One of the more unpleasant aspects of my business is dealing with businesses that refuse to change. I have a client on the West Coast who owns a family restaurant. The restaurant opened in the early-1950’s and has been past down from one generation to the next. Like many businesses (even ones that have stood the test of time), this particular family business was experiencing hard times.
After a thorough review of the restaurant’s operations, I presented the owner with a detailed report that specifically outlined where he was slitting his own wrists. Prior to engaging my services, it was his belief that it was the economy that was at fault. The restaurant owner came to that conclusion after watching more upscale restaurants close their doors. I was brought in NOT by the restaurant owner, but instead, by a good friend of the owner who believed that my services could possibly save the business.
Here’s what I discovered:
1). Luck
When times are good, even the worst businesses can still do well. The real test is when times are tough. Most of the restaurant’s operations had not maximized potential. The restaurant survived by means of good fortune, not because of great strategy. When the bottom dropped out, that REALITY came to light.
2). Waste
The business was staying loyal to vendors who were screwing them over. In short, the vendors were confident that they would never lose this restaurant as a customer. In some cases, loyalty DOES pay off. But in many cases, it does not. The restaurant’s food costs were much higher than they should have been – for the same level of quality via less expensive alternatives. In fact, in a few instances, they could have exceeded the level quality, while still saving money.
3). Tradition
The grandparents had started a tradition of never being opened for business on a Monday. Their rationale was that no one dined out on a Monday. So I asked the owner if he had ever tested out Monday nights? He told me that neither his grandparents nor parents had EVER opened the restaurant on a Monday. It was a matter of tradition.
Really?
The restaurant’s location was such that it sat near a major highway artery – making it easy for folks to hit on their way home. I asked him if he ever thought about featuring specials on Monday, Tuesday, and Wednesday. He told me that the restaurant offered specials on their busy days (the weekend)…which is why they were always busy on Thursday, Friday, Saturday, and Sunday. So I asked how he knew that they wouldn’t be busy if they didn’t offer specials on the weekend. He just looked at me…and looked at me…and looked at me. In other words, HE DIDN’T KNOW.
I suggested that they whittle down their weekend specials to one or two offerings, and then heavy-up the specials on Monday, Tuesday, and Wednesday. The owner then said, “But that means that we’ll have to be opened on Mondays. My grandparents will roll over in their graves.” My response to his concerns were very clear: These are different times. Your grandparents would understand, and would probably be more “offended” if you closed your doors and went out of business. If you are seeing a drop in business during your busy days, then do something with your less busy days as a means of offsetting the loss. Additionally, why offer lots of specials when people are more likely to come in? That’s like putting watermelon and ice cream on sale during July 4th Weekend. You could, but why would you? Wouldn’t it be smarter to offer specials when you really could use the business?
My other point with regard to tradition was that there are plenty of people who eat out on Mondays. If people expect that most restaurants are closed on a Monday, then no one will go out. But if you let them know that you’re open for business, and then give them an incentive to come out, you can actually do very well. In short, you just need to be open.
4). Laziness/Pattern
Many of the servers at the restaurant had been there since the beginning of time. They were good folks, but their attitudes had shifted to the point that they had become a little worn around the edges. Many regular customers accepted the poor service as being the norm, but new families moving into the area were less accepting of bitter, 55-65 year old servers who were – shall we say, “less-than-pleasant.” I told the owner that some of the servers needed to go if they were not able to get their heads together.
After three months, I checked back in with the owner. He had only made a few changes. Not surprisingly, he was about a couple months away from throwing in the towel. I told him that my recommendations were not suggestions. ALL the changes needed to be implemented, not just the ones that were within his comfort zone. He told me that he didn’t feel comfortable with my recommendations. I wished him well and said goodbye.
Three days later, I receive a call. He told me that he would do what I recommended, but only if I would help. I told him what my fee would be and what my terms were. He nearly passed out, but agreed to my fee and to my terms. First – during a conference call, we re-negotiated food and supplies with his current suppliers. We told the suppliers that if prices were increased by more than 1%, we would take our business elsewhere. We didn’t care if their costs went up. We would not accept the increase to “roll down hill” (so to speak). Our rationale: The supplier had been soaking the owner for quite some time. Now it was PAYBACK time.
We had a little video conference with the staff in which I announced that it was ME (the bad cop) who was going to remove anyone who didn’t change their attitude IMMEDIATELY. If they did not like “the new sheriff in town,” they could get their ass out of the restaurant and look elsewhere for a new job. The strong would stay, and the weak would leave (hopefully).
The restaurant was now to be open 7 days a week, with specials featured on Monday, Tuesday, and Wednesday. The owner, who already had two managers opening and closing for him a few days a week, would simply split the responsibility of opening and closing on Mondays between the two.
Finally, instead of using luck, the restaurant would use strategy (food purchasing, supplies, marketing, etc.). EVERYTHING would be examined under a 100x microscope.
Jump ahead seven months later and things are now fantastic. Half the staff had to either be let go, or simply left on their own. A couple of suppliers also had to be “exchanged for the newer models” (LOL). Mondays are busy, as are Wednesdays. Tuesdays are a little better than they were, and the weekends are better than ever – even in a down economy.
In this particular case, the restaurant owner came around. He saved the family business by realizing that the changes that had to be made were not going to be comfortable. Being stubborn and sticking to WHAT worked in the past, almost cost him a multi-generation family business. Opening his mind not only saved the business, but has now made him far more profitable than he’s ever been since the restaurant has been in his hands. That’s a good thing.
Have A GREAT Day!
…Dr. Marc