“Outside the box” is not so much a perception, but an attitude. Nothing is ever really outside of the box because we all live in the same world and see the same things. It is how we interpret all these things differently, individually. We look around at the world, see a ton of things that we like, and we create unique combinations of those elements or our own reconfigurations.
Thinking “outside the box” is about trying to bring creative energy and imagination to typically ordinary things. In my restaurateur world, this would include such things as dining rooms and burger menus.
For me, my personal passion is taking old worn out traditional casual concepts and spinning them into modern chef-driven entities that appeal to young up-and-comers looking for not only high-quality and innovative food, but also upgraded environments. My goal is for you to walk into one of my restaurants and feel like a million bucks while only spending $10 or $20. To me, that is a great value, and I strive for my customers to think so, too.
Thinking “outside the box” is also a way of doing business. It is as much an ethical decision as a personal growth decision, and a passion. If I’m going to do something, I want to do it my way, leave my mark and make a unique impression upon the world, even in the smallest ways.
Doing business “outside the box” certainly is not the easiest way. Sometimes customers do not care about some of the little unique things that you do, but then again sometimes you hit something truly great and it becomes a competitive advantage and a strong differentiator that pays great dividends. The day I start looking around at what is and are the most popular and successful concepts and just start copying them will be the day it is time for me to retire. It’s called losing your edge; you just become another restaurant owner fighting for the dollar.
I want people to walk into my concepts and know that they have just stepped into something special. I am not here to just serve food for sustenance. I’m here to create unique five-sensory experiences at a great value. I want people to feel strong emotions in my concepts, even if they hate it. That is fine. Just please do not tell me how forgettable it was.
Of course, thinking “outside the box,” can get you into trouble. Anytime you are doing things differently than everyone else it will cost you significantly more money and it will be much harder to find materials and resources (since you are finding things that others do not use; unique items). And there is always the fear that the customers will not embrace it. We are breaching new and uncharted territory, so you have nothing to verify that what you are doing differently is actually going to work. I would not want to do it any other way, but there is significant risk. But without great risks there are no great rewards.
With FLIP, I tried to make every little element of the concept just a bit different hoping that the sum of the differentiations would lead to an end product that is significantly different. I wanted the dining room to be just a bit different, so I flipped everything, hence the name. Overhead, flipped ceiling elements mimic the tables below, while custom-flipped booths play tricks on the eyes. In a modern space, FLIP incorporates elements of fine dining with a creative, raw energy.
Another element you will find throughout our locations is a custom wall covering. The large scale mural is filled with wild and colorful graphics that allow our guests to discover the hidden images within.
I wanted the burger menu to be different, so I went out and hired a fine-dining chef to make it, Top Chef All-Stars winner Richard Blais. We strive to redefine what we’ve come to think a hamburger should be. Our Raw Tuna Tartare with hand-cut saku, mango sphere, avocado puree, pine nut, soy jellies, compressed veg, wasabi mayo and sesame crispies isn’t part of our typical burger menu offerings. We also wanted to have our own unique dessert offerings. What goes better with a burger than a shake? Our shakes had to stand out from the rest. With unique flavor combinations including a Krispy Kreme donut shake topped with liquid nitrogen, our shakes smoke as they are served, adding another whimsical and “outside the box” offering on FLIP’s menu. Many of our cocktails are served the same way.
One reason I chose to open a restaurant is because of the freedom of expression and creativity it allows me. With the independence of choosing the menu, décor, music and locations, it allowed me to put my soul into this project. FLIP is my pragmatic work of art, and I strived to do everything “outside of the box” but within the confines of a realistic budget.
Barry Mills is the founder of FLIP burger boutique and HD1.
Blinding flash of the obvious: running a restaurant is hard work, and it never ends,
especially when you’re trying to do it all yourself.
But why do that? If you could afford to hire experts in crew training, menu design, restaurant design and marketing to help you, wouldn’t you do it?
Of course you would, and maybe you’re overlooking a ready source of value-added advice operations and a whole lot more – your suppliers.
Think about it. They’re in your restaurant all the time. They see your operation at its worst and best. And they know a lot about their areas of specialization, whether it is beverages, sanitation, produce or fish.
Major suppliers often provide a range of free or value-added services to restaurants.
The Coca-Cola Company provides its customers with a wide range of services beyond beverages, ranging from crew training to menu design – and the company has available dozens of consumer studies that can help you benchmark and fine tune your business and stand out from the competition with best practices across the business. Even if you’re not a Coca-Cola Refreshments customer, you can get great ideas at www.cokesolutions.com.
Ecolab is more than just cleaning supplies, as well. They counsel customers on food safety, quality assurance and equipment care, and they’ll even test your glassware and dishes to determine whether they’ll hold up in your restaurant.
CSM Bakery Products provides distribution solutions, as well as consumer insights and research – syndicated and proprietary – on baked goods and related categories. CSM BP also does concept research and operator surveys to better calibrate the products and services it provides to individual customers.
Your fish supplier doesn’t just deliver fish in a box. They are experts on a wide variety of seafood products, and they can help you with selecting, storing, even how to prepare different species of seafood. Companies like Inland Seafood stay ahead of trends by knowing about new seafood products before they are available for sale.
Large suppliers like Coke also can connect you with expertise in support areas like public relations or merchandising. They could even nominate your restaurant or chain for an industry award.
