENTIFY A TARGET MARKET: Many believe that the starting point is concept development, however, building a concept restaurant without understanding who your potential market is would be the quickest way to failure.
 KNOW YOUR TARGET MARKET: Qualitative and quantitative studies will help to determine what your potential market is willing to purchase, when they are likely to purchase, why they are likely to purchase and how you might best deliver the product message to them.
 IDENTIFY YOUR COMPETITION: Surprisingly your competition goes beyond the obvious. A French concept is not only in competition with other French concepts, but rather with any other restaurant in close proximity to yours.
 KNOW YOUR COMPETITION: Study them, follow their website and Facebook page, visit their operation as a guest, talk to others who patronize that competition, observe the clientele who spend time and money there and catalogue their strengths and weaknesses.
 BUILD A CONCEPT THAT ADDRESSES YOUR TARGET MARKET AND COMPETITIONS AREAS OF WEAKNESS: This is not to state that an operator and chef should avoid creating something unique and stretch the food perceptions of their anticipated customer, however, your research should reveal those items that customers are prepared to order. Success is best realized when customer needs are addressed.
 HIRE THE RIGHT KEY PLAYERS: The Chef, Restaurant Manager, and lead service staff is initially the most important hires. These individuals will become your organizers, communicators, expeditors of the company vision and the driving force as you move forward. They should be creative and talented in their respective disciplines, but most importantly business savvy.
 SPEND TIME BUILDING A TEAM WITH OPERATIONAL CHEMISTRY: Work ethic, attitude, dependability, humility, service orientation and a passion for the restaurant business are the real keys to your success as a restaurateur. There is nothing more important than building this team with your key players.
 BUY THE BEST RAW MATERIALS THAT YOU CAN: Wolfgang Puck said it best: “Buy the best raw materials and try not to screw them up.”
 ENSURE THAT YOU HAVE STANDARDS AND THEY ARE ALWAYS OBSERVED: Food preparation, plating, service technique, cleanliness, cost controls, tracking customer reactions, problem solving – all of these processes should have definitive standard operating procedures that every staff member understands and follows.
 OPENING A RESTAURANT IS MORE EXPENSIVE THAN YOU THINK: Make sure that you have the funds to open and cover expenses for your first year (at least). As you build up to opening you will spend many difficult days writing checks. What ever you budget for the opening is never enough. Watch your pennies, but know the expenses will add up quickly.
 TRAIN, TRAIN, TRAIN: Training must be on going. Formal orientation for new employees, technique training, wine tastings, food plating demonstrations, regular staff meetings with review of operations, daily pre-meal presentations and end of service recaps are all critical components of an effective staff development program. It pays off tenfold!
 FEEDBACK IS THE BREAKFAST OF CHAMPIONS: At first, it is human nature to resist soliciting feedback, but once a program is in place (comment cards, on-line surveys, encouraging employees to speak their mind during meetings, management open door policy and walking the dining room to observe guest reactions are effective ways to stay in tune with your collective performance).
 EDUCATE YOUR GUEST: Customers are interested in food and beverage like never before. A well-trained staff can and should provide opportunities for guests to discover more every time they dine in your operation. Recommendations on wine, describing exceptional menu items, telling the story of food rather than listing ingredients and sharing interesting information about the restaurant’s history will go a long way towards building guest relations and return business.
 CREATE A RESTAURANT PERSONALITY: Whether it is you, your manager, the chef, an entertaining bartender or a designated host – every successful restaurant has an identified personality; someone who becomes synonymous with the restaurant name – a person that attracts a return clientele. A restaurant without a personality is just a business.
 WORK AT BUILDING A RESTAURANT EXPERIENCE: A memorable meal is more than just great food. The experience includes the sights and sounds, unique hospitality, food presentation, bar showmanship, building ambience, and personality of all who work for your restaurant. It is the experience that brings them back.
 CONTROL, CONTROL, CONTROL: Buying right, taking scheduled inventories, portioning ingredients, following recipes and formulas, scheduling employees efficiently, tracking your advertising expenses, watch waste, lock coolers and storerooms, track sales abstracts and adjust menus when certain items do not sell, budget and assess any variances – these are some of the most important processes that an owner can implement and measure. Without them it is impossible to reach your financial goals.
 ESTABLISH ACCURATE SELLING PRICES: Selling price determination cannot be a guessing game, nor can it simply reflect a price that compares with that of the competition. Prices are based on knowing all of the costs associated with the building of a dish, using a simple formula of Plate Cost/Food Cost % and then assessing the impact of competition and what the threshold for prices might be in the current market. Pricing is a science and an art.
 TURN THE EXPERIENCE INTO A VALUE STATEMENT: Value should not be solely about price – if it is then you have failed. If the experience is strong than so is its perception of worth. To this add an emphasis on effective upselling to build check averages and your formula is beginning to reach its intended solution.
