This year could be your best ever. The restaurant industry is approaching epic market growth and that is the sign of a healthy economy. The downside is that the market can only support so many restaurants before the bubble bursts and many will close their doors in the wake of the restaurant apocalypse coming. It truly is Darwinian Theory at work. The strong will survive and the weak (or average) will perish.
How do you ensure your restaurant survives? By being honest and avoiding these 7 catastrophic mistakes that restaurants make in their operations. Take these to heart as the 7 signs of impending restaurant apocalypse.
1. Lying to Yourself
Denial is a powerful emotional drug that lures us to stay where we are. It comes from that place inside you that doesn’t want to know the truth. It’s the byproduct of your comfort zone. We all have one. That place you retreat to escape the world and well, feel really comfortable.
We avoid the truth because sometimes it can be both painful and fearful. That’s a double whammy. Make those changes you know you must or stay in your comfort zone safe. You probably know what most people choose. They justify their decisions by using what is known as “verbal softeners”.
These little white lies are designed to make you feel good for now. Maybe you’ve heard or said some of these:
- It’s (they’re) not that bad.
- It could be worse.
- It’ll (they’ll) change.
- It’s just a rut.
All of these statements are fear based dressed up as optimistic banter. You can convince yourself of pretty much anything including how bad you are not doing.
Solution: Stop lying to yourself. If things are not 100% the way you want them, stop coming up with excuses and lies. You will never get what you want from your restaurant or yourself until you admit that things just basically suck.
2. Not Knowing Your Numbers
Know that you are going to face the facts and the truth it’s time to get your bottom line in shape. If you have ever tried getting back to the gym after a lazy winter of eating whatever you wanted and experienced the struggle to get back in shape, this is how your financial fitness is going to be as well.
The sad thing is many have really let the bottom line become a secondary focus. Maybe sales have been really booming and when cash flow is great we tend to think everything is fine. Then the market tightens up and now your bank account is not so happy as it once was. Time to hit the accounting gym. It’s easy to take your eyes off the numbers or not even worry about them when cash flows freely. It’s not an excuse, it just normal to lose sight of an activity that many do not like...the numbers side of the business. Restaurant owners and operators love the creative, fun, people side. You must have a balance to everything for long-term success.
Solution: Take control of your business by digging in and knowing your numbers. You can hire someone to do the work if you are not good at this activity, however, you must be included and understand where every penny goes. Ignorance is not bliss, it’s just ignorance.
- Food and beverage costs (update all your recipe and costing sheets)
- Cost out your weekly labor schedule so you can see where you labor dollar is going.
- Start using a budget. If you fail to plan you basically are planning to fail. Set sales projections and targets for your team to hit. Set up spending budgets for food, beverage, and labor to control these potentially high dollar spending categories.
3. Tolerating Poor Performance
Yes. This one circle back to number one about lying to yourself. You most likely have a few poor performers on your team that you have been holding onto out of fear. These “C” players are really dead weight that your “A” players are dragging around. They just do the minimum amount of average to not get fired and do not truly contribute to the growth of the brand.
Think of them like the entourage that hangs around big celebrities. They take the free stuff and hang around never really adding value. You pay for the privilege of their company. Time to stop picking up the tab on those that do not produce results.
Solution: Come to the reality that if you have people on your team that is not lifting your brand up, they are holding it down. You may have a sense of loyalty to them because they have been with you from the beginning and you feel an obligation to take care of them....stop it. If they are not actively growing personally and professionally then they are dead weight on your organization. You actually are hurting their growth by not being honest with them and giving them feedback that could help them become better.
This is very common in brands that are making the leap from small operations (1-2 locations) to an emerging restaurant group (3+ locations). They drag along these negative people wondering why they are struggling to grow and break through the barrier to big-time growth. You must take a really hard look at the people you surround yourself with. Time to also make some tough decisions. Remember that not everyone is a good fit for your brand.
4. Playing it Safe with Your Marketing
With the rise of the internet, there has never been a better time to market your restaurant. Yet, so many play small in the online world and that is truly sad. You have the entire world accessible from your phone, why not show them who you are and what you stand for?
Once again this comes back to fear and your comfort zone. That comfort zone just loves to keep you stuck. Time to break free from its grips and claim your market share. That requires you to do things differently and in some cases maybe even become a little edgy.
Solution: Take your social media game up to the level of the big dogs. Here’s how...
- Get on multiple social media platforms. You should be on Facebook, Twitter, Instagram, LinkedIn, and possibly Snapchat.
- Double down on your posts. Chances are you are only posting a few times per week. To have an impact on social media means keeping your brand top of mind. That requires posting every day (sometimes multiple times a day).
- Jump into a video. A video is one of the best and most effective ways to stand out in a crowded market. Years ago you needed to hire a professional video production team to come in and shoot a video for your brand.
Today you just need a smartphone and a few apps. No excuses not to embrace the digital age with video posts or live stream events.
