Tag Archives: restaurant success

THE RESTAURANT ECO-SYSTEM NEEDS HELP

17 Thursday Dec 2020

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There are a number of reasons why restaurants fail – some are predictable and avoidable, while others can catch a business off guard.  None, however, are as devastatingly out of the operators control as this pandemic.  Even the best operators are at a loss for solutions.  There are short-term band aid solutions such as takeout, delivery, or even conversion into retail markets where wine inventories and local necessities take over space once occupied by diners, but they are not a replacement for a steady turn of tables.  Restaurants have been relegated to outside dining or limited indoor space with loads of protocol limitations (some that are even more stringent than what is expected of other businesses) – this doesn’t pay the bills or keep a staff employed.

The pandemic is an “all hands on deck” problem that can be somewhat contained through simple precautions, but until there is mass vaccination of a population – these precautions dig at the heart and soul of a business that is essential to our way of life, our psyche, and our social health and wellbeing. 

There have been well over 100,000 restaurants that have closed their doors permanently as a result of the pandemic.  Many of these restaurants have been around for decades or even generations.  They just can’t survive the pain of lost business for months on end.  Now, this alone might not keep the average consumer or politician up at night, but what they fail to understand is that restaurants are at the center of a broad eco-system of businesses that are inter-dependent.  When your favorite restaurant closes its doors it is disturbing and sad, but it is also part of a domino effect that can tumble out of control.

Here are some of the other businesses that suffer when a restaurant closes, sometimes they too cannot survive as a result:

[]         Regional Farmers:  A significant percentage of farm crops are dedicated to restaurants.  A reduction in restaurant business leads to crop waste, unplanted land, and serious cash flow problems for farmers.  Already living on the edge – smaller farms cannot withstand this loss of business volume.

[]         Fisherman:  The end consumer’s love of fish cannot sustain a fisherman’s need to catch and sell a quantity of product to offset their expenses.  Restaurants account for a large percentage of a fisherman’s direct or indirect business volume.

[]         Ranchers:  Have you noticed that the price of beef, pork, and chicken has increased significantly over the past few months?  Those processing plants need to cover their substantial operational costs now that restaurant business has all but disappeared.  If processing plants cannot find an outlet for their end product then this trickles down to the rancher who is saddled with cattle, pigs and chickens without a market.  The end result is reduced herds, increased cost of feed, land without sufficient grazing, etc., etc.

[]         Cheese Makers:  Cheese, although there are exceptions, is still a product with a shelf life.  When restaurants fail or reduce their product needs, then cheese makers must do the same.  Inventories wane, waste becomes a real concern, decreased cheese product means a reduced need for milk putting a strain on dairy farmers, and the lists goes on and on.

[]         Equipment Manufacturers:  Restaurant kitchens are home to some very expensive equipment – when sales volume evaporates then restaurants are faced with aging equipment that they cannot replace, and delays in opening new operations that require equipment purchases.   There is no other outlet for this specialized equipment.

[]         Breweries:  Sure, maybe consumers are directing their beer purchases to their local package store, but breweries know that this direct to consumer cycle is not sufficient to support their growing expenses.  It is the restaurant segment of their business that creates a steady flow of cash to support their endeavors. 

[]         Distilleries and wineries:  The same holds true for those who market distilled beverages, and of course the wine industry.  Restaurants are the mainstay of business for vintners both domestic and imported.

[]         Table Top Manufacturers:  Restaurants are constantly buying and replacing china, glassware, and flatware for their restaurants.  It is a business that is predictable and dependable – until purchases stop.  Every restaurant that tries to survive during these difficult times will commit to tightening their belts and deferring any purchases that are deemed non-essential.  Those companies focused on tabletop have found that their business has disintegrated.

[]         Local Musicians:  Musicians need to play.  That wonderful local talent that graced the stage in bars and restaurants, and at banquets and festivals no longer has an outlet.  There is literally no opportunity for them to play and earn a living.  The need to survive will have a long-term impact on the availability of live music for quite some time.  Musicians depend on the restaurant business.

[]         Florists:  Sure – florist shops do very well on Mother’s Day, Easter, and Valentine’s Day – but the rest of the year involves a full-time focus on weddings, banquets, reunions, anniversary parties, and daily restaurant floral displays.  When this business goes away (there are no conferences, large wedding receptions, business gatherings, or restaurant floral displays during the pandemic) then the florist is left with unsustainable cash flow.

[]         Linen Companies:  The vast majority of restaurants do not have laundries where tablecloths and napkins, and restaurant uniforms and side towels can be laundered, starched and ironed.  These restaurants rely on linen companies for this service as they rent all of the above.  When business dries up in restaurants – so does business disappear for linen companies.

[]         Wholesalers:  Those companies that collect, deliver, stock, and bill for essential ingredients in restaurants depend, almost exclusively, on restaurants for their business.  Unless they can change their business model and supply ingredients directly to consumers – then wholesalers are left with a greatly diminished amount of business volume.

[]         Clothing Stores and Uniform Companies:  Those local clothing stores take a direct and indirect hit from a faltering restaurant industry.  Directly – those clothing stores that have relied on providing restaurant uniforms have found that their business model is void of customers.  Indirectly, as fewer people take the risk of dining out and shelter at home during the pandemic, they also cut back on clothing purchases that they can display when enjoying a night at their local restaurant or bar.

[]         Coffee Growers and Roasters:  The direct to consumer market for coffee roasters is certainly important, and at some level the take out business and home brew option is still strong, but still a large section of their wholesale business has dried up as restaurants fail at an alarming rate while others have seen business volume decrease by 50% or more.

[]         Landlords:  Building owners have been a target during the pandemic as restaurants have found it impossible to meet the requirements of a lease.  In the end, the landlord also has to pay bills and when a restaurant defaults – they find themselves in a very difficult situation.  “Should we cancel a lease for non-payment and evict the tenant, or should we try to compromise?”

[]         Bakeries:  Most small to medium sized restaurants cannot afford the space or talent needed to produce their own breads and other baked goods.  So, they rely on local or regional bakeries for those goods.  Many bakeries have built their business model on this type of wholesale as their mainstay.  When restaurants fail – they take your local bakeries with them.

[]         Culinary and Restaurant Management Colleges:  With a decrease in the number of restaurants and significantly lower volume of business – there is far less need for those young, eager graduates.  Schools are experiencing dramatic declines in enrollment and challenges in job placement.  Every day brings another college program closing.

The list could go on and each of these listed businesses has their own eco-system of impacted operations.  The point is that that failing local restaurant is only part of the dilemma.  If we allow restaurants to fail, then we allow the entire ecosystem to fail as well.  If restaurants are financially healthy then the system works well.  Right now the restaurant industry needs help from the Federal government.  Without extended PPP benefits, bank loan deferrals, help for landlords, and business recovery training for small restaurants – this system will crumble.  Restaurants cannot wait until 70 or 80% of the population receives a vaccine.  Restaurants cannot survive until the fall of 2021, restaurants cannot continue to wonder from week to week whether they will be able to accept indoor customers or not and they cannot wait for politicians to find a way to talk respectfully to one another.  They need help now!  If this is not provided then an important part of our culture, a major employer of people, and the heart of the food ecosystem will not survive.   Write to your representative, speak your mind through the media, stand in support of your local businesses and do your part.  We have lost too much over the past 9-months; don’t add your local restaurants to the list.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericacues.com  BLOG

CAFÉ Talks Podcast

https://cafetalks.libsyn.com/

CHEFS – FAILURE IS NOT INEVITABLE

20 Friday Nov 2020

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It seems that every time I check my email or flip through postings in social media – there is another restaurant, food business, or culinary school preparing to close their doors.  It is heartbreaking to read of life visions dashed and even long-standing, viable businesses choosing to throw in the towel.  I am writing this to tell you that, in most cases, this does not have to be the storyline.

