Who Is Killing The Restaurant Industry – Part 8 (The Owner)
Listen to the podcast of the article here
In 1999 an inspector from the department of labour arrived at my restaurant “Reel ‘n Rustic” in George. Having been forced to make the arduous journey from all the way across the park, he was already aggravated and aggressive.
“I am here to investigate reports of gross abuse in your labour practices” he said “we believe you not only mistreat but grossly underpay your management”
“Oh” I said “that is very strange because there are only two managers here. One of them works a maximum of 30 hours a week, gets alternative weekends off, earns R15 000 per month excluding benefits like staff meals, medical aid, pension and gets 21 days sick leave and 18 days paid leave per month. Not to mention that he seldom works beyond 10pm and when he does is entitled to arrive late for work the next morning”
“And the other manager?” he asked.
“Well,” I replied “he is mentally handicapped, works about 90 hours a week, opens and closes the store every day, has all the responsibility and absolutely no authority, has no medical aid, may not take a day off if he is ill let alone for leave, and if he is lucky he may go home with a few thousand rand a month”
“Aha” he shouted “That’s the guy I want to talk to!”
“Well that would be ME!” I said
If this wasn’t so sad and so true, I am sure it would be funny! Antony Bourdain, in his iconic book ‘Kitchen Confidential’ said it best when he said “To want to own a restaurant can be a strange and terrible affliction. What causes such a destructive urge in so many otherwise sensible people? Why would anyone who has worked hard, saved money, often been successful in other fields, want to pump their hard earned cash down a hole that statistically at least, will almost surely prove dry? Why venture into an industry with enormous fixed expenses (rent, electricity, gas, water, linen, maintenance, insurance, license fees, trash removal etc) with a notoriously transient and unstable workforce, and highly perishable inventory of assets? The chances of ever seeing a return on your investment are about one in five. What insidious spongiform bacteria so riddles the brain of men and women that they stand there on the tracks, watching the lights of the oncoming locomotive, knowing full well it will eventually run them over? After all these years in the business I still don’t know!”
Yet despite all this, otherwise sane people continue to pump both their lives and their life savings into both tested and untested ventures. Seasoned professionals seem unable to extricate themselves from an industry that demands and takes so much from you. The words of one Benjamin Conrad Filmalter still ring in my head. You see it was some 20 years back that he called all his (then) young managers from the various restaurants together for a meeting in his Juta Street offices and said to us “You had all better have a dream, you had all better know EXACTLY why you are in this business and more importantly what you want to get out of it, because this business will take your youth, it will take your family, it will take your health and if you do not look out it will drain your life!”
Not exactly inspiring words for a twenty something manager to hear, but probably exactly what we all needed to hear from a man who had talked the talk and walked the walk! For those who have suffered the highs and lows of owning a restaurant, there can seem no tougher job, in fact, John F Kennedy said (and I paraphrase) “No single [sic] project in this period will be more impressive to mankind, or more important [sic]; and none will be so difficult or expensive to accomplish” He was of course ONLY referring to putting a man on the moon, while I am discussing the near impossible task of balancing COMMERCE, ART and PASSION into something that vaguely resembles a successful restaurant.
There is no magic formula for success and there is no school, university or degree that qualifies you for the position, it is ‘On The Job’ training at its toughest. BUT and here is where my head starts to spin, there are tried and tested methods, there are norms and customs and there are clear and definable examples of what works and what doesn’t, yet many if not most of the owners still believe they can buck the trend and show all those seasoned pros how they SHOULD have been doing it.
So let’s break it down, let’s explore what is required to deliver on the COMMERCE, ART and PASSION. Firstly “It’s a business, stupid!” No other industry takes raw material and turns it into finished goods faster that a restaurant. Then to complicate the matter, our clientele who certainly know more than we do about the industry, get to taste and test that self-same product in front of us… no going home first, no cooling off period! And to complicate matters all this is happening at one of your tables where at play are three very dangerous ingredients… Alcohol, Cash and Ego!
