Episode Transcript
[00:00:01] This is episode 200 of the Restaurant Strategy Podcast. It also happens to be our very first Thursday episode. See, things are changing. The community is growing. And because of that, so too must this podcast. Warning. I might get a little bit emotional today. A bit sentimental. After all, we've come a come a long way over the last three and a half years to get all the way to 200 episodes. But I won't let, I won't let that get get the best of me. Mostly we're gonna keep things focused and, and actionable. On today's episode, I want to give you my recipe for restaurant success. Everything I believe a restaurant needs in order to thrive. Tons of great information today. Don't go anywhere.
[00:00:42] 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. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:13] Hey everyone, thanks for tuning in. My name is Chip Close and this is Restaurant Strategy, a weekly podcast dedicated entirely to the hospitality industry. We cover marketing, operations and just about everything in between. Each episode I leverage my 20 plus years in the industry to help you build a more profitable and and a more sustainable business. I also work directly with operators all over the world through my group coaching programs to help you address and overcome the specific challenges we face in our industry. Curious to learn more, set up a free 30 minute strategy session at restaurantstrategypodcast.com schedule. Let me show you how simple it can be to run a profitable restaurant. Again, visit restaurantstrategypodcast.com schedule. As always, you'll find that link in the show notes.
[00:02:02] Now you work hard to make sure your restaurant moves like a well oiled machine. From managing staff to tracking food costs, your work is never ending. Especially when you're trying to improve your profit margin. That's why I'm such a huge fan of Spoton. You might know them as a point of sale company, but they're a whole lot more. With Spoton, you get a seamless restaurant tech solution that boosts revenue and manages costs from handhelds that are known to drive a 30% increase in sales and bigger tips to commission free online ordering to time saving labor, labor management, tech. They've got all the tools in one integrated system, plus a customer support team that actually answers the phone. Spoton is trusted by thousands of restaurants from Michelin starred single thread all the way down to your local brew pub and just about everything in between.
[00:02:51] Running A restaurant shouldn't mean sacrificing the passion that got you here in the first place. Spoton's tech helps you get out of the weeds and get back to your guests. Visit spoton.com chip to learn more. That link, of course, is also in the show notes.
[00:03:08] Now, this is episode number 200. And if I, if I seem excited, I am. I'm really proud of this show. I'm really proud of the community that we've built and the conversations we've been able to have over the last three and a half years. 200 episodes is huge. We've got a lot of ground to cover today. Specifically, I want to share my blueprint for restaurant success. Simply put, I'm going to share with you everything I believe about running a profitable restaurant business. But first, a little background for anyone who may be new to this show. My name is Chip Close. I live here in the New York City metro area, just outside of the city. I lived in New York City for 20 years until just a few months ago when I moved out. I work as a restaurant coach. I'm also the host of this restaurant strategy podcast. Right. My mission is simple both on this show and in the work I do with my clients. It's to help chefs, owners, operators, managers, marketers, to help our industry build more profitable businesses. I started off at the bottom, right? So I've been in the industry my entire adult life, 22 years.
[00:04:13] I started off at the bottom and worked my way up. When I started, I imagine it's like many of you guys, I wasn't, I really wasn't able to do much of anything. I certainly wasn't experienced enough to do anything important. So my first job in restaurants was back in high school, although I don't count that towards my true experience. But I folded pizza boxes, I washed pots and pans. I a dishwasher and a porter. I would clean the floors, clean the bathrooms. That's what I did. Then during college, I started waiting tables. I moved here to New York City and began working in fine dining. So I was a back waiter and a front waiter and a captain. Eventually became a maitre d and then a manager. I got into management. Spent the big chunk of my career opening and running restaurants. Sort of high profile restaurants too. So big Michelin star properties. I've got like 14 Michelin stars on my resume. I opened a Relay and Chateau property in upstate New York. I've worked with a bunch of James Beard award winners. All of that to tell you that I've amassed a huge Amount of operational experience, really proud of my resume. And then I became really interested in marketing because I realized that restaurants either didn't do marketing at all or they didn't do it very well.
[00:05:19] So I started doing marketing for restaurants, started getting really into social media. I'm a photographer, so I started doing a lot of food shoots.
[00:05:26] All of that led me deeper into the world of marketing and eventually so interested in it that I went back to school, went to business school, got my MBA in food marketing. St. Joe's University is in Philadelphia. It has a one of a kind program that pulls from people all over retail, hospitality, manufacturing, everything in between. And I learned a ton. Then I came out of school and sort of took my academic knowledge and all my operational experience and I began consulting for clients and then I began coaching with clients, which is really what I do now. So I run a couple of mastermind groups for restaurant owners where I gather restaurant owners from all around the world for two hours every single week, bring them together via zoom, and we work through problems in a systematic fashion. Right? The, the challenges we face in our industry are unique and so, so best to, to surround yourself with other people, other like minded individuals who, who not only are dealing with the same problems, but are willing to say, I don't know everything and I'm ready to level up. And they're looking to others for help. So that's what I do every, you know, starting off in, in actual operations, moving to marketing, then consulting, and now coaching. That's me. That's what I do.
[00:06:37] If you're new to the restaurant strategy podcast, you should know that we launched in April of 2019, so it's almost four years old at this point. And I started this show as a way of sparking conversations because I found that I was consulting at the time and I was meeting with a lot of different owners and operators and I was having the same conversations over and over and over and over again.
