Restaurants closing

For 12 years now my mantra has been:

We make money (and a return on net assets and investment) on every function or we don't do it.

And it has paid off well. Purchasing catering equipment at bankruptcy auctions have enabled us to grow again and again and meet are ROI requirements.

I take a lot of crap from purist when they hear the work we do to keep it profitable. Making our own soups out of the trimming and leftovers, but it sure has paid off this year, business is still growing.

""ONLY THE STRONG SURVIVE"" Billy Joel :(

...and to add to Billy Joel:

-Darwin

Change is inevitable; be it the response to the employee market, innovation or, yes, fiscal volatility. I think, and have for a long time, that sticking to the values of which you started your operation, with no room for change, is a recipe for utter disaster. If you operate the same as you did 10 years ago with the hopes of getting the same results you did 10 years ago, the lights will go dim.

Yes! That is called business savvy. And, again, many businesses fail, not because of poor products, too few guests, but rather mismanaged business practice. I really, honestly, worked for partners that said "well, we can lose a bit on each job, but we'll make it up in volume." The only way I see that working is that you lose a lot over any measurable amount of time.

Business is business. Without making money, there is no business. Every good intention of sharing your profitability, being a pillar to the community, being a learning facility, offering great experiences is all for not when you can no longer pay your staff, pay the rent or keep the lights on. A terrible casualty of a waning economy.

I understand fully. The restaurant business is one field where attrition happens in the marketplace. Its both sad and expected all at the same time. And even though its a pretty well known statistic that 80% of restaurants fail in the first 5 years its still a poignant reminder when people we know or restaurants we love go out of business.

that being said- I was chatting with one of my employees who used to work at another long time area restaurant telling me more stories of their already quasi-legendary cheapness. I told them that if you were to put me and the other long-time managers in a room together that we all have our own quirks and idiosynchrocies, but that if you listen to all of us we end up all at the same place- surviving in both good and tough economic times. None of us would get any points from employees on our big-hearted ways but more importantly we can offer a decent product and reliable employment. And so it goes.

Good luck and good business to all in 2009.

It makes perfect sense, when ppl are down and out and the money is tight they treat themselves to places where they are comfortable and they know what they are going to get. My fiance is the KM of one of the mediocre places and they are setting records for sales. They went from being a consistantly busy place to being on a wait 7 days a week for both lunch and dinner. We like to eat at the creative places, but you never know what you are going to get (always quality, but it may be unusual) and that isnt what MOST people want. If I was an owner again I would make my way towards comfort foods and let everyone know about it instead of flexing my creative muscle.

Restaurant closed............ how not to sell a restaurant

Closed, local place for sale; I've had some interest since begining of November, but can't get any information from the owners.

I know they lost their shirt, most anyone can tell, especially if you are in the business. No experiance, didn't work it them selves, poor location for what they were trying to do, concept missed the target by far, build out in the space is poorly laid out.

I'm just looking for some solid information to confirm my numbers; i.e. lease terms, debts againest equipment, etc.

So here I am with CASH, in my hand; I've had three meetings, no info. The eyes glaze over and they begin to talk about all of the things they think could be done to make "their" concept work. Their concept which relies on coffee for 50% of the revenue, and they open at 9:00 a.m. (in a rural town, fishing area that hums at 5:00am???) a layout that has them running from the order counter and refrigerator to the coffee machine over 15 feet, and back 15' to deliver the product.

This place is also listed on craigs, so I sent a blind email with questions; same thing. They are sending me decor pictures (which needs to be dismantled as you couldn't keep clean and sanitary) but no info. I'd go to the building owner direct, but the wife also manages the building for the owners.

Thump, thump (head beating on wall) and their rent goes on.........

Thanks for letting me vent!

