Running a Restaurant/Restaurant Troubles

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Question
Hello,

Our situation is a bit different because we are in West Africa, business here is a little bit different but not too much. We have an American themed restaurant, in a very upscale area except we are a bit hidden in a place where traffic often passes but its not a business area, it is rather residential (Several embassies in the area).  It is a very large and open air space, with indoor seating as well (recently added). Would be great for parties and rentals. We opened up in January and became slightly popular with the expat community, particularly the US embassy. People were coming but their return wasnt happening as often as we would like. We advertised our lunch delivery service and gained a few clientele from office orders. Our advertising hasnt been very active, we have advertised on facebook and through fliers and a few banners. The issue with advertising is my father (primary business owner) does not see it as very necessary to spend a lot on advertising. I suggested a billboard, which would cost about $1000 for one month but would reach our target market while in heavy traffic (very common here), he thought that would cost too much.

We have been thoroughly riddled by staffing issues. Ghana's workforce is just about the worst that you could ever imagine. They are not serious, no one comes to work on time, sometimes they dont even come to work at all. Service is very very poor. We can spend weeks training the people and they still do not care enough to do the right thing. {{Note: I recently visited the new 4-5 star Movenpick Hotel in Accra where I noticed that the staff had the very same issues after they have been trained for 6+months!}}. They have a very high turnover, at which point we are on our 4th Chef and his performance is so poor that many times my Mother & I have to assist in the kitchen. In addition to that, the salary rates they are asking for are high for a third world country but due to oil being found here, and the rigs paying chefs higher rates, all of them are expecting the same amounts. Last month, the staff had become so bad that we closed for two weeks to restaff many positions. From the beginning, I have suggested hiring filipino staff from abroad who will be housed with us, once again, My father disagreed but now he is more interested in that idea and we are seeking foreign staff.

That being said, the one month that we operated well enough to break even was in April. Of about $10,000; Our salary costs were about 20%. Food costs here are high at about 25%. Other costs including electricity and all that were another 18%. Totaling about 73%. The rent is shared because we are actually building a hotel on the majority of the property and the total cost of the lease is $3000/month.

With this all in mind, we have considered hiring foreign staff and increasing our marketing efforts to drive more customers, new and bring back the old somehow or my fathers idea of renting out the space to someone to take over the restaurant. That being said, if someone were to take over how much do you think would be feasible to ask as a monthly fee? I have also been thinking that it would be difficult because the hotel, which we were planning to have half board, would not really have a kitchen. If rent could only be 10% of sales, then I do not thinkit would be worth it. What do you think?



Thank you for your help.

Answer
Corinne,
Hello and thank you for the question. Unfortunately, I have never worked in your part of the World and it would be a mistake for you to take my input as anything other than speculative. However, I will attempt to make the following respectful suggestions which I hope you may find useful but I don't think I will be able to answer everything.

Firstly, are you aware of the trend in the States toward “fast-casual” restaurants – where people can get a higher quality meal (better ingredients) than “fast food” at a slightly slower pace? These restaurant are exploding in growth and offer two things that may be of interest to you 1) As a counter service/pay operation these stores reduce the front of the house staff to nil 2) The recipes are not complex (served in hand held – Naan, tortillas, etc.)reducing the need for chefs. You may face better odds if you reconfigured your format.

Secondly, values that are not shared in the workplace make it very difficult for work to be done. It has been said that the World would not have seen capitalism as we know it without the Protestant revolution resulting in a new work ethic. Martin Luther said that work in itself was good, an act of homage, spirit-enhancing and humbling. This single edict produced generation upon generation of self-motivated workers. I am not advocating for or against any form of worship but merely use this example for illustrative purposes. If people hold fundamentally different values, you will be hard pressed to create any changes simply because you ask/tell them to.

With that said, in the States there is an almost ubiquitous use of personality profiling (pre-test) as a hiring step to discover whether a person has the right attitude to be a success in a restaurant environment. You might approximate this by hiring family or friends of an individual who displays the traits you seek, in an attempt to staff more like-minded employees. We call this hiring a “fit” for the work, culture, ethics, etc.

I use the following quote as my personal rule of thumb –
“Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience. Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind. Experience is easy to provide and quickly put to good use by people with all the other qualities.”—Dee Hock

Corinne, never attempt to get NEW guests to try a “we’re working on it” experience -
The best “first fix” before any outside marketing, is always to make sure that your current guests are getting their money’s worth. This is called “Four Walls Marketing” – it will be far faster and more cost effective to earn an increase in business by how you have handled your old business than to generate new business for an inconsistent establishment. If not,you would then be actually exposing new people to your old problems.

