The Pandemic Isn’t Your Fault, But How You Ran Your Restaurant Before Is!Jan 25, 2022
The Coronavirus Pandemic is unlike anything we have ever experienced. Times like these bring out the best in some people and the worst in others. It has forced some to close for good and for others to rethink their reason for staying in this industry. Some have added take-out and delivery. Others have embraced the virtual restaurant concept as a way to add additional revenue streams. We all have had to take a hard look at our business models (even me) and asked what can I do now that the world has been forever changed...
Many wait for funding from the government to give them the cash flow needed to make up for the decline in sales. But, is that a long-term solution to the real issues that plague our industry?
That issue is that many didn't run a very profitable business before the pandemic started and those that were just surviving (making 0-6% gross profits) were in trouble even if they were in denial about it. The government money is nice, however, it is a bandaid to the real issues that are under the surface.
It's a lot like that sad statistics of lottery winners. 70% of all lottery winners end up broke and right back to the economic level they were at before winning the jackpot...and it happens in just seven years.
It's not the money, it's the bad money habits they still have that don't change and those habits end up bringing them back to where they were.
The funds from the government have proven to be the same for a lot of restaurants. If you had bad habits running your restaurant, those habits will still be there when the extra cash runs out. Now you can keep asking for more money, but sooner or later that well will run dry so you better make a solid plan NOW to fix those bad habits.
So let's talk about those habits. How was your restaurant running before this crisis hit? Be honest.
- Perhaps, not as well as it should have been?
- Perhaps, you let a few standards slide?
- Perhaps, you were not the leader you know deep down you could have been?
Okay, here’s the million-dollar question: Are you going to keep running your restaurant that way or are you willing to make the changes you know you must make to ensure that your restaurant thrives and not just survives?
If you said you’re ready to make the changes you know you must make, keep reading.
If not, stop here and return to that series on Netflix that you’ve been binging. Your restaurant is dead and you just haven't come to terms with it yet.
An Opportunity in Disguise
I have a client that opened their restaurant six months before the pandemic started. Things on the surface were going well. Full dining rooms for lunch and dinner. The guests were really happy. Rave reviews.
Yet, their labor and food costs were high. There were consistency issues with the food. While the owners are seasoned business owners and accomplished leaders...the culture took on a toxic quality. There was a lot of drama. The gossip mill ran full steam and little cliques started to form. They use the word team, yet this wasn’t a team. It was a bunch of mercenaries that only looked out for their own survival. You can’t grow great things in toxic soil!
One owner confided in me that they felt totally in reaction mode every single day and they were trying to “get through the day”. The other owner found themselves in a state of constant conflict with the staff as they tried to enforce the standards that were decided on when we first opened.
There can be a duality in leadership partnerships: one is an enabler and the other is the disciplinarian (good cop, bad cop mindset). When leadership seems to be on different sides, it’s easy from a distance to see the culture shift taking place. That’s one common issue many restaurants face...you can’t see the problem if YOU ARE the problem.
They had already made some big changes in their leadership team already. The original management team was let go and replaced by the next available warm bodies that seemed to have potential. I want to go on the record here and say that in the 40 years in the industry the “battlefield promotion” rarely works. Why? Because we throw people into a major leadership role and we don’t train them adequately before they take the position. That causes more damage than good as they struggle to try to learn and gain management experience while on the job!
The Coronavirus then came along and crashed their sales. What do you do in this situation? Keep limping along and try to hold out until things “get betters”? Or do you step up as owners, realizing that you were heading down the wrong path with the culture (and systems), and decide to stop the insanity by closing down temporarily? After considerable discussion, we elected to shut it down and regroup.
Now, you have to look at the Chinese word for “crisis” in times like these. The word is made up of two characters, “danger” and “opportunity”. Yes, the Coronavirus is dangerous to the elderly and people with compromised immune systems. There is also an opportunity to rebuild your foundation (culture and team), strengthen your framework (menu and marketing), and fortify your functionality or profitability (systems, strategy, and P&L optimization).