There is no shortage of organizations established to support their segment of a far-reaching industry.  We have organizations for bakers, pastry chefs, savory chefs, executive chefs, corporate chefs, club chefs, restaurateurs, cooks dedicated to sustainability, whole food chefs, college food service directors, culinary educators, hoteliers, club managers, dietitians and nutritionists, vegetable farmers, dairy farmers, cheese makers, servers, bartenders, mixologists, grape growers, wine makers, and sommeliers.  Each has a focus on issues and opportunities for their particular group, but rarely do they talk effectively with one another.

I tend to try and separate cause and effect – knowing that nothing will truly change unless we identify cause and focus on that.  Restaurants, culinary schools, producers, and those in the beverage business are suffering because of the pandemic, but there were (and still are) plenty of other crisis situations facing these segments long before Covid-19.  Restaurant profits are too low, finding competent staff is far too difficult, prices of ingredients keep rising, rents are out of sight, culinary school enrollment continues to decline, competition is too expansive, cost of an education doesn’t match rates of pay, industry pay scales and benefit offerings are too low, and marketing is way too confusing in the era of technology and social media.  How many of these challenges might be addressed if all of these silo groups actually viewed themselves as part of the same business and worked together?

Here are some things that I know to be true:

[]         Restaurants Will Rise Up Again

When WWI and WWII ended – restaurants and bars were some of the first businesses to recover.  When the Great Depression came to an end – restaurants and bars positioned themselves to thrive.  As we rebuilt American pride after 9/11 – restaurants stood in position to greet a reinvigorated American spirit.  Following the economic devastation of 2008 – restaurants hunkered down for months and then came back refreshed and charged up.  And when we are able to bring the pandemic under control – the same recovery for restaurants will be the case.  Restaurants and bars will be different; their product, service, and method of operation will likely change – but they will rise up again.

[]         Culinary Schools Will Be In Demand Again

Those schools that self-evaluate and communicate effectively with the industry they serve will always be needed.  The question is – are they willing to change?  The purpose of colleges is to teach, prepare, train and connect students with the rest of their lives.  The purpose is not to generate degrees.  When they start to look at the relevance of products that they offer and diversify from the standard degree; and once they connect better with the industry that hires their graduates, they will stand tall and thrive.  Schools cannot continue to exist in their own bubble – creating content that fails to align with the industry they serve.  They cannot continue to create programs that place graduates in debt for 20-years following graduation and, they cannot remain effective unless they deliver an education model that takes advantage of industry partnerships.

[]         Bars Will Once Again Become a Preferred Meeting Place

People love to gather, to connect with friends and make new ones.  Restaurants and bars have always served that purpose and they will again once people are comfortable with being out in public.  In fact, I would dare to guess that bars, in particular, would find themselves busier than ever before.

[]         Smaller Farms Will Become Essential Once Again

One thing that has become very apparent during this pandemic is that our supply chain is far more fragile than we thought.  Compound this with the impact of climate change on centralized production and we have a real concern that reaches far beyond the altruistic and environmental reasons for connecting with local farms.  Although a very difficult business – the opportunities for smaller regional and local farms will only grow.  But, farmers and chefs must work together to create this model.  Neither can exist in a vacuum.  The farmer needs to grow what the chef is looking for and the chef must create more fluid menus that take advantage of growing cycles and the quality derived from peak crop maturity.

[]         Great Bread Will Be Even More Important to Restaurants in the Future

One thing that we have learned over the past two decades is that great bread is essential to a great restaurant experience.  We have also discovered that artisan style bread is preferred over the tasteless, poorly structured products that were prevalent in the American diet for decades.  For those who are willing to learn and invest the intense amount of effort – artisan bread will be in much higher demand – thus a business opportunity.

[]         Private Entrepreneurship Will Prevail in the American Restaurant Industry

Those who have been most impacted by the pandemic are the small, privately owned restaurants in America.  Tens of thousands will close their doors, yet the American dream of entrepreneurship will rise up from the ashes and restaurants that have always been, and will once again become – a first choice for those who want to leap into ownership.  If banks can become more “user friendly” for restaurants and landlords more reasonable with rent, then your neighborhood restaurant will return – maybe with new owners, certainly with new concepts, and a fresh way of serving the needs of a community.

[]         More and More People Will Seek to Eat Healthy as They Understand the Impact on Health and Wellbeing

It is inevitable that our obsession with healthcare will lead a larger percentage of the population to work on preventative issues such as obesity, diabetes, cancer, and heart issues – all are linked to the type of food, the method of cooking, and the amount that we eat.  Restaurants will need to respond, and they will.

[]         Profitability and Challenges with the Labor Market Will Eventually Find Common Ground

Restaurants are and always have been highly labor intensive while remaining very stingy with profit.  The answer has always been to skimp on rates of pay and benefits creating an ever-challenging swinging door of employees moving from operation to operation for a few pennies more in pay.  The likely answer is to change the way we look at production and service leading to more efficient operations requiring fewer employees that can be paid a fair wage with reasonable benefits.  Something has to give.

Now, if we can unify our efforts around these realities, if we can connect all of those silo driven organizations to work together for common solutions, then the business of food will thrive and become far more resilient before the next crisis strikes.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant and Culinary School Consulting

www.harvestamericacues.com

CAFÉ Talks Podcast

https://cafetalks.libsyn.com/

OUR DAILY BREATH: HOW WILL WE RE-CREATE THE CULTURE OF DINING OUT?

09 Thursday Apr 2020

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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, language, politics, etc. and as such – collectively define all levels of civility.   Food, as part of this formula, also interacts with each of those other components of culture – so it might be said that it is a common denominator.

As one of the oldest professions known to mankind – cooking is a noble endeavor that serves as a portal for all that a culture means and restaurants are the vehicle for delivering this to and sharing culture with people of all ethnicities, race, genders, and beliefs. Since the days of early merchant travelers during Medieval and Renaissance days – restaurants have been integral to societal development and the sophistication of people. As Julia Child once stated (and I paraphrase): “Every great transition of the human race has paralleled a remarkable change in the way that we grow, harvest, process, prepare, serve, and consume food.” The restaurant table is the canvas on which every person involved in that process has an opportunity to paint and tell a story.

When we close a restaurant we lose that canvas, when we shutter all of those restaurants we lose a significant piece of humanity. Yes, we will move through this challenging time and there will be a restaurant business on the other end of Covid-19, but how can we re-create that canvas that will allow society to tell the story of a culture?

Think about the important aspects of our lives that have relied on restaurants as a vehicle for people to get together. We celebrate our sporting teams wins and losses over food and drink – without the restaurant there is less opportunity for this to define our tribes of support. We celebrate the union of two people through marriage over a plate of food and as such raise our glasses in love and support of their commitment. We bring intellectual conversation to a larger audience while we break bread around a common table. We discuss and sometimes resolve our political differences with fork and knife in hand. We laugh and revel in our friendships after a hard week’s work by clinking glasses in that neighborhood restaurant that serves and pampers us. We look that life partner in the eyes over a well-prepared plate of food, get on one knee in front of an audience and propose that two lives become one. We even rely on that restaurant to pass along bad news in hope that the environment will temper the emotions that accompany that message. Restaurants are absolutely essential to our way of life and the way that we communicate our feelings and emotions. Life without this common table would certainly be a bit empty.

Will the culture associated with dining out automatically return or will we need to re-learn what it means to break bread in public, raise a glass, and celebrate being alive? What must a restaurant, or the larger restaurant community do to ensure that it, once again, becomes a central part of life?

If we simply view the role of restaurants as a manufacturer of food for consumption, then we will miss the point and lose the café, bistro, trattoria, or diner’s true role in society. It is the experience of dining that is most important and it is this experience that allows a restaurant, or for that matter – the restaurant industry to flourish. As we prepare for the return to a “new normal” we must keep the larger role of restaurants in mind. Here are some thoughts:

FOOD IS THE UNIVERSAL LANGUAGE

[]         NO ONE INDEPENDENT RESTAURANT CAN SOLVE THIS CHALLENGE:

For the culture of restaurants to return – every operation must collaborate with others in their community to build an atmosphere of common purpose. Individual restaurants succeed when all restaurants succeed. When neighboring restaurants understand their importance to the restoration of a positive cultural climate – then the atmosphere of hope and celebration becomes apparent. All for one and one for all should be the standard of operation.

