Episode Transcript
[00:00:00] I'm going to start out this week with a very special shout out to Cody Sanchez. Cody, if this lands your way, know that you've inspired me and by extension, you've inspired my audience in profound ways. Cody is the host of the Big Deal podcast, which if you're not listening to it, you should. Because while it is a podcast that has nothing to do with restaurants, it has everything to do with being a good small business owner. And she just celebrated her 39th birthday and. And therefore shared 39 pieces of advice that she's gotten over her years in business, and she shared them on her podcast. So guess what? I'm going to do the same because I turned 45 this week. So here are 45 bits of advice that I've learned throughout my career in restaurants. All of that on today's episode of Restaurant Strategy.
[00:00:44] There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown.
[00:00:54] This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:15] Hey, everyone, thanks for tuning in. My name is Chip Close. This is the Restaurant Strategy podcast. We do two episodes every single week. You know me, I wrote a book. It's called the Restaurant Marketing Mindset. I tour all, all around the world giving talks, keynotes, workshops. I run a group coaching program specifically geared towards independent restaurant owners who are looking to grow. It's called the P3 mastermind. It's laser focused on profitability. If you want to learn more about anything I do, you can Visit my website, chipclose.com C-H-I P K L O S E.com or the company website. If you want to learn more about the the mastermind restaurantstrategypodcast.com/schedule. That's how you grab time on the calendar. And we can have a conversation about any of this. All of those links are in the show notes. I care deeply about this industry. I care deeply about you being able to make more money and work less. That's what I do now on today's episode. I turned 45 this week. I'm very excited about it. And again, I already gave kudos to Cody Sanchez. She did this. I am straight ripping it from her because I loved it. I had so much fun listening to that episode where she shared 39 bits of advice that she's learned over her years in business in in celebration of her 39th birthday. So I turned 45, not meaning to outdo her. I'M just older than her. I'm going to share 45 bits of advice that I've learned over the course of my time in the restaurant industry. Without any further ado, number one. Profit is the only thing that matters in your business. You can build the most incredible restaurant in the world, but if you can't run it profitably, it won't be around very long. So build a restaurant that can make money. Build a restaurant that can sustain itself, that can sustain you and your family for years to come.
[00:02:56] Profit is the one thing.
[00:02:58] Number two, everything you do is hard. You get to decide which hard you want in your life. And again, this is something that Cody has sort of hammered into me over my years of listening to her. Building a profitable business is hard, but guess what? Running a business that is struggling is also hard. Building a staff that listens to you. Creating the kind of culture that you want is hard, but letting the inmates run the asylum is hard. It's just a different kind of hard.
[00:03:25] You get to decide what kind of hard you want in your life.
[00:03:28] Number three, culture exists whether you define it or not. If you don't define it, your team will. So it is your job to set an example, to set expectations, to create an environment that will attract the kind of people you want. It is your job to create the culture that you want.
[00:03:46] Number four, what we serve is a luxury. No one needs what we have. It is an indulgence. Something that from time to time, people very much want to pay for. Right? It's a lot of work to plan a menu and shop and prep and cook and then clean up afterwards. So every once in a while, people like to go out to a restaurant and people ask the staff to do all the hard work for them. So stop selling your product like it is a commodity, like it's something that people need. They do not need it. But sometimes it's something they very much want.
[00:04:20] Number five, start seeing selling as the generous act that it is. Your guests have already made the decision to spend their money with you. Tonight, they came in for dinner. So it is your job to simply show them the best possible way to spend their money, to show them the best things you have to offer, the best way to experience your restaurant, the food you have, the beverage options you have, all of that are ways to make their lives better, to make their night better.
[00:04:47] Serving equals selling in our business.
[00:04:52] Number six, understand that we have two different kinds of people who work in our restaurants. On the one hand, there are people who desperately want to be a part of our industry. They went to school for this. They studied. They are dying to be here.
[00:05:04] But the vast majority are the other kind. They're the people that took the back door or the side door into our industry. They are doing this simply because it's a means to an end. It's a way to put themselves through college. It's a way for actors or musicians or artists to pay their bills while they pursue something else. It's a way for teachers to make extra money on the weekends or to make money during summer break. This may not be their life's calling. This is just what they're doing for now.
