If you ask successful restaurant owners the secrets of their success, most will tell you to treat your staff extremely well, be ready to work very long hours, and be extra careful when choosing both investors and partners.
But most of them also will have one or more unconventional philosophies or strategies that have served as linchpins to their success. Recently, I interviewed 20 independent restaurant owners from across the country, and the following are five of the many interesting, out-of-the-box comments that caught my attention.
Hire a salesperson for every position
— Matt Frey; Bub’s Burgers and Ice Cream; Carmel, Ind.
“When I hire, I hire salespeople, not waiters. I think every restaurant should do that.
“I’m very active in the marketing classes and the entrepreneur classes at the local high school, talking about sales and how important sales are in any business, not just mine. I tell them we don’t hire ice cream scoopers, bussers, dishwashers, hosts or waiters. We hire salespeople. If we hire you to dish, and you’re content with that, you’ll last about a week here. You should be motivated enough to say, ‘OK, what do I have to do to get my feet on that floor to make that cash?’
“We hire teenagers who walk out with $100 to $150 cash in their pockets after working four hours. These are the kids that gave you that goofy look when you spoke about ROI and maximizing profitability, but when they walk out with that cash, they fully understand, and they take it seriously after that.”
Compete for talent, not customers
— Jon Myerow, Tria Cafe and Biba Wine Bar, Philadelphia
“To me the biggest competition is not for customers; it’s for staff. If you compete in the labor market and get the best staff, the customers will follow. I like to say, ‘It’s harder to get into Tria than it is to get into Harvard.’ Our acceptance rate is lower, and our employees know that. We’ve hired some people with the passion, but they just weren’t good on the floor. Some people just can’t be good servers. I’m one of them, so I feel their pain. But I think we’ve done a good job with that. We’re very selective. If we put an ad on Craigslist, we’ll get 100 or 200 responses, and there might be three or four people that we consider seriously.”
Intimate local knowledge is the chains’ Achilles’ heel
— Scott Maitland; Top of the Hill Restaurant & Brewery; Chapel Hill, N.C.
“I focus heavily on knowing and understanding our community. One thing the independent has that no amount of money can replace is the understanding of the local community. A well-funded chain restaurant can blow an independent away with restaurant design, menu design and all of that stuff. But the problem is, by its definition, to justify that type of capital expense it needs to be [replicable], and that is the chains’ Achilles’ heel. What the money can’t do is it can’t drill down into one community and understand what that community needs. Chains can’t do that.”
A good CPA is as important as good food
— Richard Taubin; Friends Coastal Restaurant; Madisonville, La.
“I highly, highly recommend hiring a CPA, especially one who is close to the restaurant industry. They understand what percentages should be as an average. Without breaching confidentiality, they can talk to you about what other restaurants do to combat certain cost structures. Our CPA recommends the financial applications that we should use and helps us with reading P&Ls and how to make adjustments.
“When you can work with CPAs on a daily basis and have them help assure that budgets are aligned and cost controls are adhered to, it’s just as important to me as the food you put on the plate. Without controlling those costs, you don’t make money. If you’re in it just to make a paycheck, just do it on your own. Otherwise, I highly recommend you hire a CPA and make that a big part of your restaurant. Just as you would design a recipe for your food, you need to design a recipe for how you’re going to track and adjust for financial costs and profits.”
Focus on volume over margins
— Jeremiah Higgins; Arch Rock Fish; Santa Barbara, Calif.
“I’ve always said, ‘You don’t put percentages in the bank. You put dollars in the bank.’ Yeah, it’s great to have a 30-percent food cost. But if you don’t have money coming in, then what’s the point? So we’ve always operated under the philosophy that volume is very important. If you do enough volume, then the bottom line is always healthier than it would be if you lived and died by those textbook food-costs analyses and things like that.”
You may not agree with all of these strategies, but I found it interesting that during the 20 interviews I conducted, every owner made at least one comment that made me stop and think, “Hmmm. Now that’s interesting. I haven’t heard that one before.” So while you may be doing the “musts” that you simply can’t get wrong to succeed as a restaurant owner, what uncommon ideas would you share if you were interviewed today?
Wil Brawley is a partner at Schedulefly — www.schedulefly.com — a company that provides restaurants with Web-based staff-scheduling and communication software. He recently collected his interviews in a book titled, “Restaurant Owners Uncorked: Twenty Owners Share Their Recipes for Success.”
