In the B to B world, vendors and suppliers come to know a great deal about the people they serve. For 2013 we focused our annual Restaurateur Issues and Challenges Survey on Texas Restaurant Association Allied members, the companies that supply restaurants. The survey is performed in partnership with the TRA. We asked the suppliers what they saw as the biggest challenges for restaurateurs, and what came back was:

• growth of same store sales,
• finding real estate for new units, and
• obtaining necessary financing.

You might find this to be counterintuitive, expecting fundamental topics like training of staff, recruiting management, and preparing for the Affordable Health Care act provisions to rank higher, but they did not.

Details and analysis of the survey have been published in the Restauratnville Magazine Spring Issue in the article Focus on Growth 2013.

Top business people are thinking about not only growing current sales but also building more stores. They believe that they are in control of their own future despite the daily dose of negativity that is amplified by the media echo chamber. We see that with our clients, negotiating new leases, building new restaurants, and in many cases having the privilege of choosing investors and banks. Since our clients tend to be established restaurateurs, they are having an easier time raising capital than the average operator in the industry.

Some restaurateurs, especially independents, have opportunities to use all the tools the industry has perfected to grow sales within the four walls. Also, they continue to be educated about marketing, a topic that is often misunderstood. When they improve their organizations and learn how to harness this power, guest counts increase and per person averages increase.  Since those are the only two components of revenue, their life becomes easier and more enjoyable as revenues increase.

That’s not to say that complexity does not sometimes work, as I was reminded when I spoke recently with the Dallas Business Journal’s Ghianda Becerril for her article Boston’s Restaurant & Sport Bar is for families, sport fans alike.

The interesting thing about Boston’s is that they operate two concepts under one roof: a family restaurant and a sports bar. They are a powerhouse in their native Canada and they are working to gain a foothold here.  Their calculation is that a better average unit volume (AUV) can be built with two concepts under one roof.  But let’s face it,  there is certainly a family dining customer who does not want their kids around a sports bar — even if it’s on the other side of a wall.  And I guarantee you there are sport bar fans who may feel a little intimidated about displaying their love of sports and alcohol in a building with kids. If Boston’s could generate the same AUV with one concept,  I’ll bet they would.

A week after I was interviewed for this article I talked about this with a high school team at the Texas State Pro Start Finals where I judged Critical Thinking in the management competition.  One of the teams had invented a concept with a restaurant downstairs, and a live music venue upstairs.  I suggested they read the article, and visit Boston’s to learn how much extra work there is in multi concept.  (Note:  My suggestion was not for them to visit the sports bar side.  We are dealing with high school students here.)

Every time you add complexity to your business it is important to understand and consider what the true benefits are. The lesson  is not to avoid complexity completely, but to recognize it for what it is, and that it’s only worthwhile when it’s paying off.  I love a complex model as much as the next guy — people who know me may say even more so.  Some people even remember when I was part of the first multi-concept nightclub in Texas back in the 80s. It had three concepts under one roof!  But these days  experience has taught me. I am wary of making things more and more complicated in pursuit of a simple goal.

There is nothing wrong with  overcoming weakness by focusing on strengths. But when you make weakness into strength,  people experience a game changer that creates the most success possible.

There is a restaurant I enjoy that has some of the finest chef-created food around.  I never forget that someone I took there years ago told me it was the best meal he had ever eaten.

But every time I dine there, I notice a detail, not one on the plate, that is not quite right.  That does not completely deter me, but it makes me eat there less often.  While I’m there, I am so happy about the food on the table that a flaw does not really bother me.  If a server completely omits something or a manager who forgets to set the appropriate lighting level until the middle of dinner service – I am still feeling OK.  Later on I reflect on what could have been improved.

If you know me, you realize how much I appreciate the food and the chef, because details like this tend to become great annoyances in my world.  Inevitably, even when I am dining out for fun — part of me is still working.

When I reflect back on the forgetful server or the lighting problems,  it reminds me that the eyes see out.  From the inside, it can be difficult to see where a business needs shoring up. This is especially true when people are raving about your food, or whatever factor really put you on the map.

Some people naturally see their own flaws.  But most business people either don’t see where they could improve or they do see it but think they can overcome it just by being good at their strengths.  It is a lot easier for an outsider to see opportunities because they are not bought into how things ought to be or defending past decisions or stroking a human ego.  The best businesses look for every opportunity to use outside experts to improve.

Mabel said, “The GDRA does a fantastic job of supporting our industry on a regional level.   Having been a board member and executive committee member, it is great to have the opportunity to be able to help them create a better environment for each team member and group to work at the top of their game.”