[00:07:04] And I felt like there was a big misunderstanding about their business, about marketing, about operations, about what we were actually trying to do. And, and again, I've been doing this long enough to know that there are certain things, there are common threads that all successful restaurants have. I started this show, I launched this podcast, not knowing if anybody would listen and not really even caring if anybody would listen. I knew that I had things to share. I knew or I hoped there were people that I could help. And I famously said I would do it for episodes. I would commit to doing 30 episodes, one episode a week. And if it wasn't successful if nobody cared. At the end of that, I would just shut it down and figure out what else to do. It was a labor of love, and still largely is a labor of love, because I believe in this industry and I believe in our ability to network and come together in this podcast, in whatever small way does provide Community a collection point for so many, for so many people out there. Right?
[00:08:02] That's the show. That's how it started. For a long time it was just a monologue. I would start sprinkling in little interviews here and there because it seemed like there were interesting conversations that I was privy to that then I thought maybe I could bring to the, to the audience, to the listeners here, to all of you. And so I started doing that. And then about 100 episodes in, I went back and I looked at all the data, I looked at all the, the which ones were the most popular episodes, and to my very real surprise, five of the top hundred episodes were interview shows, but half of them weren't interviews. There were only maybe 20 of the first hundred episodes were interviews, and five of those 20 were in the top 100. And I went, whoa, people really want interviews. Which surprised me because I made the joke when I started the show. I said, there's not gonna be any interviews. It's just gonna be a monologue style format, just like today's is me speaking to the audience, talking about different topics, different areas that I think we could all benefit to talk about. To my very real surprise, I was wrong. People did want interviews. I famously said, the Internet doesn't need any more interviews. But it seems like you guys wanted interviews. So I challenged myself at episode 100 to do 50, 50 every other week. I would bounce back and forth between a monologue and an interview, and a monologue and an interview. And here's something very strange that happened over the last, I'll say, three or four months. I hear from listeners every single week. As you know, I respond to each and every email I get. If you don't believe me, try me, email me chipclose.com I promise you I will respond.
[00:09:33] And I hear from listeners all the time. I meet people when I'm out at conventions and expos and different conferences like that. And I hear almost across the board, one of two things. The first thing I hear is like, oh my God, I love your interviews. I really wish you did more interviews. I know how you bounce back and forth, but man, I wish I could get an interview every week. And I was like, whoa, that's interesting. And then on the flip side, the other half of the people who would approach me and talk to me would say, oh, man, I love your interviews, but I really miss. What I really love is the monologue style format, the way you started. And I sort of wish, I sort of wish you'd go back to that. So I could get those monologues each and every week. Felt like they were packed with information, lots of, lots of actionable tips.
[00:10:15] Would you ever do that? And I sort of stepped back and I thought, wow, two totally different groups of people and they each want the opposite thing. And I thought, okay, well, here's the solution. The solution is Starting with episode 200, this episode, I would move to two episodes every single week. So every Monday now we get an interview. And every Thursday you get this, a monologue style format where I'm sharing my feedback, something digging deep into some specific area. That's the way I've decided to solve this. And I hope that everybody out there is really excited again, starting today. This is our first Thursday episode. Starting now, we're doing two episodes every week. Every Monday is an interview. Every Thursday. Is this a monologue style format?
[00:10:59] That's how the show is. Now. There's really something really important I want to highlight there is that there's an evolution here. So today's episode mostly is a way to stay actionable for me, to catch everybody up. People have maybe joined us in episode 50 or 100 or 190.
[00:11:18] I want to catch you up so that you get to know who I am, what I do, where I've come from, what I believe, what this show is all about. This show is for owners, operators, chefs, managers, marketers, people who are working in the industry. This is a very insidery podcast. This is written for the industry by someone who's made his career in the industry. Like I said, the last 22 years, I built my career in this industry.
[00:11:42] So I want to keep this actionable. I want to use this as a way to catch everybody up. But I also think today is an opportunity to pause, to celebrate, but also to recalibrate, perhaps to retrench for the road ahead, for the year ahead.
[00:11:55] So to do that, I'm going to share a whole bunch of things, right, Everything I believe about the industry. But I want you to understand that evolution is key. If you've been listening to this for a while, two, three years ago, as the pandemic was just getting underway, I said I hated the pivot word, right?
[00:12:15] But what I like is the word evolution. The reason I hate pivot because it says I used to do that, now I do this. But really it is about slowly changing. It is about evolving over and over and over and getting clearer on how you can best serve your audience. That is what I have done, even in some small way on this show. I've tried to listen to what the audience tells me, either through the data, through what the, the analytics on my podcast publisher say, or what people tell me, or what people write in the surveys that I ask and all of that. So today's chance to celebrate, yes, but also to recalibrate and retrench. And all of that will make sense as we go further along in this episode. Here's the thing. What I believe about this industry, I think what we do in this industry is extraordinary. And I've said this before, in fact, I say it once a week at least. I believe restaurant owners deserve a restaurant that works as hard as they do. I know you guys know hard work. I don't have to tell you about that. What I hope is to show you a different, better way, a series of mindset shifts, a smarter way of approaching your business so that you can be more profitable.
[00:13:25] Here's something else I know. The industry has changed, right? Three years ago, the industry's changed. But guess what else happened Three years ago, the entire world changed.
[00:13:35] Now the disruption is coming quicker and quicker.
[00:13:39] Let's talk about it. Let's talk about the history of restaurants before we get much further into this, right? Because we've got a. There's a little bit of foundation here that I want to make sure that we all understand.