A Plan Starts to Form
Now many look at this shutdown as a disaster. It could be. We elected to focus more on the opportunity to rebuild a brand and make it bigger, bolder, and better. When life hands you lemons, you make fucking lemonade and sell the shit out of it! That’s where you are right now whether you like it or not. Your restaurant is caught in the crosshairs of NEW COVID variants and public panic. That is not a good place my friend. However, we need to make the best of this.
There are some restaurants that elected to close down completely during this pandemic. Others made adjustments to the service model by going with delivery and takeout only. A few others totally flipped their concept into a meal replacement model where they sold all the ingredients for a meal at home (proteins, sides, sauces, etc) and became the local food commissary. It’s been encouraging to see restaurants get creative to keep the doors open.
Here’s what you need to understand...
This pandemic has shifted how people eat at restaurants. Many will be happy and excited to return to your dining rooms, while others are going to like the convenience of delivery and takeout. So, do you stop those services that you started during this crisis when your dining rooms reopen? Oh, hell no! You keep those services in place to create a new revenue stream for your restaurant! Many didn’t have online ordering, delivery, or promoted takeout (or curbside pickup) before. This pandemic forced many out of their comfort zone overnight. Now, that you are displaced from that little bubble of comfort and mediocrity (that’s what it really is), it's time to make some major upgrades to your restaurant brand!
I talk about culture so often that you might think I am a broken record. I do it because it is the one thing that separates the good, from the great, from the outstanding restaurants. No bullshit. Culture is the “secret sauce” you have been searching for to make your restaurant better. Poor culture = poor performance. Yes, it sounds simple and basic, but after working with over 2200 restaurants, I can tell you in all honesty that it’s the truth.
The foundation of any great culture is having great core values. One advantage I have is that I see and work with restaurants from around the globe. Don’t think that the problems your restaurant has are any different than restaurants in South America, Europe, Africa, Asia, Australia...because ALL business problems are PEOPLE problems in disguise. That’s a fact, Jack! Different languages, different geographical, different economies...same behavioral problems because all people are wired the same way!
You’re wired a certain way and most likely you are unaware of your strengths and your weaknesses. Okay, you might know your strengths, but you ignore your weaknesses is a more accurate statement. You’re not stupid, you just have some blind spots to how you are. Oh, and if you don’t think you have any blind spots, that’s your first one! We all have blind spots. I do and you do. Not acknowledging them doesn’t make them go away. That’s called denial and it’s deadly to running a successful restaurant. I always have stood by the statement that ego, pride, denial, and mediocrity are the top four reasons restaurants really close down.
You can counter and say it’s undercapitalization, a bad economy, poor labor pools, oversaturated markets, or now the Coronavirus...nope. Those four mentioned earlier are what I refer to as The Four Horsemen of Your Restaurant Apocalypse!
Culture is either created by design or by default. Which one do you have currently? Did you cultivate and nurture your culture every single day or did you try a couple of things and hoped they stick? The “hope method” is how most attempt to create culture. Hope is great for some things, it’s a horrible strategy for running a restaurant. If your culture is out of control and has become a toxic cesspool, you are going to need to drain it and start over!
The first thing to look at is yourself.
A mirror is a fascinating tool. We see ourselves the way we want to be seen. You are going to need to get brutally honest with yourself. If you are not a leader, that’s okay! Nothing wrong with being the owner. To be completely open, there are very few owners who can operate their restaurant.
When I opened my first restaurant I was more of an operator. I knew how to run a restaurant. The owner side eluded me until I got a business coach who schooled me on how to build a brand and a business. To be truthful, if it wasn’t for that coach, I would have closed within six months. He gave me a second chance to develop myself past what I knew to those areas of business I didn’t know. He crafted and sculpted me into an owner-operator. Now, to be honest, I am a little bit of a control freak so I wanted to be both. Your situation might be different and now it’s your chance to pick.
If you want to be an owner, then hire people to run the day-to-day operations. If you want to be an operator, then hire people to build your brand and business. It’s very rare to find successful owner-operators. If you are struggling it’s time to choose. Sometimes the thing that chokes out the growth of a restaurant is the owner in the wrong position in their company. St. Catherine of Sienna said it best, “Be who you were meant to be, and you will set the world on fire.”
Wise words. Especially if you follow them.