5. Over-Reacting to Bad Online Reviews
The double edge side of having the World Wide Web to broadcast your brand to the globe is that you will also attract people that want to voice their interpretation of your restaurant. True or not these people will feel compelled to tell everyone how bad their experience was. The last thing you want to do is react emotionally to bad online reviews.
Is it easy to read someone’s crude and sometimes rude comments about your brand? Of course not! Your restaurant is pretty close to having a child and any parent would go out of their way to protect their child. Just don’t let the heat of the moment drag you into an online forum where your reply can be easily taken out of context and can cause more harm than good.
Solution: Take a deep breath and examine the facts. You must separate fact from fiction.
- Write out a reply on a piece of paper that allows you to really just let it all out. Release the emotions that you are feeling (anger, frustration, appalled). Read it through it and make sure all those nasty feelings are free. Now, Year it up and release those negative feelings.
- Write a reply that is empathetic and not judgmental. Will it take you a few times to get it right? Yes. Just be open to the fact that they had a bad experience and you are actually thankful they wrote the review so you have the opportunity to correct any issues.
- Keep track of common topics. If you are getting more than your share of negative reviews, then you might have a real problem that you need to address. Slow ticket times, cold food, rude staff are symptoms of deeper problems with your culture and training. Don’t go back to number one and be in denial about this. Search for the truth.
6. Poor Communication
All business problems are really people problems at their core. Those people problems are 9 times out of 10, communication problems. We fear to talk to our team because they might take it the wrong way. We fear to be critical to avoid hurting peoples feelings. We fear transparency and being true to ourselves.
Fear, in general, is what stops us from getting the restaurant we want deep down. We had this grand vision and built a brand. When you were building that brand you were fearless because you had nothing to lose. Now you do. So you hesitate to say the truth. You sidestep issues that need to be talked about. You have become weak due to poor communication. That weakness threatens everything you took the time to build, yet you don’t speak up.
Stop being afraid to be authentic. Stop being afraid, to be honest. Step up and become the leader your team is really looking for. They want someone to lead them. They want someone to challenge them. They want someone who inspires them to become better. That can be you if you have the courage to open your mouth and be human.
Solution: Time to step forward and become the leader.
- Talk clearly about your expectations for what exactly you want from your team as far as performance and standards. Never assume they know. You make sure they know.
- Don’t be a jerk. Finding your true voice as a leader is about being open and honest, you don’t need to talk down to people. Always keep respect at the front of your goal when communicating with anyone. That means people in your personal life too. You cannot be one way around some and different around your staff. You must be authentic and genuine or they will see you as being two-faced.
- Watch your self-talk. Yeah, you are probably harder on yourself than you should be. Compassion for others starts first with compassion for ourselves.
7. Not Having an Exit Plan
All goals need a target. You can say you want to lose weight. What does that mean? When will you know you’ve reached your result? If you cannot measure it, you cannot manage it. Without an end goal, you don’t have anything pulling you towards a compelling future. The days become longer and the pressure of everyday operations turns into stress that slowly sucks the life out of you. You question “is it worth it?”.
You need an exit plan. Now, an exit plan might not be to sell. It might mean to build up the first location to a certain amount, then open more locations. It could mean building the brand to have your children take over the reigns someday (a legacy brand like Lettuce Entertain You). Maybe you want to build to 6 locations and start franchising. Whatever you see yourself in 5,10, or 20 years you need to write it down. That’s your target.
Once you have your exit plan (or growth plan if you like that better), then you have to reverse engineer it into actionable steps. If your plan is a five-year plan, for example, break down the key milestones required between now and then (by year) until you see the path you must take.
Solution: Having a plan is one thing. Making a plan happen is the challenge.
- Know that people will have a hard time buying into a big vision. It’s it that they don’t believe you it’s just that most don’t dream big. It’ll be like you are one of the Wright Brothers trying to tell someone that one day “flying machine” will fill the air.
- Get someone to hold you accountable. Here is where you need an outside person who is not emotionally attached to you (that does not have an agenda) to keep you on track. Accountability is the key element for those who get their goals consistently.
- You’ll need faith. Actually, you’ll need a lot of faith. There will be times when you will question yourself. Others will question you. Your comfort zone will try to lure to back to the land of “just be happy with what you have”. Don’t go back.
Look at the horizon of the restaurant industry and you will see storm clouds growing in the distance. The market can only sustain so many restaurants until they damn bursts. Smart operators take advantage of the storm before it hits.
They double-check their financials and numbers are tight. They recruit consistently to attract top talent. They build a culture of open and transparency through communication with their team and their guests. They market consistently and constantly. They don’t focus on the competition, they focus on improving themselves so their competition becomes distracted by what they are doing.
In an ultra-competitive market, there are lions and there are gazelles. One gets dinner and the other is dinner. Which would you rather be?