[00:00:00] Speaker A: Hey there, Chip Close here, host of the Restaurant Strategy podcast. I have some big news to share. This year I will be on stage at the National Restaurant association show. It happens every spring in Chicago. This year it's happening May 17th through May 20th. I will be speaking on the last day of the show on May 20th. I'm part of an incredible lineup of speakers, chefs, owners, operators, consultants. The keynote of the event is TV show host, chef author Carla Hall. It's an incredible lineup of vendors are surrounded by an incredible network of owners and operators who descend upon all 50 states from 112 different countries around the world. There is nothing else like it. It is by far the biggest show that happens every year. Again, May 17th to May 20th. And if you use my promo code, you get 25 bucks off. Go to National RestaurantShow.com use the promo code CHIP25, that's C H I P25 to get $25 off your reg.
Offer expires May 9th. And listen, don't, don't go anywhere. Make sure to come back because I am chatting with Jim Taylor, who will, I believe, also be at the show, but he has a brand new book out that he's going to talk about. We're going to talk about his work, the work he does to help increase profits for restaurants all over the world. Don't go anywhere.
[00:01:22] Speaker B: There's an old saying that goes something like this.
[00:01:24] Speaker A: You'll only find three kinds of people in the world. Those who see, those who will never.
[00:01:29] Speaker B: See, and those who can see when shown.
[00:01:32] Speaker A: This is Restaurant Strategy, a podcast with.
[00:01:34] Speaker B: Answers for anyone who's looking.
[00:01:53] Speaker A: Hey everyone, thanks for tuning in. My name is Chip Close. This is Restaurant Strategy, a podcast dedicated to helping you build a more profitable business. So I give talks, I write books, I've got a YouTube channel. I'm on Instagram, TikTok. I've got this podcast. I also run my coaching program that is really how I work with restaurant owners. That's where I make the big impact. I've currently worked with over 150 restaurant owners spread across four different mastermind groups. This is a group coaching program. It's called the P3 mastermind, geared specifically towards independent operators who struggle with profitability. So if you've got a busy restaurant but you're not making what you deserve to make from this restaurant, then set up a free call. I promise you it's 30 minutes where you get to ask me questions so you understand what I do, how the program works. And I'm going to ask you a lot of questions so I better understand what's going on to see if we can help you. The best way to do that is go to restaurantstrategypodcast.com schedule and yes, that link is in the show notes Now. Are you tired of juggling schedules, tracking hours, worrying about HR compliance and dealing with all those last minute no shows? Well, it's time to say goodbye to the headaches and hello to Time Forge. Time Forge is a labor management solution designed for the fast paced world of restaurants with product offerings ranging from recruitment to retention of your team members. With Time Forge, you can simplify employee scheduling with automated AI schedules based on sales, weather and other events. You can track attendance and labor costs in real time, keeping up with complex labor laws like fair work week and meal penalties. You can recruit staff who live near your stores from our more than 11 million hourly job seekers. They have 11 million plus job seekers on their platform. You can pay employees their wages and tips on a daily basis after every shift. And you can communicate proactively with your staff using messaging, surveys and more.
[00:03:49] Speaker B: And that's not all.
[00:03:50] Speaker A: Time Forge integrates seamlessly with most POS systems, giving you full visibility into labor and sales performance and suggesting when you should staff up or staff down. Whether you manage one location or dozens, Time Forge saves you money, time and stress so you can focus on what really matters, delivering exceptional service and growing your business. Thousands of restaurants trust Time Forge, so why not you visit timeforge.com restaurantstrategy today and see how Timeforged can help your team and your restaurant run like clockwork again. Timeforged.com RestaurantStrategy as always, that link is in the show notes.
[00:04:30] Speaker B: So my guest on today's episode is Jim Taylor. He is the founder of Benchmark 60 Restaurant Services. He is an owner, an operator, an author, which we're going to spend a fair amount of time talking about today. Lifelong hospitality guy. Jim, welcome to the show.
[00:04:45] Speaker C: Thanks Chip. It's great to be here.
[00:04:47] Speaker B: I'm glad to have you here. We have been in orbit of each other for a long time, but only just got to meet in Vegas out at Barnbrough Restaurant Expo in March. Tell me your experience of that show.
[00:04:59] Speaker A: Have you been to that show often? Do you speak at that show often? Do you like that show?
[00:05:03] Speaker B: Give it to me.
[00:05:04] Speaker C: That was, that was the first time I'd been to that, that show.
I'm in the Canadian market for anyone who we haven't had a chance to meet before and so I, you know, quite often get to the one In Toronto every year. That was just actually last week and a half ago, first time in at the Barn Restaurant Expo in Vegas. And it was, it was awesome. I mean I find those shows are just so good from a. Exactly how you and I met. Right? They're good networking perspective. You just get to meet cool people and, and yeah, it was great.
[00:05:29] Speaker B: For those people who listen to this show, you know that I'm a big fan of Bar and Restaurant Expo. It's a big event. Used to be the Bar and nightclub or the Nightclub and Bar show. It happens in Las Vegas every March. It is a massive show. Probably the second biggest show in this country. Second only to the National Restaurant association show that's hosted in Chicago every year. But I love Bar and Restaurant Expo because it puts education front and center.
[00:05:53] Speaker A: Literally.
[00:05:53] Speaker B: The show's three days and the trade floors only open day two and day three. So day one is all speaker sessions, workshops, panel discussions. I usually end up giving my talk sometime on Monday. And it's one of the reasons that I love it. Probably my favorite part of this, this time around, because this is the fourth time I've done that show. Probably my favorite part was that happy hour that you and I were both invited to.
[00:06:18] Speaker A: It ended up being a bunch of.
[00:06:19] Speaker B: Like founders and CEOs, tech guys and like coaches, consultants, marketing wizards and gurus.
[00:06:27] Speaker A: And I felt like there was a.
[00:06:28] Speaker B: Bunch of really smart people in the room, at least people that I consider really, really smart.