[00:13:47] Restaurants have been around for thousands and thousands and thousands of years, just not necessarily in the way that we now know them. Restaurants, at least as we now know them, were invented about 250 years ago in Paris, France, right? That's the model where guests make a reservation, they show up, they sit in the dining room kitchen, and the kitchen staff, chef and the cooks are in the back in the kitchen. And we have a waiter who asks us what we want and then goes back and tells the chef and then brings the food out to the guests and then clears the food, then asks them what they want for dessert, and then brings that and clears that, and then settles up payment, right? A guest shows up, orders something, pays for what they consume, and then they leave. That's restaurants as we know them. But they weren't always like that. Go back, read your history books. Look at the way that restaurants existed in the Middle Ages. Look at the way they were even Older than that back in, you know, throughout antiquity. Like when you look at, you know, ancient Rome and ancient Greece and back ancient China. When you look at the way that restaurants were built, they were different.
[00:14:49] All of that is important to say that restaurants don't have to be the way that they have been. They don't have to be the way they are now. We have the choice, I say, the opportunity to change things if they need to be changed. I'm guessing, I'm thinking as I'm looking at things that they're about ready to change, that they need to change, that we're long overdue.
[00:15:13] When you think about it, 250 years actually isn't that long. But the amount of disruption that's happened just in the last 30 years. Look at what technology has done to every major industry in the world to travel and hotels and. And TV and movies and music, let alone restaurants.
[00:15:33] Technology has changed everything.
[00:15:36] So why do we think that we can just keep doing it the way we keep doing it?
[00:15:40] This is the lesson that the railroad companies learned the hard way. This is what the music industry learned the hard way. This is what TV is learning the hard way now. Streaming services learning the hard way, publishing, on and on and on.
[00:15:54] The world changes, especially now as technology works at a quicker pace than we've ever known in the history of the world. So restaurants, at least the model we know aren't that old, hasn't been around that long. There's no reason to say that that's the only way that we have to do it. That's going to be a really important theme as we go through today's episode. I think it was Danny Meyer who said our industry was built on the promise of cheap rent and cheap labor. So what happens now that neither of those are true anymore? And of course, I don't have to tell you this, but now we have to contend with skyrocketing food prices, right?
[00:16:30] So no more cheap rent, no more cheap labor, and now no more cheap food either.
[00:16:36] Something's got to give. There's no way to move forward and try to operate a restaurant that was built on other principles, other principles that are no longer true for trying to run a business on principles that are no longer true. It's. It's a failing prospect, right? Like I said a second ago, our industry is changing, but the world is changing, and so must we.
[00:17:03] I believe restaurants need two things to succeed. I talked about this in a past episode. I'll just recalibrate here.
[00:17:08] I will highlight this for anybody who's New to the podcast, I believe restaurants need two things to succeed. Number one, a path to profitability, and number two, a true understanding of how we market ourselves.
[00:17:20] Right. So let's talk about a path to profitability. We have to build a business that is profitable. A business by definition exists to increase shareholder value. Right?
[00:17:31] Milton Friedman taught us that a business exists then to turn a profit.
[00:17:37] If it doesn't turn a profit, it's not a business, it's a non profit, it's a charity. And those are important. We certainly need those in the world. But I don't think, I don't think a lot of you guys got into this to be a charity.
[00:17:49] You got into this to run a business.
[00:17:52] To run a business, to feed people, create a little profit so that you can pay your bills, you can support your family, create legacy, create wealth. Maybe for future generations, all of those are fine. Those are noble pursuits. But in order for a business to be a business, it needs to turn a profit. And I think too many restaurants lack a path to profitability. Here's the analogy I use all the time. My brother lives in California. I live here in the New York City area. In order for me to get from New York to California, there's a path I need to take to get there. I can't just hope I'll get there. I can't just do some things that might get me there. I got to figure out when I want to go. I gotta book a ticket on an airline that is going there at the times that are, that I've are convenient to me.
[00:18:36] Then I go to the right airport, the right terminal, the right gate. There is a path for me to get to see my brother.
[00:18:44] That's the path. Figure out when I want to go. I buy a ticket for that time. I go to the right airport, right terminal, right gate.
[00:18:51] It is no different for a restaurant. How do you get where you want to go? And here's the big problem.
[00:18:57] A lot of restaurant owners lack a path to profitability because they don't truly understand profitability. They don't understand where they want to go.
[00:19:07] So before you figure out a path to get there, I want you to first figure out where you want to go. You want to go to California, you want to go to Florida, you want to go to Texas, you want to go to Maine. They're very different places. Figure out where you want to go. That's how we begin. So we talk about what are the things that I believe. I believe our industry is extraordinary. I believe we do something that A lot of other people couldn't do. And I believe we deserve a restaurant that works as hard as we do in order to get that. The two things that all restaurants need to succeed is a path to profitability and understanding and marketing the path to profitability. In order for us to tackle the path, we still have to. We first have to figure out where we want to go.
[00:19:44] What does profitability look like?
[00:19:47] It's a number.
[00:19:48] We're either we either hit it or we don't. We either exceed our goal or we don't.
[00:19:54] It's very black and white. So you got to figure out where you want to go, and then you got to sit down and figure out the path to get there. Here's the thing. I always talk about the 30, 30, 20 rule. I talk about this with my clients all the time. Many of them will be listening to this. They will undoubtedly be sick of me saying it. You need to tether your expenses to your revenue, right? If revenue goes up, then labor can go up. Cogs should go up.
[00:20:18] But if revenue goes down, labor has to go down. Cogs have to go down.
[00:20:23] Prime costs are our labor plus our prime costs are cogs plus labor, right? We live and die by our prime costs. Because how much of our business is predicated on the product we bring in to turn around and sell and the people who make that happen, right? Who bring it in, who wash the stuff, cut the stuff, peel the stuff, cook the stuff, serve the stuff, clear the stuff, clean the dishes afterwards. We live and die by our people. We live and die by our payroll.