Okay, so the big guys are there to help. But what about the small, local suppliers that provide your meat and potatoes and everything in between. Those guys can’t do much to help, can they?
Sure they can. Your produce supplier can advise you on which fruits and vegetables are fresh and plentiful, and which are popping up on menus all over town, so you can stay ahead of the curve.
Your local suppliers probably can share anecdotes about successes and failures at other restaurants (without getting into industrial espionage) that can help you make decisions about what to buy by when and how much.
And if you want to target a specific demographic – Hispanic customers, for example – your suppliers may be able to tell you which products seem to sell best to and attract Hispanic customers.
When I worked at Church’s Fried Chicken, we began looking into a line of “heritage” products for minority customers. A minority food manufacturer that supplied Church’s stores investigated food groups that appeal to core demographics. Her research led to improved sales in Church’s to minority customers, and the food manufacturer had to add a third shift to keep up with the demand for her products from Church’s.
Look at it this way: it can’t hurt to ask, and you might be pleasantly surprised by the amount of information and good advice your suppliers can provide. And they will if they can. You’re their customer. They make money from you, so they have a stake in your success – after all, they can’t sell to a closed restaurant.
If the supplier rep isn’t interested, go over his head. Tell the supplier general manager you have a question or a problem he or she may be able to solve. Successful suppliers sweat the small stuff because they know that it is the little things they do that can have BIG impact on a relationship with a customer.
You may find you’re not in this by yourself and that you have a deep bench of supplier expertise and counsel you can draw upon to grow your business – and theirs.
Ellen Hartman is president and CEO of Hartman Public Relations, LLC, a public relations agency specializing in the foodservice industry.
We are in the craziest business in the world. Some of us aren’t even sure how we got here. Some are better at it than others. Some work tirelessly, while some don’t even seem to be working, but we all have something in common: We all want to be successful!
Nearly 19 years ago, I caught the restaurant bug. I was young, made some money and enjoyed my job, but I did not feel successful. I felt like just another kid fresh out of college who couldn’t find a “real job.” At least that’s what everyone told me.
People would always say I was better than working in a restaurant. I would always wonder, what’s better than doing what you love? Nevertheless I ended up owning my own place. One year ago, my brother (my business partner) and I asked ourselves, “are we really successful?” How do we gauge our success? What does success mean to us? What are we here for? Who threw that ham at me?
We had been operating our stores for nearly 13 years, and we still didn’t know the answer to these questions. In a sense, I felt as if we were just going through the motions. We were caught up in the routine. From the outside, anyone would think we were a success (everyone knows if you own a restaurant you print money). I suspect that many people in our business feel the way we did.
Amidst soul searching I was reading a Truett Cathy book. Chick-fil-A has always inspired me from a business standpoint because they seem to go against the flow of normal restaurant thought, and they are immensely successful. I was shocked to learn of their defining moment in the early 80s. I couldn’t believe that Chick-fil-A, the powerhouse, the “we do it only 6 days a week and we still outsell you,” had a defining reflective moment, but they did.
In the midst of skyrocketing chicken prices and fierce competition, Chick-fil-A experienced a decline in sales. Near panic and confusion ensued. They sat all of the big players down in a room and came up with… a mission statement.
Upon hearing of the result of the meeting, the fine folks back at the office were shocked that all the king’s workhorses and all the king’s men could only scrape together one lousy mission statement. What they didn’t expect was that that statement, when communicated and folded into the culture of Chick-fil-a, would bind them together and set them on a course to become one of the most successful chicken fast-food companies, second only to KFC.
This story sent me to thinking. What they did, in essence, was define their own success. We decided to apply this theoryto our business. We asked ourselves this question, Why are we in business? It’s a simple enough question. Is it to make money? Is it to serve others? Is it to be successful? Does one thing lead to another here? Are these questions linked or separate things?
We decided that most people in our business would say that they are in it to make money. It follows that in our business, to make money you must (or should at least) serve the customer. Therefore if you do those things well, you will be successful. It makes sense, right? Well it didn’t to us. We decided to flip the chart upside down.
I am in this business because I love people. I have a natural desire to serve others and interact with them. This business allowed me to do it from day one, and I couldn’t get enough. I spent the better part of owning my own business worrying about growing and making money, when all I really want is to be around people and serve them. Not just serve them food, but really serve them.
I enjoy listening to people, talking and telling stories. Brightening someone’s day with a smile or a hug or a nice word. People will eat at a place just for that reason. It’s not always all about the food (no matter what your chef may tell you). When I spend quality time with great customers, it’s like cash money. It’s like the one golf shot in 18 holes of crappy ones that keeps you coming back. So we stopped worrying about what we couldn’t control and started focusing on what we wanted to do.
We defined our own success. We are already successful because we are doing what we want to do. We serve customers. We impact our community. The money is just something we have to manage so that we can continue to serve customers, not the other way around.
I’m telling you that I am finally at peace knowing that my success doesn’t depend on the day’s sales, but the day’s impact on a customer, or an employee for that matter. I have a business that exists to serve those who walk in to eat and those that walk in to work.
So, you say you’re in the restaurant business? Well, how do you gauge your success? Don’t be afraid to flip the chart around. Don’t be afraid to just do what you love, and if you’re not, don’t be afraid to make some changes.
Glenn McDaniel has been in the Slope’s BBQ business for 14 years with his brother Andy. He continues to work in all aspects of the day to day operations and can be found behind the counter everyday. He especially enjoys building relationships with customers and out-serving the competition.