And you came right up to me, to your credit. And I tried to corner all kinds of people in that room because I think it's really important that we know each other and that we get to know each other because we're sort of dedicated to helping owners and operators out there in different markets and in different ways.
[00:06:50] Speaker A: For those out there who don't know.
[00:06:52] Speaker B: You, explain a little bit of your history, explain what benchmar60 is and all the things that you do.
[00:06:59] Speaker C: Yeah, thanks. Well, thanks for the opportunity. And, and it, you know, I, I'd been following what you do for a long time, so I had to come and introduce myself. Really quick note on the Bar and Restaurant Expo though. So I had a chance to speak on the last day in the last time slot. So this is a credit to the Bar and Restaurant Expo and the people that go there because you're right, it's so education focused. I was joking with some friends that I'm in the last day, on the last spot in Vegas of a three day show. Nobody's coming to that session. Right. But I Was amazed at how engaged people were and how excited people were about just the opportunity to learn and move forward and you know, so anyways, it was, it was a great show and had a great experience. Can't wait to go back. Yeah, awesome. For those people who don't know me maybe because I, again, I'm, I'm in a different country or, you know, for whatever reason, I've been in hospitality my whole life. I always sort of joke about one thing that, and I don't know if I've told you this, but I was the kid whose parents taught to open beer and wine bottles when I was 10 or 12 or something so that I could help speed up the service at their Christmas parties.
That was my, that was my introduction to hospitality and I just loved it right away. I was just like, this is the, I'm the host, right? I'm 12 and I'm hosting my, this Christmas party kind of thing. So I got into restaurants right away when I was, you know, 12 and then got an actual job when I was 15 and away we went. But I, I had a long corporate career and, and you know, to try not to make this story too long, I, I was incredibly lucky to work for a very long time for a systems based, people based, growth minded company.
And I worked for them for 20 years. So I went, I started with them when they had three restaurants and helped implement and build systems to the point where they were doing half a billion in revenue. So I just, you know, had a really cool career and lots of opportunity to learn and grow within that system and that structure. And now fast forward to where we're at now. Benchmark 60 Restaurant Services was sort of born out of the pandemic as an accidental entrepreneurship type thing where imagine friends. Yeah, crazy, right? When I let, when I decided it was time to move on from the corporate operations thing, some friends who owned restaurants asked me for help and I, I just sort of fell into it. I said, okay, I guess I'm gonna do some consulting. I had no clue what that meant. I had no clue how to deliver it. I didn't even really know what I was trying to accomplish. I just knew I wanted to help.
And so here we are five years later. We work with restaurant companies all over North America specifically to help them optimize their business model. So labor, cost management, cost of goods, pricing strategy, menu engineering, those types of things. And there's huge ROI there. There's so much opportunity. So we get to work with really cool restaurant operators all over the world.
[00:09:38] Speaker B: So one of the cool things, you didn't speak specifically to it, but there's a whole other arm to your business that was of particular interest to me because I didn't quite understand what you were building. And over the course of a couple conversations, you filled me in, but sure. So you've got benchmark 60, which is obviously consulting or coaching group, where you're working on all that stuff to, you know, help bring efficiencies and greater profitability. Very familiar.
It's all the things that I believe. I think that's why we. We hit it off so well, because I believe in all the things you believe in. But then there's this whole other side of the business as well, where you're now helping to teach people what you've learned or teach people to do the things that you've gotten really good at doing. So explain that arm to your business.
[00:10:23] Speaker C: Yeah, that's. It's been a really interesting sort of organic part of our business. I mentioned that I started my consulting business or advisory or coaching or pick a term you want to use. Right. It started by accident. I had no clue what I was doing.
[00:10:39] Speaker B: Yeah.
[00:10:39] Speaker C: I didn't know how to price my service, how to. How to deliver the service, how to. I didn't know how to do anything. I. I was just trying to help. Right. And a friend asked for some help. So, sure, let's do it. But I, you know, you know about this as well, if not better than anybody else. The crazy thing about consulting or advisory or coaching is the business itself isn't actually about consulting or coaching or advisory. It's about how to get in front of people and how to position and how to talk about how you solve problems. And it's about all of these different things, components that go into helping eventually helping somebody move forward. Right. And so I find that I found that over the last few years, I just kept. The way I referred to it or sort of tell the story is that I just kept meeting people just like me. They were career hospitality people, or they are career hospitality people. They've had an awesome run corporately, or maybe they owned a restaurant and it's time to make a change or they want to start their own thing or build something for themselves. So they take this leap and overnight they become a consultant or a coach.
And they probably have really good skills and great ideas and genuinely care and they really want to help. They just don't know how to build the business side of it.
So we've basically taken all of the lessons without all the scars Basically, you know, and packaged them in a way where we can say, okay, so let's talk about what is it that you're trying to help? What or who is it you're trying to help? What is the problem you're trying to solve? How are you trying to get in front of people who do you even want to help and where are they? And really help new or aspiring consultants build scalable, sustainable businesses the same way that I built one. Over the last five years, Pop Menu.
[00:12:25] Speaker A: Has reimagined the restaurant. They're breaking the mold of the menu, taking the kitchen doors right off the hinges and serving up their most comprehensive technology solution yet. Pop Menu Max. It comes with the previous ingredients that we've talked about here on the podcast, right? Websites designed with SEO marketing tools that help keep you top of mind with guests, and of course, that patented interactive menu technology.
