Profitably is Priority #1 – Words of Wisdom

I am a restaurant expert, teaching my SMART systems to independent restaurant owners all over the country (and the world). I teach through speaking engagements, training workshops and coaching sessions. What it all boils down to — I talk a lot!

But with all my talking, my single goal in life is to help the independent restaurant owner not only survive, but thrive, in the sea of chain restaurants out there.

With this in mind, I have a treasure chest filled with timeless stories and words of wisdom that I dive into almost on a daily basis. One story I seem to use regularly is the one where I show restaurant owners that running a restaurant is about making money. It’s not about winning a popularity contest or running a charity. It’s a business meant to make a profit.

So many restaurant owners get into the business because they have a passion for food, for service, and had a dream of creating the perfect restaurant. For these owners, making money was the side benefit, just so long as they could fulfill their passion for food and interaction with customers.

Whatever the reason for opening a restaurant, many independent restaurant owners are missing the fundamental tools they need to run a profitable business. They run their businesses by walking their floor and checking their online banking statement to see that there is money in the bank — with their fingers crossed.

I’ve seen restaurant owners who love their employees so much, they will go into debt or dip into retirement funds to make payroll. They don’t want their employees not to have a job, even though the business is losing money hand over fist and won’t be around for long-term employment anyway.

So here are my words of wisdom on this subject…

If you’re an independent restaurant owner, you have a responsibility to run a profitable business!

You have a responsibility to your customers, to whom you provide a product and service that fills a need in your community.
You have a responsibility to your employees to offer them gainful employment by which they feed their families.
You have a responsibility to you, your family and your investors to run a profitable restaurant, because that’s how you pay your bills, how you keep a roof over your head and create a strong financial future.

With this in mind, put systems in place that make your restaurant run smoothly and profitably. You need to make smart business decisions based on turning a profit.

This simple shift in thinking can put you on a path to restaurant success almost overnight. Is this how you see your business? Let’s make this post interesting and valuable to everyone. Please share with me how a shift in thinking propelled your business forward. Please take the time by posting your story in the comment section below. Inspire others with what you’ve learned.

Tags: Profitable, Restaurant

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Non-Operator Comment by Mark Frank on January 5, 2009 at 11:43am: Joel,

Have you ever thought of offering your services for free? If there is a way to quantify your return perhaps this could be a good experimental strategy. One of my best customers is one I used that on and with nothing too lose he let me demonstrate what I could do. Of course keep this on a short duration and make sure improvements are quantified.

In a tight market people are dubious as they should be. My only other suggestion is to have other’s you’ve helped write testimonials (I collect them); their use has more to do with getting more business than anything else. There are many out there with advice and some of that advice has a longer-term payoff and while valuable do little to pay bills now.

Be creative, offer to work for free for one or two people (single project/issue) and see what happens. As an example, I offered to write a marketing campaign for a small local franchise affiliate and asked for one dollar for each redeemed letter (key placed on his POS system for verification). We mailed 10K letters on the initial run and received 200 redemptions, it was a quick buck, however the important things was he has since given me about $1,000 in work and has written a very nice letter for me which I have used several times (actually I wrote it and he signed it on his stationary). He liked that letter and idea so much he will use it several times each year, and each time I get one dollar per redemption, not bad.

Mark

Comment by Joel Pomerantz on January 4, 2009 at 8:10pm: Thank you very much for your insight, David. I have been working in and around the industry for about 26 years, and my experience bears out every one of your comments. I think one of the most satisfying challenges to meet is where someone doesn't know what kind of help is available, learns what it entails, and gets transformed into a 'help-acceptor.' It happens occasionally, but I agree with your basic observation that restaurant owners are an independent breed; sometimes what's carried along is the conviction that they know all there is to know about their business and how to improve it.

Again, thank you for your help!

Joel

Non-Operator Comment by David Scott Peters on January 4, 2009 at 7:59pm: Hi Joel, I understand your challenge. Here are my two cents...

1) You need to always offer what's in it for them.
2) You need to build credibility... why should they listen to you.
3) Always be honest and a great listener.
4) And finally... be prepared for this one... understand some people don't want your help and they never will. Many owners and managers think they know everything and that can be their demise. Nothing you can say or do will change their perception.