[00:05:30] So stop expecting people to care as much about this as you do, or as much as some of the other people who work for you. And as soon as you acknowledge and embrace that everything in your restaurant changes, you begin meeting people where they are.
[00:05:45] Number seven. If your restaurant needs you there in order to succeed, it is a failure.
[00:05:52] This is something called key man problem, right? That a business exists with a key man and doesn't succeed without them, then your job in your restaurant, as much as humanly possible, should be to figure out how to remove yourself from. From the operation. And when you do, you'll learn that you have to teach everyone else how to think like you, how to act like you, how to go through the day, how to walk through the dining room, how to do things the way you want them to do it. And that is your real job. Your real job is to define what people do, how you need them to do it, when they do it, and why it's important that they do it. That is your job that becomes your role. And any great restaurateur figures this out before they can have the true success that they think they deserve.
[00:06:38] The more valuable you are to your business, the less valuable your business actually is.
[00:06:45] Most restaurants have key man problems. And in order for it to succeed, to thrive, you need to be able to pull yourself out of it.
[00:06:53] Number eight. The best owners out there begin with the end in mind. They know what they're working towards. Whether that's 10 locations, 20 locations, 50 locations, whether that's just one location that can run seamlessly without them. Whether to build something they can pass on to their kids or to build something that will be wildly profitable, something that they can sell before they retire, you have to think about your exit strategy. Otherwise you will be stuck on this merry go round for a very, very, very, very long time.
[00:07:25] Number nine, Our industry is changing in real time, right before our eyes.
[00:07:31] Danny Meyer once said that this business was built on the promise of cheap rent and cheap labor. So he went on to say, then what happens when those two things are no longer true? He said in that interview, it's what keeps him up at night. It's what continues to keep me up at night. So I would imagine that was one of the reasons why he created a concept like shake shack and now why he's working so hard to grow his daily provisions concept. Because they're more casual, they require less overhead, they require a smaller footprint, they require less people. By you, I would learn from the folks who are out there that are smarter than you and simply watch what they're doing.
[00:08:07] Danny Meyer is playing chess while the rest of us are playing checkers.
[00:08:13] The industry was built on cheap rent and cheap labor. So what happens when those two things are no longer true? How do we move forward? How do we continue to serve people in a generous way? I think it's worth watching what he's making and what other people like him are making.
[00:08:27] Number 10, marketing is much easier than we think. Really. It comes down to answering three questions. What is your product? Who is that product for? And how can you reach those people? Think of it like a mantra. What's the product? Who is it for? How do we reach them? Once you figure out who you can serve, meaning who has a problem that you are uniquely qualified to solve, then you can come up with a compelling solution to their problem. Then all you have to do is find new, creative ways to let people know that you have solved their problem. And when you start seeing marketing through that very, very simplistic lens, it will become much easier and you will get a whole lot better. And yes, you will be a whole lot more profitable.
[00:09:10] Number 11, dining out is expensive. And yes, it is getting even more expensive.
[00:09:16] We have to continue to guard our margins and pass that cost onto the consumer. That is what they're paying, right? If you're afra that people won't pay the higher prices, then congratulations. You're saying the same thing millions of people have said for roughly the last, let's say, 12,000 years. Over the course of human history, prices have only gone up and up and up and up. That's the nature of inflation.
[00:09:39] And as you continue to raise prices, which is something you must do, simply have to keep in mind the value you're providing. Make sure that the product you're serving is actually worth the new prices that you have to charge.
[00:09:53] Number 12, let's talk a bit about value, because it's an overused Word. And if you can think of it more simply, I think you'll be in a better spot. For me, value is just an equation.
[00:10:03] Worth minus price equals value.
[00:10:07] So you charge a price. This is what I'd be willing to trade this burger if you give me 17 bucks in exchange for it. That is the price.
[00:10:16] The worth, though, is what the consumer would actually be willing to pay for that item, that burger. Most transactions, right? Most of the time, a consumer is actually willing to pay more than you're charging him. It's a deal, right?
[00:10:30] You were charging more than it cost you to make, right? That way you make a profit. So it's worth selling it at that price because you come out on top. And the consumer also does the same sort of calculus. The consumer says, well, I'd be willing to pay 19, 20, maybe $22 for that burger because this is saving me the annoyance of shopping and prepping and cooking and cleaning up later.