This new recipe brings automated phone answering to the table, third party online order aggregation, wait listing and more. Pop Menu's phone answering technology, for example, has your ringing phones covered with AI. The simple questions that used to keep your phone line tied up will now be handled by the computer without having to pull a staff member away from your in person hospitality. So all those questions that people ask can be answered by the AI server, by the AI phone answering service. So no more missed reservations, no more people asking for your hours or if there's parking or if you've got a gluten free whatever. Also, no more missed revenue. And that's just the beginning. You have a passion for food. Pop Menu has a passion for technology. Together that's a recipe for restaurant success. And now even more digital ingredients are in their technology pantry. And Pop Menu is helping restaurants attract, engage, remarket and transact with their guests on a whole new level. Trust me, if you're a restaurant owner, you need to look at Pop Menu to take your business to the next level. For a limited time only, get a hundred dollars off your first month. Plus you get to lock in one flat unchanging monthly rate. Go to pop menu.com/restaurantstrategy to claim the offer. That's $100 off your first month by visiting P O P M E N U.com RestaurantStrategy as always, that link is in the show notes.
[00:14:09] Speaker B: I think it's awesome. I had somebody so Jim and I talked about this offline. About a week ago I had somebody approach me and asked me if I do this, if I would teach him how to coach. And I said oh, I'm sorry, I don't really do that. I think it's a great idea.
[00:14:29] Speaker A: And he said, well, I was looking.
[00:14:30] Speaker B: At, yeah, I was going to talk to you, and I know Jim Taylor does this. And I said, oh, you should. You should talk to Jim if that's what he does. Which is really. Which spurred a whole other conversation that you and I had a week ago. And I said, oh, you should, you should go talk to him. If that's what he's doing, if he's going to teach you how to do it, then. Then yeah, absolutely. He's a. He's a smart guy. He knows what he's doing. And if he can systematize all of that, then great. So I think it's a really cool thing. Who do you find. Do you find.
[00:14:59] Speaker A: These are.
[00:14:59] Speaker B: So you said lifelong hospital mentality folk are these people who used to own restaurants and are saying, I don't want to do that anymore, but I still want to be. I still want to be able to pass on the wisdom that I've gleaned. Or, yeah, these people. Like, what do you find?
[00:15:14] Speaker C: There's. There's really two different. It's interesting because there's. There's two different scenarios. There's the. What I sort of refer to as the intentional consultant or coach or advisor. And the unintentional.
The intentional is maybe I had a restaurant and I sold it, and my mission is I'm going to go and help the industry move forward. And so I'm going to get into advisory. And it's funny, you know, I use those words interchangeably sometimes because people don't like the word consultant. But advisor, coach, whatever it might be, right? They take this, you know, intentional, I'm gonna do this.
And then they go, well, building this business is a lot different than writing the menu for the restaurant I used to own. It's completely, totally different.
Or there's the unintentional, which was like me. They decide that it's time to move on from the business that they were in, whether they were running a restaurant or owning a restaurant or in the corporate side of things. And then someone comes to them and says, I would love you to help me with this. And they, they say, yeah, that sounds really exciting. And they get one project right out the gates, and then they go, I don't know how to do that again. Yeah, I don't know where to find the next one. You know, I hear from people all the time that say, oh, yeah, my business relies 100 on referrals. Well, that's like, that's like relying on winning the lottery for income.
[00:16:32] Speaker B: Correct, Correct.
[00:16:34] Speaker C: So there are systems and strategies and ways to, you know, whether it's organically or, you know, through advertising or whatever to do that. But you have to build the business model around it. Otherwise, it's gig work.
[00:16:45] Speaker B: Love it. Okay, I'm gonna stick a pin in this conversation because it's really good. We're gonna come back to it because this has a lot to do with the new book that you've just released, and I want to spend some time talking about that.
[00:16:55] Speaker C: Sure.
[00:16:56] Speaker B: But I want to dive deep into sort of the opera. You know, operationally.
[00:17:03] Speaker A: You work with a.
[00:17:03] Speaker B: Lot of different restaurants. It's sort of the. The beauty of having somebody like you on the show here because you get to peek behind the curtain at a lot of different businesses right now where we're at. And I know things are a little bit different in Canada than they are in the U.S. but our listener base is mostly U.S. and Canada, and I think there are enough similarities. What do you think is the biggest thing that keeps independent restaurants, let's say, from being as profitable as they possibly can be?
[00:17:29] Speaker C: Well, again, you know, could answer that two different ways. But I think the biggest thing. And we're seeing the pressure on this more and more and more, especially in the last, call it, couple of months or Q1 of 2025, the whole cost of goods side of the business, and not just what's my food cost, but things that are deeper than that, that really make an impact. What's my pricing strategy? What's understanding things like variance between actual and theoretical cost of goods, the systems that go into cost of goods management. That whole side. That whole cost of goods side of the business is putting so much pressure on margins. It's. It's. It's never been seen like this before. Coming out of the pandemic, labor was the sort of like, number one tag, you know, word type thing. Right. It was the buzzword because you either couldn't get it or couldn't find it or couldn't afford it or whatever it might be, couldn't keep it.
[00:18:22] Speaker B: Yep.
[00:18:22] Speaker C: And it's dramatically shifted to cost of goods.
[00:18:24] Speaker B: Now talk to me about margins. So you spend it. You and I both spent a lot of time working with owners and operators on prime cost. People, listeners, this show will know cogs plus labor equals prime cost. Prime cost. Something we talk about a lot of time.
Is that where the Benchmark 60 comes from?
[00:18:42] Speaker C: So originally, Benchmark 60, when I accidentally got into the business, I thought we were going to build courses.
[00:18:49] Speaker B: Okay.
[00:18:50] Speaker C: Like, you know, 25, 30, hundred, 200, whatever it might be. I thought we were going to build digital courses because we were still in the pandemic. You couldn't travel, you couldn't see people in person. You know, so it was like, how do we give access?
[00:19:01] Speaker B: Yeah.
[00:19:02] Speaker C: So the name came from some benchmarking type things, right? How do we benchmark against using data and what historicals are and that type of thing. But also the intention was how do we generate ROI in 60 days? Okay, so the name was Benchmark 60. All the courses we were trying to build for whatever we were going to charge for them, you would make your money back in 60 days. And then we sort of went a completely opposite direction of courses and. But the name sort of stuck. Okay.