By Matthew W. Clarke and Joseph “Joey” Costyn, Smith, Gambrell & Russell, LLP
Let’s face it – nobody’s perfect. Tom Brady occasionally throws an interception, and even the best managers and supervisors sometimes drop the ball on an employment law issue. Whether it is a tricky termination or a problem employee who just happens to have engaged in protected conduct, there is no “magic bullet” when it comes to minimizing the chances for making a mistake in compliance with workplace employment laws. Some common problems tend to arise on a fairly frequent basis, however. By being aware of those issues, an employer can at least minimize the chances of a “fumbled” human resource (HR) issue.
The hiring process is often much like the dating scene. Both parties are initially acquainted, whether by mutual acquaintance (hiring recommendation = blind date), single-party initial interest(resumé submission = pick-up line), or even the Internet (monster.com = match.com). Each party may enter the process with great optimism and hope, which are generally good things, but which also have a tendency to cloud objectivity, preventing a clear-sighted vision of what may be ahead.
Rare is the match made in heaven. As the relationship grows and both individuals start to notice each other’s flaws, it either works out as you adapt to one another, or it ends with both sides feeling disappointed. Here are some common tools that the HR professional can use to increase the odds of a successful, long-term relationship.
Ensure Adequate Background Checks
A recent analysis from a national screening provider revealed that the number of discrepancies uncovered in employee resumés during 2010 more than doubled over 2009. The study found that 42 percent of screened employment histories contained an inconsistency between the information provided by candidates and the results of the verification check, compared with just 19 percent for the same period in 2009.
Background screening should be conducted to verify the application information and as a basic safeguard to ensure that someone with a violent criminal history, for example, isn’t being hired as a security guard. It is also essential to adopt a practice of consistency in performing background checks. Do not conduct checks only for“shady” candidates or those who seem like they might be hiding something. Such a practice could lead to costly liability from a disparate impact or even direct discrimination standpoint.
Employers will have less need to worry about disparate treatment claims if they treat everyone the same way. Conduct the same type of background screening on all applicants for the same job classification, and maintain the same response standard for background checks that come back with negative history. For example, if an employment offer is withdrawn due to the applicant’s falsification of his criminal history, it is important that other applicants who commit falsification are not treated dissimilarly.
Background checks are particularly important for individuals applying for positions that involve unsupervised customer interaction, access to sensitive information and other positions of trust. Claims for “negligent hiring” can arise when someone is injured or damaged by an employee in such a position, where the employer knew or “should have known” not to hire the individual for such a position.
Employees who are to be placed in a position of trust with access to customers, their property, company funds, secure areas, confidential information, etc., should be screened to determine whether a prior conviction indicates a propensity to violate such trust. Employers should be careful, however, to ensure that they are in compliance with local, state and federal laws, such as the Fair Credit Reporting Act, when conducting background checks.
In addition to third-party background screening services, employers can take the following practical and inexpensive steps to weed out less-than-forthcoming candidates:
• Review resumé and application for inconsistencies.
• Look for gaps in time in employment history.
• Perform Google search and/or LinkedIn search to see if credentials match the resumé/application.
Conduct Thorough Interviews
The purpose of an interview is not to see whether the applicant would make a good buddy with whom to catch a game after work. An interview is the chance to go beyond the resumé and make objective observations about a candidate’s qualifications, demeanor, professionalism and actual interest in the available position. Interviewers should not gloss over important questions about work history, experience and desire to become a part of the company just because, for example, the interviewer and interviewee were both members of the same fraternity or sorority.
People are different. Studies have demonstrated that, even for an individual who has no overt prejudices based on race, nationality, sex, disability, etc., it nevertheless remains true that people are less likely to understand others who are different from them.
Different people do not always understand each other or communicate effortlessly upon initial introduction. For this reason also, an interview should be conducted professionally and in a fairly scripted manner. It is not a casual conversation. candidate about any apparent or possible inconsistencies. Find out why he left his previous employment, and do not be afraid to follow up his answer with more detailed questions. Remember, every applicant who is not hired has a potential “failure-to-hire” claim against the company. Even though such claims are not common, you should adopt a process that will allow you to maintain documentation that will help explain why you did not hire an individual — just in case.
The Importance of Documentation
Human resources professionals make thousands of employment-related decisions every year. While most of these decisions may sporadically need to be justified to a supervisor or union, there may come a time when one of the thousands of decisions made has to be explained or justified to a third party – like a judge or a jury. For a decision made months or even years ago, how are you going to prove that your actions were proper? The answer, many times, is through proper documentation.
During the interview process, it is important to take notes or otherwise document the reason that an individual is either accepted or rejected. This does not need to consist of a lengthy or even separately prepared narrative, but could be as simple as making handwritten notes on the application or resumé during or after the interview.
Imagine two candidates with identical resumés. One candidate interviews exceptionally, while the other admits that the experience claimed on his resumé is a little exaggerated and that he is only interested in the position because he “just needs a job.” If the rejected candidate brings a failure-to-hire claim six months later, the person conducting the interview may not even remember meeting either candidate. A couple of handwritten notes on the candidate’s resumé or application explaining the unfavorable admissions during the interview, however, could provide all the evidence needed to secure a dismissal of the claim.
This advice applies equally to the employment decisions that are made after someone is already hired. It is not uncommon for jurors, and even some judges, to take the attitude that “if it is not in writing, it did not happen.”
