Restaurants often wait until until it is too late before asking for help. Far better to call in the experts before disaster strikes and avoid the need for rescue altogether. Chris Sheedy reports.
There is plenty of research showing how successful a restaurant can be in the few months after it opens. Fresh staff, excited owners, a newly decorated interior and customers eager to try the newest offerings all make for a glowing honeymoon phase. Then comes the 100-day slump when those very same customers find the next big thing, the media is no longer interested in your start-up story, and the real world kicks in.
That is often when a restaurateur’s lack of preparedness and planning is rudely revealed. After that honeymoon period, restaurant consultants say reality begins to bite and if you are not 100 per cent prepared to run a lean and motivated business team aligned with a bulletproof strategy, your business could very easily fail.
“It all has to begin with a vision,” says Michael Fischer, business broker and restaurant consultant with Michael Fischer & Associates. “If the vision is not clear and if it is not based on a market need, or if the vision is to copy somebody else who is doing well, then there is likely trouble ahead. On the other hand, if somebody does have a vision and knows exactly what they want to do and why they want to do it, it makes creating a successful business a lot easier.”
Fischer, who in the past has held the positions of NSW president and national president of the Restaurant & Catering Industry Association, says he is sometimes called in as a consultant when it is simply too late. When this occurs, he is expected to work miracles.
“When you’re a new business, you start off with a lot of money and you employ a good designer, a good architect, a great chef and a publicist,” he says. “For the first 100 days you succeed based on that. If you’ve been able to create a niche, something different or something perceived to be good value, then you could succeed. If not, then you could fall by the wayside and become a historical statistic.”
So how does a restaurant owner best utilise the services, experience and clarity of vision of an external consultant in order to avoid becoming a statistic?
Seek advice early
The most successful business people often employ external advisors—or at the very least, they bring a mentor on board to ensure they are constantly improving and are not allowing any bad habits to develop. For the very same reasons, a restaurateur should bring a consultant in to their business as early as possible.
“I’m a consultant, so of course I’d say businesses should bring a consultant in from the very beginning,” chuckles Tim Muxlow, restaurant consultant from Food Business Consultancy. “But it really does help. One of the big problems is that everyone thinks they’re an expert when they first go into business. Then they only realise they need help when they get into serious trouble.”
Muxlo says that many people who contact him don’t even have enough money left to pay him for his services. Their dream has truly become a nightmare.
“Bring a consultant in early and we can offer help and guidance with business planning, financial forecasting, budget analysis and more,” he says. “We can set you up with the right suppliers, shape the right menus and organise staff training.
“One of the mistakes I often see is that a particular chef will write a menu and—as we know— chefs can be quite transient. When they leave three months later, the customers become annoyed because they liked the food before and now it’s not the same, so they’ll never return. I try to set up a business that has a set menu then we leave the chef to be creative with the specials, so at least most of the menu is consistent.”
Don’t rush in
The main message from our experts is that planning, and an intimate knowledge of every inch of your business, is everything. A consultant can help make this a reality. A restaurateur should never rush in or assume the management of the business is going to be easy, they say.
“Do the planning in the beginning and make sure everything about the business,
including the restaurant’s appearance, fits what you are offering,” Muxlow advises. “Do your research and develop your business plan. Make sure your finances are in place and do a budget analysis to ensure you can survive the long term.”
The reason an intimate knowledge of all of your business’s processes, costs, people and operations is vital, Michael Fischer says, is because absolutely everything about your business is interconnected—if you are looking to make a change in one area of your business, it is going to require adjustments in other areas.
Fischer explains, “If I say to somebody that in the industry sector they are in, their cost of goods should be no more than 28 per cent of their turnover, but in actual fact they’re spending 37 per cent of their turnover, what are they going to do about it?
“How do they look at their menu and how do they analyse the menu composition? How do they look at, and adjust, their buying? How do they make adjustments to the relationships they have with their suppliers? Do they know the value of the items that are being stolen from them, or that are being wasted?”
“All of these things can make an enormous difference. It is possible that you need somebody from outside the business to help you develop the skills to know your business in as much detail as you need to in order to run it successfully.”
Finally, Fischer says, once you employ a consultant, make the changes they recommend. Don’t just consider the changes then continue doing what you’ve always done. Often the single most difficult option is change, but if the business is dying then it is also the only option.