Are your establishment’s actions meeting or exceeding its words? Is the unit operationally succeeding? (Slow ticket times; hot food served cold; cold food served warm; poor quality product; lousy service; dirty, or smelly.) If not, that is the first fix.  With that said, you might think I’m asking you to bear down until you can produce perfection. Not so. Just be able to back up your promise/standards/specs.

Guest’s “hate it” short checklist -
   Poor phone etiquette
   Slow greeting
   Acting indifferent/unfriendly toward guests
   Dirty, smelly, unkempt uniforms
   Waiting for unbussed tables/unopen sections
   Soiled and sticky tables, counters, or surfaces
   Broken and/or ripped furniture or fixtures
   Lack of product knowledge
   Poor timing on delivery of food or beverage
   Dirty and/or out of stock utensils
   Auctioning of plates during delivery
   Receiving the wrong order
   Poor quality product
   Improper product temperature
   Foreign objects in food
   Noxious odors from bars, drains, or sewers
   Dirty/unstocked bathrooms
   Teammates not washing their hands after a bathroom visit
   Slippery floors
   Visible clutter or disorganization
   Slow to ring or deliver a check
   Theft by overcharging
   Within earshot of guests-audible complaining or vulgarity by the team
   Managers not interacting with guests
   No ownership of or positive resolution to problems
   No ‘thank you’ or invitation to return
   Indecipherable hours of operation
   Unsafe parking lot

All the above are common knowledge. The uncommon practice is for you to actually develop a system or habit to eliminate each of the aforementioned items from ever occurring in your establishment.

After resolving any/all of these glaring operational issues, I have always strived to accomplish the following - Attract attention, create interest, manifest desire, and induce action to increase sales. In the States many companies are growing at a rapid rate because of couponing (discounts on price to drive traffic) perhaps this might be a way to generate some extra business during slower periods.

When it becomes time for marketing I argue for simplicity –
1.   The first rule of hospitality marketing is to produce something worth talking about, also known as “signature items,” “differentiation,” “authentic-ness,” or putting your best foot forward. (Make sure you can consistently “pull this off” before you start blabbing about it!)
2.   The second rule is never have your team be confused or unable to articulate what your special, service style, promotion, or feature presentations are all about (they are the facilitators of the potential ideal experience for the guest).
3.   The third rule is to leverage “user-friendly” as far as you possibly can (web-based reservations, social networks, delivery, curbside pick-up, frequent purchase rewards, community involvement, easy to operate/read menu, flexible menu substitutions, etc.; and maybe even trimming the tree that is partially covering your store signage).
4.   The fourth rule is to nudge (without being pushy) for extra sales that can be coaxed from the wallets/purses of the visitors you already have. Don’t ignore the specials or “combos” that will bring you the best margins. I once asked a server who was beating the pants off everyone else in a “side salad” promotion what magic he was using to produce such great results. He said, “I just try to remember to ask everyone if they want a side salad with their order; it’s only $4.75.” Oh, I see; asking for extra sales in a nice, informative way produces more sales….!

Also, ride the tide in the direction it is already moving. This is also known as collaborating, co-promoting, piggybacking, and generally making it easier on yourself. There are people in your area who are sweating and stewing about how to increase sales of their products (some of which you sell). Just imagine how much brain power is focused on advancing their prospects. You can use this fact to your advantage. Train yourself to identify where your needs and theirs intersect and then request the use of their resources (money) for the use of your snail/e-mailing list, special event partnerships, access to your parking lot, menu placement, and so on.

And, always begin your advertising adventure with an annual marketing/sales calendar you cobble together from the store’s historical data and current trends. Start the assembly in the month of August to have it ready before January. Include holidays, three-day weekends (those Sunday nights usually produce more traffic), major sporting events, seasonal sales shifts, community festivals, and “in-service days” (i.e., when the schools are not in session).

Then layer in your purveyors’ special promotions, selected dates for menu changes, seasonal beverage shifts, and any of the silly-somethings that you want to take advantage of (i.e., in the States - New Year’s Eve, Valentine’s Day, Mardi Gras, St. Patrick’s Day, Secretary’s Day, Cinco De Mayo, Mother’s Day, Father’s Day [always a bust for me], store anniversary/birthday party [always a winner], back to school, Oktoberfest, or even the national gift card months of November and December).