 COMMUNICATE EFFECTIVELY: Use all of the available tools to communicate your message internally and externally, but be cautious of those that cost money without any measurement of effectiveness. Your website, Facebook Page, Blog and email blasts cost very little and approach a defined market. Internally, the best communication is face-to-face, but consider using payroll stuffers, newsletters and email communications for this audience as well.
 SWEAT THE SMALL STUFF: Everything in the restaurant is important. It is all in the details: a clean parking lot, well appointed signage, spotless windows, floors, walls, bathrooms, kitchen, china, glassware and flatware, beautifully detailed plate presentations, flavors and aromas, greetings and sincere service, appropriate alcoholic beverages that are geared towards your target audience, a great cup of coffee and spectacular desserts – this and so much more are essential if you are to build a successful brand.
 BE REALISTIC: No matter how good you are, even if every aspect of the formula is firing on all cylinders, the likelihood that your restaurant will be immediately profitable is very low. You should anticipate that the first year may be breakeven at best, year two should be better and if you stay focused year three will be the turning point. BE PATIENT!
 BE RELENTLESS: Don’t let your guard down. Every minute, every day, every season this formula cannot waiver. This is the task of the owner: keep everyone focused – ALWAYS.
 HOPE FOR LUCK AND BE GRATEFUL WHEN IT IS PRESENT: When all is said and done, there are far too many details and variables for any formula to be consistently effective.
I wish you well.
PLAN BETTER – TRAIN HARDER
Harvest America Ventures, LLC
FOLLOW our blog at: http://www.culinarycuesblog.wordpress.com
Some would promote one vs. the other when in reality you can’t have one without the other. With the Superbowl behind us (a rather painful one to watch) you could easily compare Creativity to a solid offense and Business Acumen to a dominating defense. This year’s game seemed to be an example of the old adage that “defense wins the big games”. There was no question that Seattle exhibited an extremely powerful defense, but in the end they still had to score points (43 of them to be exact).
In restaurants, like any business, an operator must understand the financial implications of their decisions and know how to control their costs. Even with all of these crucial efforts in place the restaurant must still build an exciting menu, attract customers through effective and creative marketing and execute great tasting and looking food. The creative process can never be absent from the formula for success. The opposite is also true. There are thousands of examples of creative restaurants with full dining rooms that can never seem to turn a profit. With a lack of controls including ordering, inventory, production, costing and selling price determination, waste and theft control, the busiest restaurants will eventually fail.
This reality is true in every business, every industry. Sometimes one or the other is not as apparent, but success cannot happen without a balance of creativity and control. Most would agree that Apple Computer is one of the most creative companies around and when asked, Tim Cook would repeat Steve Jobs statement that Apple is not about making money; they are about making insanely great products. This is certainly true, but underneath all of that creative process is a company with extremely tight controls leading to the biggest cash reserves of any company, anywhere. They can ride any storm from the competition because they are able to balance creativity and control.
Restaurants live in one of the most competitive environments you could imagine. Every source of prepared food is competition for every restaurant. To this end, successful restaurant operators need to make a real commitment to the creative process around product, service, brand building and marketing. Those same operators can never lose sight of the sensitive nature of restaurant profitability.
Just as in football or computers, it is rare if not impossible to find one person who can effectively be in charge of creativity and control in restaurants. It is not human nature to be insanely great at both, yet this is what a business requires. Chefs are, by nature, creative people; or should I say the position of chef attracts creative people. Most chefs are passionate about the process of ideation around menus, applying their talent to the preparation of food, building flavors, using the plate as their canvas, and connecting on an artistic level with their guests. Not dissimilar to how a painter or sculptor is passionate about applying talent to a canvas or stone. Chefs need that counterpart who is just as passionate about the control process.
The most effective restaurants are able to build partnerships with business managers and chefs. A perfect example is Joe Bastianich and Mario Batali or historically: Escoffier and Cesar Ritz. Business Acumen is equally significant if the restaurant is to reach its goals. The two make one and in the end, just like in football, computers or any other business, bring a level of success that you can go to the bank with.
PLAN BETTER – TRAIN HARDER
Harvest America Ventures, LLC
Restaurant Consulting and Training
This is the most important question for operators or would be operators of restaurants. This is the defining question that separates those who will be successful vs. those who are destined to fail. Unfortunately, far too many in the restaurant business never ask this question, nor do they respond to the signs of failure until it is too late.