[]         KNOW THE MESSAGE – TELL THE STORY

The restaurant that knows the story behind the business and the community and tells that story in a heartfelt manner is the restaurant that will build relationships around the table. Customers may walk through the door initially because of the food, but will return time and again because of the story that the owners and staff tell.

[]         THINK GLOBAL – ACT LOCAL

We are truly in this together. Every restaurant must think in terms of how do we help the entire industry rise again.   At the same time it is how the operation expresses this goal in their local community that will ensure a steady flow of supporters. Become active in helping the industry rebuild itself, change where necessary, and polish its rough edges while at the same time do everything possible to collaborate with local vendors, organizations, farmers, and complementary businesses to show how essential the restaurant is to the culture of a town or neighborhood.

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[]         IT’S ALL ABOUT SERVICE – IT’S ALL ABOUT FOOD

When restaurants return they must understand that service and food are equal in importance to the guest. Great food without great service is shallow just as great service without great food is never a winning combination. Defining what each means is unique to every operation.

[]         PEOPLE FIRST – RELATIONSHIPS FIRST

When all is said and done it is the people who work in a restaurant that paint the picture of success on that canvas and it is the relationships that are built between those staffers and guests that make all the difference between a successful restaurant and one that is simply biding time.

[]         TREAT EVERYONE THE SAME AND EVERYONE DIFFERENTLY

One of the more challenging aspects of running any business, and particularly restaurants is that every customer walking through that door is unique and expects to be treated as such. We obviously need to have standards of operation, but if we are not prepared to adapt frequently to the needs of each guest then we may never reach a consistent level of success.

[]         REMEMBER THE TDE

Finally, it is essential that every quality restaurant (regardless of the style, type of food, or price point) should learn that the restaurant “experience” is one that appeals to all of the human senses. Great restaurants appeal to the sense of smell by accentuating those positive aromas of the kitchen, the sense of sight through well appointed, clean and attractive restaurants and plate presentations, appropriate and complementary sounds whether they be the sounds of the kitchen or music that complements the experience, knowing that the physical sense of touch applies to the comfort of the chair, the weight of the flatware and glassware as it matches the type of food and price point, and the right textures of quality food on the plate, and finally the sense of taste – food must be consistently prepared in such a manner that causes the guest to pause and truly savor every bite. This is the Total Dining Experience (TDE).

The way to bring back the restaurant industry is to bring back its importance to the culture of a community and society. We can and must play our role in making sure that this is at the heart of our decision making process.

PLAN BETTER – TRAIN HARDER

Remember the TDE

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericacues.com BLOG

OUR DAILY BREATH: CHEFS AND RESTAURATEURS – IT’S A NEW DAY TOMORROW

30 Monday Mar 2020

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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. Well, we now have the time.

Labor issues have been at the top of the list for decades: low pay, no benefits, unpredictable schedules, 12-hour shifts, and difficulty finding and retaining good employees when these issues persist. Low profitability, vendor challenges, rising cost of goods,    cumbersome regulations, high rents, expensive marketing, and ebbs and flows of business volume have collectively made this enticing business to enter – nearly impossible to maintain. “We can’t just stop what we are doing and find solutions to these problems – I am most concerned about getting through today.”

If there is a silver lining to the monumental problem that we are facing now, it might be time to think, assess, trouble-shoot, and plan for a brighter tomorrow. It appears that the federal stimulus bill may help small restaurants stay afloat for the next few months, but it will not solve the long-term issues that restaurants have sat on since the beginning of our growth spurt in the 1970’s. Now is the time, we have the time, and we have the ability to re-invent, to prepare for a bright tomorrow.

This virus has demonstrated just how important restaurants are to people of all ages and socio-economic backgrounds. It has also demonstrated just how fragile that need is. We must learn from this and plan accordingly. We know that the need to network with friends and neighbors is essential to all who live in communities throughout the world. Restaurants’ are a magnet for people to connect, discuss, smile, laugh, and enjoy each other’s company. Food is the universal language, a language that everyone speaks and enjoys using. We know that busy lifestyles demand that restaurants fill a physical need to eat when cooking at home is oftentimes too hard to arrange. We know that the restaurant industry is essential to the economic health of countries throughout the world – engaging more people than nearly every other employer outside of government. And, we know that restaurants provide millions of people with the opportunity to become entrepreneurs – a dream that exists in so many of us. Without restaurants – society just seems incomplete.

So..what should be part of our thinking right now? What can we do to prepare for a brighter future in the restaurant business? What can we do NOW to set the stage for future success? Here are some thoughts:

[]         LABOR:

We (restaurants) cannot continue to expect to find and retain competent, dedicated, passionate employees as long as our current labor model is accepted and used. A livable wage is something that talented, hard-working people deserve. Basic benefits of reasonable healthcare, paid vacation, and paid sick time are the standard in nearly every other industry and must become the standard in ours. More reasonable hours (realizing that peaks in business require extra effort) should be a goal. This does not infer that all restaurant work should be necessarily based on a 40-hour workweek, or that 8-hour shifts should always apply, but it should still be a model that we are moving closer to. Two days off per week (with some exceptions) is reasonable and helps employees find some balance in their lives. These are not excessive goals – this is a standard that we have ignored for far too long. To fail to do this will simply perpetuate the labor challenges that plagued us before the virus.

[]         CONCEPT DEVELOPMENT:

In order to address the labor issue above, we may very well need to reconsider our restaurant concept. What restaurant platform will continue to exceed customer expectations, build pride among employees, and establish a reputation for the restaurant that drives financial success, and will provide a reasonable living for our staff members?

[]         EFFECTIVE MENUS:

As the concept evolves there will be exciting opportunities for chefs to reimagine menus that work, menus that require fewer, well-compensated employees who still bring the talent and passion to the kitchen everyday. Let’s start from scratch and build a menu with these critical factors in mind.   Forget the established models that have been at the core of our existence since the days of Escoffier and look at what works in the 21st century.

[]         BRICK AND MORTAR:

The cost of building, renovating, and maintaining a brick and mortar restaurant are excessive and oftentimes stand in the way of profitability. We are learning that people are interested in delivery, enamored by food truck style concepts, and willing to embrace a different style of service. What can we do to minimize the on-going investment in brick and mortar?

[]         RENTS:

Restaurants and landlords need to have serious discussions about rent and its impact on business survival. If the cost of rent exceeds 6% of sales then it is very difficult for the average restaurant to make a go of it. For the landlord – a successful restaurant is a magnet for growth in a community, a magnet that provides many future opportunities for revenue and financial success beyond that restaurant space. Maybe the restaurant is a means to an end for the landlord rather than an individual driver of revenue.

[]         SUPPLY CHAIN:

A marriage of local, regional, and large corporate vendors is a healthy model for restaurant success. Putting all of your eggs in one basket by limiting your purchasing to one vendor is never a good model to use. Building strong “trust” relationships with vendors should be a goal for both parties. Aligning with vendors who are able to work with the restaurant in creating a financially viable operation also works for all involved. Let’s work on this.

[]         SUSTAINABILITY:

This may be a perfect time for conversations between kitchens, vendors, and packagers to find better solutions to waste management, managing ingredient seasonality, protecting supplies of over-used ingredients, and helping the planet survive.

[]         PROFITABILITY:

If a restaurant can only look forward to 5-6% net profit then the business will always face financial challenges. The best restaurants not only prepare and serve great food, they are not only operations that treat their employees fairly – they are businesses that are financially solvent. We need to take the time to define a concept, a menu, and a system that will allow for a more reasonable and manageable profit picture.