Put differently, people often adopt the assumption that if something is important, it will be written up or somehow documented. Employee discipline and terminations are often based not on a failure to meet performance benchmarks or easy-to-demonstrate error, but on conduct, which is not so self evident.
Documentation of the conduct upon its occurrence gives great credibility to the validity of an employment decision made on that conduct. Even occurrences that “everyone knew” or were “common knowledge” in the workplace around the time they happened might be distant memories by the time the company needs witnesses to testify. A four-sentence handwritten memo to the personnel file can be the evidence that literally wins the case for the employer.
No matter how clear and effective your employment documentation may be, it is not going to help you if you cannot find it. Remember to develop and follow appropriate document retention/ destruction policy, as well as an organized system or keeping track of employee discipline and performance.
Supervisors need to be reminded to turn wrap-ups and evaluations into the appropriate department for filing in the employee’s personnel file. Department heads or other managers who maintain their own files on individual employees should be dissuaded from doing so, or at least be required to communicate with human resources to ensure proper process and content of their files.
Employers face difficult hiring and firing scenarios on a daily basis. By integrating some basic safeguards into your HR routine, you can minimize the botched plays, and keep your organization a winner.
While there were not nearly as many bills up for discussion in 2012 as in the previous year, there were still several important issues on the table in this year’s legislative session that will have an impact on the restaurant industry. So, how did it all shake out?
One of your most important benefits as a member of the Georgia Restaurant Association is GRA’s advocacy efforts on your behalf. GRA’s Government Affairs team helps to protect your interests as a business owner by working directly with legislators to support member initiatives and by providing representation in state government to defeat anti-restaurant measures and promote bills that enhance the industry.
In 2011, legislators were occupied with considering a long list of issues that affected the hospitality industry, from education and public health to Sunday alcohol sales and electronic gambling, topped off by a controversial bill requiring many Georgia businesses to ensure that their employees are legally eligible to work in the U.S. This year’s legislative session was quite different, with a considerably smaller list of bills that would affect the restaurant industry. However, the passage of two bills in particular — one regarding the administration of wage garnishments and the other allowing brewpubs to expand their production — will have a significant positive impact on Georgia’s restaurants.
Wage Garnishment
One of the most critical pieces of legislation to pass this session was House Bill 683, which allows employers to address wage garnishments rather than being forced to use legal counsel to do so.
“Last year a Georgia Supreme Court ruling had changed everything around so that an employer would have to go through an attorney to address a wage garnishment,” explains Katie Jones, GRA Public Affairs Coordinator. “It was bad news for everyone.”
However, with Governor Nathan Deal’s support this year, HB 683 successfully passed both House and Senate in February.
Many GRA members are relieved by the passage of this bill. Mark Oswald, Managing Partner of Ruth’s Chris Steak House, says that had it not passed, the financial and administrative ramifications would have had a very negative impact on restaurant owners.
“At the time the Wage Garnishment legislation was being considered, we had five open cases in which our attorney was actively involved,” he says. “An average legal fee on each garnishment filing is approximately $500 – so costs can mount up quickly. Additionally, conferring with our legal counsel took more of our Director of Human Resources’ time than being able to handle garnishments directly.”
HB 683’s passage means direct savings for employers in both money and time.
“Not only does the ability to handle garnishment notices internally eliminate an unnecessary lawyer, it also saves us real dollars in legal bills. We are now able to process notices far more cost efficiently,” states Oswald.
Brewpub Expansion
House Bill 472 will increase the number of barrels a brewpub can produce from 5,000 to 10,000. It will also increase from 500 to 5,000 the number they can sell to wholesale distributors.
The bill’s sponsor, Rep. Richard Smith, said that the proposal was designed with small business owners in mind, as a way to boost their sales and create jobs.
“It’s an economic development issue,” he said in a statement during a Senate committee hearing after the bill was overwhelmingly approved by the House.
The bill also addresses the growing popularity of craft beers. Increased sales could create the opportunity for small craft beer brewers to buy the equipment they need to brew by the barrel and then distribute their product more widely.
“Our brewpub members are really excited about the passage of this bill,” said Jones. “It’s a victory for them, their customers and local communities.”
Additional Issues
Other bills on the 2012 legislative docket addressed the issues of taxes, unemployment, alcohol licenses and fees, and sick leave.
Bills that passed and are waiting on the Governor’s signature include House Bill 100, which creates a tax court and a more efficient system that will increase the uniformity and predictability of decisions in tax cases; House Bill 1066, which establishes a staggered alcohol license renewal system much like Georgia’s car tag renewal process and also changes the provisions on distance requirements and license fees for special event applicants; and House Bill 347, which cuts the length of state unemployment benefits and, although it also increases unemployment insurance rates, will help stabilize the state’s unemployment benefits fund.
Successfully defeated was House Bill 432, which would have assigned mandatory restrictions to employers offering paid sick leave.
Summary
The overall results of 2012 Legislative Session will have a positive impact Georgia’s small business owners, including restaurateurs.
“…when the dust settled, we were left with some quality legislation that will make life easier for our small businesses,” states Kelly Hornbuckle, GRA Director of Marketing & Communications. “And for that, we would like to thank our elected officials. We met with many this session, and they were very receptive on a range of issues.”
Following a contentious 2011 session preoccupied with the glare of a hot spotlight on immigration, legislators and advocacy groups alike were pleased to focus on other issues this year.