[00:19:28] Speaker B: So I want to stick on this because I like the name a lot and I like the idea a great deal. And I believe that meaningful change can happen as quickly as 60 days.
Assuming you can identify the levers quickly and you can take action on those. I firmly believe almost every single client I've ever worked with sees a meaningful impact. 60, 90 days into our work together, like it can happen that fast. I had two different phone conversations today with two new members. And I said, wait till you see the restaurant you're going to have in 90 days. It's going to look nothing like the restaurant. Where do you see the P and L you're going to have in 90 days? It's going to look nothing like the P L you and I are reading off of right now. And you obviously feel that, right?
[00:20:15] Speaker C: Absolutely. You know, think things like that pressure for around cost of goods. I know you do an incredible job with this.
Some of those systematic changes.
You know, you make systematic changes to how the menu is written or how the, the what the processes around waste management or receiving or recipient adherence or putting scales in the kitchen or any of those things. You make systematic changes to those and it dramatically will change the P and.
[00:20:45] Speaker B: L.
So then, okay, so you do this, right? So you do the, the consulting wizard thing. Give me, give me one thing. What's, what's one thing that a listener who's listening to this now could implement in their business that would make a meaningful like, like drop points to the bottom in 60 days? Like, I know you got a million tricks up your sleeve, but like, what's one trick? What's one thing somebody could do right now when it comes to menu engineering or waste management or you pick your favorite.
[00:21:14] Speaker C: Well, we've been, we've found that probably the lowest hanging fruit in most menus in independent, small, multi unit type companies is just injecting an understanding of, I mentioned this a minute ago, the, the concept of variance between actual and theoretical food cost.
Right. I was talking to someone about this the other day, saying to them, you know, the concept, or talking about the concept that if your menu is costed at, let's say 30%, you will never actually achieve 30 food cost ever. Because that means that you sold one of each item, which you're never just going to sell one of each item. It means that every recipe was 100% adhered to. It means that there was no wastage at all. It means that every order that came in the back door was absolutely perfect. There was no returns, no spoilage, no anything else. No one stole a pack of steaks and walked out the back door. You know, all of those things happened. So it will never actually be 100%. So understanding first the variance, that there's a variance that will always happen between actual and theoretical, maybe it's 32% is where it should have landed, maybe it's 38%.
You know, then we factor in things like sales mix and we could, we can understand that it looks like it should have been 30, but it actually was 38. That means there's an 8% opportunity. If we can just narrow that through some of Those systems in two months, we could get 4% back probably you could get half of it back really quickly.
You know, you say to a restaurant operator, do you want me to show you how to put 4% on your bottom line overnight? I mean, it's, there's a big number there.
[00:22:56] Speaker A: Running a restaurant means juggling a lot. Staffing, inventory, customer service and finances. Sales tax has to be done. And while no one plans to miss a deadline or miscalculate a payment, mistakes happen. When those happen, they can lead to penalties, fines and yeah, added stress. That's why there's Davo by Avalara. Davo integrates with your point of sale system and automatically sets aside sales tax daily, giving you a clear view of your actual cash flow. Then when it's time to file, Davo files and pays your sales tax on time, in full, guaranteed. No more last minute scrambles or costly mistakes. Just seamless automation. Thousands of restaurants trust Davo and with a 4.9 star rating on G2, it's a proven solution. Your first monthly filing is free with zero commitment. Get started
[email protected] RestaurantStrategy. I will add in Here. This fits in perfectly with what we're about to talk about again. Davosalestax.com RestaurantStrategy and yes, that link is in the show notes.
[00:24:03] Speaker B: It's funny when I, I didn't realize so which is why I asked about the name Benchmark 60 and your definition of is so much cooler than mine. But I thought it was referring to prime cost because you and I spent a lot of time talking about prime and I think for me 60 is the benchmark. Anything over 60 you can't make money or you can't make meaningful money. I think it's great if we can get it to 55 or below. Certainly there are concepts that lend itself to 55, 52, 50% for a full service restaurant in most of North America. I'd say if we could benchmark our prime cost at 60%.
That's a good rule of thumb.
[00:24:42] Speaker A: Do you subscribe to that or do.
[00:24:44] Speaker B: You think about that differently?
[00:24:45] Speaker C: I do. I, you know we. Not that maybe it's partly to do with some of the markets that I grew up in.
The Western Canadian market. And this applies to certain states for sure and other countries in the world where wages are so high that a restaurant like I literally talked to a restaurant the other day that was running 82 prime cost.
[00:25:10] Speaker B: Can't make money.
[00:25:11] Speaker C: Not a chance.
Our goal was to get them to 70.
[00:25:15] Speaker B: No, can't make money.
[00:25:16] Speaker C: They make a little bit of money.
[00:25:17] Speaker B: A little bit.
[00:25:18] Speaker C: But it's better than no money. And you know, but, but in that, in that market their, their average employee wage removes salaries from the conversation. Their average wage is $20.
[00:25:31] Speaker B: I totally hear you. It's funny. Episode 331. To anybody who hasn't listened to this before, it's my interview with Kevin Boehm. Kevin Boehm is obviously one of the Co founders, co CEOs of Boca Restaurant Group. That guy knows a thing or two about running profitable restaurants and he was very honest in talking about how he thinks about making money in his restaurants.
And he said he's in Chicago, downtown Chicago, fine dining. He's like, I know my restaurants can't. I can't get my all in labor lower than 38%. He's like, and I also know that I can't make money if my prime cost is higher than 60. Which tells me that I blended COGS beverage plus food actual what's on the P and L can't be higher than 22 because 60 minus 38 equals 22. And he said everybody knows we are Laser focused. And so he talks about how he benchmarks every single line item. He's like, I know in October when.
[00:26:22] Speaker A: I do this much revenue, I know.
[00:26:24] Speaker B: I can't spend any more than Y dollars on soap for the bathrooms.
[00:26:28] Speaker A: I know.