I have wrestled with this question for years and in my current role as a consultant am faced with delivering the answer(s) to properties who are waking up to a realization that it is very difficult to realize a profit even in the busiest operations. When I step back and look for cause and effect it appears to me that the answer to this question lies in the mindset of the restaurateur and chef. Does the operator have a mindset of a solid business manager or is he or she totally focused on being a part of the creative venture that a restaurant can become. There is a middle ground, but without business acumen, the restaurant will struggle. The following examples point to the yin and yang of building the right mindset balance:
*Are you content with creating a restaurant based on positive cash flow or are you working to build a long-term, sound business?
Many restaurants fall into the trap of believing that they are successful when cash is coming in faster than it is going out. This works well until there is a dip in business or unexpected expenses come knocking on your door. The illusion that success is simply based on a steady flow of customers has clouded the vision of many restaurateurs. Yes, you are busy, but are you really profitable?
*The opposite can also be true. The restaurant has incorporated excellent cost controls including portioning, inventory controls, focused buying, and time management, but fails to recognize that the top line DOES drive the bottom line.
Restaurant seats that are empty are way too costly. The combination of cash flow and cost control is necessary for the “business” to succeed.
*Menu, menu, menu. Is your menu a reflection of the egocentric need to offer the most expensive ingredients? Kobe beef hamburgers – really? Shaved truffles on your hand cut ravioli filled with fresh mozzarella imported from a small village in Northern Italy where the animals are hand fed a mixture of grass and grains from meadows that are above 2,000 feet and have exposure to the sun for 11 hours a day. You have seen the hype that is associated with building an image of restaurant importance. The questions are twofold: is this really a reflection of talent and is this in any way profitable?
*Does great food require the most expensive ingredients? Incredible cooks, and ones that can assist the business in making a profit are able to coax extraordinary flavors from less expensive ingredients. The prices they charge reflect the quality of the experience and the desired profitability of the menu item. Hold onto the truffles for the rare price fixe wine dinner and start looking at ways to build flavors from those chicken thighs. Try making some exceptional mozzarella in-house and market that as a calling card. There is greater talent in making your own vs. simply ordering ingredients on-line.
*Do you take ingredient shelf life seriously?
Waste can kill a restaurant business. Are you monitoring your inventory, ensuring that temperatures are ideal for specific ingredients, rotation of product is taking place, and order amounts are monitored closely to maximize usage? Is your menu flexible enough to accommodate the ingredient shelf-life cycle? How large are your garbage or compost cans? Does someone on your staff monitor production to minimize ingredient miss-use?
Stocks may require specific proportions of ingredients to develop consistent flavors, but broths are much more adaptable. Don’t throw out those carrot or onion peels; work them into a broth as a basis for featured soups or braising liquids. Those lobster shells make a great fumet or lobster butter.
*Measure, measure, measure. Use a scale! This is a business of pennies and your proteins, in particular, must be scaled out to protect the small amount of profit that you might realize from every menu item.
Watch what comes back on plates from the dining room. Consistent unfinished meals either means guest dissatisfaction or portions that are too large. It is always better for the experience and the business to have multiple complementary flavors on a plate than to simply overwhelm a guest with portion size. No one needs that 16- ounce steak. Portion control is a foundation of profitability.
*Know what it costs to make a cup of coffee. Coffee is a perfect example of how we can let costs get away from us. On the surface it may be a few pennies to make even the best cup of coffee, but are you factoring in what your staff consumes, waste, refills, etc. Business people know what their products cost to deliver, including all of the variables. Yield management is your job. Is that rib roast really $4.25 per pound? What about trim, cooler shrinkage, roasting shrinkage and slicing waste? You might discover that the roast plate cost is actually 30-35% higher than the cost at purchase.
*There is no such thing as a free lunch. Allow me to repeat again – this is a business of pennies. Do not give anything away for free. Your friends who expect a deal in your restaurant are not really your friends. Account for everything. If your restaurant makes donations then monitor them and categorize them as advertising and public relations. Make sure that you then promote your generosity so that it may have an impact on future business. If you provide a meal for your employees make sure that you track it and categorize this as an employee benefit. At the end of the month or year, print the cost of this and show your employees what that means to them in real dollars of value. Get credit for what you do – this is good business.
*Finally, charge what you need to charge. Restaurant prices cannot be negotiable. Once a price is set for a ‘la carte or banquet menus, do not waiver. You cannot afford to lower your prices. Offer your guests plenty of choice but do not sacrifice profitability. If there is too much resistance to an items price then change the menu item.
Making the decision to have a business mindset without sacrificing your commitment to quality is the only combination that works. A restaurant that is not profitable serves no one. Make a decision this year to be in the business of profitability. This one decision will serve your employees, your customers, your investors and you for the long run.