[]         CONNECTING WITH THE MARKET:

This is the time to build a greater understanding of the new marketing environment for businesses. Those traditional methods of old either no longer work, or they are priced out of reach for the average small business. Learning how to leverage social media and word-of-mouth is critical for long-term success. Being able to collect analytical data that demonstrates, what, how, and why certain methods of marketing work will become even more important to the small business. Take the time to investigate ways that data collection can help you manage your marketing strategy moving forward.

Yes, we are fearful of what is before us, and of course there is real uncertainty of how to deal with todays challenges. Let’s put aside the fear and relish the opportunity of time to work on what tomorrow can bring.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericacues.com BLOG

 

 

 

 

 

ARE RESTAURANTS FACING EVOLUTION OR REVOLUTION?

25 Tuesday Feb 2020

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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 fact, what I hope to be is something more in line with being an advocate for change before change happens without us.

I don’t have the answers – they need to come from a consortium of restaurant professionals representing operations, organizations, education, ownership, and customers. I can, however, sound the preliminary alarm by demonstrating and connecting those dots, so that the picture becomes clear and telling. Here are some of the indicators:

  • The rise in support for PLANT FORWARD styles of cooking that demonstrates a healthier approach towards diet is apparent. Plant forward includes vegetarian, vegan, and a commitment to increasing fresh fruits, vegetables, beans, nuts and seeds, and decreasing the amount of animal protein. To fail to recognize this and adapt menus to accommodate EXCITING versions of the above is a serious mistake.

 

  • Increased popularity of non-alcoholic cocktails is either an opportunity for restaurants or a real roadblock to continued success.

 

  • WINE SALES are decreasing worldwide. While a short-term blow to the wine industry and restaurants that are wine centric there are opportunities to build in craft beers and hard cider as well as increase a less contrived approach towards consumer wine education. Pretention is fading in popularity. Don’t forget that the restaurant industry has supported itself on the back of alcoholic beverage sales – this has been our model for decades. Do we need to re-evaluate?

 

  • We have predicted the demise of fine dining at least a dozen times in the past 25 years – is it really happening now? Americans are spending nearly 50% of their annual food budgets in restaurants and indications that this can continue to grow – is fine dining the right answer? If 3% or less of the restaurant industry is fine dining and this is the segment that receives the most attention – what about the other 97%?

 

  • Is BIGGER ALWAYS BETTER? Who benefits from over-sized and super sized portions? Obesity is an epidemic in the U.S., so, larger than necessary portions is harmful to consumer’s health. Large portions stretch a restaurant’s ability to convert sales into profit, and large portions do very little to demonstrate any level of finesse that a chef might try to muster up. Is it time to stop using massive portion sizes to falsely demonstrate value? Is it time to move past the 18 oz. strip steak, the triple-decker burger with bacon and cheese, and the tomahawk pork chop that makes the diner feel like he or she owes the world an apology after forcing that last bite?

 

  • When did it somehow become dangerous or negligent to drink real milk, consume that delicious cheese, or spread a little butter on your toast? Well, whether it is for health concerns or a new philosophical resistance to consuming anything that originates from an animal – this is the new reality. What are you doing to modify menus, reduce portions of dairy, and/or educate consumers about moderation?

 

  • The conscience of modern chefs has been leaning toward farm to table for more than two decades. Artisan farmers have gravitated to small rural communities and transitioned to decentralized, sometimes specialized, organic farming to help to feed this growing interest and define their concern over the quality of ingredients and their impact on sustainability. This is great, however, those small farmers are finding it increasingly difficult to generate enough sales to offset the significant costs associated with farming. Can they survive? How do we stay true to the concept of farm to table and help these artisans make a living?

 

  • Young cooks are less inclined to sacrifice balance in their lives for the demands of the kitchen. Fluid schedules, holidays, 12-hour shifts, and all of the physical and mental demands of the job are no longer part of a life that they choose. These employees may resist initially, but then simply choose to find another line of work. This, above all else, paints a grim picture for restaurants of today and tomorrow, unless we find a solution and accept the need to change.

 

  • Once an exciting career that young people and those reinventing themselves were clamoring towards – becoming a cook and eventually a chef has lost it’s sizzle. The reality of the work and the commitment has finally over-shadowed the glamor that is falsely depicted on television. Enrollment in culinary schools has plummeted, and every restaurant from coast-to-coast is struggling to find new employees and keep the ones they have. Growth means very little if you can’t find the right people to execute the vision of a restaurant.

 

  • The government crackdown on immigration may seem right to some, but to those of us in the restaurant business it means that many of our most dependable, hard-working employees are gone. A reasonable resolution to the country’s immigration policies is critical and essential for the food business from farm to table.

 

  • With an increase in the number of food recalls, and serious questions about the source and the process of bringing food to market, there is a growing mistrust in the integrity of the food supply. This can only lead to a subsequent mistrust of restaurants and what they offer.

 

  • When a presidential candidate states that “Anyone can be a farmer, it takes a lot more grey matter to be in the tech business”, we know that the food supply chain is losing its importance in the eyes of the U.S. government. This will likely backfire at some point soon.

 

  • After all of these years of growth, the restaurant industry has yet to find resolution to the cause of many of its woes – restaurants return very little profit which cripples their ability to improve wages and work conditions, and do what is right vs. doing what they can afford to do.

 

  • The gentrification of neighborhoods, which seems to always begin with an influx of new, popular restaurants, eventually attracts new landlords who are greedy for profit. Increases in rent have driven restaurants out of business even when they are otherwise successful.

The list could go on and on – the bottom line is that as hard as the restaurant business has always been, it now seems to be leaning towards impossible. Necessity may be the mother of invention, but invention begins when people recognize the need and the opportunity for change. Isn’t it time for those of us in the restaurant business to recognize all of the signs and find a way to collaborate on real solutions?

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericacues.com BLOG

 

 

 

 

 

 

 

RESTAURANT OWNERS – WHAT ARE THEY THINKING?

17 Sunday Nov 2019

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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 sure hot food is hot and cold food is cold, serve it quickly and with a smile, and provide value for the money spent. Simple right? It would be if customers were not fickle, if vendors were always dependable, if raw materials were always consistent, if competent staff was easy to find and retain, if your equipment never broke down, if the weather always cooperated, and if the economy would stay consistently strong. Unfortunately, all of those factors seem to work against you.

With all of that uncertainty – why do restaurateurs make it all the more difficult by coming up with hair brained ideas without enough research, and without demonstrated feasibility, and why do they lose sight of the details?

Moving into an expensive rent district to sell a single – value product that you happen to like is asking for failure. That cupcake, cookie, soup, salad, or bagel palace will never pay the rent, attract enough volume, or inspire a staff that you are trying to retain. The Lebanese restaurant across from the Alamo in San Antonio, Texas may be located in the midst of heavy foot traffic, but no matter how great the food is, the concept doesn’t fit the environment. When you open the sixth pizzeria in a two-block radius you will struggle to survive on the slice of business pie that you are left with. And when that “authentic” tacqueria opens with two 16-year old white Anglo Saxon high schoolers assembling the “Best Tacos in Town”, some customers will question the use of the word “authentic”. What are they thinking?

There are many reasons why there are a million freestanding restaurants in the U.S. and why a large portion of them file for bankruptcy within 1-5 years – they just don’t think it through. They don’t know what they are getting into and they certainly are not prepared for the reality of executing a restaurant concept.

Now, I must admit – I don’t own a restaurant, nor have I ever owned a restaurant. Even though I have spent five decades in the restaurant business, and even though I have thought about owning a restaurant many more times than I can count – I had either enough intelligence or far too much fear to actually take the leap. I know that as smart as I might be with preparing others to make the right decisions, I could easily fall into the trap of making those decisions for myself on emotion rather than street smarts.

So, what are the problems and what are the solutions?