[00:20:52] So the 3020 rule says 30 plus 30 plus 20 equals 80. If you keep all your expenses, you put them all in those three buckets, and you keep your expenses to 80% of revenue.
[00:21:04] That guarantees a 20% profit margin.
[00:21:07] 20% profit margin is what we should be aiming towards in this industry. No more single digit profit margins. No more trying to get for five. And then we fall short. We had one or at negative one, we got to dip into our reserves just to cover payroll next week. No, we work way too hard to do that.
[00:21:25] So you need a path to profitability.
[00:21:28] I'm telling you to go for 20%. Maybe it's more. Hey, maybe it's less in actuality, maybe it's less. But I'd rather have you aim for 20, fall short and hit 17 or 16 than aim for 5, fall short and hit 1% profitability. But you're biting your nails the whole second half of the month. No, absolutely not. So the path to profitability Got to figure out where you want to go, and then we got to figure out how to get there.
[00:21:50] My 30, 30, 20 rule says that all of your expenses should go in one of three buckets. 30% should be cogs, 30% labor, and 20% for everything else. Your rent, your utilities, your insurance, your marketing agency, your pr, your printer, paper. Everything else, everything falls into one of those three buckets. And if you can keep them tethered to 30, 30, 20, you carve out a 20% profit margin. Because 30 plus 30 plus 20 equals 80, right? That's the idea. That's the big idea that I'm talking about all the time. And yes, to get there is not necessarily easy, but I will show you how to get there. That's what I do with my coast, with my coaching clients all the time. We work on a way to get cogs down, to get our labor in, into line, to educate and empower our managers so that they can be allies in this fight. They can be allies in you creating a profitable business, building a team of managers who aren't just, you know, comping food, doing bank drops, turning on the lights, locking the doors. But actually, managers who do all of that plus manage the profitability of the restaurant are caretakers of the business itself. That's what we need. I'm. I'm convinced of that as we move forward. And that's what you need. That's what I want to convince all of you. So the two things all restaurants need to succeed, number one, is a path to profitability. You got to figure out where you want to go, and then you got to build a path to get there. My 30, 30, 20 rule is that path. And if you got trouble with that, you got problems, questions about that, then by all means, I talk about it all the time. Set up a call with me. RestaurantStrategyPodcast.com schedule. We'll set up a call, 30 minutes to chat about the coaching programs, and we'll talk about that, see if I can clarify it further. The other thing that I think all restaurants need to succeed is a true understanding of what marketing is. Here's what happens. All the time.
[00:23:40] I ask a new client or a prospective new client, say, tell me about your marketing efforts. They always tell me one of two things. Number one, oh, I can't. We can't afford marketing. Or number two, they start telling me about their social media.
[00:23:52] Social media is not marketing. It is a tool available to the marketer, but it, on its own is not marketing. Marketing is about figuring out who needs something that we are uniquely qualified to provide? It's finding a market for our product or our service.
[00:24:09] Now, two ways to do marketing.
[00:24:11] Number one, we can create a product and then go try and find an audience, right? Go try and find someone, find customers who might want that product. Or the better way of doing it is to go find people who need something, and then we craft a product, a solution to their problem. So two ways to market. We can create a product and go try and find a customer, or look for a bunch of prospective customers, figure out what they need, and craft a product that fills their need. Most restaurants don't market the first way, and I think the way to succeed is to market the second to understand what the market needs. Who has a unique problem that you're uniquely qualified to solve? What. What group of people? What kind of person has a problem that you're uniquely qualified to solve? That. Right? There's a. There's a firm misunderstanding about what marketing is. That's marketing. Here's my definition for marketing, right? Because I ask people, hey, what is marketing? And they start talking to me about Instagram. Instagram's not marketing. Marketing for me is answered in three questions. What are the three questions? Here we go. What's the product? Who is it for?
[00:25:14] How can you reach them?
[00:25:16] Right? The best part about that definition, what's the product? Who is it for?
[00:25:22] And then how do we reach them? The who is at the center is literally at the heart of our definition. For me, marketing is about empathy. It's about figuring out who out there has a problem that we can solve. If you do that, if you figure out who has a problem, you can go craft a compelling solution to that problem.
[00:25:44] So that's what marketing is, right? Two ways to market. I think marketing is best done the latter.
[00:25:51] What's our definition for marketing? It's those three questions.
[00:25:54] When we do that, I'll introduce you to another framework that I've got called the abcds of marketing.
[00:25:59] ABCD stands for audience, brand, competition, and differentiation.
[00:26:05] Audience is figuring out who. Who has a problem that needs to be solved. B is for brand.
[00:26:12] Brand is your company.
[00:26:14] The product that you craft as a solution, the experience, the service you provide as a solution to the problem that your. Who has that your audience has.
[00:26:24] So that's A and B. You figure out the problem and then you craft a solution.
[00:26:28] C is for competition. You figure out who else is trying to solve the same problem you are.
[00:26:32] That gives you a category. And then D is differentiation. Now that you're in a Category, you're lumped together with a bunch of other people who are trying to solve the same problem you are. You figure out how you can stand out. How do you separate yourself in a noisy marketplace? You separate yourself by differentiating yourself. We call in. In academic textbooks, marketing textbooks, they'll call that the value proposition. Value proposition is simply a fancy way of saying, why does someone choose this over that?
[00:27:00] They choose this over that. For some reason.
[00:27:03] You have to provide those reasons to the customer.
[00:27:07] That's the abcds of marketing. Guess what ABCD leads to E. E stands for everything. Everything you do, every choice you make, communicates something to a prospective customer.
