February 29th, 2012
In their February 2012 issue, Restaurantville Monthly profiles the work we recently did in partnership with the Texas Restaurant Association on our 2012 Restaurateurs Issues and Challenges Survey. The publication notes the connection between operators’ focus on l
iving their culture and their optimism for 2012. “By maintaining a high level of cultural integrity, restaurants will build loyalty and increase profitability and revenue.”
When you do one, you get the other.
February 9th, 2012
The best management teams are balanced, cover each other’s blind spots and use their time wisely to make outstanding decisions.
On February 7, I volunteered along with a group of restaurant industry professionals to staff and judge the 2012 Dallas Regional Texas ProStart Restaurant Competition. The event was sponsored by the Greater Dallas Restaurant Association and Texas Restaurant Association Education Foundation at the Arlington Convention Center. High school culinary and restaurant management teams competed to go to the state finals, in pursuit of a berth at the National Pro Start Invitational in Baltimore this spring.
My team of four judges was responsible for evaluating the management teams’ critical thinking ability, posing business challenges to them and grading their responses. Other judges reviewed their fictional business plans, presentations, and menus.
Like management teams in any business, these teams took on a personality of their own, which I reviewed in the later feedback sessions. One team was “smart, fast, action,” others were ”thoughtful and reflective,” “personality and hospitality,” and “concept and detail.” It was interesting to see how groups of students came together through friendship, common interests, or the leadership of their educators to create their own vibe, culture, or approach.
The best companies combine people with different perspectives into teams in order to cover their blind spots. Likewise, I really wanted to blend the “thoughtful and reflective” teens with their “personality and hospitality” counterparts to build an unbeatable group. But since the contestants were sorted by high school, that was not going to happen.
The teams also reminded me of the value of taking all the time available to make a decision. Each team had 20 minutes to craft their responses to the four critical-thinking questions that we posed. The answers that came back in five or ten minutes were good, but all the teams could have profited by taking the full 20-minute time allotment. It is true that great organizations act quickly in response to challenges. But companies that act prematurely instead of using breathing room to craft the best response, do so at their peril. Just like a high schooler.
ProStart is a two-year high school curriculum designed by the National Restaurant Association (NRA) to develop talent for the future of an industry that is hungry for it. By exposing teens to the many different careers the industry has to offer, it is both a “feel-good” and a “do-good” program for the NRA. It doesn’t hurt that this program is being promoted at a time when chefs are treated like full-blown rock stars on reality television. I saw more than one high schooler proudly sporting a chef’s hat around the floor of the convention center at the regional competition.
February 2nd, 2012
The good news? There’s a low barrier to entry in the restaurant business. The bad news? Well, you know.
Most people think inferior locations, service, food or atmosphere are the factors that most often doom a restaurant. While those are all important, having enough cash in the bank can enable a start-up to survive them all.
I have a friend who figured out that the best way to get through college would be to pay students smarter than him to write his papers. It worked well in his freshman, sophomore, and junior year. As a senior, he ran out of money to pay for papers. “I would have graduated,” he said. ”But I was undercapitalized.”
Last week the Dallas Business Journal’s Steven R. Thompson reported on shoestring startups, Pecan Lodge Catering and Maple and Motor, and an expansion, Il Cane Rosso for his article “Restaurateurs Find Minimalist Recipes for Success.”
In the article, Steven asked me to compare a typical restaurant opening budget to that of the operations he was writing about. He said their opening budgets were between $100K and $125K. I just laughed. That budget range is smaller than the cash reserves most professionally managed restaurants open with. Most of our clients would spend half that amount on pre-opening traning alone!
Don’t get me wrong. I am a big fan of Il Cane Rosso. Their pizza ranks in the top tier of pizza in Dallas. And Maple and Motor found a spot on my “Clean Plate Awards” list for Restaurant Business magazine a few years ago. I look forward to enjoying Pecan Lodge’s catering, too. But the business plans for each of these operations really pushed the limits of risk tolerance, opening with tiny budgets that were all they could afford.
An important part of any business is managing risk. For each one of these fantastic job-creating, great American success stories of undercapitalized restaurants that make it, there are ten more that failed. They simply tried to do too much with too little. Most food truck owners aren’t driving around town because they are creative and trendy. They would much rather be in a brick and mortar location, but they just can’t afford it.
Let’s put it this way . . . if an owner is counting on the first weekend to be busy in order to pay a contractor, then the risk tolerance is off the charts. I’m glad for these successful operators. Each one took a high risk and have been successful. But if their story is inspiring to you, my recommendation is to understand what the best operators know:
The greatest chance for success results from having an appropriate amount of capital on hand relative to the needs of your business.
February 1st, 2012
Excerpt from forthcoming book: Beyond Business, By: Matthew Mabel ©2012
Little Village Syndrome – Click Here to Download Full Chapter
Small businesses can be like lush tropical villages protected by mountains and water that keep the outside world outside. Inhabiting the village is a pleasant experience. Life is good, comfortable and familiar. Natives get along well, save for an occasional argument undertaken in a context of security and trust. Every inhabitant has their own safe place in the village. Over a period of decades villagers learn their roles. Special rituals are performed. When the history of the village is told, it is clear that unique behaviors have become accepted as keys to group success. People do the things that have always worked in the past. Villagers do not compare themselves to other villages they have heard about. What would be the point in that, they wonder incredulously. Their village is special, better and unique. Villagers know in their hearts that there truly is nothing to compare themselves to. It is hard work to maintain the village’s prosperity and happiness. The inhabitants have not taken the time to look out into the world. This inward focus is the natural order, as opposed to a character flaw or risky behavior.
It is easy to spot a “little village” company. First, the people working there are happy. Unhappy people leave the village, not the happy ones. Second, in many cases, people have lived their whole working life in their village. Third, they have a great deal of pride in their accomplishments. If the village was not an admirable place to be, villagers would go elsewhere. Fourth, when I ask their leaders about their competition, they believe that their product or service is so great, special, or unique, or that their customers are so well loved, appreciated and catered to, that they do not actually have any competition, in the conventional sense of the word. At first the only plausible explanation for these circumstances must be that the village has no newspapers, cable TV or reliable high-speed Internet connections. If they did, more of the outside world would have permeated their borders.
When we identify a company with Little Village Syndrome, we begin to gently push the villagers out into the world, and ask them…
