Tag Archives: Foodie

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 17, 2017 · 1:11 pm

What Restaurateurs And Founders Share

It’s Foodie Friday, and this week an article on a restaurant trade site caught my eye. It’s all about the things restaurant owners wished they’d known when they decided to open a place. Having spent a lot of time working with startups, what I find interesting is that many of their statements are not unique to the restaurant business. In fact, I’m willing to bet that you will nod your head in agreement with these if you’ve even started a business or worked with one in its early stages. You can read the entire piece by clicking through here.

Photo by Bank Phrom

First and foremost, the time involved. One owner said she wished she’d known “That I was going to spend the first couple months basically living in the store and two years married to the business. 86 my social life!” I’m often amused at the founders who still have side gigs, especially if those gigs are not consulting positions that are very flexible. One startup with which I’m working has two founders who don’t seem to be able to focus enough time on their company, and as a result, their progress is very slow. What should have taken them several months has taken them a couple of years. In part it’s a financial decision – the gigs help fund the startup – but I sometimes feel as if they don’t really get that you need to be married to the business, as this owner says.

Another owner wishes he’d known “To have enough money reserved to be able to wait to open the doors to the public.” There is something to be said for throwing a lot of tests out there and iterating, but I’m a believer in making sure you’re putting your best foot forward. That doesn’t mean every beta has to be perfect but it does mean, to paraphrase the words of the old Paul Masson commercial, not selling any product before its time. The world is too cluttered and I’m not sure any business gets multiple chances after a bad customer experience (think about how many apps you’ve deleted recently or a restaurant at which your first meal was your last).

Then there is the point never underestimate the value of private dining. As the owner put it, people wanted a place where it was quiet and personal. I think that makes it as much about the experience as it does the product. Personalization is key!

Finally, I love another owner’s point: “To build your squad. We always knew that having good people was important, but I’m not sure we realized how important.” As any business grows, the founders can only do so much and your success is in the hands of the people you’ve brought in and trained. Your job as a manager is to help your team to do their jobs, but it’s also to be sure that every person is carrying their load. Nothing will bring a business down faster than a weak link in the chain that causes resentment among the rest of the team. Hire well, don’t be afraid to admit you’ve made a mistake with a hire if you have, and do everything in your power to retain great talent.

Yes, the food service business is different in many ways (you probably don’t have the health department visiting nor do you deal with many cuts and burns), but as the piece demonstrates, every startup faces many of the same challenges, don’t they?

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