[00:27:20] That's how you market a restaurant. That's the foundational piece that almost all restaurants miss.
[00:27:26] They miss the fundamentals.
[00:27:31] So a company will call me in and say, hey, we really want you to run Facebook ads because you're really good at Facebook ads. Which I am. I'm good at Facebook ads. I know how to build good, successful Facebook ads for restaurants. And I say, great, Tell me more about your restaurant. And I go through the ABCD exercise, and they stop, and they say, no, no, no, no. Don't worry about that. Don't worry about that. I just want you to run an ad. And I say, you're missing the point.
[00:27:52] I can't run an ad. That's advertising. It's promotions. I can't run that until I understand who you are and who you're for.
[00:28:00] Because I literally, when I go into the advertising platform in the back of Facebook, I have to tell them who to target.
[00:28:08] Who are we serving? That's a. That's the audience, right? What's the problem they have? How are we a solution? That's my copy. That's my creative.
[00:28:17] What image, what video am I showing them? What's the headline I'm choosing? I have to choose something.
[00:28:24] I have to choose something that speaks to their problem, that shows them I've got the solution to their problem. I understand their pain, and I'm here to fix their. Their problem.
[00:28:33] So unless we do the abcds, I can't run an ad.
[00:28:38] I can't build a menu. I can't do much of anything.
[00:28:42] This is where so many restaurants fail.
[00:28:44] And if we just solve these two things, again, what I think all restaurants need to succeed and where I think I see many of them failing, it's this. It's a path to profitability and a true understanding of marketing. And really, what we get into is now we're talking about product, market, fit, understanding what your market needs or what a group, what an audience in the market needs, and you craft a product to fit their need.
[00:29:06] This is why I think most restaurants struggle. Plenty of restaurants that fail, and there are a variety of reasons for that. They're in the wrong space. They don't know what they're doing. Terrible menu, they can't execute.
[00:29:15] But then there are plenty of restaurants that can execute, that are in a great place, that are providing a compelling, compelling product, compelling experience. But because they don't understand this idea of product, market fit and how to position themselves and how to target an audience, they struggle.
[00:29:35] So restaurants fail because of a million reasons. But I think restaurants struggle because of these couple reasons. And that's what I'm out.
[00:29:43] That's what I'm out to solve.
[00:29:45] Now, beyond that, as we talk about, you know, what we need and what I believe in this industry, I believe that we need to embrace change.
[00:29:54] There is change that is already happening. And guess what? There is more change coming, right? There's change that we're seeing, feeling. I know there is more happening now. Now this cycle is just moving now. It's now it's moving at the speed of light and we can't hang back. I always say this is like a giant wave.
[00:30:11] We can either ride the wave or be crushed by the wave. But there is no. There's nowhere in between. We can't survive. We can't survive by the status quo, doing things the way we always did them. We will get crushed by the wave.
[00:30:24] Here's the thing.
[00:30:25] This is, and this is a very real thing. So many operators out there, I find, are frustrated because they feel like they can't win the game.
[00:30:35] But somewhere along the way, they failed to realize that we're actually playing an entirely different game now.
[00:30:42] Right? We started playing baseball, we're going for runs. And now somewhere along the way, all the other kids decided to play football.
[00:30:50] So we're trying to get runs, they're scoring touchdowns. We're playing totally different game. What's happening right now is totally different. The industry is totally different than it was 10, 20, 50 years ago.
[00:31:00] If we're trying to play the same game that we were 10 years ago, you're losing. If you're going to try to win at the same game, it's unwinnable. You have to play a new game, there's a new game being played.
[00:31:12] So I always say, so many operators are frustrated because they feel like they can't win the game. They fail to realize that we're playing an entirely different game. Now.
[00:31:20] So let's be really honest with what game we're playing. Let's make sure you're playing the right game, that you got the right pads, that you're going for the end zone, not home plate.
[00:31:28] That gets to something we'll talk about just a second.
[00:31:30] A better understanding, not just of our business. Because I think you understand the industry well, I think you understand your business, but I think collectively we need to have a better understanding of business in general.
[00:31:44] More on that after a word from another one of our sponsors.
[00:31:48] Now today's episode of Restaurant Strategy is also brought to you by seven Shifts. Seven Shifts is a team management platform built specifically for for restaurants. Great restaurants are built by great teams and seven Shifts is your secret weapon to better understand your restaurant, hit labor targets and keep your entire team connected with drag and drop scheduling in app communication, task management, tip. Management, and more. It makes restaurant work a whole lot easier from back a house to front of house managers, franchise owners and larger corporate teams. Seven Shifts has benefits at every single level. Plus it integrates with the other systems your restaurant already uses, like your POS system and your payroll.
[00:32:27] So turn your team into your competitive advantage. Restaurant Strategy podcast listeners get three months absolutely free. Get started by visiting seven shifts.com RestaurantStrategy that's the number 7s h I f t s.com RestaurantStrategy to get three months free and join over 30,000 restaurants using seven shifts today. You will find that link also in the show notes.
[00:32:55] Now sometimes when I speak at conferences, I do this thing where I'll raise my hand and say, hey, how many restaurant owners are there in the crowd? Raise your hand.
[00:33:05] And I say, great. Because most of the people in the audience will raise their hand and I say, okay, great. But for the next 45 minutes, you're not a restaurant owner. For the next 45 minutes, I want you to think of yourself as a business owner.
[00:33:17] See business owners focused on profit and growth. And guess what? One begets the other in a sort of virtuous cycle. Profit and growth. If you make more profit, you can grow your business. As you grow your business, you will naturally make more profit. As you make more profit, you can continue to grow your business. Either move into larger locations or multiple units or whatever it is.