PROBLEMS:

[]         WE LIKE WHAT WE LIKE, THUS EVERYONE ELSE WILL AGREE WITH US

Fortunately, or unfortunately to some – this is the service business. This means that those who choose to be restaurateurs need to design menus and concepts that address the needs and desires of potential customers, not simply stroke their own ego. The minute the restaurant becomes a vehicle for a chef’s self-expression is the minute that begins to stress the system and drive the train in the wrong direction. Sometimes it works, but more often than not this is the turning point towards failure. If you want the restaurant to be an expression of art, then make sure that your bank account is flush with cash.

[]         EMOTIONAL EXCITEMENT TAKES HOLD

The thought of owning your own, driving the train, making all the decisions, expressing yourself in a manner that was limited when working for someone else, and the thought of your name on the marque is foremost in your mind, is the thought that clouds your realistic business decisions. Step back and do your research – put aside the emotion until this is done.

[]         CHEFS ARE ALL ABOUT THE PRODUCT – OWNING A RESTAURANT IS BUSINESS

Chefs are technicians and artisans – they are rarely great business people. The most successful restaurants are ones where a partnership exists with both skill sets in place. Find a business partner willing to say “no”.

[]         NOT EVERYONE WILL SHARE YOUR PASSION

In the end, whatever your culinary passion – don’t assume that your staff or your customers will be as passionate about your concept. You will need to either draw them in and win disciples, or invest an incredible amount of time and money looking for the right players. The same is true with customers – if your concept depends on rabid loyalists, then you will need to have patience and a big marketing budget to find and keep them.

[]         COMPETITION IS A FACTOR – DON’T IGNORE IT

Every competitor, even the marginal ones, takes away from your business potential. Study them, watch them, respect them, and work like hell to demonstrate why you are better than them. The pie is only so big and the more competition, the smaller the slice.

[]         MARKETING ONLY WORKS WHEN THE PRODUCT OR SERVICE CONNECTS WITH YOUR TARGET

Don’t expect to turn customers around to your way of thinking and cooking. All the marketing dollars in the world will never convert a carnivore into vegetarian or vice versa. Make sure your product connects to the audience available.

[]         LOCATION, LOCATION, LOCATION – COSTS BIG BUCKS

Yes, without a doubt – Ellsworth Statler’s golden rule still applies – Location Rules! Keep in mind you can overcome this, but it takes time and money. On the other hand – great locations today demand very high rents. Do your research.

[]         IF YOU ARE NOT PREPARED TO CHANGE – THEN DON’T TAKE THE LEAP

Some may say that it is important to stand your ground and stay true to your concept – great – as long as you have the wherewithal and iron stomach to hold your ground. The most successful companies embrace the need to change and do so before it’s too late.

[]         AUTHENTICITY IS IMPORTANT

In the restaurant business it is critical to be true to form if, in fact, you are promoting an ethnic cuisine, style of cooking, or food philosophy. Research it, build a level of understanding, immerse yourself in a culture, hire people who feel it, and promote real authenticity. Don’t try to be farm to table unless you connect with farmers, believe in them, friend them, and work to help them. Don’t offer a Korean noodle shop unless you can spend time in Korea and learn about the culture, unless you are willing to hire Korean cooks and support them through a true understanding of ingredients, culture, and process. This is your investment in being true.

THE SOLUTIONS:

[]         THE FIRST AND MOST IMPORTANT ADVICE HERE IS TO NOT OPEN A             RESTAURANT

Sounds harsh – but IT IS A VERY, VERY, VERY difficult business with incredible demands placed on those involved, and a VERY high risk of failure. So, if you want to jump in – do so with open eyes and total commitment to making smart decisions.

[]         BUT IF YOU MUST:

If you feel the draw that cannot be controlled – then enter it with the right attitude and a willingness to listen and act.

[]         STUDY THE MARKET

Know the market for customers, know what they like, understand their lifestyle, research the characteristics of the demographic, talk with them, win them over, listen intently, and act accordingly.

[]         FIND REAL ESTATE YOU CAN AFFORD – DO THE MATH

Yep – sometimes you need to walk away. The rent or lease SHOULD NEVER EXCEED 6% of your anticipated yearly sales. If it stretches beyond that – walk away! Rent is funny – it doesn’t care that you had a slow month, it is oblivious to your equipment breakdowns, and need to raise the pay scale for employees – rent needs to be paid on time or the landlord will pull the plug.

[]         BE A PENNY PINCHER

Whatever the purchase- ask first: “Do we really need this now?” Look to see if you can buy something used, learn how to make basic repairs on your own. When it comes to menu – keep in mind that real talent is not in grilling a Kobe Steak – the real talent is braising a chicken leg that is exceptional in taste, and far less expensive to work with. Buy smaller garbage cans for the kitchen – control your waste and make it everyone’s job.

[]         KEEP IT SIMPLE – DO IT WELL

Plan smaller menus, build great flavors, be consistent, change frequently, and be unique within the constraints of what people are willing to buy, offer an acceptable range of prices, and keep your inventory down to a minimum.

[]         BE THERE

Sorry, if you want to own it – you need to be there – all of the time. Train your people well enough so that you could leave, but never assume that it will be the same without you. This is the price of admission.

[]         HAVE ENOUGH MONEY IN THE BANK

YOU WILL NOT MAKE A PROFIT IMMEDIATELY – in fact, it may take you 2-3 years before one dollar of real profit sits on the table. Have enough back up in the bank, or the resources for those funds, to support you through those initial years.

[]         BE FLEXIBLE

Study every day, change your plan of attack, don’t get depressed when it’s not working – be prepared to adjust. The best restaurateurs are able to audible on the line of scrimmage.

[]         KEEP IT INTERESTING

You want guests to come back frequently. You want them to bring their friends. You want them to trust you, but at the same time it is always important to throw in a well thought out surprise.

[]         INVEST IN THE EARLY ADOPTERS SO THAT YOU CAN GET TO THE EARLY     MAJORITY

The early adopters are more likely to try something new, but they only represent about 12% of the population. They will get bored in a relatively short period of time and drift to the next new thing, but if you manage them well, then they can be used to entice the majority players who will stick with you for the long run.

[]         PRICE IT RIGHT

The right price is not always the lowest price. Keep in mind that it is all about value. Is the price worth it? Whether it is food quality, service, ambience, or ways that you can customize a customers experience – make sure that they walk away feeling like it was money well spent.

[]         TRAIN, TRAIN, TRAIN

No need to say too much about training – YOU CAN’T SAY ENOUGH ABOUT TRAINING. Everything else falls into place when you invest here – everything else falls apart when you don’t.

[]         KEEP YOUR STAFF HAPPY

It was Richard Branson of Virgin Brands who said that happy employees make happy guests. Be a cheerleader, be a supporter, pay them fairly, and invest in training.

[]         IF IT DOESN’T WORK – CHANGE; IF THAT DOESN’T WORK – THEN HANG IT UP BEFORE IT’S TOO LATE

Know when to pull the plug. Most long-term success comes from plenty of failure. Chalk it up to experience, but don’t hang on until you and your bank account are totally drained.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

www.harvestamericacues.com BLOG

WHEN IT COMES TO MENUS IN 2019 – LESS IS MORE

20 Tuesday Aug 2019

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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 is not only hard to find great employees – it’s even difficult to find ones that a few years ago you would never, ever hire.

[]         COOK RETENTION: Hanging on to competent, dedicated, and passionate cooks is even more difficult since they live in a sellers market. If they are good, they are in demand. When they are in demand – operators are willing to pay the price and offer more comfortable work schedules. You can’t blame the good ones for leaving.

[]         OVER THE TOP COMPETITION: For some strange reason, even with the increased level of challenges and the likeliness of failure – more and more restaurants continue to open. This flood of competition is focused on gaining market share and as a result they work overtime to cut into your piece of the pie. In the end, everyone seems to lose.

[]         INCREASING PRICES OF INGREDIENTS: Your vendors and their suppliers show no mercy. This flood of competition places greater stress on the supply-chain, which in turn opens the door for increasing prices. Whatever the market will bear rules in this type of business environment.

