Tag Archives: Business and Economy

December 8, 2017 · 2:17 pm

The Food Business Isn’t Just Food

It’s Foodie Friday and the topic today is business. I know: that’s pretty much the topic every day, but let me explain. I read an article on one of the restaurant sites I frequent that spurred a thought that goes beyond the restaurant business.

Photo by Helloquence

The piece was all about the financial statistics a good restaurateur needs to watch. I’m always surprised when a place with good food in a great location goes out of business but it seems to happen a lot. Sometimes it’s that the chef leaves and things slide downhill but more often than not it’s because the business part of the food business overtakes the food part of the food business.

One needs only to watch an episode or two of the show Restaurant Startup to see how a food business is not especially different from any other startup. I assume what I’m seeing on the show reflects the new restaurant world at large and today’s article confirms that belief. Many of the contestants have no clue about the first, and maybe the most important statistics any startup needs to grasp: Cost Of Goods Sold. In a restaurant, that’s food. In a service business, we usually call it cost of sales. In either case, it’s the cost of producing whatever it is you’re selling. You’d be surprised how many businesses don’t know this number.

That number is part of a bigger one called overhead, which includes rent, salaries, services such as accounting and legal, and things like keeping the bathroom clean (your restaurant has one; hopefully, so does your office). These numbers are critical because if you charge too little for what you provide you won’t be in business very long, and you can’t figure that out unless you know your monthly nut.

Once you have the Gross Profit (or Gross Income) number, you can subtract your expenses to get Net Income or Net Profit. Divide that by your sales and suddenly you have a profit margin. That’s something you can use to benchmark your results against other businesses of the same type. In the restaurant business, it’s generally not very big, which is all the more reason why a complete grasp of the numbers is critical. There isn’t a lot of room for error.

I spend a lot of time with my clients on their numbers. It’s not just so that they can present themselves well to potential investors either. Like your web traffic or any other piece of data, they can illuminate a lot and help you make critical decisions. Ignore them at your own peril.

By the way, I’m writing this as a sort of thank you to my late brother who was my CPA and who beat accounting into me many years ago. He passed 5 years ago next week and I miss his guidance and the clicking of his calculator every day.

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December 1, 2017 · 10:52 am

No Waffling Here

It’s Foodie Friday and this week I’d like to have us reflect on that great Southern institution The Waffle House. It seems that one trips over a Waffle House every few miles here in the South and there’s a reason for that. It is a beloved place and not just among the stereotypical audience one might suppose. Watch this clip from his Parts Unknown show in which Anthony Bourdain discovers the wonders of the place and you’ll see how even chefs respect it. As the clip hints, there are few better places for one to land having been a little overserved and possessing an appetite.

Photo courtesy Nick Gray

What can any of us learn from this? A few things, I think. First, consistency. You can say you don’t like the food but you can be sure that whenever or at whichever Waffle House you order it from you’ll get the identical dish. It is consistent beyond belief, including how each dish is plated. That’s hard for a single restaurant to do all the time. To have over 2,000 places doing it is pretty unbelievable.

It is efficient. There is a code for servers and cooks involving placement of jelly packs, butter, and other condiments on the plate that allows cooks to work on many orders simultaneously without messing anything up (check out the photo).

It is clean. One might think that a place open 24 hours a day would begin to get a little worse for wear. Not a Waffle House. They are constantly sweeping and cleaning. I think we’ve all experienced something “off” at less-upscale restaurants. Dirty silverware, food residue on a plate or a grimy floor. Not here. I get that your business might not be serving food, but a sense of order reflected by attention to detail is a trait your customers want, something the constant cleaning provides in this case.

It is transparent. Because the kitchen is open, you can see the wonder of each order being made. It instills a feeling of confidence since the kitchen has nothing to hide. The eggs are fresh (I’m told the chain uses 2% of all the food service eggs in the country), not powdered and the other ingredients are clearly fresh as well.

It is personal. Because every plate is cooked to order, it is made exactly the way the customer wants it.

It isn’t vanilla. What I mean by that is that it has its own style and even its own language. Where else can you go and order something smothered, chunked, covered, diced, and several other ways as one can with Waffle House hash browns?

Finally, it is reliable. It’s always open, so much so that there is an unofficial “FEMA test.” If the local Waffle House is closed, a location is undergoing some sort of disaster which may require FEMA intervention.

Each one of the aforementioned qualities is one our own businesses should possess.  Ideally, they have them all. Does yours?

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November 29, 2017 · 11:28 am

Actions And Words

I’m a believer in watching what people or organizations do as opposed to what they say. Words are too easy while actions are often difficult. Words can also distract from actions that belie the message the words are attempting to convey.

English: This icon, known as the "feed ic...

(Photo credit: Wikipedia)

No, that’s not a political statement (although feel free to take it as one). It’s more a response to a couple of things that happened this morning while I’ve been going through my morning email. Like you, I subscribe to quite a few newsletters as a simple way to stay on top of industry news and developments in technology. I also use a newsreader (Feedly, which I highly recommend) to digest dozens of websites in a brief period of time.

I was reading a newsletter from a respected site for digital mavens. It tries to help those of us on the digital side of things to grow our businesses. The lead article in this morning’s newsletter caught my eye. It was about strategy and leadership in data and actually was important enough for this organization to use it as the subject line in today’s email. I read the blurb and clicked on the “read more” button. In response, I got a “404 Not Found” error. The redirect URL was empty. I tried clicking the headline and that did, in fact, get me to the article, but the call to action wasn’t the headline. What happened here was just someone being sloppy.

The same sort of thing happened when I clicked on an article in my RSS feed. The article headline – about some people receiving promotions at a former competitor – got my attention so I clicked through to read the article. Whoever set up the RSS feed for the publication had this link click through to the publication’s homepage, and the article I wanted was nowhere to be found. I’m not sure if this is willful or sloppy but, as in the previous example, it’s a bad user experience and makes me less likely to click through in the future.

Broken links suck. Besides frustrating the reader they carry an SEO penalty. They’re also easy to check – there are several free tools to do so. Misleading links – or headlines/teasers for that matter – are just as bad. While they might not hurt your search ranking they will hurt your reader. Which really leads me full circle to actions speaking louder than words. If you claim to be a leader in digital marketing, you can’t put broken links into your newsletter. If you claim to be serving the advertising and marketing community, you can’t serve us by forcing us to look for the useful information with which you’ve teased us. The same holds true for any business, by the way. Customers see what you do and that makes it easy to discount whatever it is you say. Does that make sense?

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