[00:33:41] Profit and growth. This is why so many business people are obsessed with it. That's why you hear Wall street analysts talk about it profit and growth all the time.
[00:33:50] And it's true.
[00:33:51] I believe we have to be savage about the bottom line. I always joke around my clients that's all I care about. All I care about is the bottom line. Everything else we do is in service of the bottom line. We serve great food, not because I want to do it, but because it helps us create great meals for people.
[00:34:13] And they love it so much, they come back, they love it so much, they talk about it, they love it so much, they go write a great review. We help them celebrate birthdays and anniversaries, big moments, small moments.
[00:34:23] We do those things. We create great food, great hospitality, cool places for people to dine in, not because that's what we should be doing, but because it helps us make more profit. We have to be savage about the bottom line. It's like we talked about before in the path to profitability.
[00:34:40] Everyone needs to understand where, what sort of profit you can make. And then you got to build a path to get you there.
[00:34:47] So that's something I'm hoping to change. I do that every single day as I record new episodes of this podcast, as I work with clients in my Mastermind group.
[00:34:55] We have to also get good at thinking outside the box, and this is directly tied to profit and growth. We have to get good at challenging the status quo and realizing that you exist simply to take care of people, to provide people with something that they need. But guess what? People need a lot of different things, and there are a lot of different ways to serve them.
[00:35:17] So what would happen if we simply took a step back and asked, how can I best serve the people who need me?
[00:35:26] My audience, the people I serve, how can I serve them better? How can I serve them in a different way, in a new way?
[00:35:32] This is something we specifically learned over the course of the pandemic. Right? People came into us for in person dining when we were no longer allowed to host them in our dining rooms. We had to pivot. And yes, I know I hate the word pivot, but we had to pivot.
[00:35:47] Meaning we had to get really clear on who our people were. The people that stayed open and found a new way to serve them, either by doing takeout and delivery or at home meal kits or zoom cooking classes or whatever it is that all the restaurants out there did.
[00:36:03] They pivoted because they looked at their audience and they said, our audience used to need this.
[00:36:08] We can no longer provide this. But guess what? Those people still need something.
[00:36:14] And what is it they now need? What is it they need that we are uniquely qualified to provide?
[00:36:21] This is what we have to get better at asking all the time, not just in the midst of a global crisis. But every single one day, every single week, what do our people need? And how can we best serve the people that we serve?
[00:36:36] If we do that, we put ourselves in the position to lead.
[00:36:42] That's really what we need. I think we need leaders.
[00:36:45] We, all of us human beings, crave vision.
[00:36:49] All of us want guidance.
[00:36:51] As a diner, I want someone to take me by the hand, lead me through the meal, to show me the best way to experience the restaurant. That's what I want when I go out for a great meal.
[00:37:02] So that's what I always strive to do. When I was serving, when I was managing, when I was training servers, I wanted to show them that they're in control.
[00:37:11] They're in charge. They get.
[00:37:13] They get to determine how a table experiences the restaurant. And that is profound.
[00:37:19] Here's the cool thing. We know our people don't, meaning our guests. They don't know. They come to us because they don't know.
[00:37:28] I don't know how to make this food.
[00:37:30] I can't make this food. I don't have the ingredients. I don't have the skill set to make this food. Make this food for me. Show me how I should experience this.
[00:37:39] Man, if we embrace that and got really better at that, it would change everything. Again, this is about leadership, right? All of us want guidance. We want leadership.
[00:37:50] We crave vision.
[00:37:53] And guess what?
[00:37:54] This isn't just for our guests. This is for our staff as well. Our staff wants the exact same thing. In fact, they are begging us.
[00:38:01] They're telling us, show me how to succeed.
[00:38:05] Show me how I succeed in this restaurant. What do I have to do?
[00:38:10] You know, that's what they're saying. They're saying, you the owner, the manager, you know, so teach me. Show me how to do it.
[00:38:19] So instead of owners, instead of operators, we need visionaries, we need leaders.
[00:38:27] A couple months ago, I was giving a talk with Sean Walshef. Sean Walshcheff is the podcast host of Digital Hospitality. He's also the owner of Cali Barbecue out in San Diego, California. And we gave this talk, and we started talking about something called the two whys, right? So everyone knows Simon Sinek. He wrote this book called Start with why, right? The great. The great businesses work from the inside out. Most businesses work from the outside in. They know what they do, they know how they do it better than anyone else, but they never get to the why. And Simon Sinek says, no, no, no. The great restaurant, the great restaurants, the great businesses start from the center and move the way and move their way out. They Know why they exist, and then they figure out how they can do that and what that, what that manifests what, what the meal then looks like to then try to serve their why.
[00:39:17] And Sean and I talked about your two whys. Number one, why do you do what you do? Or why did you begin doing what you do?
[00:39:23] Right? Why did you start your restaurant? And then number two, why should anyone care? Why does that matter? Which is really what our guests are asking us every single day.
[00:39:33] Maybe not explicitly, they're not going to come out there, but they're saying, hey, why should I care about what you're doing?
[00:39:37] Why should I care about your restaurant? Our job is to make sure that that's absolutely obvious, that they know this is who we are, this is who we're for, and this is why we exist.
[00:39:49] This is why I started doing it, and this is why it matters that I'm still doing it.
[00:39:53] Again, if you answer those two questions, those two whys, it will profoundly change your business.
[00:40:00] Then I think we're talking about everything that I believe.
[00:40:04] I believe we need to be more organized as an industry, especially with all the independent operators that I work with out there. We need to get more organized, dare I say, more strategic. So it all comes down to, for me, systems and goals. And in case you want further reading or further listening here, go back and listen to episode 86, 87, and 88. Man, it was a long time ago, but those episodes are great. It's three episodes in a row, all about systems and goals, goal setting.