[00:26:29] Speaker B: I mean, he literally has everything benchmarked. But when we talked about prime cost, he says, I know the number 60, I can't make money. Can't make the money. I know I need to make for my investors, for, you know, what I deserve to make from this if my.
[00:26:42] Speaker A: Prime is over 60.
[00:26:42] Speaker B: So if my labor is at 38, 60 minus 38, that's what I've got left for my cost of goods. And that tells me where. That tells my team what can and can't go on the menu, how much of a given item gets portioned on there. And we have to get really creative. We have to do, you know, different. Different things. He's like, it's bred all kinds of creativity in, in the kitchen because of the limitations. And he says something that, that I've now repeated over and over. He said, you know, remember, the rules are what make games fun. He's like, you know, that's good.
[00:27:15] Speaker A: The rules.
[00:27:17] Speaker B: Yeah, we can run the best restaurant in the world.
[00:27:19] Speaker A: There's a really.
[00:27:19] Speaker B: There's a reason El Bulli isn't here anymore. There's a restaurant, there's a reason NOMA closes next year, because they don't adhere to the rules of labor.
[00:27:28] Speaker A: Great restaurants. Yes.
[00:27:29] Speaker B: You and I could put together the best restaurant in the world, but it would require so many people and so much and so much that we couldn't make money and. Or the people wouldn't be properly compensated. So part of the rules. Right. The constraints on there are also what breeds creativity and makes this a fun venture worth going into, which I just, I constantly have to remind myself. I just love that quote.
[00:27:53] Speaker C: You know what I think that, that immediately sort of brings to my mind is if the rule is 60% cost combined, then, you know, the ways to. The exciting and fun ways to go after that are don't look for ways to cut things. It's things like how do we drive the average guest check higher so that it drops the percentage?
[00:28:17] Speaker A: Sure.
[00:28:18] Speaker C: Or how do we look at, you know, the one little bit of wiggle room that we usually, you know, try to practice what we preach in our own restaurant and really talk a lot about is contribution is just as important, if not more than percentage. Right. And if it. If we know that, let's say 22% COGS is where we want to land, but we end up at 24 because we sold a whole bunch of items that have really high dollar contribution. Meaning it's help the cause the percentage to climb a little bit.
That's probably okay because it's going to help the labor come down a bit.
[00:28:49] Speaker B: Sure, sure.
[00:28:50] Speaker C: But you know, there's so much, there's so much more dynamic around that type of stuff now than there used to be. Especially in some of these high wage markets like Vancouver or Chicago or, you know, it's just getting harder, you know.
[00:29:00] Speaker B: There, there's something that was lost.
I've thought a lot about this, I read a lot about this. I went back to business school, got my MBA to sort of seek this out. He said, you know, restaurants are ubiquitous, right? They, they're easy to like get up and running, right? Like I know how to cook, I'll.
[00:29:19] Speaker A: Go buy food, I'll prepare it and I'll make great meal.
[00:29:21] Speaker B: Like that's the best part about what we do.
The sort of ubiquity of it though really comes from the profitability. He's like, and I think we've turned our eye to this, or we've turned our back on this, I should say. And, and now we're starting to turn our eyes back over our shoulder and we're realizing the reason there were so many pizza joints is because pizza can go out at 11% cost. The reason there are so many Chinese restaurants all over, right, over the last.
[00:29:49] Speaker A: You know, 80 years is because it's relatively low cost.
[00:29:52] Speaker B: They are profitable.
[00:29:53] Speaker A: Cogs are very low in those. The reason there are so many bars.
[00:29:56] Speaker B: Is because cogs are very low on alcohol.
And I think if we, if we lose sight on this, right, it's fine to run this really fantastic fine dining restaurant, but like you know, you know, carefully sourced, organic, local, grass fed, all that is expensive right there, there are costs that and, and it's fine. So I love when I get people who say, well, I just can't charge.
[00:30:20] Speaker A: What I need to charge.
[00:30:21] Speaker B: I said, well then, then you're not being clear on your value proposition, right?
[00:30:25] Speaker A: Saying we have curated, we have sourced.
[00:30:28] Speaker B: All of this great product and that comes at a cost. We believe it's worth it. But if you don't charge what you.
[00:30:35] Speaker A: Need to charge, then what you're telling.
[00:30:37] Speaker B: Your customers that you don't believe it's worth it.
[00:30:40] Speaker A: So you're saying we believe this is worth serving.
[00:30:42] Speaker B: But like I know you don't really want to spend this and it's just there's a reason that Whole Foods is meaningfully more expensive than every. Than every other supermarket out there. Because they're saying, we've sourced all this.
[00:30:54] Speaker A: Responsibly and ethically, and we've gone out.
[00:30:56] Speaker B: Of our way and we've curated a collection of products that we think is.
[00:31:00] Speaker A: Worth the added cost.
[00:31:02] Speaker B: Now, as a consumer, you don't have to believe them or agree with what they're saying, but they do put their money where their mouth is. And in the restaurant industry, again, we talk about margins. Like, we live and die by these margins because we say, well, I don't.
[00:31:14] Speaker A: Know if people will really be willing to pay it.
[00:31:16] Speaker B: It's like, build a product, create an experience that people can't help but pay, that it's worth splurging for. I always use Disney World, right? There's only one Disney World. If your kids want to go to Disney World and you're like, well, we're gonna go to Six Flags instead, they're like, what? No, we wanted to go to Disney. There's only one Mickey Mouse. You're only gonna find in one place, you know, and create the kind of experience that is worth going out of your way for. There's only one Disney World. You gotta go all the way to Orlando to get it right.
[00:31:45] Speaker A: All these parks, all these hotels, all these water.
[00:31:47] Speaker B: Like, there's only one place like it in the world. Yeah, you can go to Disneyland. Yeah, you can get a little version of it.
[00:31:53] Speaker A: But if you want the full throttle.
