News for the Hospitality Executive
By: William “Billy-O” Orilio, MHS
In this day and age everyone thinks they are an “expert” regarding the restaurant business, because everyone has dined out at restaurants. Most of the public has a hard time understanding the failure rate of the restaurant industry, after all, “How hard can it be to operate a restaurant?” As an operator you would think, with all this "expertise," why do so many establishments fail or are barely making it through these rough economic times?
Restaurateurs general depend upon their own experience and instincts to guide their business decisions. If they were not confident of and passionate about these "resources," they would not be in business. Sometimes the most difficult acknowledgment for an owner to make is the need for OBJECTIVITY. This is the most valuable service a professional consultant can provide, whether it is for the small independent operator or for a large chain.
In order to receive the greatest benefit from a professional consultant, it is critical for the operator to concentrate on the following areas of operation: CONCEPT, MARKETING, PRODUCTION and CONTROL. Merely to tell the consultant "All I care about is the bottom line” is to guarantee futility for you and frustration for the consultant, you might just have well hired the “public expert”
To have success with any professional consultant both parties must be clear regarding specific goals, operational as well as financial. It is not unusual for a Concept to become ambiguous or poorly defined. Refinement in your facility and operation often changes the original direction of your concept, which may also change your target market. The client and consultant must first achieve a clear understanding regarding what kind of operation they are striving to achieve. This agreement and understanding is the basis for their relationship, and leads directly to the Marketing of the business.
Having the message reach enough of the right people in a convincing manner is the essence of marketing. Image is most valuable when it is a true reflection of what the restaurant is, rather than a "projection" of what you want your customers to believe the restaurant is. The consultant concentrates on objectivity, analyzing how well your efforts represent your concept.
Production determines the actual experience the guest has while at your restaurant. Production must reflect and project quality and value in three areas: Food, Service and Environment.
These "Big Three" elements are primarily determined by the associates employed to produce them. The consultant must be sure that selection, training, and motivation of personnel are given the highest priority and are an ongoing process of improvement and reward. Anyone can teach another, but to truly train an individual to be a better associate and then continue to develop that associate to also be a better person is a never ending process.
Monitoring the quality of the consumer's experience is one of the critical follow-up steps an owner must take. Operators and managers are often too close to the associates he or she has selected to evaluate their performance accurately and fairly. However, the consultant can view their performance from a different perspective. Often, the consultant is able to work closely with the operator to design a method to monitor service and food quality from the customer's perspective. Combining these inspections with cash control audits is commonly performed by a reputable Mystery Shopping Service.
Control may be the most elusive aspect of the business, but need not be. The consultant must be able to review or produce a business plan that budgets operating and fixed expenses in relation to revenue. By relating previous Profit & Loss statements to industry standards, conceptual goals' and operating pro forma, the consultant can provide the standard by which daily, weekly, and monthly activity can be evaluated. Once you assure that proper sales-recording procedures are in place and followed by everyone, daily point-of-sale reports will provide immediate information for effective control. The consultant must ensure that the menu is properly priced, and that purchasing, storage, and sanitation guidelines are being followed or all efforts are often for naught.
However, it is crucial to gain control over the current business level before attempting to realize greater profits. Simply doing more business with poor controls and poorly trained associates only makes your purveyors richer. The consultant must establish and provide the tools to enforce areas of responsibility that will translate into increased profits. You can’t just put standards in place that may not fit your mission. Rules and policies are great but only when they work for you, not against you.
It is true that often it is difficult to see the trees in the middle of the forest!
William Orilio is the owner of HOSPITALITY CONSULTANTS, a San Diego based hospitality consulting firm, which specializes in assisting operators develop “Mystery Shopping” programs with proven results. He was the publisher of “HOSPITALITY INDUSTRY REPORT” for 16 years and has taught restaurant, hotel and casino management at San Diego Mesa College for 19 years and San Diego State University, CES for five years.
William “Billy-O” Orilio
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