[00:10:52] So, yeah, it is worth the 18 or $17 or whatever it is you choose to charge.
[00:10:57] Transactions work when both sides win. When the merchant makes more than it costs them to make the thing, that's how they turn a profit. And the consumer gets it for less than they would otherwise be willing to pay. And they'll never say that out loud, but that is what goes through their minds. Do a gut check. You are a consumer as well.
[00:11:16] Number 13.
[00:11:18] Jim Collins talked about this in his book Good to Great. He said, the first thing you need to do is get the right people on the bus in the right seats. After that, everything else becomes infinitely easier. In most restaurants that I've worked at, most restaurants that I've consulted for, most restaurants that I continue to work with now as a coach, suffer from personnel problems. Either they don't have the right people in place, or they have the right people but in the wrong seats.
[00:11:44] Your job, especially for those key, especially for those key roles like general manager or chef or sous chef or kitchen manager, your job is to get the right people on your team on the bus in the right seats, which means being really clear on what you actually need for a specific role, and be really clear with the skill sets and personality traits that you'll need from somebody filling out that role. Get good at that, and you will solve more than half of your problems.
[00:12:12] Number 14.
[00:12:14] Understand that everything comes down to systems and goals. A goal is a clear articulation of where you want to go, right? And a system is just a repeatable set of actions, meaning we do this and this and this to achieve the following result. If it works, we do more of it. If it doesn't work, we figure out a new way to achieve the desired result.
[00:12:34] Everything comes down to systems and goals. And the sooner you can understand that, the better you will be at marketing, the better you will be at hiring, the better you will be at training, the better you will be at doing everything you need to do to succeed.
[00:12:50] Number 15, understand that for most of us, assuming we're not independently wealthy, most of us need to work to live. Therefore our professional lives exist to support our personal lives. This is true for pretty much everyone I know. It's certainly true for me.
[00:13:07] I don't know if I was independently wealthy, now I'm talking like $100 million in the bank.
[00:13:12] I have no idea how I would behave. I do not know how I would go through this world. Would I continue to, to. To run, to run my program to help people? Or would I travel the world and dine at the best restaurants? Or maybe I would volunteer for, for causes that I. That I cared about. I don't know. Because this is a problem I do not have. I do not have a hundred million dollars in the bank. So for everyone, that's again, true for me, and I assume it's true for you. And I promise you, it's true for every single person who works for you. The professional life must support their personal life. And the sooner you can understand that, the better you will be at serving your people, your employees. You'll begin to understand what they actually want and need, and you'll be able to provide them with a job that allows them to get what they want and what they need.
[00:14:01] You'll be able to provide them with a way to achieve all of their dreams.
[00:14:06] Number 16, excuses and complaints will destroy you. It's as simple as that. And I want to say very little on the subject, but know this. You have to take ownership of everything that goes on. If the staff's not doing what you want them to do, it's because you are not holding them accountable. Because you did not set clear expectations, because you were unclear as a leader. And if you're complaining about something, that means you can't do something about it, right? You can't do something about that problem.
[00:14:33] And on the part of the business owner, it's almost never true.
[00:14:37] So get rid of complaints, get rid of excuses. They're only getting in the way of you accomplishing what you said you set out to accomplish.
[00:14:45] Number 17, mechanics before magic. Great marketing cannot save a poor operation. You need good food. You need good service. It needs to be an interesting looking dining room, a comfortable dining room. Once you have a great product, meaning a great restaurant with great food, great service, then you can begin marketing it. But marketing of the thing cannot make up for the thing.
[00:15:08] Number 18.
[00:15:10] Restaurants are about community. The sooner you recognize that you can be the town square, you can be the place where people collect. That's the moment when you'll truly succeed. So being the kind of restaurant that can take care of children, having the kind of restaurant that caters to tourists and bridge and tunnel and the uber wealthy, that's the moment where you'll succeed. Being that place for all people to exist, that all people are welcome. They're all there for different reasons, but they are there to have the exact same experience. A meal in your restaurant. You get to be the town square. So act as hospitably as you were the town square.