[00:31:55] Speaker B: Experience, you got to go out of your way. You got to pay extra. You got to, like. You got to clear time, all of that. There's a. There's a. There are additional costs that come with that.
[00:32:04] Speaker C: You know what's interesting about that? Just the. The devalue.
The devaluing part of the business thing that you're talking about. It's interesting because that happens a lot. You're right. In restaurants, there are thousands of people leaving operations or ownership of restaurants to get into advisory. We see the same thing happen.
[00:32:24] Speaker B: Yeah, sure, right?
[00:32:26] Speaker C: They go, I'm going to just charge less to hopefully get someone to take me on to help them. And it becomes a really, really tough model to.
[00:32:33] Speaker B: To build on at the end of the day. It's funny, when we were at a bar restaurant expo, the talk I gave, which for anybody listening to this, it's episode 438. I recorded that talk, and I put it out there for anyone, Anyone who couldn't be in Vegas. I'd love for you to hear that. It's a talk I was invited to give in Auckland, New Zealand, coming out of the pandemic. They were really suffering through the pandemic. They suffered way more than the US or Canada or anywhere in Europe. They had a real, real problem and for very political reasons and all of that. But the talk I gave there, I was invited to give at Bar and Restaurant Expo in Las Vegas just a little while ago. And I recorded it again. Episode 438, I hope. Listen to it. And it's. It's about this getting, you know, getting into the luxury mindset. Not serving luxury products, but saying, you know, the Birkin bag, the most famous handbag in the world, starts at $35,000 US and it costs roughly $900 US to make, right? Like, there's a massive markup.
[00:33:31] Speaker A: And they're not interested in margins.
[00:33:33] Speaker B: They're not protecting, not thinking about their.
[00:33:34] Speaker A: Labor cost or the cost of the leather or the stitching.
[00:33:37] Speaker B: They're not thinking about that. They're charging with the market will bear. They're charging what they can get away with.
[00:33:42] Speaker A: It's the same thing. Any great luxury good.
[00:33:45] Speaker B: It's how diamonds are priced. It's how luxury cars are.
[00:33:48] Speaker A: How do you price a Ferrari?
[00:33:49] Speaker B: I don't know, man. Whatever people are willing to pay like, they're going to get what they will get. And I want our industry to get back to that so we're not in.
[00:33:58] Speaker A: The way.
[00:33:58] Speaker B: You get out of that is, you know, is by getting away from this commodity talk, right? So the same thing you're talking about other consultants, coaches, advisors, you know, people saying, well, I'll do it and I'll do it, but I'll do it a little bit cheaper than the competition. Then you get into the commodity mindset, then you're Walmart.
It becomes a race to a bottom.
Instead, get yourself to the place where you are creating something that cannot be duplicated, cannot be replicated, right? There's only one Jim Taylor. There's only one chip close. There's only one whatever it is, Disney World, Mercedes, Ferrari.
[00:34:30] Speaker A: If you want a Ferrari, Maserati is.
[00:34:32] Speaker B: Just not going to cut it.
[00:34:33] Speaker A: It's just not Ferrari.
[00:34:35] Speaker B: So get to the place where you're creating something. Because if you say, yeah, we got a sushi restaurant. I use sushi in the talk. It's like, oh, yeah, yeah, no, no. We got spicy tuna rolls. We got spider rolls, we got rainbow rolls. You're like, okay, so does the place right down the street, so does the.
[00:34:47] Speaker A: Place right around the corner.
[00:34:48] Speaker B: So does the place across the street. I can go into a sushi restaurant in almost anywhere in the world and pretty much get a spider roll, a rainbow roll, a spicy tuna roll for me. And I think for a lot of consumers, they're interchangeable. If you're in the mood for that, great. But it becomes a race to the bottom.
[00:35:03] Speaker A: Unless you tell me that this is.
[00:35:05] Speaker B: Different and why it's different, why it's worth going out of my way for, seeking out, paying a little bit extra for. I feel really passionate about it, and I think. I think it's the only way out right now. We started talking about how to guard margins, labor, and cost of goods. The only way to do it is not play the margin game. It's just to untether yourself for margins. And I don't know how we do it as an industry, but I know at the individual unit level, you can do it.
[00:35:27] Speaker C: You can. Yeah, you know, I can. I wholeheartedly agree with everything you're saying. And the value thing is incredibly important. You know, if there's. For those that are listening, I'm sure that, you know, you. I know you go through some of this stuff too, but I. I really passionately believe that in order to go even one step in the right direction, try to just remove percentage from the conversation for a minute.
And what I mean by that is go. What's my. What's the average wage I pay? Is it going up or going down? If it's going up, and I didn't do it on purpose, there's a problem. What's happening with average guest check? Is it going up? Is it going down? If it's going down, that's a problem. You know, I saw a stat, and this is. This is the Canadian version, but it would be very similar across North America.
The average restaurant right now is seeing a 5% decline in guest count.
[00:36:19] Speaker B: Yeah.
[00:36:20] Speaker C: If your guest count is declining, it's making everything harder. So, you know, rather than saying, oh, labor is high, let's look at guest count, because that's impacting revenue, which is impacting the percentage. You know, so breaking it down beyond just the percentages, I think, is. It's just an incredibly important part of the, you know, solving the puzzle.
[00:36:36] Speaker B: Jim, you know what I feel really strongly about? I feel like my.
My job as a coach, right, with the clients that I work with, is he has to show them, you know, how to xyz. But more than anything, it's to make sure my clients and now the listeners of this show, make sure they understand they have Agency that, that. I think a lot of people out there, and I'm guessing a lot of listeners feel this way. And if you've never heard me say this, here I am saying it. You have more agency than I think you realize.
[00:37:05] Speaker A: You have more control.
[00:37:08] Speaker B: You can maneuver and manipulate things.
[00:37:10] Speaker A: You are nimble.
[00:37:12] Speaker B: Certainly much more so than I think we like to think. Like, oh, the price of this is going up. Oh, the price. Minimum wage.