I remember a fantastic television ad years ago for a company that escapes me at the moment. The owner of the company assembled his key sales people together and said that they had a problem: many of their old, established clients had told him that they no longer felt like they knew his company, no longer felt like he was in touch with their needs. He paused and then said that they were going to change and go back to the company that they use to be. He passed out plane tickets to everyone and said they were to go back to building those personal relationships with their clients, listening to them and responding to their needs. To me, this was one of the most important commercials of the past 20 years. It pointed to a problem that exists in so many industries, and in this case – the food service business. Vendors have lost touch with the client. They do not understand their needs, are more concerned with moving product rather than constantly earning the respect and trust from their clients and serving as a partner in their business success.
Running a kitchen and a restaurant is incredibly hard. The amount of daily detail is mind numbing and creates a stressful environment that can easily detract from the primary mission of making customers happy. The centerpiece of every restaurant is the food; the differentiated product is service. Customers have come to expect excellent food as the price of admission for restaurants: “of course the food is good; that is what they should be all about”. To provide excellent food on the plate, the restaurant depends on vendors to deliver superior raw materials that are fresh, appropriate to the specifications of the restaurant, and cost effective.
It is in the best interest of the vendor to work with restaurants that are financially viable. To this end, the vendor should be a partner/advisor that is focused on helping the chef and the restaurateur set the stage for profitability. The best vendors know their product inside and out, understand their clients and the menus that they offer, are great listeners and most importantly are expeditors who will do what ever they can to insure that every client has what they need, when they need it, at the quality that they expect, and at a price that will allow the restaurant to make money.
Some may say that this is asking too much. I don’t think so. Think about those small, personal vendors who have focused on building relationships before they dedicate themselves to make a sale. The fishmonger who has a breadth of knowledge about the product that far exceeds the knowledge of the chef, but never flaunts that knowledge in front of their business partner. Rather than promote their knowledge they use it to build a systematic program of educating the chef and being a resource for information that creates a strong bond between the two. The cheese maker who brings in new cheeses for the chef to taste in an effort to enhance the restaurants ability to attract a certain customer profile and shows the operation how to maximize shelf life and flavor. This was the norm not too long ago and thankfully in some areas still exists.
What kind of relationship do you have with your vendors? How well versed are your sales people with the product that they sell? Do your sales reps understand the issues that plague you all the time: shelf life, yield, freshness, flavor profile, sustainability, integrity of the producer, and of course plate cost? Do your vendors bring ideas to the table when you are preparing to change your menu? Do they take the time to understand your needs, your food philosophy, and your restaurant image? Do you feel that this is beyond the scope of the vendor’s job or is this something that you crave but cannot seem to find?
Purveyors were like this not too long ago. Sales people were knowledgeable about their products and in many cases were experienced restaurant people who knew how to work with the ingredients they sold. Not too long ago a chef could call up their salespeople when they were running out of product on a weekend and know that their business partner would help to bail them out – somehow. It was not too long ago that salespeople would call the chef an hour before order time was about to close just to see if there were any last minute adjustments. It was not too long ago that a chef could call the vendor for research information or simply to ask them to seek out something currently absent from their product list. It was not too long ago that a conscientious restaurant that normally paid their bills on time but was in a seasonal slump could ask the vendor to carry them for a little bit longer until they were in season. It was not too long ago that salespeople did business face-to-face on the chef’s schedule rather than simply requiring chefs to punch in order codes on their computer.
Some may think that this vendor/chef relationship of old is not in tune with our modern, technology driven work environment and somewhat backward. I believe that most would stop and relish the relationship that the company owner referred to in the beginning of this article was trying to re-create. Successful business is all about building strong relationships: relationships with customers, employees, the media, investors, and yes: vendors.
There is no question that restaurants can take great raw materials and screw them up, but it is nearly impossible to take inferior raw materials and turn them into great finished menu items. Wolfgang Puck once said that his formula for success is to “buy the best raw materials and try not to screw them up”. At the core of this formula is the relationship built with the vendor.
Last week SYSCO purchased U.S. Foods, who had recently purchased Quandts. If I were a stockholder of SYSCO shares I would be thrilled. I just hope that SYSCO finds a way to use this merger to bring back those relationships between their salespeople and chefs across the country. I am going to trust that this merger will result in more intensive training of salespeople to insure that they truly know the product they sell. I am going to trust that these same salespeople will take it upon themselves to study their clients, their menus, their philosophy, their issues and work to build a partnership that will insure long-term support of each other and business success for the restaurant.
I have been fortunate to work with quite a few companies that were tuned in and salespeople who were responsive to the needs of the chef and the restaurant. The salesperson is the vendor they represent. Salespeople can make things happen if they truly have the restaurants success in mind. Salespeople can cut through the red tape when they know how important it is to the chef. These are the people I want to work with. People like Nancy Matheson-Burns at Dole and Bailey, Cindy Greer at Florida’s Finest Seafood, or Eamon Lee from Maines; they believe in “customer first”.