[00:40:33] All of that is going to. Is going to change you. But I'll give you the quick little overview here, and if you want to go for a deeper dive, you go listen to episode 86, 87, and 88, systems and goals. For me, like I said, it all comes down to profit, right? It all comes down to the final result, the final thing. We're trying to achieve that. For me, when I work with owners or operators, I say it all comes down to systems and goals. What we have to get really good at doing as an operator, as an owner, is identifying problems in our business, prioritizing those problems. Because luckily for us, there's never a shortage of problems. But we have to prioritize those problems, allocate our resources appropriately. So we identify problems, we prioritize problems, then we set goals for our problems, right? We never start solving a problem until we set a goal.
[00:41:19] When we reach this mark, it will be solved.
[00:41:23] So we identify problems, prioritize problems, then set goals for our problems, and then we Put a system in place to solve that problem.
[00:41:31] Note a system is just a repeatable set of actions. If it's repeatable, it's scalable. If it's repeatable, you can teach it. You don't need to be there. You could teach a lot of other people. You can open multiple locations.
[00:41:44] This is what we do, this is how we do it.
[00:41:47] That's the power of a system.
[00:41:51] I know we're not talking about, you know, making people mechanical, making people robots, but just teaching them. This is what we do, this is how we do it. And this is why it matters that we do it this way.
[00:42:02] So systems and goals. If you can get good at one thing in your business, after you listen to this episode, it's this. Get really good at identifying problems, prioritizing those problems, setting goals for the problems, and then putting a set a system into place, a set of actions to try to achieve the goal. If you do that, you can measure it.
[00:42:19] So a word about goal setting. I always talk about the smart goal framework. S M A R T. It stands for specific, measurable, assignable, relevant and time bound. If you make the goal specific, it therefore becomes measurable.
[00:42:35] Right? When we come up with a goal, we assign it who is responsible for it. Because if everyone's responsible, no one's responsible. So what do we want to do? We measure it, we assign it so we know who's accountable for that. We make sure it's relevant to the success of the business. And then we make it time bound. We put a deadline on it. We're going to increase sales by 20% on Monday nights over the course of Q1.
[00:43:02] That's going to be the responsibility of the general manager. Now we've made it a smart goal. Now we can measure it. Now we can see whether what we're doing is working.
[00:43:12] That's what I believe all restaurants need. If you can get really organized about how you think about systems and goals again, it'll change your business.
[00:43:22] Then if you can get yourself organized and your team organized, I guarantee you would be unstoppable. Two things you can do right away to change your life. Especially now. We're at the beginning of the year. It's a great time to do it. Put together a marketing plan once every quarter. Doesn't have to change drastically every quarter, but your goals will change. If you want a really good template, I have one. Go check out episode 75. There's a link there to a download where you can get my marketing plan outline.
[00:43:49] It'll show you how to build A really easy one. Not a big hundred page document, but one that's like 10 to 15 pages, that's easy to circulate among your staff so you can make sure you're all rowing in the same direction.
[00:44:00] And the other one is a marketing calendar. Right. This is an Excel spreadsheet and I have this as well. I give this away all the time. If you want one, just email me chipclose.com I will send it to you totally free. This is a way to get organized over the course of the year to look at all your different marketing channels and understanding what do we need to accomplish? What are the things we're going to do to try to accomplish those things. If you can do that and lay all that out at the beginning of the year, you will be miles ahead of 99% of the other restaurants out there. I promise it will change. So the marketing plan, if you want to learn more about that, go check out episode 75. It's way too much to cover here on this episode, but all of the, all of the important stuff is in that episode. And then put together a marketing calendar. It's an Excel spreadsheet. I've got my template that I love to use. I will give it to you for free. Just email me chipclose.com that's C H I P K L O-S-E.com and I promise I will send it to you. You then you need to create a plan for how you hire, train and manage your team. Right. You need to understand who do we need? What are the skills that somebody would need to succeed? Meaning what does somebody need to bring to the table and then what can we teach? You got to get really clear on that. And you've got to, you've got to interview for the first, what are the things I can't teach? What are the qualities? I just need someone to have stuff. Need people to be hospitable or curious or passionate.
[00:45:23] Can't teach that stuff. Right? It's one of those things can't be taught, can only be learned. People have to bring that to the table. But yeah, if somebody's curious or passionate, they'll learn about white burgundy. They'll learn about the different styles of the different types of caviar, different kinds of oysters there are out there.
[00:45:42] You got to figure that out for yourself. Maybe that's different. Maybe what I'm laying out is different for you. You got to figure out what are the qualities you need people to have day one when they walk in and what are the things that you can teach them. Then how do you teach them? You need to get put together a training plan. And not just a week long training plan, not just a three day training plan. I always talk about having a level one, level two and level three training. So level one is how do you teach people over the course of one week to be good enough to take a station, right? To work garmage, to work a shift behind the bar, to take a section on the floor. What do they need to know to get a crash course in your restaurant? That's level one training. That's where most restaurants stop. But you got to go further. Level 2 training asks the question, what do people need to know so that by the end of the first 90 days they're as good as the best server out there, as the best cook you have, as the best bartender you have. What do they need to learn? And then how do you teach them that?
[00:46:39] How do you continue their education, their training over the course of the first 90 days? There's no one way to do it. A couple ways that I like to do it, but there's no one way to do it. You just need to answer that for yourself. And then level three training is how do you identify top talent people who might be ready for promotion, who might be interested in promotion over time and how do you develop them? How do you teach them leadership and management and communication skills? How do you teach them about the financials of a restaurant? How do you, you teach them to be better. How do you help them level up every single day?