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Top companies are developing precepts about what content does and does not go on social media.   These guidelines are outgrowths of training and culture.  Beyond the basics of decorum, restaurants with a more defined culture are much better at knowing what fits on social media vs. what will cause their brand to deteriorate.  So if your culture is vague or misunderstood, the time to correct that is now.

Of course we know that customers use social media to promote restaurants.  Emily Babich of the Dallas Business Journal recently covered that story:  Restaurateurs Know Where Their Bread is Buttered.

It’s a dream of all business owners that their employees would also take to Facebook, Twitter, Pinterest, Instagram and Reddit and promote their workplace.  But it’s the nightmare of all business owners that these same people could go online and damage a brand, customer relations, and for that to go viral to the point that everyone across the country is texting, tweeting and IMing about it.

I discussed the subject recently with Ron Ruggless of Nation’s Restaurant News for his article, Social Security: Employee Education, noting that social media policies are essential to brand protection.  I was reminded that the best companies avoid being a viral joke by ensuring that their people know what the brand stands for and what is both permissible and consistent with their culture.

Think of social media as a big table that exists outside of a restaurant’s dining room.  Just like at the tables where they serve guests every day, employees either represent the brand well, or they don’t.  It’s going to be a lot easier to motivate guests to increase frequency, spending, or both when every impression is a good one – no matter where the impression is made.

The best business people take control of their lives, and never become victims of their businesses.  Any profitable business can be arranged to complement the style of its owner, by placing the right people in the right places and applying the art of appropriate delegation.

People start their own businesses not only to achieve, contribute and profit, but also to give them personal freedom. When you own the place there is no one to tell you that you have to be there at 7:30AM or that you can’t take Friday off.  There is no one to tell you that you have to work on details of the businesses when what you really want to do is develop new business.  No one, that is, but yourself.  That, and the consequences of the decision you have made, or not made.

We ask our clients, “What did you do today that someone else could have done?”

That leads to the contemplation of three questions:

1. Who has been placed in a position that is not right for them or not yet right for them?

2. Who could be added to take on more duties?

3. When  do we start?

We have clients whose owners have worked a six-day week  since their business started.  By the end of this year we are determined to structure their company so they can make the choice to work five days a week just like their peers do.  Imagine that!  They are going to get a whole day each week back,  which if my calculator is accurate is an extra ten weeks off a year!

We have another client who is very successful at operating their business.  But he does so at the cost of not having time to nurture investments in a number of companies and people that have the potential to really take off.  We are going to change that.

In both cases we are going through the a process of changing responsibilities,  choosing the right people, and raising people up to be great through coaching and responsibility.  The outcome is going to be both better results and more happiness.  My experience is that good people can handle a little more than you think they can when given a reasonable amount of support and training.

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1.  Show true, heartfelt hospitality even when you distracted with handling your business.

2.  Take advantage of what’s not working.

The best business people are always thinking about their customers and are enthusiastic about making changes, small and large, to make their customers happier.

Once again this year, I volunteered to judge critical-thinking ability at the Regional Texas ProStart  Competition.  The January 23 event was sponsored by the Texas Restaurant Association Education Foundation at the Hurst  Convention Center.  High school culinary and restaurant management teams competed to go to the state finals coming up in Waco in March,  in pursuit of a berth at the National Restaurant Association Education Foundations’ National Pro Start Invitational in Baltimore in April.

ProStart is a two-year high school curriculum designed by the National Restaurant Association (NRA) to develop culinary and management  talent for the future of the restaurant industry.  It is a timely effort, as a whole generation is captivated by the food, chefs, concepts, and managers they see every day on their media screens.  Restaurants are cool.  There was a time when the attitude was “If I can’t get a job anywhere else, I can always work in a restaurant.”  That has changed.  Now, for a large group of younger people, it is “I’m going to do whatever I have to do to get a job in a restaurant.”  ProStart is a big part of that.

This event is the most fun you can have on a work day.  In my opinion, ProStart and the work of the Education Foundation are the best things that the Texas Restaurant Association and National Restaurant Association do.

As a critical-thinking judge, I got to quiz these teams of students about knowledge of their concept.  Other judges on the panel focused on marketing, customer service, and workplace safety.  The students were excited, knowledgeable, and some of them were so strong I would have hired them on the spot if they were of age.

Sure, many of these students were nervous as they sat in an imposing board room probably for the first time in their lives, feeling like contestants on Shark Tank.  It’s natural that many compensated by being all-business and whatever version of “professional” is in the mind of a teenager.  So one of the things I talked about in the feedback sessions was the art of showing true hospitality. It’s  a lesson we can all learn and we can all improve upon.  Even while under the pressure of business goals and tight operations, restaurant people do better to always remember the warmth and sincerity that breeds good hospitality.  This applies to any business where, through no fault of their own, the customer or guest can become an afterthought.

