From the Fire to the Pan
At least we are moving in the right direction!
First, I want to thank all of you for your support and suggestions after I told the tale of finding ourselves flat-damn broke after wrapping up the remodel. There were some very good suggestions, particularly along the lines of selling wine club memberships, pre-selling wine dinner series, etc. We plan to put together a survey soon to float a few ideas.
Out of the fire…
When I last shared our restaurant remodel reality show I had returned from an 8,000-mile road trip. I had been entertaining loan sharks along the way. You know, the ones who write me 116 times each week offering pre-approval of loans up to $350,000 with rates as low as 7%. If one decides to check these out they receive some convoluted offer that, once decoded, represents actual cost of fund rates of 24% to 48%.
Janet and I both have excellent credit, as does the business, now in its fifteenth year with year-over-year sales growth of +30%. Makes one wonder who gets the 7% deals. It turns out there are no consumer protections when it comes to businesses screwing other businesses. Nonetheless, I was able to round up sufficient funds with reasonable terms that allow us to return our focus to running a restaurant. It’s not over yet, but we’ll be just fine.
Why the pan?
Though we are out of the fire, we are still in the pan. This is our own fault; a result of certain decisions we’ve made. Decisions like: Let’s pay all of our employees a living wage and provide health care benefits as well as paid time off and paid sick leave. Let’s buy only the best ingredients available and funnel our (your) purchase dollars to local businesses and farms. Another: let’s build a Marketplace… a story for another day.
Restaurant Metrics
Folks use spreadsheets to model operations and outcomes. This is a useful exercise to project performance and outcomes but I see the over-reliance on these pro forma so often defeat good decision-making.
I have interviewed chefs fresh from chain restaurants that operate on 25% cost of goods. We have no imagination for accomplishing that. If we hit 35% it is a real cause for celebration. Labor is the ultimate restaurant killer.
I have recently watched demos of software that help manage restaurant labor. These services cue the manager to cut labor if specified metrics are not being met. So you cut support and service because the night has started slower than you planned. In doing so you eliminate the revenue your employees were relying on and stripping your staff such that, when that crowd shows up later than you’d planned you have preemptively converted success into failure by shorting the labor needed for good service or appropriate ticket times.
My philosophy for running a successful restaurant is to put butts in chairs.
That‘s where you come in! The last twenty diners in an evening earn us as much profit as the preceding 100 guests. Cost of goods is virtually our only variable expense. Fill it up! (And try to get somebody/anybody to make a reservation after 7:30.)
We don’t put a big thumb on our wine markups because we rely on our regular customers and they appreciate the relatively good value. And we don’t try to recapture all of the cost increases we are hit with because, well, how could we? We just strive to hit every mark, every meal.
Hitting Those Marks
Janet’s kitchen has always rocked it, but the meals hitting the tables are the best they’ve ever been.
We have forever had great folks on hand to serve you, though longstanding customers have repeatedly noted our improved service standards.
By striving for better efficiencies and teamwork we do the best we can on cost control. I look around for places to shave dollars and see few palatable options.
It is the emphasis on personnel, training and leadership that enables us to achieve our objectives.
We could not presume that we would grow simply by showing up and doing the same things we did last year. or the year before. Sales since reopening the first of March are up 35% over the same period in ’22. Sales in May were up 45%. These are great numbers. It seems to be working.
It will take another year or two to dig ourselves out from the remodel but we were never in it for the short haul. We are playing the long game.
So don’t fret about us. Just keep doing what you’re doing. Tell your friends, bring your family, and if you are thinking of dropping in after 7:30, please, be our guests. I didn’t mean to alarm you with my last article… Just telling another chapter of the story.
No whining allowed!
Janet and I are spending the week at our home in Walla Walla. As I write this I have my morning coffee beside me on my sunny porch watching my new rescue pooch luxuriate with a soup bone in the front yard. If I complain, I just know that God will smite me.
