Success is a byproduct of commitment to goals

By Steve Slowey

So I have finished my first week at a restaurant that I have owned but recently took over all the GM duties and it was not easy.

I live a relatively relaxed life and enjoy my routine. Taking on this project has certainly changed all that. I started by making an honest assessment of what was needed and created realistic goals for myself and my management. I narrowed the focus of my managers so I would not overwhelm them and I took on the brunt of the load. This particular store had several systems in place and really it had too many. The systems were burdensome and created so much of a workload that the primary function of the employee was replaced by all the additional tasks they were made to do. An example would be the servers, their primary function is to take care of the guest and insure that the guest experience is of a standard that the guest would become a repeat customer. The systems that were in place had the servers doing so much additional work that they were unable to properly attend to the guests needs and it showed in declining revenues. First, I redistributed the workload and made the guest the priority and did away with excessive tasks. I also worked hard to win the respect of my employees so they would be more willing to accept me and my philosophies.

Success is a byproduct of hard work and commitment and it begins at the top of every business and trickles down to all involved. I have to be willing to put in the work and make the time investment to ensure that the goals I have set are accomplished. I also have to be the one who accomplishes my goals and cannot expect them to be met by handing them off to someone else. Every successful business has a strong leader and this particular store was in desperate need of that. What keeps me going is that if I do this correctly, the time I am investing will pay dividends in the future not only by increasing the value of this store, but also by allowing me the ability to enjoy my life.

So many times in my professional life I have come across businesses that are in decline because the owners are unwilling to give up their personal time to properly correct the issues. People do things for only two reasons, either they want to or have to and if you wait till you have to the risk of failure will be much greater.

These next couple of weeks I will work to have the systems in place that will allow me to fiscally manage my cost of goods and labor to insure profitability. The retraining of my staff will be ongoing during this process and will continue until I see it executed consistently and achieving the desired goals. Once this is complete and my foundation is solid I can rebuild my revenues and feel confident that they are stable.

Do you have what it takes?

By Steve Slowey  

Recently, I took over an existing restaurant operation and though I consider myself pretty smart, I was overwhelmed by the challenge and the magnitude of problems.

In 2012 the store was a powerhouse. It performed very well, but due to a number of issues, it has continued to regress to the point it is now; down 2% from 2015 which was down 2% from 2014 etc. Needless to say, the store is down and I have to fix it. I will share with you my assessment of issues and my plan to repair.

My first day at the restaurant, all the employees of course, were worried. They acknowledged things were bad but they were reluctant to change. They all wanted to let me know how long they have worked there as if that is some “get out jail free card”. (Personally, I would have stayed quiet, since the reviews on the store are really bad.) So I have a bunch of “entitled” employees (refer to previous blog posts) rather than productive employees. The other issues I saw are poor operational procedures and lots of discounted pricing. My guess is that the discounted pricing was used to increase traffic and/or to offset slumping sales {it did not work}. Labor costs were way too high and my cost of goods was 6% high due to discounting and poor procedures.

My biggest challenge is ME. I have to be willing to asses the situation, put a plan together, and execute. My plan takes me to my goal and to get there I have to be focused and committed without time and energy restraints.

If you’re faced with a similar situation, you had better be willing to do it the right way or you will add to the issues, and further devalue the business. This business is worth it. The first step I had to take; determine if the ROI was worth the time and energy and cost to repair what is broken.

This week I will put the focus back on the customer and not the employee. I will evaluate my staff to build the team I will need to accomplish my goals. My blogs going forward will be a journal, documenting my plans, struggles, and accomplishments. These are the realities of being in business and when you’re the leader of your business, you had better know what direction you are heading.

The Entitled Employee

by Steve Slowey

Let’s talk about the evolution of Employee X. When Employee X starts a new job in, say the restaurant industry on the staff level, he/she is eager and ambitious, no task is too large, they stay late and arrive early. As time passes Employee X establishes tenure; and so develops a behavioral fork in the road. Which path Employee X chooses is largely based on the operational systems in place within the restaurant.

A typical restaurant operates with rewarding tenure. We’ve all heard it: “Mary’s been here for 10 years, so we promoted her to General Manager”. Now it may be that Mary is an exceptional employee that out-performs all of her counterparts, runs circles around the other servers, and truly deserves the promotion to General Manager. But in most cases at a typical restaurant, this type of promotion is not based on productivity, it’s solely based on tenure. If you value an employee for their tenure rather than their productivity, you will likely have several mediocre employees with an inflated sense of self-worth. You will spend ten times more time coaching, training, motivating, and counseling this type of employee than any other.

The better way to manage employees is a system based on rewarding productivity. This type of system should be rooted in accountability. When I developed systems that revealed who my most productive employees were, tenure based entitlement was gone! Employee X, regardless of his/her tenure, could be the most productive one week, and perhaps the least productive the next. That iteration in itself, didn’t solve the entire problem; I needed a more consistent productivity outcome. So I then developed systems that scaled my employee’s productivity, meaning I created an acceptable range within which they were rewarded for staying. Furthermore, when they fell below that range, there was a consequence. When I implemented this system and followed through with it, I found a profound Increase in productivity across my entire staff regardless of their tenure.

This idea of rewarding based on productivity instead of on tenure does not just apply to the restaurant world, it transcends business. There is no place for unearned entitlement in business. It can do an incredible amount of damage to your business.  The days of employees starting at the bottom and working their way to the top are gone. You will be lucky to get three years in the restaurant industry, specifically. If you want your restaurant or business to be a great place to work, then there has to be a consequence to failure. That concept, coupled with a reward for productivity, will make your employees value their job.

When you meet with your (prospective) Franchisor, ask them what type of operational systems they have in place that reward employees based on productivity. It may be that the Franchisor does not mandate one type of system over another. In this case, the onus may be on you to implement your own system. 

How Much Should I Be Paying In Rent?

I often get asked ‘How much should I be paying in rent?’. The rule of thumb for a restaurant is based on your projected sales. Your all in rent ceiling should be no more than 6% to 8% of your gross sales. 

An example of this is as follows:

Lets say you have a 3,500-sf space at an all in rent of $20 psf. Your annual rent for this space is $70,000. Lets also say that your restaurant is projected to do $1,000,000 in annual sales. Your rent ceiling would be equal to $1,000,000 (8%) or $80,000 per year. In this example, the proposed rent is lower than the rule of thumb, so judging by industry standards and assuming your operating your restaurant efficiently, this rent rate is manageable.