Tag Archives: Strategic management

Ghost Kitchens In The Sky

Our subject this Foodie Friday is kitchens, specifically kitchens that service your takeout order. Think about it for a second. You place an order for a meal to go at your favorite dining establishment. In some cases, you go there to pick it up. In many other cases, even years ago, you’d order a pizza or some Chinese food and it would arrive at your front door looking just as it did when you picked it up yourself. You probably didn’t think about if it was actually cooked in the restaurant’s kitchen since it looked and tasted the same as when you ordered at the place. In fact, it almost certainly was cooked by the same hands that were serving the dine-in customers at the same time.

Fast forward to today. With the advent of food delivery services, many more establishments are offering food for delivery. Most sit-down places have experienced a big jump in takeout, so much so that it’s become a significant percentage of their business. I think it also has to do with our general impatience these days. Who can sit still long enough to enjoy a meal cooked to order? So, many places are asking themselves why not set up a kitchen specifically to handle the delivery business rather than expand the restaurant kitchen to handle the additional orders. Ghost kitchens have arrived.

As one article described them, ghost kitchens are delivery-centric cooking spaces without the added hassle of in-person dining that a traditional restaurant brings. Think of them as cooking-focused WeWork spaces. Lower rent, no front of house, no cashiers and no customers tapping their feet waiting for their food are all part of the appeal. As long as the food tastes the same, why would the customer care?

I could write another 1,000 words about ghost kitchens and the pros and cons but the point I want to make today is that they exist because restaurants are rethinking their businesses. If they can grow at better margins and lower costs by doing that rethinking, can’t you? Some pretty big players – Google Ventures among them – are getting involved, and you know it’s just a matter of time before Amazon through Whole Foods starts delivering all those great dishes you can buy at your local store for a take-home or to work meal.

Is it inconceivable to you to share accounting, legal, and other back-office functions with another business that’s non-competitive? A ghost kitchen for your business? How about having your sales staff pick up some lines that complement yours and offer both to customers that might be interested?

If you’re not thinking out of the box, the box might just become a coffin. Instead of a ghost kitchen, it might be a ghost business!

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Filed under food, Helpful Hints, Thinking Aloud

1,2,3

I’m back! I didn’t post anything last week because I went on my annual golf outing with my Board Of Advisors. All is well except my golf game.

I don’t know if you saw anything about a survey that was released last week. I did and I made a note to make it my first post upon my return because it makes a number of points that I think any of us could find useful in business. The survey was run by Civic Science which has been conducting online polling since 2008. It was a very simple question and the responses were astonishing, at least to me.

Should schools in America teach Arabic Numerals as part of their curriculum?

That’s the question. They surveyed over 3,600 people and over 2,000 of the respondents said “no.” That came out to 56% of respondents saying we shouldn’t teach the numerals we all use every day. Yep – those are Arabic numerals. Interesting, right? Kind of scary too because it reveals what happens when you allow yourself to answer a question based on your inherent feelings (or prejudices) without having a full understanding of the question being asked.

It wasn’t just a test of prejudice against the word “Arabic.” They also asked about teaching a Catholic priest’s theory on the origin of the universe. While obviously, it’s a much more obscure fact (the Big Bang theory was his idea), it shows once again that people will answer something without enough (or any) information based on inherent biases (53% said “no” to this, which is taught every day).

How often does that happen in your business setting? Someone starts to say something in response to a question in a meeting and suddenly it’s quite obvious that they have no idea about what they’ve been asked. It’s not just people answering the wrong question either. It’s quite possible to have an understanding of the question but no grasp of the facts required to answer it.

So here are three words (3 in Arabic numerals) to keep in mind: I don’t know. They can be hard to say, especially when you have a knee-jerk response to a question. But ask yourself if that response is based on fact or on your existing bias. You might be surprised what you’ll learn along the way as well as prevent your team from making a bad decision. Make sense?

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Filed under Helpful Hints, Huh?

Shopping At The Farmer’s Market

It’s Foodie Friday and the local farmer’s market opened up here a couple of weeks ago. Of course, the state farmer’s market is open year-round but it’s huge and a 25-minute drive. The one here in town is more intimate, less-crowded, and only 6 minutes away.

I like farmer’s markets for a few reasons. The first is that the quality of food – mostly produce – is generally higher than what you can get from the supermarket. It’s likely it was picked either that morning or the day prior. It certainly didn’t have to travel from Mexico or South America. Most importantly, these markets are inherently seasonal. You don’t get watermelons until late summer (OK, earlier here in the South) and there aren’t red things masquerading as tomatoes in March.