[00:37:17] Speaker A: Oh, I gotta pay.
[00:37:19] Speaker B: There are forces there. But I think if you stop, take a deep breath, step back from the thing and like you're saying, just.
[00:37:25] Speaker A: Just look around.
[00:37:26] Speaker B: Are we going up? We going down? Is it going. You know, where is it going? And understanding that you've got agency, that there. There are things you don't have agency on, right? There are things that you have no control over or limited control over. Fine. You negotiated your lease once, four years ago. There's nothing you can do about that. But in almost. In most other meaningful areas of the business, you have.
[00:37:49] Speaker A: You have some control over. Revenue is a controllable.
[00:37:51] Speaker B: You can control what you serve, how much you charge for it, how many people you get in.
[00:37:57] Speaker A: You can control how good you are.
[00:37:59] Speaker B: Getting people to come back, increasing the frequency of visits. You do control what products you buy, how much you portion, and how much you ultimately charge for them.
[00:38:08] Speaker A: You're in charge of the story you.
[00:38:10] Speaker B: Tell people as to why you're charging, what you're charging. Why does the French Laundry get to.
[00:38:14] Speaker A: Charge what they charge?
[00:38:15] Speaker B: I don't know. Because they tell a really good story about it.
[00:38:17] Speaker A: Because Thomas Keller is a good story. Because the French Laundry is a good story.
[00:38:20] Speaker B: Because Napa is an extraordinary place.
[00:38:23] Speaker A: It's a good story. Right before we hit record, you and.
[00:38:25] Speaker B: I were talking about Vancouver, talking about Whistler. I just went to Whistler for the first time, right?
[00:38:29] Speaker A: I can go skiing in New York State or Vermont. Why did I travel 3,000 miles, cross.
[00:38:35] Speaker B: A border, drive two hours north of Vancouver to go to Whistler?
[00:38:39] Speaker A: There are reasons, right?
[00:38:40] Speaker B: There's a value proposition. There are tangible reasons as to why I did that. And why do they get to charge 2x what most other. What most other places do? There's an answer to that. And people can either choose to be part of that story or not, but there's. There's a reason for. There's a reason for that.
[00:38:57] Speaker C: So true. And it's a beautiful drive.
[00:38:59] Speaker B: It's a beautiful drive. 99 is a special, special road. And we got a cab up there. We got a car service to take us Up. Which I'm glad because I think I would have killed us three times on the way up and twice on the way back down because it is a windy, beautiful road. I would have been stuck looking out at the scenery and taking us right over the edge. Jim, I want you to take a few minutes here before I let you go to talk about the new book. So you wrote a book and then you wrote another book.
[00:39:28] Speaker C: I did, yeah.
[00:39:29] Speaker B: And they were sort of back to back, like.
[00:39:32] Speaker C: Yeah, yeah, they were. You know, I tell people all the time I'm an accidental entrepreneur and I'm also a accidental author.
[00:39:40] Speaker B: Yeah.
[00:39:41] Speaker C: It wasn't part of the original plan. Fine. But it was a way. And you know all about this, right? You just want to try to give as many ways to help as possible.
[00:39:50] Speaker B: Yes.
[00:39:52] Speaker C: Low access, easy access, high, whatever it might be.
[00:39:54] Speaker B: Yeah, take it. This is Sean Walsh. This is something I learned from. From Sean Walsheff. So you and I are both friends with Sean and he came on the podcast and he says you don't get to dictate how people want to learn. Some people want to listen to a podcast, some people just want to watch bite sized videos on Instagram. Some people want to read a book and mark up the margins. Some people want to listen to the audiobook, some people want to watch YouTube.
[00:40:16] Speaker A: Some people want to go to a.
[00:40:17] Speaker B: Trade show and hear you speak there. Like you sort of have to be. It's the generous thing to do. It's. I was really struggling with writing my book. And he's like, it's. It's selfish of you to not put it out in different forms. He's like, the generous thing to do is to put it out in all the different ways so that you don't dictate how people have to come to you. You're meeting them where they are, so. I totally hear you. I interrupted. You keep going on.
[00:40:40] Speaker C: So no, you wrote the book and.
[00:40:42] Speaker B: You wrote another book. Back to back.
[00:40:44] Speaker C: Back to back, yeah. They both came out in, in one year, so we were working on them simultaneously. But yeah, the first one is called Bold Operations and it is, it is about how people first leadership in hospitality impacts the bottom line. It's about systems and strategy and ways to improve, you know, the modern restaurant and the success mobile router.
[00:41:05] Speaker B: It.
[00:41:06] Speaker C: While we were working on that and sort of over the last couple of years, like I said, thousands of people are leaving operations or ownership to get into advisory and coaching. And I was having this conversation over and over and over and over with clients and with friends and all kinds of things. So the second book that just actually hit Amazon last week, 10 days ago, is called Bold Consulting. And it is the framework that we've used to build a scalable, sustainable, profitable consulting business. It's based on, you know, things like how to go from grinding for hourly work that, you know. Unfortunately, this might sound a little bit controversial, but typical consulting, especially in hospitality, is gig work.
It's a three month project that takes you away from everything you want to be doing with your life. You don't see your family for three months because you're working so hard as the interim GM to fix the restaurant.
[00:42:01] Speaker B: Yep.
[00:42:02] Speaker C: And then you, then you don't have a job for two months while you're looking for the next one. Right. So it's everything we've used in terms of everything from how to create content that speaks to the people that you want to be speaking to, how to build audience, how to position strongly, how to go from hourly to retainer based pricing, all of this type of stuff that is really just based around value.
[00:42:24] Speaker B: I love it. I love the first book. I have not read the second book yet because it just came out while I was away on vacation. I will get that.
[00:42:32] Speaker A: We're gonna put the links to both.