The main reason to do this work is to avoid undertaking a major effort for every marketing possibility that shows up at your door. If you build a comprehensive calendar and then trim down your selections to the ones that best fit your situation, you will put more muscle behind fewer choices, so you will be exercising more control of your resources and possibly your fate. This should help you to plan in advance the entire coming year, rather than scrambling from month to month. It will give you a chance to train/educate and enlighten the team/crew as to what you are trying to do.


Sometimes it can help to have a business vision of success – no matter how far away it seems. I offer the following for review and reflection

A thriving operation looks like…
A WOW factor business! Guests can always count on the excellent consistency and quality of the food, beverage, service, and spirit/tempo provided by the operation. The guests feel as if they are the most important thing in the building—like they are the winner of each and every transaction. The balanced employee rhythm between personality and professionalism is visible. The relationship-building skills of the team are superlative. Guests actually pass by competitors to visit this establishment. People proudly invite their family and friends to this operation.

The staff feels like a million bucks. They are treated with civility and held accountable to expectations, yet are empowered to do the right thing. They have the tools, training, and support to do their best. It’s about more than just being the money; they willingly share in the responsibility to create a great guest experience. This is because of the high level of “fit” and “buy-in.” The team holds a clear understanding of how their roles contribute to the outcome, and not surprisingly, they are motivated to help each other exceed expectations. They would invite their friends/family/competitors to work here.

Managers are focused on making every moment count. They are clearly aligned with a system that is healthy and targeting the growth of all. They have a hardy supply of skill, stamina, and wisdom. They work at identifying daily goals and are actively clearing the path to success. These managers support victories with celebratory “pump-ups.” Work challenges are viewed as opportunities to stretch and grow. They are committed to building successful business results by fostering successful business relationships. Sales and profits are on the rise.
The unit looks fresh and clean, regardless of its age. Its sparkle shows off the “store-proud” activities of the people who work there. Through their outreach efforts and business practices, this store has become a welcome addition to the community.

There is positive word-of-mouth power in the marketplace about this property. A thriving operation is taking market share from its competitors. The end result is magnetic. They are attracting new business by the way they have handled their old business.  

Wishing you and your family the best -

Running a Restaurant

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Chase LeBlanc

Expertise

I am the author of the new book, HIGH IMPACT HOSPITALITY: Upgrade Your Purpose, Performance and Profits!http://amzn.to/guebkx I am also the founder and CEO of Leadagers LLC http://leadagers.com/ (leaders who manage, managers who lead, "leed/i/jers") a hospitality industry consultancy. Our primary focus is in upgrading the purpose, performance and profits of restaurants, bars, food & beverage outlets and/or nightclubs. We have expertise in operations, start-ups, training, in-house leadership development and positive customer service experiences. 720.269.9537

Experience

My 30+ year hospitality career started as owner/operator of a nightclub development and management company. After successfully selling that business, I led within a variety of national and global operations as General Manager and multi-unit Regional Manager and I have also served corporations as Vice President and President. My extremely broad range of experiences includes leading training stores, entertainment complexes, fine dining establishments, high-volume theme restaurants, quick-service restaurants, dance/night clubs, comedy clubs, college taverns, dueling piano bars, pizzerias, high-volume sport’s bars, live music showrooms, retail stores and gift shops, fast-food concessions, catering/banquet facilities and high-volume arcades.

Publications
"Staffing Doctor" columnist for Hotel F&B Magazine http://www.hotelfandb.com/blog/?p=819#more-819 Top 10 - FastCasual.com http://www.fastcasual.com/article/140233/Top-10-ways-to-motivate-your-managers Core Hospitality - Quick Serve Leader - http://quickserveleader.com/article/making-hospitality-core-your-restaurant-brand-expert-corner Wise Words - Inside F&B http://insidefandb.com/2012/01/wise-words/ And have been a featured blogger for FohBoh.com In addition to my new book High Impact Hospitality,http://amzn.to/guebkx I have been a contributing writer for and/or my properties have been featured in Cheers, F&B, Food Service News, Hot Spots America, Military Club & Hospitality, Nation’s Restaurant News, Night Club & Bar and Top Shelf.

Education/Credentials
Attended the University of Colorado for three years and left to open my first nightclub at the age of 21.

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