“It was a relief to turn to other matters this year and have a very successful legislative session,” says Jones. “All in all, we are very pleased with the outcomes of these bills on behalf of our members.”
FOHBOH. Split that in half and you have two equal parts to the inner workings of what makes a restaurant run. The “front of house”(FOH) is all aspects of the restaurant forward of the kitchen wall, and, if there’s one, an expo “window.” The “back of house” (BOH) is simply the kitchen. Considered “industry terms,” the FOH
and BOH are machines that any aspiring restaurateur should be more than familiar
with.
A restaurateur is someone that I’ve always aspired to be. Once a pizza delivery boy, I’ve been working my way up in the industry ever since my delivery days. Soon enough I found myself in the “back of house” making pizzas and calzones, eventually taking over the dough-making responsibilities — made fresh daily! From there, I was prep, line cook and kitchen manager at various kinds of restaurants in Atlanta. During my time working in the back of house, I learned that those jobs made up only half of the restaurant as a whole.
To be an operator, you have to excel in many things. It does you little good if you are great at one thing but can’t do everything else. I knew it was time to explore the other half. I ventured beyond the wall into “the front of house.” Throughout the years, I worked as a server assistant, server, server captain, bartender, dining room manager and lastly, general manager.
The FOH and BOH machines work together to make a restaurant run well. Each is constantly interacting with the other to offer the best experience to our diners possible. There is seniority, multiple persons and personalities and a dynamic that you are only aware of if you have been so lucky as to have worked in both areas of the restaurant. Any server who has been in the industry long enough will tell you, it is in your best advantage to be close friends with the kitchen or at least grab a drink with the expo every once in a while if you want to have any pull when the kitchen is in the weeds and your tables have 30-minute ticket times.
Whether it is fine dining or casual dining, there’s always a BOH and FOH working together to make the restaurant run. While on the surface most people would assume that casual and fine dining are pretty similar, there are large differentiations. Pilots and train engineers are both in the transportation industry, but I wouldn’t be quick to switch those positions out next time I’m on a transatlantic.
Casual and fine dining is selling different experiences for the customer, and each customer has different needs and reasons for choosing one over the other. They are both selling a dining experience of sorts, but the needs are different. Casual is typically about convenience and value, getting a decent meal at a cheap price with as little hassle as possible. Fine dining is typically more aligned to customers seeking a dining or social experience and willing to spend a premium for higher-end environments and food.
Throughout my career I’ve learned that neither front of house or back of house is more important than the other, no matter what the environment. Being a restaurant owner is like majoring in a bunch of minors. If opening a restaurant is your dream, follow it; just be sure to do your homework along the way. It requires tons of generalized knowledge way outside of the back or front of house such as business, finance, management, marketing, culinary arts, beverage management, law and EMP(mechanical electrical & plumbing) to name a few. Having significant experience in both BOH and FOH settings gave me an integral head start in understanding the total requirement it takes to operate a restaurant as a whole.
After spending a decade working through the ranks of Atlanta’s restaurant and hospitality industry, Barry Mills has added a new job title to his resume with the opening of FLIP burger boutique and HD1: restaurateur.
Even though buffeted by strong economic headwinds in Q2, Atlanta restaurants still whipped up positive sales for the quarter. Sales at independently owned restaurants posted an increase of 5% over sales for quarter 2 2011. For the year-to-date through June 30 Atlanta restaurant sales increased 5.8% over sales for 2011.
Quarter 2 2012 vs. 2011
A majority of Atlanta restaurants posted same-store sales increases in the second quarter, 2012 when compared to the same period in 2011. Of the 80 restaurants surveyed, 76% reported positive sales gains in Q2 2012. That contrasts to 24% of restaurants reporting Q2 negative sales trend.
Twenty-one percent of restaurants surveyed reported double-digit sales gains in Q2 2012. While the Q2 numbers are impressive given the difficult economy, they are not as compelling as Q1 2012 when 81% of restaurants showed positive sales and 37% of restaurants showed double-digit sales gains.
Sixth Straight Quarter of Sales Growth
Quarter 2 2012 is at least the sixth straight quarter of comparable sales growth for Atlanta restaurants – the time that NetFinancials has been tracking sales on a quarterly basis.
Conclusion
Robert Wagner, NetFinancials president states that, “Consumers were assaulted with plenty of unsavory economic news in Q2 2012. So it is a little surprising that Atlanta restaurants did so well. A 5% sales increase with 76% of restaurants reporting positive comp sales is a good quarter and showed the remarkable resilience of local Atlanta restaurants. These positive sales comps are an important sign of economic vitality in the Atlanta restaurant industry – a critical source of jobs and commercial activity in the metro area.
“Operators cited the strong growth in visits to Atlanta restaurants from out-of-towners and well as a determination by local consumers to enjoy a meal out even in the face of tough economic news.”
The Sample: The 80 independently-operated, non-franchise restaurants were drawn from the metro Atlanta market. Total Q2 2012 sales volume was $45,480,897. The sample included restaurants in Atlanta’s fast-casual, casual and fine-dining segments opened at least 18 months.
It all started in 1958 in Omaha, Neb. — with the first gas station to offer self-service at the gas pump. Today, the self-service trend has fundamentally changed behavior in nearly every aspect of our lives. We go to the ATM instead of a bank teller. William Shatner buys our airline tickets via priceline.com. We print our own movie tickets for the next blockbuster hit, find our own book titles, never have to ask for directions.