[00:15:51] Life is short.
[00:15:53] I'm sure you got into this business because of passion or excitement, or because you had some inherent skill or drive and all that's great.
[00:16:00] But understand that we only get a finite amount of days on this planet, and I want you to be able to spend them doing the things that matter most to you.
[00:16:08] If the only place you want to be is in your dining room, then great. That's why I want you to. That's where I want you to be. If you just want to be at the pass garnishing dishes before they go out, then great. That's where I want you to be.
[00:16:20] But if you want to be with your kids, if you want to be with your spouse, with your girlfriend, your boyfriend, if you want to be with your parents, your siblings, if you want to be on a beach, I want to make sure you are building a life that can make that possible.
[00:16:35] Number 20. Revenue does not cure all sins. In my experience, revenue can cover up a lot of sins. So in order to build a wildly profitable operation, you need to make sure that you can manage that operation. Meaning proper forecasting and budgeting for the key areas of your business. And once you have those dialed in, once you understand how to put guardrails on your business, then yes, of course, it is time to grow the hell out of your business. Because I'm not an idiot. I understand the impact that revenue growth can have on a restaurant business. But not before you do the other things first.
[00:17:09] Number 21. When it comes to revenue growth, there are really only three ways to make that happen. You can sell your thing for more money, you can sell more of your thing, or you can sell a variety of different things. That's it. And when it comes to restaurants, it's not necessarily increasing the price of your product, but focusing on increasing check average the average amount that each guest spends when they dine in your restaurant, increasing the number of covers that you serve each week, and finally growing different day parts, selling different revenue streams. And that's it.
[00:17:41] There are only three things you can do to increase revenue. Understand it.
[00:17:45] Number 22.
[00:17:47] First time diners represent the single biggest opportunity in your restaurant. The fact that something got these people to come in and try you as opposed to any of the other places they know and love is incredible. So now it's your job to blow them away and make sure you invite them back.
[00:18:05] Number 23.
[00:18:06] Get better at saying hello. Just because you've acquired a customer doesn't mean you've acquired them for life. You need to be maniacal about getting people's contact information so you can continue the dialogue long after they've left the restaurant. Think of about the, Think of it like the guy going to the bar, buying somebody a drink, right? Buy a drink for a little bit of conversation and maybe a phone number so that they can contact them later. They can remarket to them later. It's the same thing in your restaurant.
[00:18:34] Number 24. We also need to get better at goodbyes. If I were you, I would scrub the following statement from my vocabulary. Thanks so much. Have a great night.
[00:18:44] Instead, when people are leaving the restaurant, ask the question you actually want to ask them, which is thanks so much. When are we going to see you again? Thanks so much. When will you be back? Thanks again. Can I make you another reservation? That more than anything else that that single shift will change your restaurant.
[00:19:02] Number 25.
[00:19:04] Hire, train, model, coach.
[00:19:07] It's a four step framework that defines the way you go about your work. Your job is to hire people who have the capacity to do what you need them to do. Then you need to teach them how to do it. That's what training is all about. After that, you model a behavior. You show them yourself, or you show them how other people do what you are asking them to do. And then finally you coach them. So you watch them, you listen to them, you tell them when they're doing it right, you tell them when they're doing it wrong. And then you show them ways that they can do better. You show them ways to build on the successes that they've had. You hire for it, you train for it, you model it, and then you coach.
[00:19:47] Number 26.
[00:19:49] I think most restaurants are pretty terrible at training their staff. Usually when I talk about training in a restaurant, right, we're talking about the first seven days of someone's employment.
[00:19:58] Meaning how can I teach them everything they need to know to be able to take a station on Saturday night? And well, yeah, that's important. We will need to do that, obviously, but training actually goes far beyond that. So thinking in terms of what I call a three tier training is what I want you to do. Tier number one, what do I need to teach someone so that they can be good enough to take a station at the end of seven days?
[00:20:22] Then what will I need to teach someone so that they can be as good as our best player at the end of 90 days? That's tier two. And then finally tier three, what would I need to teach someone or what would I need to do in order to keep this person working for me for the next decade?
[00:20:40] When you frame your training as if it's trying to answer each of those three questions, it'll change the way you approach training. It will change your culture within your restaurant.