Throw into the mix a transient workforce who by the whole are not particularly well paid, who have direct access on various levels to CASH, ALCOHOL and YOUR STOCK and you are beginning to get a picture of this powder keg. You are working 80 hours a week, juggling staff, placating customers, delaying creditors, fighting competitors, desperately trying to keep our marriage or your personal life intact and you still have absolutely no idea how or how much money you are making! “Shit, I didn’t sign up for this”
Under trained, over matched, out gunned and alone… This may be a good time to refer you to the Golden Rule of Restaurant Ownership, “Don’t get high on your own supply!” If you are going to take up drinking, make sure you are paying retail prices for the booze or this is going to be a long slide down.
So what are the basic errors that are being made…?
1. Owners failing to behave like owners! There are two sides to this problem; the first I shall address is absentee ownership. Yes I know it works occasionally but that is the exception (and ever diminishing exception at that) and NOT the rule. “Be there” is the best advice I can offer. Most absentee owners think they are delegating responsibility and authority to people who know more about the daily workings or a restaurant than they do and this is clearly not DELEGATION it is ABDICATION! It is one thing to slowly hand over duties as you need to free up your time to concentrate on expansion or other opportunities but to do so from day dot spells disaster. The other side of the spectrum is owners behaving like chefs, cleaners, bussers and waiters (not to mention the HR department, the plumber, the tech support and the reservations clerk). Get to work ON your business and not just IN your business. Otherwise twenty years from now you will either be in a lunatic asylum or still locking the doors and cleaning the floors (The asylum sounds better already)
2. Concentrating too much on what you like! I am really not to interested that you and your wife have a unique way of cooking Brussels Sprouts that you are sure will revolutionise the entire restaurant industry… Nobody goes out to eat Brussels Sprouts, get it?!?! Fish where the fish are, sell people what they like, where they like it and when they like it and they will beat a path to your door. “But shouldn’t I ask the public what they want?” Yeah right! Henry Ford said, it I had asked the public what they wanted they would have told me FASTER HORSES
3. Lack of vision and purpose! We have all read the motivational poster “If you don’t know where you are going, you will never get there!” There is a reason that poster is a best seller… it’s true. Stop planning for the end of the month and start looking to the end of the year, the end of your lease and the end of the decade. Now start putting things in place for the future and not just for this month’s rent payment.
4. Lack of training of staff! “But what if I train them and they leave?” What if you don’t train them and they decide to stay… Invest in your people, invest in their wellbeing and upliftment, even if you lose a few the rest will pay you back big time. Help upskill your staff and watch the returns reflected on your bottom line. You need to place a little more faith and a little more trust in them, people seldom disappoint you, most time they will end up behaving just as you predicted they would. What do you predict from your staff? Take it from Disney “Your front line equals your bottom line”
5. Having too much / too little faith in their staff! Yes this may fly in the face of the delegation/abdication comment but what is needed is the correct balance and with that balance comes having the checks in place to ensure it is all being done (but this is actually starting to sound like hard work and if you had wanted hard work you would never have given up your job at the bank)
6. Not understanding the value of a customer! Yes I have heard the story, they want extra this, and they want extra that, they are all trying to con me… hmmm would it be better if they didn’t come? All of them? Try and calculate the lifetime value of a customer before you rush to pass judgment. We have all had customers we could certainly do without and they sooner you and your business see the back of them the better, but don’t generalize and don’t be in too much of a hurry to send customers away.
The list goes on – eating and drinking from your own supply – too many freebies for friends – no stock control – no accounting systems – no contracts for staff – not paying suppliers – not paying VAT – not sticking to the franchise agreement – not monitoring basic expenses – relationships with staff members – no clear understanding of the industry – lack of support for industry bodies (like RASA) – poor relationships with suppliers AND the biggest killer of all… A basic lack of understanding of their customer and what they want from you.
Owners are currently killing their own industry and they are killing it fast! But it is not too late to stop the rot and not too late to prepare for the seven years of feast that so often follow the famine, just make sure you are ready! Don’t make the same mistakes again, knowing this industry you will find a whole bunch of new ones to make this time around.