Self-service at restaurants, however, seems counterintuitive. We don’t want to cook – that’s why we’re at the restaurant. However, the demand for self-service ordering is growing as customers adopt the technology that allows the service to work. Smart restaurateurs are meeting the demand. Approximately 25 percent of restaurants that offer delivery and takeout are using some form of self-service ordering, according to a recent study by Cornell University’s School of Hotel Administration, “The Current State of Online Food Ordering in the U.S. Restaurant Industry.”
What is Self-service Ordering?
Also called online ordering, self-service ordering allows customers to view a restaurant’s menu, select a convenient location, custom-build their order, prepay with a credit card or gift card, and schedule their own pickup time – all from their smartphone or computer.
Restaurants can offer online ordering through their own website, through a multi-restaurant site such as GrubHub, through a mobile app, via text or through Facebook. According to the Cornell study, the most commonly used platform for ordering is online at the restaurant’s website, which makes sense since the Internet has become the No. 1 decision tool for deciding where to eat. However, as phones become smarter, developers expect ordering via mobile phones to outpace online orders.
Noah Glass, founder of Online Ordering (www.olo.com), which provides online ordering platforms for more than 150 top restaurant operators, has seen significant growth in the number of brand-specific mobile applications offered and used. For example, his company saw approximately two app orders Today, OLO’s brands average five app orders for every one mobile web order.
Benefits
The Cornell study reported that restaurants that adopted online ordering saw a substantial increase in order frequency and volume, increased customer satisfaction and more targeted marketing. Let’s examine each.
1. Increase order frequency. With 17 locations in Georgia, Cold Stone Creamery was the first national ice cream concept to launch online ordering for its ice cream cakes. Jana Schneider, director of marketing, reported a big jump in frequency of cake orders since they launched online ordering in early 2011, and the site already has more than 55,000 customers. Schneider is hopeful that the chain’s mobile ordering service, which launched in October 2011, will grow by an even greater multiple.
“Our mobile site has been a successful addition to our online ordering program,” Schneider says. “It was created so that Cold Stone customers – like busy moms and dads – can order a cake anytime, from anywhere and never miss celebrating an occasion with a Cold Stone Cake.”
2. Increase order volume. According to the Cornell study, the real boost in online selling comes from volume. On average, about a third (29.1 percent) of operators reported an increase in order volume, and another 32.3 percent indicated that they had experienced both increased sales volume and increased service.
Study respondents reported a bump in catering of about 14 percent, and self-service ordering makes group orders a snap. For example, Bullritos, a burrito chain that recently opened its first Georgia location in Covington, uses a platform that allows customers to order with a group using Facebook. Customers invite friends or co-workers to order as a group through a status update. The invitees click on the link posted in the status update and check off their favorite lunch items from the restaurant’s menu. The invitees items are then added to a group order, the order is submitted online and – voila! – lunch for the office.
3. Increase average check size. Noah Glass of OLO also reports an increase in average check size among his client list, which includes such large chains as Sonic and Subway as well as smaller, regional chains. Glass estimates that most of his clients see a 25 percent jump in average check size. He attributes the increase to the ease of ordering and suggestive selling logic built into OLO’s software.
“When customers order from their smartphone or computer, they can go at their own pace,” Glass says.‘If dining in, they are not pressured by a long line or impatient cashier. If calling in an order, they are not left waiting on hold or struggling to communicate order details to a busy employee. So they order everything they really want.”
4. Increase marketing RI. A recent study by BIA/Kelsey found that 97 percent of customers use the Internet when researching local buying decisions. However, with nearly infinite ways to find a restaurant – Google, Facebook, Citysearch, Yelp, Foursquare, Twitter, etc. – it can be tough for an operator to stand out.
Online ordering cuts through the noise. When a customer clicks on a restaurant’s branded ordering site, he or she is transported from on-the-couch-searching-the-web to first-in-line-at-the-register, ready to order up their lunch, dinner or late-night snack. Furthermore, when a customer places an order through the self-service ordering platform, they are offered a chance to opt in for the restaurant’s email database program, so savvy marketers can target customers with just-right promotions.
How To Get Started
First, consider your total number of units. Ten or less? Market-leader GrubHub allows operators to post menus and locations on its platform, easily searchable by its customers in 75 major cities and 300 college campuses across the U.S. Customers use the GrubHub platform, but the orders (and revenue) come to you. For operators with 10 or more locations, providers like OLO can build a customized online ordering website for your brand.
Second, consider your point of sale. Tad Phelps, vice president of sales for Atlanta-based NCR Hospitality, recommends choosing a self-service ordering system that integrates seamlessly with your POS system.
“Pick a solution that integrates tightly with your POS system,” says Phelps, whose company develops software applications for both quick-service and table-service format. “It’s also important to look for a solution that also offers more than just ordering. A good system will offer integration to customer loyalty programs and gift card redemptions and provide for the ability to gauge customer feedback.”
If you are a small operator without a sophisticated POS system, you can still get into the self-service action. Companies like OLO offer online ordering software that can run on any Windows-based machine, including a personal computer.
Last but not least, start making a return on your investment. In the Cornell study, half of respondents said that the ROI of online ordering was exceeding their expectations, and another 45.5 percent said that it had met their expectations for ROI. Add it up? Nearly 100 percent of restaurants polled believed online ordering was worth it.