[00:20:51] Number 27, stop telling your people what to do and start showing them how to do it.
[00:20:58] Think in terms of the what, how, why framework. Tell them what they need to do, then show them how they need to do it, and most importantly, explain to them why you need them to do it in a certain way. Right? It's a matter of giving them scripts and playbooks rather than lectures. At the pre shift meeting.
[00:21:17] Number 28. Speaking of this pre shift meeting, you shouldn't run your pre shift meeting. Your staff should run it for you. So you need to go over the nightly reservation book, but you have the host do it. You need to talk about the changes to the menu, but have your servers do it. The servers who have seen the changes over the last few days. You need to talk about 86s in additions to the beverage program. Have your bartenders talk about what you need them to talk about.
[00:21:42] Service points, right? Things that are specifically you want them to focus on. Write them down, but have your staff talk about it in their own words.
[00:21:49] When you run your pre shift meeting, think about the 8020 principle, meaning 80% of the time they are talking, 20% of the time you are talking. That simple change in dynamic of that meeting will change everything. And it should be no more than 20 minutes. They should lead it.
[00:22:07] You get to put in your two cents, right? You get to add in and edit and you know, talk about anything additional, right? You are important, but it's crucial for Them to run the meeting. It shouldn't last any more than 20 minutes.
[00:22:19] Number 29. If teamwork is important, don't just tell people that teamwork is important. Build it into their routines. So I'll give the example. When I would train bussers, I would teach them a figure eight, right? Bread, water, clear, reset, help. Those five tasks, they had to make sure everybody in their station had bread. Everybody in their station had water. Then see if anything needed to be cleared. Right. If there was dead glassware, napkins, or straw wrappers, then see if there was a course that needed to be cleared. They did that. And then once all that was done, they would see if they had to mark for a new course or do they have to reset a, you know, a table. Again, bread, water, clear, reset, and then help. Once all of their main tasks were done, they would go to one of their neighbors and see if they needed help. They would go to another neighbor, see if they needed help. They would go to the front podium. They would go to the kitchen. They would go to the bar, see if they could run drinks. They would make sure everyone has bread, make sure everyone has water. They would see if anything needed to be cleared, see what needed to be reset, and then go offer help. And that's how we built teamwork into the busser's. Job description. 20% of their night was spent helping others.
[00:23:27] Number 30. There is a relationship between competition and collaboration, right? So the businesses, the restaurants, the other. The other people that you may be competing with for dinner dollars are also part of your community. So think of car dealerships. There they are all lined up on the same road, on the same stretch of a road. Unusual, right?
[00:23:48] Yeah. That's the way it is in every market, every city, all across the city, all across the country.
[00:23:55] Same thing with restaurants. All the restaurants are lined up in a popular part of town. They are not your competition. They are also your collaborators.
[00:24:05] Number 31.
[00:24:06] People get paid what they're worth.
[00:24:10] That's true for the people you employ, and that's true for you as well. The more value you create, the more valuable you are to other people, the more you will be compensated.
[00:24:21] Remember that when you build your business.
[00:24:24] Number 32. Right on the heels of that, the great zig ziglar was famous for a quote, and it has resonated with me for the past 15 years.
[00:24:32] You can get anything in life you want as long as you help enough other people get what they want.
[00:24:40] Number 33.
[00:24:42] Just like you diversify your retirement portfolio, you must also diversify your revenue streams so that if one ever gets cut off, you can rely on the others.
[00:24:53] Number 34, the great Seth Godin said it best in his book Purple Cow. The only way to succeed is to stand out. It's to be remarkable to create something that doesn't exist, to create something better than anything else that is currently out there. That's how you get talked about. That's how you win.
[00:25:12] Number 35, Simon Sinek said it best when he talked about the Golden Circle. He said in his book start with why most companies know what they do, they know how they do it better than anyone else, or they know how they do it differently.
[00:25:25] Most companies do those two things so well, they never get to the why, right? But the best companies out there, the Nikes, Canon, Apple, they understand why they exist and that defines how they serve. Apply that framework to your business and you can't help but win.