Develop Better Habits
Like it or not, your restaurant is a reflection of two things: your habits and what you tolerate.
If your restaurant ran smoothly and the profits were great, you have more good habits than bad habits. Now, if your restaurant was more like a cage-death match and profits seemed to be more like a roller coaster ride, then you have more bad habits than good habits.
Here is some good news: habits are learned behaviors. That means that you can also unlearn those bad ones and replace them with good ones! However, there is also some bad news: if you could easily change your bad habits you would have by now.
I know that change is hard. Just look at all those New Years Resolutions that are made every January 1st and by January 17th, they are dropped and forgotten. Then you find all kinds of excuses why you didn’t follow through...
- I was too busy
- It was too much work
- It was a waste of money
- I didn’t see any results
Excuses always sound good to the person making them. They do nothing to move your life or your restaurant forward. Sadly, you can rationalize the shit out of anything. That just makes you a loser. A loser who doesn’t follow through. Is that how you want to be remembered?
You tried to rebuild your restaurant and just couldn’t do it? Or, was your restaurant already on the rocks before this storm hit and now it has become an easy out?
The truth will set you free, but first it will piss you off.
So what are some new habits you want to start? I am glad you asked!
Yeah, like most restaurant owners, chefs, and managers you tend to take care of everyone else and neglect taking care of yourself! You don’t exercise, eat like crap (every though you work in a restaurant), and sacrifice sleep. Then you come in playing the martyr card and tell everyone (and anyone) who will listen about what a rough life you have. I see this kind of crap every day on Facebook. Here’s the cold hard truth: if you are not happy will your life the way it is, then do something about it! Just stop whining and crying about it.
Raise Your Standards
This is restaurant rehab lesson #1. Nothing in your life (or your restaurant) will get better until you raise your damn standards! Remember I said that your restaurant is a reflection of what you tolerate? This is directly related to your standards. What separates the Wolfgang Pucks and Thomas Keller’s of the world from the average restaurants? Those restaurants at the top have uncompromisable standards! You play the game at their level, or you don’t play on their team very long!
Know Your Numbers
Not knowing your numbers is just, how do I say this eloquently...fucking stupid! You are a business and your restaurant must make a profit to stay in business. Profit is not a dirty word. If you have conflicting views about money (and honestly many do that they don’t know about).
What do I mean by conflicting views about money? Have you ever said any of these before?
- Money is the root of all evil.
- The rich get richer, while the poor get poorer.
- Money isn't everything.
- I'm just not good with money.
- Be happy with what you have.
- People with a lot of money are greedy.
These conflicting beliefs about money are actually holding you back. It’s time to silence those little demons in your head!
The best way to manage your numbers is to track, measure, and manage your Key Performance Indicators (KPI’s). These data points are critical to long-term success! If you got caught with less cash in your bank account than you wanted to have, then tracking and managing your KPI’s are the key to fixing that! No bullshit, you either manage your numbers or they manage you. Just look at your bank accounts right now. If the sight of your bank balance makes your heart palpitate, then it’s time you got on the KPI bandwagon!
Make a Commitment
If you elected to fight against the dying of the light. If you decided to really rebuild your brand from the ground up. Then, I honor you.
It takes courage to stand back up after you’ve been knocked down.
It takes faith to see a lot of your hard work get erased in a short amount of time and still want to rebuild it.
It takes a leader to stand out in front and say “we got this”.
Maybe you made some mistakes before this pandemic crushed our industry. We all have! Forgive yourself and make a commitment to correct your course! You can’t go back and change the past, but you can change who you are today to create a better tomorrow.
When you commit to a course of action and a new plan you want to be monomaniacal in your focus. This is the path you want and you will reach your destination! Is it always smooth sailing? Hell no! Hey, boats are safest in the harbor, but that’s not what boats are built for! You got to get out into the sea!
Restaurants came into existence in 1765, because one man wanted to restore the souls of weary travelers. He sold a simple dish called a “restorative” and from those humble beginnings, an industry was born. To not respect that man and his vision to be a host to others is disrespectful. When you fail to honor his dream you dishonor yourself.
You are a restaurant owner. Fucking act like it!
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