Ellen Hartman is president and CEO of Hartman Public Relations, LLC, a full- service public relations agency specializing in the foodservice industry. Hartman and her team have experience working for full service brands such as Chili’s, Huddle House and Olive Garden, fast casual brands such as Cosi, and many QSR brands including Popeyes, Church’s, and Arby’s. An industry leader for more than 20 years, Hartman is a frequent speaker at industry events, is active in the Women’s Foodservice Forum and Les Dames d’Escoffier International and has served on the board of the Multi- Cultural Foodservice Hospitality Alliance.
How many donation requests do you receive each year? For us, it is deep into the hundreds between our two restaurants. Why do you give? Is it because you want to give back, to get someone to stop annoying you, help out a good customer, good PR or for guilt mitigation?
Frankly, it can be and has been all of the above for us. Having been very active on the non-profit fund-raising side of the world before opening Muss & Turner’s, I am fascinated by the connection between the .org community, discretionary income and restaurants. There is no lack of good causes in our community, and it is amazing how many fund-raising efforts are hinged upon or tied to food and beverage elements.
We are approached by every possible organization you can imagine and receive hundreds of requests for donations, event participation and sponsorships. At one point a few years ago, these requests became a real threat to my time and level of engagement in this business and left me with a feeling of serious annoyance versus realizing the desire to give back with pure intentions.
I wish someone would do a study to measure how many billions of dollars the restaurant directly and indirectly raises for the non-profit sector each year. Think about that for a minute. It has to be astronomical, and the food and beverage industry should be very proud.
The reasons restaurants are approached vary. First, we are open to the public and very approachable. Not many folks are willing to cold call a random local business or hit up their entire social network beyond a pitch on Facebook.
Someone sending an e-mail to a local restaurant they have a relationship with is relatively easy, especially if that someone feels they can leverage their patronage as a reason to give to their cause. There is typically no ill will intended, but that sense of entitlement is tricky to handle. Whatever cause they are connected to is important to them, and they have no idea how many requests we receive each year, nor should they. Saying no is often saying no to them personally. Careful.
Second, people also just love food, wine and chefs. Nonprofits figured out long ago that folks with discretionary money would rather give in exchange for something, albeit a discount on a trip, a gift card or an experience that can’t be bought on the open market very easily, like an in-home chef dinner for eight.
We participate in a lot of events each year, and it is concerning in this economy to hear how frustrated my peers have become with the now higher level of expectation and demand to give more to fund-raising efforts.
Restaurateurs should give back to their community, as it is the right thing to do. The challenge is how to manage so many requests along with everything else, participate with better ROI and say no without offending our loyal guests.
How We Give Back
We created a system a couple of years ago that we rarely veer off, and this past year we decided to become more focused with our efforts, time and money and selected one organization with which to partner: the Atlanta Community Food Bank (ACFB). Beyond being an amazing organization run by very passionate people, it makes sense to us to help those who need food since we make our living off of fortunate folks who most likely never encounter real hunger. This partnership has made it easier and more purposeful to say no to many of the requests, especially if they are coming from people or organizations we don’t know well.
We donate food to the ACFB weekly, recently hosted one of their Supper Clubs and did a Simple Abundance cooking class at Cook’s Warehouse. As we moved into colder weather over the winter, we involved staff in volunteering to satisfy distribution assistance. It’s great team building with the bonus of being beneficial to the community in which we live and work.
The opportunities for us to impact the bottom line of hunger through the ACFB is extraordinary.
This in no way means we stop there and deny the hundreds of requests we receive in both restaurants. We created a questionnaire form to facilitate the process. Our intent is to remain approachable, responsive and bring value if we see fit.
This form puts everyone on an even playing field, sets expectations and eliminates those with not-so-pure intentions. Someone internally facilitates this process and once per week sends all the requests to the partners to weigh in, discuss and debate. From there we communicate status or details. If someone takes the time to formally request a donation, we feel they deserve an answer either way. The accountability extends to the redemption of the donation as well, with a checks and balances system for the guest making the reservation and then coming into one or the other restaurant.
If you choose to not even acknowledge a request, what signal does that send your guests and the community? How you handle these requests communicates your intentions in a major way, like it or not. This is PR in its most authentic form.
How We Raise Money and Increase ROI
The goal is for the nonprofit to make as much money as possible, and typically this involves using your restaurant or chef as the proverbial worm on the hook in a silent or live auction.
Most people making requests are looking for gift cards, because it is perceived as easy and quick, which it is. Why would you give money away quickly and easily? Do you think people with discretionary money who attend charity events really seek out discount gift cards, or are they seeking out an experience or something of novelty they can’t get on their own?
Do these same people dine out? Wouldn’t it be better if you could make contact with them to know when they are coming in to say hello, thank them for their generosity and ensure they have a blow-away dining experience?
We very rarely offer a gift card. What makes more sense to us is a private wine tasting for a group; dinner for two; a chef ’s table experience, an in-house chef dinner or a cooking class. Something unique that allows for pure engagement in what we are doing with the people we want to reach. All donations need to be booked through us, and our team knows what is going on. Yes, it may involve more time, but is there better time spent than having a chance to connect and naturally sell your restaurant to people who have never been there before?
The bottom line: We fully believe in giving back and encourage our industry peers to never stop being such a major force in fund raising for those in need. Managing the requests and fulfillment
of them is time-consuming and costs money, but if you take the time to get clear on what truly matters to you and if you handle these requests the right way, there is not a more effective way to grow deeper roots in your community.