[]         LEASE AGREEMENTS THAT ARE NO LONGER REASONABLE: It has always been the case that restaurants lead the way in gentrification efforts to bring downtrodden areas back to life. Restaurants create energy, interest, and business as the innovator crowd throws their support to foodservice operators who create a buzz. The area comes back to life, business comes on strong, and the entire area becomes energized. As soon as this becomes apparent – new landlords smile and raise rents so that they can cash in on the changes – oftentimes pushing restaurants into a corner where small profits turn into no profits.

[]         PRICING YOUR PRODUCTS BEYOND CUSTOMER’S DESIRE TO PAY: In response to all of these conditions – restaurants are inclined to maintain the excitement of their menus and service and simply raise prices again and again to compensate for out-of-control expenses. At some point restaurants inevitably price themselves out of the market and create a perception of price gouging.

[]         MINIMUM WAGE HIKES: Yes, our industry has a reputation for lower than average wages and minimal, if any, benefits. It is a tough, labor-intensive business that is quite unforgiving when it comes to profit, so the employee is often on the short end of the stick. Rather than collectively seek fair solutions, we wait until the government feels that they must intervene on behalf of the employee and insist that wages go up while none of the factors that keep wages low are addressed. Should employees receive a living wage? Of course, the answer is yes – but without finding solutions to rent, ingredient costs, low profitability, etc. the only result is restaurant failure.

How do we (those who own, operate, or hold the position of chef in a restaurant) adapt and survive when there are so many reasons why we should fail? The answer is likely quite complex, but here is one partial solution that is within our grasp – CREATE MENUS THAT CAN ADAPT TO THESE CHANGES.

[]         SMALLER IS BETTER

In the current business environment, large menus don’t cut it. Too many choices lead to inconsistency, especially with a shallow labor pool. Large menus mean larger inventories of expensive ingredients with short shelf lives, more equipment to support a larger number of hands to do the work, and less focus on doing what you do exceedingly well. Keep it simple, keep it seasonal, buy the best ingredients you can, and execute preparation at the highest level.

[]         MAKE IT CONNECT

Smaller menus allow restaurants to connect to a cuisine, a culinary focus, and natural complements between appetizers, entrees, and desserts.

[]         MULTIPLE USES OF INGREDIENTS

Take your time to weave cross utilization through the entire menu and production system. Total elimination of waste may be too optimistic, but great menu planning can help to bring you close to zero.

Painted in Waterlogue

[]         PLAY TO THE SENSES

It is still about creating food experiences and the best restaurants will invest the time in planning for full integration of sight, sound, smell, touch, and taste. The best menus will be hard to resist if these connections are made.

[]         STEP BY STEP

Giving chefs poetic license with food may seem like the best way to encourage passion in cooking, but this does little to build consistency in appearance, flavor, and cost. With a labor pool that is less passionate, and fewer in numbers, it seems time to build a system with your menu that walks cooks through every step in production and plating. Some may cringe at this and proclaim that it inhibits creativity, but there is a reason why many of the chains still remain profitable in tough times.

[]         BUILD IN PRIDE

Now comes the balance – “How can we create a step-by-step system of production and create a sense of pride for cooks and chefs at the same time?” Consistency and pride are not mutually exclusive. Pride comes from a job well done, beautiful food, ingredients that are cared for properly, cooks that are cognizant and protective of the source of those ingredients, flavorful food that is always on mark, happy guests, and a restaurant that is popular and financially viable.

Painted in Waterlogue

[]         BE THE BEST AT SOMETHING – MAKE IT YOUR SIGNATURE

Why should a guest choose your restaurant over another? Marketing firms invest countless hours and financial resources to answer this question, when oftentimes it comes down to this simple reality – is there something truly unique, truly special, and exceptional in quality that can only be found in your restaurant. What will it be? Is it a particular dish made in a way that sets you apart? Is it your personalized service? Is it the theatrics around a food presentation? Do your due diligence and work on finding that “something special” and play it for all that it’s worth. To Morton’s it was their roast beef cart, to the Palm it was their incredible steaks, to Wolfgang Puck it was a unique approach to wood-fired pizza at Spago, to Joel Robuchon it was his whipped potatoes that were half butter, to Outback it was the Bloomin Onion, and to Katz’s Deli it was the hot pastrami on rye – find your signature.

[]         CHICKEN LEGS OR WAGYU FILET

It is hard to make a profit on high cost ingredients when selling prices have a ceiling. The talent in cooking a steak (certainly still an art to do it right) is less pronounced than making a leg of chicken just as exciting – yet how many restaurants take the time to figure out a way to bring the chicken leg into prominence. The chicken leg is profit waiting to happen – invest in it.

[]         SMALLER PORTIONS OF PROTEIN, MORE INTERESTING VARIETY ON THE     PLATE

We continue to surrender to the feeling that bigger is always better. Bigger when dealing with proteins either shreds away profitability or drive restaurants to charge obscene prices. Work on building the whole plate with interesting variety – well prepared vegetables, relishes, chutneys, reductions, etc. and keep those protein portions under five ounces. No one needs that 18-ounce strip steak, or five-pound lobster – work on making the plate interesting, of real value, and avoid putting customers in a position to regret their indulgence.

[]         FEWER STAFF, HIGHER QUALITY, BETTER COMPENSATION

If the menu is planned correctly then restaurants can maintain operation volume with fewer hands. “Less hands” place a restaurant in a position to find more talented individuals and pay them well. When the formula of efficiency, quality, pride, and good pay is packaged, then a restaurant might actually be able to ride the storm and come out on top.

[]         BREADTH OF PRICING OPTIONS FOR GUESTS

I am not inferring that restaurants should eliminate that delicious steak, or maybe some seasonal halibut or beautiful diver’s scallops, but when they exist on a menu for premium prices, make sure there are ample lower priced, just as special, items on the menu to create opportunities for guests to find value that fits their pocketbook.

[]         OPEN FIVE DAYS ONLY IF YOU CAN SWING IT

Last, but not least, this may not be a menu issue, but a stressed out labor pool has made me think clearly about operating hours and I believe that, if you can generate enough sales to stay afloat – five days per week is a real solid answer to success. This gives the operation a time to rest, every employee some predictability in their lives, the chance to keep your “A-Team” together whenever you are open, and relieve some of the stress from trying to find adequate numbers of employees to stay the course.

Food for Thought!

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting

www.harvestamericaventures.com

www.harvestamericacues.com BLOG

THE SLOW, PAINFUL DEATH OF A RESTAURANT

07 Thursday Dec 2017

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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 the operator who more than likely had visions of happy guests filling restaurant seats, plates of beautiful food leaving the kitchen, happy banter taking place among employees, a full parking lot and financial success. Now that investment of hard earned funds, passion, an idea that was felt to be spot on, and eager employees who shared in that hope was gone. It is one of the most painful things to watch and even more so to be a part of.

The question always is – was this outcome avoidable? Is it possible that given better planning and more astute operation – this restaurant could have risen to the top as another example of a great business? What happened, what were the signs, should the operator have turned right when he or she turned left?

There are many realities related to the operation of a restaurant that are far too often ignored or misunderstood and there are just as many fixes for those realities. Why then, when the pitfalls are well known, do restaurant owners and operators fail to prepare, adjust, and respond to the signs in front of them?

Take a look at this primer that might make a difference for many who have the best of intentions only to find their dreams dashed:

  1. PAUSE BEFORE YOU SIGN ON THE DOTTED LINE

Quite often – restaurants are doomed before they even start. Make sure that you do the research, run the realistic numbers, look at the competition, know the area and the market potential – make sure that the planets align before you pull out your pen.

  1. STEP BACK AND RESPOND TO THE NEED

Every operator, whether he or she is an accomplished cook or not, has a desire to build a menu based on what they believe will sell and represent them well. This is, of course, human nature, but the most successful restaurants build a menu based on what the community is interested in buying. Research the market first, talk to people, observe their eating habits, and find out what is missing in the area. At the very least – consider this info before the menu is in print.

