Successful etiquette of Business

Dear Community,

I took time to go through the old fashioned way of keeping a business healthy, but also through thoughts of improvement of businesses. I would like to get leaders in the industry to think outside of the box, giving your inspirational ideas, what to do, and what you think should be avoided. 

Check your Business plan

When was the last time that you checked, if you are on track with your finances in relation to your business plan?

Before you started your new venture, you put so much thought into that concept to make sure that you won't fail, but:

• Are you still managing your milestones?
• Are you making sure that you are on track?
• Smart Goals are set for those reasons, I prefer Chris Crofts version "SPVEM" (Scary, Positive, Visual, Emotional and Measurable)
• Are you keeping your Balance sheet up to date?

It would surprise me, if you have forecasted a crisis like the one we experience currently. That's a valid reason to reassess your plan and correct your financial targets, does the business need any financial support?

• Sales report: What is selling well/What is not selling well.
• Awareness: Value of the SWOT analysis, which can be manipulated to a Cost/Value table to set up a menu.
• Jobkeepers: teams running on that scheme, should use it as an advantage

In our society we have a lot of guests who always search for "value for money" on our menu, which means in our industry the high cost - low value quarter.

It is important to understand, if you serve a lot of high cost - high value dishes:

• Your food cost (%) might be higher
• Your profit margin (%) might be smaller, but
• Your profit ($AUD) might be higher

Businesses with 21% food cost can go bust, if they don't have the cashflow to pay their bills, staff are the first thing which will be cut. The infamous PacificWest pre-battered fish and chips for $AUD 18 is a great example for that kind of business.

More and more restaurants try their luck with only serving one side per main, so the guest has to order another side extra.

-> that's not upselling, that's just hoping your guests are idiots.

Unique Selling Proposition

What can make a difference?

• Keeping in mind my last article, if a business is not doing well, and it needs to reduce prices to keep floating, you are on a down spiral. During the Corona Crisis, going on cheap quality and low valued menu puts you in the category of McDonalds, Dominos and some of the other franchises. If you think that you will succeed against those, I will wish you all the best, you should stop reading here and get back to work, good luck. Discounts won't keep your business alive. You will get a lot of people who don't want to spend money, and as bad as it sounds, you don't want those as your clients.

Of course I will have a couple of opportunities to think of:

• Using pre-made foods can make have a positive impact on your revenue. Premade Apple tarts or an Applestrudle, Choc mud cake or Scone mixes can create a market of afternoon teas. Find the good quality suppliers, pay the price and increase your cashflow with an easy new offer. If our core business is reputable than this can be seen as successful Cash Cowing. If everything can be either manipulated to make it unique or made from scratch, can be considered for each venue itself, as long as it doesn't take too much attention off the main business.
• Create your own brand in your restaurant. Prepack dishes and let guests order your special dressing that makes your salad, or your barramundi dish with all the sides. Let's take advantage of the MasterChef generation, the opportunity of selling perfectly prepared Mise en place and leave the fun part (the finishing) to your guests. Pre-ordering? If you have all the Mise en place ready for you to use, and ready for guests to buy?
• Running out of food in the later evening can be identified as "daily fresh food", as long as it is not too many items on the menu. Keep the monthly stocktake down. A stocktake value of around 5% of your monthly revenue ((revenue)*(food cost%)/(10 days) and add 2% for condiments) would be a great result and means nothing less than turning your stock over every 3 days - that would make your complicated HACCP concept redundant.
• Let FOH create weekly wine specials - purchase 3 boxes (depending on the size of the business), do a wine testing with the team (chefs and their daily specials included) and create a wine tasting procedure for guests.

Investing in your business or having cash on hand

Money in the bank or investing in the business is a very sensitive decision. That's where we need to do a ROI report.

In Australia we have been pretty fortunate. I wrote those reports to explain what equipment would benefit the business in which way, also an estimation of the ROI.

An example, a business (not fine dining, but a strong focus on MICE) made the following decision:

• Buy a paco Jet for the bistro
• Buy the cheapest bratpan possible for the events, which was also used to prepare food for the bistro, even though I highly recommended the Frima

Of course it depends on the business requirements of what you decide for, but in this case the ROI of the paco jet will be infinite and the Frima would have a ROI of less than 4 years.

A decision like this can break the business. A requisition and concept on how and why new equipment elevates your business, gives you an indication of the necessity.

Let's talk about investment of equipment:

• Is your team aware of what tools and machines are available?
• Is your entire team efficiently using the kitchen to its full capacity?
• Would a new piece of equipment open a new market and pay itself off?

It all comes back to a simple question. What has the higher ROI - Investment or Interest. 

Leadership

Small businesses need to be careful about how they use their labour. It will be an important time to make sure all the administrative work is done outside of the business hour. Working as the support centre for your team, building and training them to work autonomously is key.

Passing on responsibilities to let the individuals take charge of ideas is a great way to evolve new leaders of the industry. Take the opportunity to get into conversations with your guests and the team, creating the personal connection and loyalty.

Touchbase

Thank you for your time, reading my article. In my international career I earned a lot of experience in surprising conditions and learned how to expedite equipment even further than they were envisioned. Keeping myself up to date and reading articles from brilliant Cuisine-Engineers and Food-Scientists (for example Thomas Vilgis) to learn new potentials to find great solutions on my path ahead.

Tim Kleinmann is an expert in the hospitality industry with profound international skills in Leading teams in Front and Back of House, Economics and above 15 years’ experience in operation, management and administration.