[00:42:33] Speaker B: Of those books in there because it's just really good. I just, I'm constantly trying to learn. So for all the listeners out there, I'm constantly trying to learn. I think I'm pretty vocal about that. I read a lot, I watch a lot, I attend a lot of these shows. I try to, you know, shove my hand in people's faces and introduce myself. Jim is one of the people that I'm really glad about, for anybody out there. So we're going to include the links to both of the books in the show notes for anybody out there. I'm sure there are, because my listeners are, you know, this audience is made up of owners of operators, of longtime, you know, career hospitality folks. I want to make sure that we're sending them to the right way.
[00:43:14] Speaker A: Where do they go if they want.
[00:43:16] Speaker B: To learn about the program you run to, you know, yeah, they're going to read the book. But to train people, to teach people to give them the tools they need to sort of launch their own business. How do they go? How do they go and learn more about that?
[00:43:29] Speaker C: The best place to find it is honestly is to find me on LinkedIn and then you'll start to see things about, you know, some of the content we create about it. We have a really good Newsletter series on it. We talk a lot about that kind of stuff there. And there's, you know, beyond the book, multiple ways to get more information. This is. Some people tell me I'm crazy for this and, and you might be one of them. We don't have a website for it.
It's not about, you know, big in your face branding and all that kind of stuff. It's about helping the specific people who want help. So all of our stuff is, is in one place. It's all on LinkedIn. We, we talk about it a lot. We create content about it, we write newsletters about it. It's all about adding value and they can find us there.
[00:44:09] Speaker B: Okay, so I will include the link Also to your LinkedIn and I will say I do think you're crazy in the same way that Sean Walshef sort of said, because if your goal is to help people, I think you want to make it as easy for people to find you and find that help as possible. So even if it's just like a landing page where it says, you know, submit this form and we'll send you more information or we'll start a conversation, I do think it's the generous thing to do to create just a simple website for it. But include the link to the books, include the link to your LinkedIn page so people can connect with you and, you know, inquire more about that. Because I think it is a really cool thing you're doing. And back when I was starting consulting back in 2016, I didn't have anybody.
[00:44:53] Speaker A: I saw people doing it, but doing.
[00:44:55] Speaker B: It the way I didn't want to do it. And then when I over the pandemic, when I switched from consulting to coaching, really, because I was in store. And then I couldn't do that anymore, so I became over the phone and zoom. I didn't have anybody there really, you know, to look up to sort of guide me on my thing, which is you, you started it, you launched it to scratch your own itch. So I appreciate that.
[00:45:17] Speaker C: Thanks.
[00:45:18] Speaker B: I want to, I want to ask you last words of wisdom. So it's hard right now. We're, you know, labor is, labor market is softening, but still hard and cogs are through the roof and volatile. We'll say final words of wisdom. Any insights, anything you'd share with, with the audience here to help them do it better, more effectively, more profitably?
[00:45:43] Speaker C: You know, right now, I think it all, it all starts with menu.
You know, you talked about value prop, but beyond that, you know, if you don't have a specific pricing strategy. If you can't tell someone, it's priced for this way, for this reason. If you can't tell someone, this item is on the menu in this place for this reason. If you can't tell someone, this item is the most profitable on our menu and this is why we sell it as often as we can. You know, those types of things. If you haven't engineered the menu in a strategic way, there is massive opportunity. It's really quite simple to do so. You know, talk to people like you. There's lots of resources out there. It's actually quicker than most people think. And it's, it's a, it's really low hanging fruit.
[00:46:26] Speaker B: I always say it's that menu matrix thing, right? It's the, it's understanding the profitability and the popularity of your item and putting all of your items in a given quadrant and say, man, which, which my ones that are doing the heavy lifting for me and which are the ones that are just dragging me back. And John Taffer talked about this when he was at the show, talked about, you know, the sort of the compression of the industry that we're figuring how, out how to do things with, with a smaller menu, a smaller footprint, less staff, like everything's just compressing. It's just not possible to do it the way we did it in the 90s, 2000s and you know, pre pandemic. It's just, it's just a different world now.
[00:47:03] Speaker C: A really quick, a really quick example on that. And then I know we got to jump off here. I was talking to a restaurant operator. I asked him, why is your menu positioned the way it is? Why is it written the way it is? He said, oh, it's alphabetical.
We immediately went, okay, let's talk about this. We made some changes. It took two weeks to go through his process, you know, get the team involved and sign off and all this other stuff. It immediately added A$50 to their average guest check and drop their food cost by 2 points just by re engineering.
[00:47:30] Speaker B: The menu, just by putting it in a different order.
[00:47:34] Speaker C: Right?
[00:47:35] Speaker B: It's, it's, it's so true. You have to understand, you have to understand what's doing, what's doing all the work for you.
Jim, I have loved getting to know you over the last little while. Like I said, love the first book. I can't wait to read the second book. I'm excited that you were able to talk a little bit about it here today. Again, everybody listening, we're going to put the link to both books in the show notes. We're going to include the link to Jim's LinkedIn profile so you guys can connect that way.
Jim, keep up all the hard work. I appreciate it. I have a feeling we're going to have you back to have a deeper conversation. I think we should have you back from time to time because you're just. I like talking to people smarter than me.
[00:48:17] Speaker C: Oh, come on. Thank you for the opportunity. Appreciate it.
[00:48:20] Speaker B: Thanks, Jim. I appreciate it. Have a good day.
[00:48:23] Speaker A: So, once again, big thank you to Jim for taking time out of his day to chat about his new book, to chat about the work he does, to chat about the impact that he's making towards restaurant owners all over North America. If you want to learn more about Jim, all those links are in the show notes. And don't forget, the National Restaurant association Show is coming May 17th. 17th through May 20th. I am on stage the last day of the event. It's going to be a great talk. It is all ready to go. I'm rehearsing it, making sure it is all ready. If you go to nationalrestaurantshow.com and you use my code CHIP25, you get 25.
[00:48:56] Speaker B: Bucks off your tickets.
[00:48:58] Speaker A: Thank you very much for being here and I look forward to seeing you in Chicago.