  1. START WITH THE LOCATION AND THE LEASE

Location IS IMPORTANT! Sometimes a block in the wrong direction can lead to business doom while a block in the right direction can bear loads of fruit. Spend the time to analyze parking, traffic patterns, why people move the way they do in a neighborhood, and what other businesses are in place that attract patrons. Take a breath and take your time.

Once a site is identified make sure that you can afford it. The best rule of thumb for restaurants is that your lease, rent, or mortgage should never exceed 6% of your anticipated annual sales. REMEMBER THIS NUMBER and do not allow yourself to drift from this basic reality. If the lease proposed exceeds this percentage – be prepared to walk away.

  1. PUT ASIDE THE EMOTION AND THINK LIKE A BUSINESSPERSON

Going into business is very exciting. Emotions run high when a potential restaurateur looks at a building and the wheels begin to turn with thoughts of grand success. This must be a sound business decision – dot the “I’s” and cross the “T’s”.

  1. DEFINE WHAT YOU INTEND TO BE

A vision is important, but only viable when it is converted into action. Every successful restaurant has a fairly clear idea of how they want to be perceived by employees and guests.

  1. THE PRODUCT SETS THE STAGE

The product served is connected to everything else in the restaurant. The menu should connect to the aesthetics, type of staff, qualifications of the culinary team, pricing strategy, equipment, marketing plan, and the profile of guests to be served. Spend the time to make sure that these connections are in place and are based on solid research.

  1. IT’S ALL ABOUT THE STAFF – HIRE RIGHT, TRAIN WELL, AND LEAD

No matter the quality of product, the best location, the most attractive lease arrangement, the integrity of the marketing plan, and the cost controls in place – if you fail to hire the right staff, train them exceptionally well, and assess their performance – all is for naught. It’s all about your staff.

  1. FOOD BRINGS THEM IN – SERVICE BRINGS THEM BACK

Food and beverage is, of course, at the heart of any restaurant. You must ensure that this is well developed and in tune with what customers are willing and interested in buying, but it is the quality of service, the true hospitality, the connections that are made between staff members and the guest that bring people back and convert customers into friends and ambassadors. This can never be forgotten.

  1. CONSISTENCY

What ever you do – the restaurant product and service must exude TRUST. Guests want to trust that EVERY TIME they patronize your restaurant they can trust that the level of quality and attention to detail will be there.

  1. PROFIT IS MEASURED IN PENNIES

Everyone in your restaurant must understand that the restaurant business is a business of pennies. The smallest missteps equate to an erosion of profit. Portioning, controlling waste, eliminating the potential for theft, watching vendor pricing, and using established methods to determine accurate selling prices are critical pieces in the puzzle.

The other factor that drives nearly everything else is that “The Top Line Drives the Bottom Line.” Owners and operators must focus on driving sales, filling restaurant seats, and training staff members how to increase check averages. This must be assessed every day.

  1. SWEAT THE DETAILS

Everything is important! The cleanliness of the parking lot, the working order of signage, the current status and easy navigation of your website, the content of your social media, the spotless presentation of the restaurant dining room, the cleanliness of bathrooms, the attention to uniforms and grooming of staff, making sure tables are level, the condition of china and glassware, the friendliness of staff, the speed of service, the presentation of food, temperatures of food, temperatures of the dining room, the comfort of chairs, and so on are critical. Everything is a detail and everything is ultimately important.

  1. TAKE EVERY OPPORTUNITY TO MARKET

Every day for the owner/operator is an opportunity to get the message out. Your image is whatever you promote and if you fail to constantly present this image then you are conspicuous in your absence. Don’t create a marketing void.

  1. ENGAGE YOUR STAFF IN SOLUTIONS

Your staff members have much to gain and much to lose. Solicit their thoughts on business and engage them as problem solvers. Your staff members are much closer to the paying guest than you are.

  1. BUILD RELATIONSHIPS

Happy guests want to develop a strong connection with your restaurant – give them a chance. Solicit their thoughts, invite them to tastings, remember their names as well as their likes and dislikes, make them a part of your team – they are ready, willing, and able.

  1. ANALYZE, ANALYZE, ANALYZE – ACT

Finally, make sure that you understand what is going on. With contemporary point- of-sale systems and management applications you can and should know: check averages, what sells and what doesn’t sell, which servers are most effective at upselling, when you are busy and when you are slow, sales per seat and sales per square foot, profile characteristics of your guests, and the contribution to profit of each menu item. Failure to collect and use this data is a step in the wrong direction.

Operating restaurants is very difficult and even if you do everything right there are no guarantees. However, failure to do things right will certainly lead you down the wrong path. Don’t become the next restaurateur to place that out of business sign in the front window.

PLAN BETTER – TRAIN HARDER

Harvest America Ventures, LLC

Restaurant Consulting and Training

www.harvestamericaventures.com

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WANTED: SUCCESSFUL RESTAURANT OPERATOR

29 Thursday May 2014

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WANTED: SUCCESSFUL RESTAURANT OPERATOR

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
http://www.harvestamericaventures.com
psorgule@hotmail.com

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RESTAURANT BUSINESS ACUMEN OR CREATIVITY – WHICH COMES FIRST?

04 Tuesday Feb 2014

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RESTAURANT BUSINESS ACUMEN OR CREATIVITY – WHICH COMES FIRST?

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
http://www.harvestamericaventures.com

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WHY IS IT SO DIFFICULT FOR RESTAURANTS TO MAKE MONEY?

26 Thursday Dec 2013

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WHY IS IT SO DIFFICULT FOR RESTAURANTS TO MAKE MONEY?

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.

http://www.harvestamericaventures.com

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WHAT HAPPENED TO THE CHEF-PURVEYOR RELATIONSHIP

15 Sunday Dec 2013

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WHAT HAPPENED TO THE CHEF-PURVEYOR RELATIONSHIP

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”.

http://www.doleandbailey.com
http://www.floridasfinest.net
http://www.maines.net
http://www.harvestamericaventures.com

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Setting the Record Straight About Restaurant Profitability

13 Friday Dec 2013

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Setting the Record Straight About Restaurant Profitability

I am on a mission today to set the record straight. There is a terrible misconception on the part of the media, restaurant customers and even many restaurant employees that food establishments make gobs of profit. “I can purchase those ingredients at 1/5 the cost and make that dish at home”! Yea, you probably could assuming you have access to the same ingredients and know how to cook, but this does not take into account why you go out to restaurants. The modern restaurant serves many roles from the reward system for patrons to a source of entertainment and knowledge. But for decades the primary reason why people go out to dinner is so that they don’t have to cook or clean up. This is reminiscent of the old advertising adage used by public transportation in Buffalo while I was growing up: “take a bus and leave the driving to us”. Now the cost of operating those restaurants, like the cost of operating any business go way beyond the obvious cost of the primary raw materials. So, in an effort to clarify what many do not realize, here is the reality of restaurant profitability.