In order to prevent them from losing sight of that concept, I have coached one of my clients to finish every statement with

“and the benefit to the guest is . . . ”

The judges panel heaped mass amounts of praise onto the high school teams for their very impressive accomplishments, team work, and presentations.  In addition, I suggested to a few groups that they strive to show how much they care that the guests and associates are having great experiences.   That’s a much more compelling inspiration than simply presenting themselves as whiz kids with good business ideas.

Another issue I talked about with the students was how to stay flexible so their imaginary businesses would stand the test of time, weather inherent changes and respond well to customer feedback.  More than one team did not think that was going to be a problem: their concept was great, their offerings were timeless, and everyone would enjoy them forever.

Here is what I was thinking:  When you hit 20 you think you know everything. By the time you get to 30, you realize you know nothing.  And these contestants had not even hit 20 yet!

Most of the work we do in improving restaurants is by taking good and great restaurants and making them even better. Once in a while we do take on a well-capitalized  turnaround or an underperforming property. Things start to happen after listening very carefully to the guest about what they like, don’t like, and would prefer.

In the past I have advocated such radical change as switching a name, changing service from fast casual to full service, replacing an entire menu, or remodeling a beautiful brand new restaurant because it was not working. At other times we have made smaller shifts like changing uniforms, training, marketing or web sites.

No matter how much you believe in something, if it is not working, and the guest tells you so through their thoughts or actions, changes small or large are called for.  Some people get so tied up in their creativity and supporting their old decisions that they tend to think like many of the high school teams did,  “No, really, this is going to work and my vision will be validated by an adoring public.  Just you wait!”

I am sure that the 12 high school management teams we worked with will be thinking about all these things, whether they made the cut and are headed to the state finals or they did not and will be plotting to get their next year.  Last year, one of the teams I judged became national champions, so anything is possible.

Recently the term “best practices” proudly took its place among Forbes.com’s list of “the most annoying, pretentious and useless business jargon.” “Best practice” was deemed “the most pompous confection the consulting industry has ever dreamed up.”

In the past generation, our industry has become professionalized, reflecting both the sophistication of global multiconcept corporations and the knowledge of independent operators. Lexicon aside, restaurateurs have a true desire to get better.

America’s highest honor for achieving that kind of business performance excellence is the Malcolm Baldrige National Quality Award administered by the National Institute of Standards and Technology.  The award is named for President Ronald Reagan’s secretary of commerce. He was a champion of quality – and also of best practices, long before the term was invented.  For Baldrige, this was the key to economic security in the face of international competition.

Two restaurant companies – K&N Management of Austin, Texas, and Pal’s Sudden Service of Kingsport, Tenn. – are among the winners of the 91 Baldrige Awards given out during the program’s 24-year history.

Pursuing improved practices can have a huge positive impact on both unit-level and corporate results.  So why aren’t all organizations following a proven path?
Most people know what they should be doing; they don’t know why they are not doing it.  Companies often treat symptoms instead of causes; focusing on hot-button issues without first putting energy, time and resources into building a process that works every time to produce the desired goal.

When improving business practices, the best restaurant companies look at four factors:
1. They choose people who have the desire to break new ground and improve – and take pride in doing things in a superlative way.  Some management teams are innovative; others follow orders.  It is a lot easier to improve business practices when everyone on the team is capable of being inventive.

2. They pick a focus.  As tempting as it may be to try, it is impossible for a management team to improve everything at once.  The most effective management teams learn to spot a problem, identify a solution, keep that solution going and then stack another initiative on top of that without abandoning the victory they just achieved.

3. They measure progress to determine whether these changes are worthwhile and ensure they do not fade away. Most measurements are through metrics, but others in our industry can be anecdotal.  Without measurement no one really knows whether the solution continues to exist.

4. They reinforce the expectations that people stick with these practices – every day on every shift – through systems, training and sharing of anecdotes.  Experience tells us that people vastly underestimate the value they get from having their memories refreshed. The good news is most companies have pre-shift meetings and weekly operations meetings to use as vehicles for this.

Through the process of focusing, measuring and reinforcing through committed people, and then rinsing and repeating, management teams can conquer any challenges they encounter.  That is true whether the challenge is building revenue and profit, cost management and service levels, or improving vendor and investor relationships.

The Baldrige process is a challenging one and clearly not for everyone.  But the idea of focus, measurement and reinforcement driven by people who care can be successfully applied to every restaurant in the country.

Matthew Mabel is president of Surrender, Inc., a Dallas-based restaurant consulting and organizational development firm he founded in 1991.

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People prefer to buy from people they like.