Heck, I don't know everything. I learn every day. And I certainly don't BS anyone if I don't know the answer. My job, as is yours, is to do everything in our power to help those who want the help be successful! Concentrate your efforts on the positive people who are ready to make positive changes. Don’t waste your energies on those who don’t want it.

Ultimately, those that accept your help and get results will be your best form of credibility and marketing. With their success, yours will follow. They go hand in hand.

Well, that’s my two cents. These basic principles have been the key to my being able to work with some really incredible people as members on a daily basis. I consider them the top 5% of the industry. They are people who want to change, learn and share with and from each other. Even when their chips are down, they keep a positive outlook and a great attitude.

I don’t think my members are like this by accident. I believe this is a direct result of how I have built my business. And I think it can be duplicated in any business, including your.

To your success, David Scott Peters

Comment by Joel Pomerantz on January 4, 2009 at 7:30pm: I am a state restaurant association representative and have seen operators go through a very difficult this fall and winter, with little hope of improvement in the foreseeable future. The organization I work for has endorsed services designed to save members potentially far more than their annual dues cost. Now more than ever, saving a few thousand dollars a year that way should appear as a welcome and simple component of a program of cost savings contributing to the profitability of a restaurant.

My current challenge is in overcoming the apparent perception on the part of restaurant owners and managers that I am just another salesperson walking throught the door who is only out for himself and his company, particularly at a time when paying existing vendors, landlords, utility companies, etc., their due is itself a major obstacle. Any thoughts from the professionals out there on how to communicate more effectively that we are here to help??

Thank you.

Joel Pomerantz

Non-Operator Comment by David Scott Peters on January 4, 2009 at 7:37am: Thanks Bill. Restaurant owners have to keep in mind that with the economy in the poor state it is in today, running their restaurants the same way they did when sales were booming does not work anymore. This brutal economy is murdering profits and the losses have nowhere to hide like they once did.

Back in the day - when times were good... skimming vendors, employee theft and yes... even a little sloppiness on an operators part was easier to overlook because they were still making money.

Today, however, the financial meltdown has many restaurant owners neck deep in quicksand!

There is no better time than today to start running your restaurant and making decisions based on budgets, systems and profitability as a priority.

If anyone needs a push in changing your mindset or you just feel stuck in quicksand, please feel free call or email me. You can find my contact information on my profile page. I will be more than happy to help.

Thanks again Bill.

Comment by Bill Baumgartner on January 4, 2009 at 7:21am: David,

Priority #1.
You are exactly right !

How can something that comes so easy to me, be so hard for somebody else?

Having been a regional manager for a smaller restaurant franchise, I have seen too may want-a be restaurant owners fail.
I worked with accountants, builders, lawyers, and a whole gammet of professional people. They all had money to invest.
They all thought a restaurant was an easy way to make a buck.
Even though they were successful businessmen and women in their given profession, a majority of them operated their food establishments with an emotional mindset, and way too little regard for the bottom line.

Many were out of business in the first two years.
A few of the others figured out it wasn't so easy, and sold-out before they lost their entire investment.
There were some that succeeded, but they did so with a lot of painful changes and usually with a whole lot of help form a few restaurant savy individuals along the way.

Profit, first and foremost !
Thanks for the reminder,

Bill

Non-Operator Comment by David Scott Peters on January 4, 2009 at 7:20am: Thanks Andy! And you know what we didn't say? We didn't explain that there is an additional benefit to having all of those systems in place and running profitably... "your restaurant is easier to run too!" When you make that mental turn, as you have done, the restaurant is more profitable, it's easier to run and it's fun again. I appreciate you sharing. Thanks.

Comment by Andy Swingley on January 4, 2009 at 7:08am: I couldn't agree with you more David! Though I am not a independant owner I still run restaurants and what you describe for some of my experience is a "business maturity" that doesn't arrive until someone gives it to you as a gift or your on the way to "out of business" and get it through hard knocks.

Many years ago I used to think it was just about walking the floor. If I had lots of happy guests that was all I needed but I wasn't making any money and opportunities passed for me and my people to be even more successful. I met a "hard nosed" financial mentor that showed I could do both, make tons of money AND make guests happy.

Systems for food cost, labor management, guest service....a system and a set of measureables for all of the business not just one. Made me the all around operator, mentor, coach, and business man I am today.