As a cook, the farmer’s market presents both an opportunity and a challenge, one that actually is mirrored in most businesses. The opportunity is to find ingredients that are in peak form, and because they’re plentiful, at a lower cost (that whole supply/demand thing, you know). The challenge is that to take real advantage of the market, you have to be willing to work with what’s available and that can be limiting. You might want to make a peach cobbler for dessert this week but it’s blueberry season now so that’s dessert.

Businesses face the same challenges as cooks. There is a seasonality involved in almost every business and the opportunity in season is to maximize profits. I think there’s a real opportunity outside of your prime season as well. This is when you can experiment with new products or promotions. You can look for niche audiences (what’s available!).

There’s also the challenge that my little market faces each week. It’s 15 miles from a much bigger market. How can it attract high-quality vendors and draw from surrounding communities? Obviously, most businesses face similar issues to distinguish themselves if they’re realistic about the choices consumers have these days. When I was working in TV we worried about the other networks. Broadcasters today have to consider anything with a screen as competitive.

Mostly I like farmer’s markets because they force me to be thoughtful and creative. How can I plan out a menu that’s the best within the limitations of what’s available? You might ask yourself the same thing about your business. Every business has limitations, whether financial, supply chain, or even people. How do you get the best out of what’s available?

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Filed under food, Thinking Aloud

Your Ideas Suck

One thing I’ve done over my decade in consulting is to go to tech events. Many of these attract dozens of budding entrepreneurs as well as we consultant types who are always on the lookout for a new client. Inevitably, as you’re making small talk and new connections, someone will tell you about their earth-shattering, world-changing brilliant idea. All they need is some seed money. Most of the time, their ideas…well…suck. Let me explain why.

First of all, they can’t explain the problem that they’re solving. They have a vague idea of who might have the problem but they can’t really explain what the problem is since they’re not the customer. Then they can’t exactly explain how they’ll scale – how they will attract a large enough customer base to get them to positive cash-flow and profitability. Lastly, they can’t explain the revenue model – how they will monetize the enterprise.

Major suckitude, in other words.

If you can’t explain how your idea takes in someone’s money – an investor’s or a customer’s – and spits profit out the other end, you’re in big trouble. An idea isn’t a business, you see.

One thing I’ve learned in consulting on franchises is that a lot of food franchises want you to have some food experience. While specific industry experience is less of a requirement in other categories, having relevant experience is a huge help everywhere, even if it’s just demonstrating skills that can help in your new business. If you don’t have the basic skills you need to germinate your idea – leadership skills, sales skills among them – or relevant industry experience, you are going to fail. Was that mean? OK, it was mean, but your idea still sucks because you are hanging it out there all on its own with nothing to support it. No money. No experience. No skills.

By the way. Most people who have been around for a while (your potential investors and others) can figure out very quickly if your buzzword-laden pitch is BS. Dressing up your sucky idea with a fancy presentation laden with jargon is lipstick on a pig.

What ideas don’t suck? The best businesses come from someone trying to solve their own problem and having the business acumen to grow that solution into something that can benefit others if the problem is a big enough one. There is a plan to make money, acquire customers, and generate a profit. Got an idea with those things? THAT doesn’t suck!

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Filed under Reality checks, Consulting

Passover Baking And Business

This Foodie Friday, we are most of the way through the period during which observant Jews don’t eat leavened goods. That means no bread or anything else that involves flour or anything that could make the baked good rise. Think about anything that you bake. I’m guessing that it has flour or baking powder or baking soda or yeast. All of those things are big no-nos to those that observe Passover.

I’m not a baker, as I’ve written before, but since I’m often tasked with preparing the food for Passover I’ve learned quite a bit about baking during this time of the year. Oddly, it doesn’t really require a huge shift in your thinking these days since many people are on some sort of gluten-free diet. That accounts for shifting away from flour and into things such as finely ground nuts, which are totally fine for Passover. In fact, my Aunt Ileen’s nut cake was always in demand and it wasn’t until recently that I realized it was gluten-free. Who knew 30 years ago when I got the recipe from her!

How do you make cakes rise with no leavening agents? Whipped egg whites will get the job done. Everything becomes a sort of chiffon cake (or a tart of sorts). Then, of course, there are things such as macaroons (not the delicate French kind) that are just scoops of coconut or almonds held together with sugar syrup and often dipped in chocolate.