Ryan Turner is the co-owner of Local Three in Buckhead and Muss & Turner’s in Smyrna.
The “holy trinity†of financial statements that every restaurateur must prepare each month is: I. the Statement of Income and Retained Earnings (aka Income Statement or Profit and Loss Statement, P&L); II. the Balance Sheet; and III. the Statement of Cash Flows. The most important of these is the P&L.
No business can be run without numbers. Numbers serve as a sort of thermometer that measures the health and well-being of the enterprise. Numbers are symbols, very much like words, with their own intrinsic simple meanings when they stand alone and far more complex and meaningful when in the context of pertinent other numbers.
There is nothing unique or unusual about the importance of knowing your numbers. However, the difference between well-managed companies and not-so-well-managed ones is the degree of attention they pay to their numbers.
If you do not produce regular monthly financial reports on your restaurant, you are flying blind. One critical mistake often made by new restaurant entrepreneurs is that they think they can save a few dollars by doing their own accounting and “get by†without the expense of a professional accounting service.
However, like the saying, “The individual who chooses to act as his or her own lawyer in a court case has a fool for a client,†so is the restaurateur who believes he does not need the services of a professional hospitality accountant to set up his business books. My personal experience in working with independent restaurant operators who choose to do their accounting “in-house†is that their accounting records and reports are marginally acceptable to the IRS for income tax purposes and woefully inadequate as financial management tools for evaluating the financial condition of their restaurant.
In one case, I worked with a financial institution when one of their loan customers stopped paying their business loan. I was asked to look into their situation to see if foreclosure could be avoided. The couple that built and operated this restaurant had collateralized their loan with their life savings and retirement funds. The first thing I asked to see were the financial statements for the last 12 months. When I reviewed them, I was unable to assess the financial condition of the restaurant because the statements were prepared using “cash accounting†instead of “accrual accounting.†The local public accountant they used was not familiar with hospitality accounting and the Uniform System of Accounts for Restaurants.
When I asked the accountant why he was not using accrual accounting, he replied that there were “tax advantages†in using cash accounting. Of course, that was a moot point since the business had never made a profit. But the biggest travesty of using the cash system was that it had hidden the fact that their costs were way out of line. In fact, a break-even analysis showed they were never going to be profitable.
Your goals should be to increase sales, reduce costs and increase profit. These are the objectives for any decision you make for your business. The bottom line is that if you do not know your numbers, you do not know your business.
The first and most important point about numbers is that they must be accurate and collected in a timely manner. I was asked by a successful independent restaurant operator to assess his business and determine its value. I agreed to do so without any charge and asked him to provide me with the past 12 months of income statements and balance sheets.
I began to suspect something was awry when he asked me to “guess†what his food cost was running and told me to guess “low.†My response was “27 percent?†He said it was 17 percent. No restaurant should run that low of a food cost because in order to do it, prices would be outrageous, the portions miniscule and the quality dubious. That was not the case with this restaurant.
It seems that there are operators who are “numbers people†who enjoy analyzing financials, and then there are those who are not and are uncomfortable with numbers. Those who are not often defer collecting and recording numbers to someone else and do not really understand what the numbers are telling them. They may not even keep track of customer counts, sales or the preparing of reports. The latter are numbers that every restaurant manager, let alone owner, should check every single day.
Another very successful operator asked my advice because his business had almost been bankrupted by a trusted employee, and he did not want that to happen again. Again, this operator chose to keep his accounting in-house and not to use a professional hospitality accounting service. In addition, he was not comfortable with numbers and deferred to others who never took a month-end physical inventory and were using monthly purchases as food cost on the monthly statements. (A physical inventory means that you will count all food, beverages (alcoholic) and supplies on hand at the end of the month and extend the value of that inventory.)
The amount that is used for “food cost†on your income statement must be “cost of food sold,†which must be calculated using the formula “Beginning Inventory plus Purchases minus Ending Inventory.†That calculation produces “cost of food consumed,†and the Uniform System of Accounts uses cost of food sold, which is cost of food consumed less employee meals, discounts and complimentary meals, food transfer to the bar and recorded waste.
My first recommendation was to take a monthly inventory and extend it. Despite my recommendations to get that information, his operations manager “slow-played†the process, and after three months I withdrew without ever getting an inventory value. The owner was not a numbers person and had delegated this important task to his operations manager. I knew that this was not a good situation and one that should not be permitted. It preyed on my mind so much that several months later I asked him if he ever got the inventory completed. They had not. I then told him that as long as he did not have a month-end inventory, he was vulnerable to the same fraud that had nearly bankrupted the company earlier.
The detail needed by an operator on their financial statements is far more detailed that that needed by the IRS to determine tax liability. I recommend that, at least initially, new restaurants should retain the services of a professional hospitality accounting firm to “set up†their accounting records. The cost of this service is about 1 percent of your sales, and that is the best money you will ever spend.
When you have mastered the numbers, you will no longer be reading them any more than you read words when reading a book. You will be reading meanings. Your eyes may be seeing numbers, but your mind will be reading food cost, market share, gross profits, prime costs, etc. All the things you are doing and planning will jump out at you, if you will only learn to read through the numbers.
Dr. David Pavesic is a former restaurateur who now teaches courses on restaurant cost control, financial management, and food production at the Cecil B. Day School of Hospitality at Georgia State University.