[00:47:13] That's what you also need, a level three training. And guess what? Restaurants mostly never even think of that, right? Just the manager walks out one night and suddenly the most senior server becomes the new manager. It's fine, but not really what we want. It's fine in a pinch, it's fine in an emergency, but that's not a long term plan. It's also why I think many places fail because, or many places struggle, I should say because there's no, there's no path forward. The servers don't know that there's a path forward. Bartender, a busser and I think we can help. I think we can help ourselves by helping our people. So you got to figure out the plan for how you hire, train and then manage your people. And I've talked a lot about management over the years. If you've never read it, Danny Meyer's book Setting the Table does this perhaps better than any other, any other book out there.
[00:48:02] How do you manage your People to get the most out of them, to keep them fulfilled and productive.
[00:48:09] How do you do that? A bunch of different ways to do it. Danny Meyer, I think does it the best.
[00:48:14] Finally, then, this is where we'll end. We'll. We'll wrap this up here. Every so often, maybe once a year, right around the beginning of the year, you should take the time, I think, to. To sit alone with your thoughts, take stock of where you are, where you've been, and, yes, where you want to go.
[00:48:31] Now. We just talked about this a few episodes ago back on episode 198. Go take another listen to that episode.
[00:48:38] But our priorities change as we grow. It's a natural part of getting older. We change, and the things we care about change.
[00:48:47] All I'm saying here is to embrace that and celebrate that.
[00:48:53] I think life is too short to get stuck doing something you don't love.
[00:48:57] So please, go find something you love or make the changes necessary so that you can love the thing you're doing. And I know that's not easy for me, the restaurant industry, I was not something I loved in the beginning, but I found my way to it, and I found. I found the way that I could and would love it, and I do, and I now love it. Right? But it wasn't that way for the first couple of years that I was in the industry.
[00:49:22] The other thing to understand is that a restaurant is not fixed. Right? We talked about this way in the beginning. Now this is where we're going to bring it full circle.
[00:49:31] The reason most restaurants fail are too many to name, but the restaurants. The reason that most restaurants struggle is because I believe they fail to evolve.
[00:49:43] So let yourself change. Let yourself grow. Give your restaurant permission to change and to grow as well.
[00:49:51] Again, get organized, get intentional. That will change your business, and ultimately it will change your life. And here's the best part.
[00:50:00] It takes no more effort than what you're already doing.
[00:50:04] Yes, you will have to make a change, and change is hard, but you can do that.
[00:50:08] And I promise you, it will make all the difference.
[00:50:11] So here's what I want you to do. At some point today, I want you to take just 15 minutes to yourself. If you can take more, take more, but take 15 minutes to yourself and do this last part.
[00:50:20] Take stock of where you've been, where you are, and where you want to go.
[00:50:26] Take stock and make sure your business is doing what you want it to.
[00:50:31] Because, hey, remember, our businesses exist to support us, not the other way around.
[00:50:39] I will repeat that.
[00:50:41] Our businesses exist to support Us, not the other way around. And too many restaurant owners out there merely exist to help support their business.
[00:50:51] And that's the wrong way.
[00:50:53] So let's bring purpose to our work and let's be intentional about the business we're building and the life we're building.
[00:51:01] I think we have the ability to change lives, not save lives. Let's be clear here. We're not curing cancer, but what we get to do every single night is extraordinary. And it does change lives. I have been changed from it. You've been changed from it. And I'm gonna guess you've taken care of enough guests who have been changed by you, by your existence, by the food you serve, by the experience you provide. And that's not just at the super fancy fine dining level, but all the way down to the bagel sandwiches and coffee, you know, the little bodega that feeds people on the way to their. On the way to their bus, to their train.
[00:51:36] We do. We change lives. We make people's lives better.
[00:51:39] Again, I want to. I want to close out the way we began. What we do is extraordinary. And I don't think most people could do what we do now. I hope this episode has resonated with you. I hope it convinces you to take action, to build a life that serves you, to build a business that serves you.
[00:51:58] Remember, I say this at the top of each and every episode. But in addition to this podcast, I also host a weekly mastermind group for restaurant owners where we systematically work through a unique the unique challenges that we face in the industry.
[00:52:09] So if you want to learn more, schedule a free call again restaurantstrategypodcast.com schedule. You will find yourself with a bunch of like minded individuals who love this industry but want to grow, have built a successful business, but aren't where they want to be.
[00:52:25] So if you're curious about that, if you want to take action on any of the stuff in this episode, you get in touch.
[00:52:29] As always, I want to thank you for spending part of your day with me. I appreciate each and every one of you.
[00:52:34] It's been truly humbling. Honestly, 200 episodes in, it's been incredible to see how this community continues to grow, how much bigger than me it has become.
[00:52:44] I'll finally, I'll finish by saying this. This has been a dense episode. So please take a deep breath. Maybe find some time to revisit this episode in the coming days. Even. I promise you will get something new out of it with each. Listen, if you have a partner, a spouse, managers that you work with a chef that you partner with. Please send this episode to them as well. Maybe they don't listen to this show. Maybe this is a great way to introduce them to the show.
[00:53:09] This year, let's make it the best one yet. Let's make sure we get everyone rowing in the right direction. Let's be the leaders that our community deserves. The leaders that our staff deserve.
[00:53:21] Let's build a profitable business that you deserve.
[00:53:24] I want to thank you again for being here. And I will see you next time.
[00:53:45] Sam.
[00:54:11] Sa.