What does this have to do with business? While the easiest thing to do at this time of the year is not to bake due to the conditions having changed, instead people learned to adapt. If you have anyone with gluten intolerance in your life, you may have already begun to make that change, not realizing that it would come in handy in other situations. Businesses need to be prepared to do this sort of thing as well. Markets and business conditions are constantly shifting, and the ability to adapt and change is one of the most important things a business can have. Maybe it’s a supply-chain disruption. Maybe it’s the loss of key personnel or of an important client. Continuing on in your business, even if you have to make product changes to serve the customer, is paramount at all times of the year, unlike Passover.

I’m very much looking forward to getting back to leavened bread but I’ve come to appreciate what we can learn from how the rules shifted this week. You?

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Filed under food, Thinking Aloud

Let Me Call You Back

One thing I deal with constantly these days is getting people on the telephone. I will often make 20 calls in an hour or two and only get a few people – all of whom have requested that someone call them – to answer the phone. Sometimes when I reach them they’re at work or driving and they ask if they can call me back. They hardly ever do, even when we set up a specific time. They don’t call me so I’ll call them at the appointed hour. They rarely answer.

It sounds awful, right? They claim to want information about new opportunities yet they won’t answer when opportunity comes knocking. My question to you concerns your business doing the same thing. No, not having customers hang up on you, but the opposite. Are you hanging up on them?

When was the last time you looked at your inbound customer service metrics? Do you even have such things? Research shows that consumers value efficient service and knowledgeable staff when they call a business. They find being kept on hold, rude service, and automated phone menus frustrating. You can measure on-hold time and you can test the customer service reps to be sure they’re knowledgeable and personable.  You can check when call volume peaks and schedule more reps during that time.

One thing I’ve come to like quite a bit is the “let me call you back” option when there is going to be an on-hold time of more than a few minutes. You know what I mean – “press 5 to get a call back when there is an available representative or press 6 to schedule a time to be called back.” That’s customer-friendly and shows them that you respect their time and have empathy for their problem. When I hear “your call is important to us,” I always think “if it’s so damn important, why aren’t you answering?” Calling back shows it really is important.

It’s the little things we do in business that say a lot about how we run our firms. What messages are you sending? Are they the kind that will get customers to return?

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Filed under Consulting, Helpful Hints

The Buffet Bill

Happy Foodie Friday and a Happy Easter and a Zissen Pesach to those of you who celebrate one or the other (or both!). I spent much of this week in Las Vegas, one of this country’s great food cities. I know – how can I say that about a town that’s built pretty much just to separate you from your money? Well, you gotta eat in between all of that spending and it seems as if every big name chef has a place in Vegas. There is also an awful lot of great local places too.

While the food is very good at most places in town, it’s pretty expensive. Obviously, the high-end, big-name chef places are pricey but even some of the small local joints I patronized ended up costing quite a bit of change. While I realize that the prices I pay in my little North Carolina town aren’t “big city”, I’m quite used to NYC pricing since that’s what I paid my entire life. The prices in Vegas are beyond that when you total up all of the ala carte items you order.

One thing that’s a real tradition is the Vegas buffet. Every hotel has one and there are many stand-alone buffets in town as well. They’re not inexpensive either. The one at my hotel was $31 including the tip. Yes, even bottomless mimosas! As I was running through the massive food service area (for the third time), I realized that I’m very much a buffet guy and I think most consumers are too.

What I mean by that is that we seem to be living in an age where everything is ala carte. Your airline ticket may be your protein, but you might want some veggies (an assigned seat), a salad (a checked bag), and a starch (fuel surcharges, booking fees, etc.) which will make up the real cost of your meal.  Sure, your hotel room is $139/night, but the “resort fees” and fees for things like having a safe in your room or built-in tips for the housekeeper can inflate your bill quite a bit.

Everyone complains about what most ticket services tack on to the base price of a concert ticket. Look at your cable or telephone bill and I’m sure you can find quite a bit of dough you’re being charged that takes your monthly tab beyond the advertised price that drew you in as a customer in the first place. I’m a buffet-pricing guy. Tell me the entire price upfront and let me decide. Sure, the lower price might get me in the door once, but the anger I feel when I see the final bill will assure that I won’t be back.

You might be fine with ala carte pricing. In theory, I am too because why pay for something you won’t use? The problem is that you really don’t have the option. When an airline charges you for carry-on bags or for checked bags, there is no “option” unless it’s a day trip without luggage. You’re paying the fee. why not include it in the price?

Enjoy your buffet this weekend!

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Filed under food, Helpful Hints, Reality checks