Monthly Archives: April 2020

April 29, 2020 · 3:47 pm

A Whole New World

The thing you hear often these days is some expression to get back to “normal.” The truth be told, those days are gone for good, I’m afraid and I’m not sure that it’s a bad thing in many ways. I’ve been thinking a lot about what the “new” normal looks like because as I’m talking to folks about franchises, some of the businesses that I would have recommended a few months ago are suddenly not as attractive as they were then. Others have emerged as having even more potential.

I want to share some thoughts with you today mostly to get you thinking about what the new normal is for your business. The first thing you’ve probably noticed, maybe because it’s affected you directly, is how many people are working from home. Business meetings take place virtually. I’ve seen a number of professional conferences rescheduled from some hotel ballroom to a virtual meeting place.

What will this do to the real-estate business? If you’re leasing 10,000 square feet of office space now but find you’re being just as productive with the staff working remotely, can that 10,000 become just enough space for a few offices and a conference room? Maybe investing in secure networking is a better use of funds. Some 60% report being either as productive or even more productive than they were working from the office according to a recent study and once the economy reopens, 24% say they’d like to work either entirely or more from home compared to how they worked before,

What will this do to the convention business, at least in the near term? Yes, there is huge value in the face time and spontaneous meetings conventions provide, but I’m not sure people will want to travel. Business travelers are the highest-profit customers airlines and hotels have. Between executives not needing to travel as much and vacation travelers being scared to, what happens to the travel business?

I worked in sports for many years. I’ve seen where some organizations are talking about revamping arena and stadium seating to spread their customers out. Of course, this will reduce capacity quite a bit. What does that do to the economics of those sports (I’m looking at you, NHL) and entertainment shows (concerts, etc.) that are heavily dependant on ticket sales? Seating capacity is an issue for restaurants and bars too. How do movie theaters stay in business with reduced capacity and with an audience that’s now learned to enjoy the theater experience at home?

We need to be thinking about supply chain disruption. Does manufacturing come back here? Are new factories built with social distancing in mind? Does this accelerate the trend to automation since robots can’t catch a virus (well, at least not of the non-digital kind)? We also suddenly are aware that our economy rests squarely on the people who seem to be paid inversely to their importance. Nurses, truck drivers, meat cutters, and others on the front lines are compensated far below the worth that has become evident to us all over the last few months. How does this enter into the conversation when the time comes?

Those are just a few things that have popped into my brain while this disaster goes on. What do I say to folks I’m working with, many of whom have been forced to rethink their employment or who have chosen to? In a nutshell, I think these businesses are worth a strong look:

  • Senior care – people were already wanting to stay in their own homes as they age and the issues in senior group quarters during this have accelerated the trend;
  • Cleaning, both residential and commercial. Self-explanatory
  • Education – both afterschool programs and tutoring. People always spend on their kids and more schooling is going to take place online and at home. Traditional programs in the Arts, STEM, and other areas will be hurt, I believe, and parents will seek them elsewhere.
  • Pets – I can’t tell you how many people have acquired new pets during this time. It also seems all of a sudden that everyone I know is posting something about their pet. Pet supplies, pet boarding, and pet grooming. Dog training too, maybe, if the new puppy we have is any indication (the other 2 dogs don’t seem to be fans yet).

Those are a few of my thoughts. There are a number of other business sectors that look promising in the new world but the important thing is that we recognize that things have changed, probably forever. Have you thought about how that affects you and your business? Is it time for you to change as well?

 

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April 24, 2020 · 3:11 pm

I’ll Have The Hot Dog Sandwich

Foodie Friday (at least I think it is!). Today we will deal with one of the most urgent food questions ever asked: is a hot dog a sandwich. If you ask The Google, you’ll get 120,000,000 results and I’m sure you have your own answer.

Of course, I have my own opinion but let’s think about a few of the factors that many people consider as they ponder this. First, there is a seam factor. To some, if the seam that separates one piece of bread from another isn’t open on all sides, the food in question is not a sandwich. Of course, in my mind, I wonder if that disqualifies many subs (a.k.a. heroes, hoagies, grinders, and such) from being sandwiches. Subway and Blimpie sell what they call sandwiches but they’re usually closed on one side. Obviously, a hot dog bun is usually not sliced all the way through and to some by the seam factor cannot be a sandwich.

Then there are those who say if it was a sandwich it would be called a sandwich. No vendor of tubular meat has ever said they’re selling sandwiches. They’re selling hot dogs, dammit. As The National Hot Dog and Sausage Council ask rhetorically, Does ESPN broadcast sandwich eating contests?

Then again, historians point out that when the hot dog was first created in the late 1800s, it was referred to as a “Coney Island Sandwich” or “Frankfurter sandwich.”  Why someone would consider a lobster roll a sandwich but a hot dog not a sandwich when both are served on the same bun is beyond me.

There is a business point here, no matter where you come out on this issue. If you ask this question, you see just how eager people are to argue. You probably get that reaction in business a fair amount of the time as well when you ask certain questions. Have you ever noticed just how certain they are in their opinions as they offer them up? The hot dog/sandwich question can get people thinking about things such as seams and types of bread that they might not contemplate. That’s the sort of thinking that each of us needs to do with most business questions. Often, while the answers may seem obvious, further contemplation and including additional factors and constituencies into our calculus can change where we come out on an issue. We probably don’t do that often enough.

Oddly enough, most people I know have strong opinions about the identity of a hot dog as a sandwich. It’s hard to get them to change their mind on the matter. Me? I think by definition it is a sandwich but feel free to change my mind. As with most things in and out of business these days, I’m open to factual information that can do that. Are you?

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April 17, 2020 · 3:04 pm

We’re Trucked

Believe it or not, it’s Foodie Friday again (I know, you can’t keep track of what day it is). Obviously, we’re not dining out here and I’m pretty sure you’re not either. We are, however, bringing in for from some of our regular haunts in an effort to support them during this difficult time. In a couple of cases, the restaurants are moving closer to us by rolling out their food trucks into various places nearby.

Food trucks are one of the businesses I represent along with dozens of other food franchises. I can tell you that the cost to open and operate one of these beasts is significantly less than for almost any other type of food place. I haven’t pulled any of the Franchise Disclosure Documents to check out the operating and earnings claims for trucks vs. brick and mortar but I’m thinking that the trucks probably have better margins.

Margins in the restaurant industry are notoriously small. While you might expect your margin in any other type of business to be north of 25%, in the restaurant world they run 3–9%. Not much room for error and definitely no room for the type of catastrophic business environment in which they’re trying to operate. Having a truck to roll out, either in lieu of or in addition to operating the brick and mortar joint for takeout might just be a lifesaver.

I could spend the rest of today’s screed talking about why the margins are so bad and what can be done about it. The two-word solution is “charge more” but I’ll leave that for another post. What I want us to think about today is how we can “food truck” our businesses. How can we find some other way to operate, maybe even in a more efficient, consumer-friendly manner once we get to whatever the new “normal” will be?  How will you calm your customers’ frayed nerves? How does your business have to change to mirror the changes in society, media consumption, supply-chain and each of the other factors and constituencies that make up your enterprise?

I find I’m spending more time talking to people about businesses that can operate out of the home.  I also remind them that no matter what business they’re evaluating, the process will take time. 2 months for a non-retail business and maybe as long as 5 months if you’re outfitting a store/salon/restaurant etc. The time to be planning and beginning the process is now. Borrowed money is cheap, there will be a glut of real estate, and you want to be ready when the new normal eventuates.

So how are you food-trucking your business?

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