R.I.P. Restaurant in Peace (The Finale)
This will be my third and last column on why so many independent restaurants fail. I much prefer focusing on strategies to improve success, however this little series on failures highlights a tough industry and, notwithstanding, regardless of the level of passion with which one enters this or any other business, there are numerous pitfalls to be avoided.
Today my column will likely tick off a few people so allow me to apologize in advance. I am NOT addressing hard working, dedicated and loyal restaurant staff. I am addressing management that continues to hire and employ staff at the very bottom of the wage scale and expect, without any training, culinary art and operational excellence.
But this is a two-sided coin. Who’s left to hire in this full employment economy? Owners and managers tell me that if anyone even shows up for an interview or, if hired, the first day of work, that this alone is a plus. Are you kidding me?
Okay, let’s start with the applicant pool. Even though the hospitality industry employs the largest number of people in this country with tremendous opportunity for advancement into all sorts of arenas, the applicant pool is full of cigarette, alcohol and drug addicted folks who can’t make it to work, won’t call in when they can’t get there and will leave you without notice to go down the street for 15 cents more an hour. One of my clients even told me if they were to start drug testing new hires that they would have to shut down the business; there would be nobody there to work. Is this where you want your teenager going for their first few part time jobs? For now, staffing an independent restaurant remains the number one indicator on whether they remain open.
How do we fix this especially in a tight employment economy? The answers are simple and complex. You could beat your competition by paying better wages and improving the benefit package. You could remain in business if you commit to training and investment in your people. You might stay open if you get off your high horse where everything is “my way or the highway” and take a risk to allow and encourage your team to express, experiment, implement and grow. It’s definitely hard and not without the owner and managers leading the charge to retain great loyal staff or commit instead to always hiring and training which comes at a cost.
More specific to restaurants, pay staff what they are worth to your organization. There’s been some discussion about reducing the expectation of customers to tip to make up for the difference. Some eateries are experimenting with adding 15-20% to their current prices so they can pay staff properly. Imagine that! Customers will feign disbelief at this suggestion but hey, you’re paying for it anyway. What then is the incentive to give great service? Maybe a customer will still tip a bit more. There’ve been times I’ve tipped $5 on a $10 lunch because service was excellent and $2 just wasn’t right for the level of attention I received.
But beware of the price rise strategy. If you raise prices and food and service standards remain the same without any attempt to amp up the offering in both food and service, you’ll get hammered by your clients and customers. As for me, I’m always pleased when I walk into an establishment and see familiar faces, especially when they recognize me. It’s a testament to loyal staff and management who must be doing something right.
So, regardless of your industry, does any of this sound familiar. Take Action today to address acquiring and retaining great staff and be the owner/manager you must be for them to stay, then Go Run a Lap! Business is Fun! Next time I promise we’ll get back to success instead of failure.
Tony Marder is a Gastonia resident and President of ASM Ventures Corporation. His clients are family businesses who develop and implement new strategies to make more profit. You can reach him for questions or comments at www.enjoyingyourbusiness.com.