[00:25:43] Number 36, Jim Collins again is the author of the book Good to Great. And in that book, which is packed with tons of insights and value, but in that book he talks about the hedgehog concept. The hedgehog concept is a Venn diagram. Three overlapping circles. Those three circles are what people will pay you to do. What can you be the best in the world at? And what do you love to do? And your business is right at the center of those three overlapping circles.
[00:26:08] What will people pay you for? What can you do better than anyone else in the world? And what are you insanely passionate about? Meaning what do you love to do when your business is right there in the center?
[00:26:20] Number 37. James Clear wrote a revolutionary book called Atomic Habits. It is not what you want to accomplish. It is the daily tasks that you do to accomplish that right that help you accomplish the daily, weekly, monthly and lifetime goals. Think of your life, your productivity, as a series of tasks, the thing you do to accomplish a bigger thing that then helps you accomplish what you're trying to do, your Life's work.
[00:26:46] Number 38. Leonardo da Vinci has this very famous quote, and it says, simplicity is the greatest sophistication.
[00:26:55] Keep your business simple. Keep your Life Simple.
[00:26:59] Number 39. People work hard when they realize that their efforts make a difference difference that they're able to make an impact.
[00:27:06] So yes, people work to make money, to pay for things. But part of that is wrapped up in the impact they make in their lives, in the lives of their family and friends.
[00:27:14] Always remember that in order to motivate someone, you have to think about why they do what they do.
[00:27:20] When you have to make sure it's clear to them that they make an impact. And that will be a profound shift in your business when you help people see that.
[00:27:30] Number 40, leadership is different than management.
[00:27:34] A leader provides vision and direction for a company, points to where we're going, and a manager makes sure that everyone does what they need to do in order to get there.
[00:27:44] Understand when you should be wearing each of those hats, and I promise you, you never wear those hats at the same time.
[00:27:52] Number 41, word of mouth is the single biggest marketing tool we have at our disposal. And you need to think more deeply about how you put your thumb on the scale, how you get people to talk about you. It doesn't happen by accident. People talk about things that are remarkable, exceptional, different than anything else out there.
[00:28:11] Number 42 I once worked with a PR company and the founder of that company said the five words that he thinks about all the time are first, last, best, most, and only.
[00:28:23] And really, that's an it's an exercise about going to the edges.
[00:28:27] Can we be the first in the city to do this? Or are we the last place that still serves a given dish? We are the best, meaning we are the most awarded, the best reviewed restaurant. We are the first in the city to serve this particular dish or where we are the only place in the world to get this one thing.
[00:28:43] Think about how you can go to the edges. Those words first, last, best, most, only those words can help you get there.
[00:28:51] Number 43 everything in your life changes when you go from a scarcity mindset to an abundance mindset.
[00:28:59] Know that money is not finite. It's just like creativity. Creativity flows. The more you dip your bucket into the well of creativity, the more appears, the more creative you become.
[00:29:11] So think in terms not of scarcity, not finite, but infinite, ever expanding.
[00:29:18] When you live your life from a place of abundance, more will appear. More will will present itself at your feet.
[00:29:26] Number 44 at the same time, I also want you to have a clear idea of what enough is for you, how much is enough. Be really clear with what you need and what you want and don't get caught in the rat race of constantly going for more and more and more. Understand when enough is enough, and then stop. Enjoy the achievement. The fact that you've arrived at the place you said you were going to get to should amaze you.
[00:29:53] Finally then, number 45, bring people along with you. If there are things you've learned, tell other people who you might think need to hear them. If there are things you've accomplished, share those accomplishments with others. Share the impact that you've made, the wealth and the abundance that you've created. Surround yourself with people you love and make sure they can celebrate with you. Make sure that they can enjoy even just part of the greatness that you've created. I promise you when you bring others along on the ride everything else is better.
[00:30:25] That's it you guys I appreciate you being here every single week. Happy birthday to me and I hope Some of this resonates 45 things that I've learned over the course of my 25 years in the industry. A lot of it over the last nine years of me building my own small business and growing and scaling that business. If there's things I've learned I am here twice a week to turn on the microphone and share them with you and I implore you to do the same.
[00:30:49] Pay it forward. Bring others along. I appreciate you guys being here. Thank you very much and I will see you next time.
[00:31:16] Sam, it.