YOU IN THE MIRROR

The other day I was talking with Vito, the owner of a local Italian Deli in my home town. We were discussing a business that I recently reviewed and Vito said to me “what you put into your business is what you get out of it."

I was telling him about a restaurant I was recently hired to review for why the business was losing money. Upon completion, the owner received a very detailed evaluation offering over 10 different perspectives covering the good and the not so good of his business. The material was written to focus on the most significant reasons why the business is not profiting, which was the main concern by the owner.

What I found.

1. Very concerning was the labor costs, which by ratio was extreme. Management was scheduling staff with no regard to guest flow and costs, and the owner takes no responsibility with this process.
2. Speaking with customers and by observations I found customer relationship issues.
3. There were cleanliness issues that required immediate attention.
4. There were no inventory procedures and no idea of recipe costs.
5. The owner failed to engage under any circumstances in operational tasks like at the register or at the cooking area. In fact, the owner arrives after opening, leaves prior to closing, and is not in attendance on the busy weekends.
6. Most concerning, however, is all the employees have access to the businesses keys and storage.  

The final evaluation offered a plan to reduce payroll, which included the owner taking over the scheduling responsibility from the manager and accepting responsibilities in the workload to reduce costs. I suggested a competitive vendor and saved him over 60% on the costs of the vegetables they were purchasing. I helped create new menu items with higher profit margins, and an afternoon combination concept.  We cost out many of the recipes so that they knew how each item sold contributed to profits, which also disclosed they were regularly pushing the lower profit items. I highly recommended controls placed on the keys.

What you can expect when there is no implementation or follow through.

1. Four weeks after I completed my review the business was closed by the Health Department for one week to clean up the violations.
2. It took over 5 months for the owner to process the credit application to reduce food costs. 
3. Steps suggested to reduce payroll were not embraced, as the owner did not want to take on further responsibility, and the owner will not assist with customer sales, or with the cooking of product.
4. The training provided in inventory procedures was not put into place.
5. All employees still have access to keys.
6. The business currently remains operating at a loss.

What my friend Vito said to me could not have been said better, and this story reflects common issues that are observed in restaurants and throughout the hospitality industry.  If you do not become invested into the success of your business, there is only one person in the mirror you can complain to.