I think Chefhow is right. Every few years articles in trade magazines start to focus on how comfort food is coming back into style. I always think it never goes out of style, we just get bored chefs who don't want to produce it. When people experience turmoil and uncertainty in their lives, they run for cover. The cover they run for is usually things they are familiar with or remember from "safer" times, which is why we call it comfort food. The place I work at has been in business for more than 150 years. It started as a railroad hotel and road house for people traveling to the nearest market town. The original owners traded with local Indians for game and fish to feed the travelers. People have been coming there for generations. We now focus primarily on seafood. All our dishes are prepared very simply with simple accompaniments. With all that, I'm nervous as a cat on a hot tin roof in this economy. While other area restaurants are cutting their quality, I'm ramping ours up as much as possible. The quality issues we had were mostly with preparation, which has been resolved. It's a very small place, 86 seat capacity, but for all practical purposes the reality is about 64 per turn. We did 210 covers New Year's eve with not one complaint or dish sent back. So I think the key to survival is affordable quality. Our per plate totals have actually increased an average 20% since August. People are not afraid to spend money if they know what they're getting and that it is of good quality. It's all wait and see though, as no one knows what will happen tomorrow in this economy.

Division of labor

I think the biggest reason for our survival is simple: I make the money, but I'm not allowed to spend it. That' my spouses' job. and she knows very little about the specifics of what I do, so its easier for her to tell me what my budget and labor expenses are- shes pitiless in that respect. She just tells me that is how much money I have to work with, and reminds me that I'm very good at making it work out.

The dollar is tight. I agree with Mushroom Girl open a hamburger place, but one that does hi volume. You dont need brain surgeons working for you or chefs. or expensive purchase food items, tight control, count the napkins even no dispensers on tables. No sugar or sweet and low either customers steal that to. You gotta watch the pennies and they add up to dollars. Dont serve a good burger, serve a great one, limited menu, hardly any inventory, like a dollar store in by morning out by night.

Another thing that is hard to get my culinary instructors to understand. They just don't realize how much it cost to have cash tied up in inventory.

sOMETIMES TIEING UP CASH IN INVENTORY COULD BE GOOD.Here in florida tomatoes all kinds fresh canned go up a lot in January. By buying xtra in november or beginning of December you could save 20% I dont know of anyplace where you can get 20% on your money today. Sometime it does not pay to have grocery just laying on shelves depending on your rate of consumption. Its money that could be used for other things.

Accepting that you don't know everything is key.....

We "re-opened" a restaurant and bar (after significant remodeling) in a rural community 8 months ago and while our initial few months went great - things went south with the economy. We realized that we couldn't survive with our more upscale menu and approach. We went back to "bar basics" and now offer more great reasonably priced lunch specials and a much more robust bar menu with sliders, meatloaf sandwiches (with roasted red pepper mayo), prime rib panini's (leftover from our Saturday night specials), etc. We keep our mid week dinner specials simple and only get fancy on the weekends. For us, it has worked but we had to accept that we needed to deliver what our customers wanted - not what we wanted for them. We are looking forward to a great year - I wish I could say the same for the 3 restaurants in the nearest neighboring city that closed last week......

I agree. The world is shifting and we need to change with it. We need to stop doing the same things we have been doing the last 10 years and listen to what the customers want. There are restaurant casualties everywhere but there are also busy restaurants right next door. Alot of what people want is in the experience and the 'packaging'. It's harder to interpret but sending out good food is not enough. There is so much choice nowadays that you need to have something that no one else has.

I am cautiously optimistic as we still don't know how much worse things culd get, but our Jan. sales were up 7.3% from Jan.'08. We learned our lesson last year when the previous manager tried to run cheap specials and get the head count up. That is not the type of place we are. We are a destination place being essentially in the middle of nowhere. People come there for a good meal. I ramped up the quality last Aug. and increased per plate totals over 20%. We have been doing a comment card promo to see where we are in terms of customer satisfaction and where our demographic draw area is. The cards are overwhelmingly positive with 99% citing the food as the best part of their experience followed by service and atmosphere. We did not specifically ask how they felt about pricing, but the comments regarding price have been great food for a reasonable price. We really can't do any more other than to ride it out and hope for the best. People will still go out to eat, but they will be more careful how they spend their money. Don't dumb down what you do in terms of quality as it will blow up in your face. You might get a few more bodies in, but they won't be happy even with a lower price if they expected better of you. You wind up running a full staff and making no money. We left the prices and portions alone and went with less staffing. We served approx. 20% less people than in Jan. '08, but as i said earlier, sales were up 7.3% and when added to the payroll savings, the mumbers on the bottom line are even better. Hang in there everybody and do the best you can. Good luck to all of us.