We like to know a little history about a business.  We like to think we are doing business in someplace special, with special people.  The most successful businesses have great stories to tell and these stories serve to engage their associates and customers in what makes their business special.

There’s this restaurant that has a great story to tell about its commitment to quality and specialness in their specific segment.  However, they have not invested the resources required to really tell that story.  So as competitors have told their own stories,  this restaurant has fallen behind and guest counts have declined.

On the other hand, I know of a restaurant that spent plenty to tell a story about its corporation and price point.  Frankly, nobody was very interested.  They had a much better, more personal story they could have told that would have been quite compelling.  They are currently under performing and are now working on a way to tell the more interesting story.

All this came to mind when Stephen R. Thompson of the Dallas Business Journal called me to comment on Mi Cocina’s expansion from Dallas / Fort Worth to Atlanta and Washington, D.C.  for his story “Mi Cocina Dips Its Chips in Eastern States.”  Mi Cocina is the biggest restaurant success story in Dallas for the last 10-15 years.

In 2009, I told D Magazine that Mi Cocina had the potential to be the El Fenix or El Chico of the 21^st Century.  Considering those two brands have been around for a combined 166 years, that’s a pretty big deal.

What a great story!  Mico Rodriguez, scion of the Mia’s Tex-Mex family, left to open his own Tex-Mex restaurant with upscale cues. With the opening of its second store in Dallas’ tony Highland Park Village, the story took a big leap forward.  Mico’s late brother, Paul, who stayed behind at Mia’s used to tease, “We have better food, but he has better furniture.”  There was a lot more drama later, detailed in that D Magazine article, but that’s a story of another kind which, happily for Mi Cocina, has not attached to the brand.  The happy ending?  Mi Cocina now boasts 20 units.

So what does this mean in Atlanta and Washington, D.C.?   Well, it means real estate people are offering locations.  But it might not mean much to the consumer.  The new locations will succeed or fail based on the quality of their operations.

Which brings me back to those two restaurants I mentioned before.  It reminds us all that you can promote your business on features and benefits, but people relate more to stories.  If you doubt that the telling of your story is important, you are wrong.  The best operators know how to build that story, circulate and promote that story, invest in that story and use it to their competitive advantage.

What is your story?

Why? Because it will motivate you to grow revenue and profits in a way you have never been motivated before.  You can use it as a catalyst to put yourself into action and make your business stronger than ever before.

The smartest business people are starting to realize that the Affordable Care Act looks very likely to be fully implemented over the next few years.  They also realize that they had better get control of their businesses, their top lines, their bottom lines, and their product.  The time is now to begin figuring out a way to generate the revenue and profits needed to pay whatever expenses or penalties occur when the employer mandate begins in January, 2014.

Let’s say you are a business owner with 50 or more employees that does not offer health insurance. You are not feeling too good.  Maybe you are checking your own insurance to see if it covers psychotherapy.  Your counterparts felt the same way in 1965 when Medicare started, or 1937 when Social Security started, or more recently on the eve  of FMLA, COBRA, and let’s not forget ERISA.   You may feel that clearly new expenses are coming your way, and there is a good chance that the world is going end and you will go out of business because of it.

But after you calm down, you realize that the world will not end and you will keep going .

Or maybe you are watching the presidential race unfold like you watched the Supreme Court deliberations about the Affordable Care Act.  You are hoping circumstances beyond your control will eliminate the employer mandate.  The strategy that the Supreme Court was going to rule in your favor didn’t work out. The next hope is that Mitt Romney will get elected and invalidate the mandate as he says he will.  But, face it, you are not really sure how or if he would do that since he has not offered any specifics.

The best businesses are not just watching, they are taking action to build revenue and profits. They realize those profits  may be required to pay for new expenses that are imposed by the health care law.  Many employers are vague about the fact that they may face either increased health insurance costs or Affordable Care Act penalties.   The thinking goes that it may be less expensive to just pay the penalties than to offer insurance. But penalties are not tax deductible, so they may be working with the wrong numbers.

When employers take energy out of their fear and anger about the Affordable Care Act and focus on making more money, they are truly responding to the potential burdens of the legislation.  In fact, the best scenario that can come out of the Affordable Care Act, other than it realizing its controversial and disputed promise, is that it’s going to force a lot of business owners to figure out how to make their companies stronger, more successful, reach more customers, bring in more revenue, and make more profits.

You have 15 months.  When do you start?

“I’ll just wait,” you say to yourself.   “I’ll see what happens with the presidential election.”  But, let’s say you do wait, and the election goes your way and the law never comes into effect.  Are you willing to skip an opportunity to make your company stronger, more successful, reach more customers, and bring in more revenue and profits because the pressure is off?   Do you, your employees and customers have too much already?

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