1. On average, if the restaurant does everything right they can realize a net profit of about 5% before taxes. That means that of that $50 tab for your dinner at a favorite steak house, the restaurant MIGHT realize a net before taxes of $2.50. That assumes they do everything right and do not have any waste, spoilage or theft (external or internal). This assumes they have the time to check prices from their vendors every day and always buy right. This assumes that their employees are always diligent when it comes to portioning, utilizing all ingredients, and properly preparing dishes according to the recipes developed.
2. What can go wrong? That dining room ambience that you love costs lots of money to maintain. Think about the cost of those fresh cut flowers, the price of china, glassware and silverware. Understand that each cloth and napkin placed on a table cost money to rent (yes, rent – most restaurants do not own their linen nor do they launder them). That nice stemware from Riedel that you like to drink your French Pinot Noir from probably cost $15 and guess how many break on a daily basis. The Italian bone china that the chef loves to use to highlight his/her cuisine may be $15-20 per plate, and you guessed it – they also break frequently.
3. Music is another issue that escapes most people who dine or even work in restaurants. Even if we play CD’s in a restaurant there is a fee that goes to BMI and ASCAP. Even more so if you have live music (not including what you pay the musicians).
4. Maintenance can be a real drain on restaurant operations. The cleaning chemicals used to wash dishes, clean floors, sanitize surfaces is substantial.
5. How about restaurant build out? The cost per square foot of building a kitchen including equipment can be in the neighborhood of $400 per square foot. A relatively small 600 square foot kitchen would thus cost approximately $240,000 to build. Dining room space is cheaper, but typically much larger in square footage. That restaurant that you love to go to is a multi-million dollar project. This needs to be paid back over time and guess what – the bank is not patient when it comes to payment due dates.
6. Bar inventories are important to a restaurant’s health and the selection demands of the public. The nature of state liquor authorities is to require payment cycles from restaurants that range from cash on receipt to 14 days or so. If you miss a cycle payment the vendors will not and cannot deliver to you or will require COD. So, that restaurant wine cellar with a list of 200 wines by the bottle and a selection by the glass may have a value in the hundreds of thousands of dollars, or more.
7. Food is highly perishable, especially proteins and produce. In some cases shelf life is measured in a couple days. It must be used in that period of time or it becomes costly waste. Since in a ‘la carte restaurants we never really know what you are going to order, managing ordering and inventories is very important. Any waste will eat away at that 5% net.
8. Let’s talk about waste: it costs lots of money to have that restaurant waste and recyclables taken away.
9. Uniforms: we want our staff to look good, crisp and fresh and since they are working around food, their clothing needs to be sanitary. Thus, most restaurants rent uniforms, aprons and side towels. This can account for thousands of dollars of cost each month.
10. Insurance is of course an issue with any business but in restaurants we also need something called third party liability insurance to protect the operation and its employees from an intoxicated guest who causes harm to a third party who in turn chooses to sue the restaurant. Yes, if a customer drinks too much it is the fault of the restaurant.
11. Marketing and advertising is a shotgun effort in most cases. We place ads in the newspaper, magazines, radio and television to try and stimulate traffic. We never really know how well this works but find ourselves in a position that failure to continue advertising might negatively impact business; so we continue to spend thousands and cross our fingers (social media is helping a great deal with driving down marketing costs).
12. Turnover and training is an on-going issue in restaurants. Since rates of pay are fairly low, the work hours are long and stress runs high, employees come and go way too frequently. Although we should spend more on training, typically by the time we finish training a staff we need to start over with new ones.
13. Staffing is expensive in restaurants because it is a labor-intensive environment. Lots of preparation and support work that can require a restaurant to have dozens of staff to support those 100 dinner guests tonight.
14. Note that I have not even touched on mortgage or lease, utility costs, equipment repairs or property taxes.

Now, this may seem like I am complaining; I am not. It is however important to counteract the misconceptions that people have about this fantastic business that services the public in so many ways. We are the first businesses that charities go to for assistance, the first businesses that provide employment for young people just starting out and the first business that guests turn to when they have had a rough day and need to be pampered. This is what we do and we love it (for the most part).

Many restaurants that have continued for quite some time do so simply because they are able to maintain a positive cash flow, not because they make gobs of profit. Those who find it hard to control those sensitive costs are unable to create a steady flow of cash or are unable to meet the needs of a fickle customer base, become part of that 66% failure rate.

A simple request would be to acknowledge that restaurants provide a service, one that is costly to provide and that although your steak might seem pricey, you understand that a great deal goes into bringing it from steer to plate. Fortunately, there are restaurants out there for every socio-economic level, 965,000 of them in the U.S. as of last count.

http://www.harvestamericaventures.com

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RESTAURANT FIRST IMPRESSIONS ARE LASTING ONES

31 Thursday Oct 2013

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RESTAURANT FIRST IMPRESSIONS ARE LASTING ONES

How important are the details? Make no mistake the “small stuff” does add up when building an experience for your guests. First impressions help to draw people into your business, set the tone for the experience, build guest expectations, define your concept, demonstrate your commitment and establish the measurement for value. How are your first impressions?

I remember a great story that I heard years ago about SAS airlines. The story was titled: “cattle calls and coffee stains” and referred to the way that many airlines board planes and their lack of attention to detail. In the story reference is made to the guest who once seated, pulls down the chair tray only to find coffee stain rings from a previous passenger. As small a detail as this might be, the guest immediately wondered if they could safely fly the plane if the airline couldn’t even clean their chair trays. Details do matter!

Consider some of the more remarkable retail companies and their approach. Apple Computer draws people into their stores by using simple, clean lines that highlight the product. This is accomplished with dramatic use of light and glass, minimalistic décor and attention directed to the brand and the product. As a result they own the largest dollar sales per square foot of any retail company.

Anthropologie pulls customers in by creating one of a kind window displays that tell stories and tie the product into those stories that entice and educate at the same time. This company accomplishes this through a team of artists in every one of their stores, a home office department dedicated to research and design of these windows and a decision to forego traditional advertising for the uniqueness of their first impression strategy.

Restaurants can learn a great deal from these and other effective models focused on first impressions that are visual, textural, aural and in some cases even involve olfactory senses. Restaurants can even add the sense of taste to their first impressions.

Walk through your restaurant as a customer. Be aware of first impressions: “sweat the small stuff”!

1. Begin with your curb appeal. How does the restaurant look from the vantage of a car seat? Is it sharp, clean and inviting? Does the exterior need paint, better lighting, more appropriate signage or better landscaping? Is your parking lot clean, well lit, freshly paved and free of views of dumpsters and discarded equipment?
2. When you approach the entrance, is it inviting? Are the windows clean and does the entrance subliminally say: “welcome”?
3. As you enter the restaurant are you immediately greeted? Is the transition lighting such that your eyes adjust immediately from being outside?
4. What are the visuals? Are they related to the restaurant concept? Is the restaurant décor interesting, warm and free of unnecessary clutter?
5. Are the colors conducive to a great food experience (warm earth tones are best)?
6. Pay attention to the distinction between pleasant sounds and noise. What is the noise level (a comfortable level of customer chatter is a positive, acoustics that do not allow the sound to dissipate can be very unpleasant and will oftentimes ruin an otherwise positive experience for guests)? If you pipe in music of some type is it appropriate for the concept of the restaurant and it’s menu? Are there kitchen sounds drifting into the dining area? Are these sounds adding or detracting from the experience?
7. Look at your tabletop. Is the table covering, glassware and china, silverware a match for the value experience you are trying to create? Do you have flowers on the table? If so, are they fresh and vibrant?
8. Is the table lighting sufficient for reading the menu and viewing other people around your table? If not, this can dampen conversation and make menu decisions frustrating.
9. Are your service staff members professionally dressed and does the uniform (formal or informal) match the concept and the value experience? How about the staff members grooming (hair contained, body tattoos, jewelry and make-up) – is it appropriate for the concept?
10. Are your bathrooms attractive, well lit and most importantly spotlessly clean and free of offensive odors?
11. What are the smells in your dining room? Some food aromas are appropriate and may even add to the experience (the smoky smell of barbeque in a restaurant that features that product, the smell of fresh bread in a bakery, the aroma from a char-grill in a feature steak house), while others may turn people off (old oil in a deep fryer, too much garlic, burnt toast in a diner, etc.).
12. Look at your menu document. Is it clean, free of stains, torn corners, etc.? If not, replace them.
13. Finally, the restaurant has a unique opportunity to continue building positive expectations for a great meal and increase sales through the sense of taste. Consider the use of an amuse bouche (1-2 bite complimentary morsel from the kitchen) to encourage people to stand at attention for the flavors to come and even become more receptive to upselling. Make sure that your drinks, appetizers and soups help to build a positive picture for the overall experience.

First impressions are lasting impressions. Your goal should always be to create memories. Memories that are positive will bring customers back – the customers that allow your business to thrive are the ones who return on their own accord.

**NOTE: The picture in this post is of Alfred Portales Gotham Bar and Grill in New York City. This has consistently been one of my favorite restaurants in the country and one that truly understands how important first impressions are to their success.

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