Tag Archives: food and beverage business

What We All Lose If Tipping Is Eliminated

Updated 9-18-16

~ Prices will go up more than 20% . Trust me, they’ll have to. So customers will pay more at any place that’s even moderately popular.

~ Good servers at most places will make less money as the net wage hike will not cover the lost tips. The majority of servers I know are strongly against getting rid of tips.

~ Operators will lose as higher menu prices will decrease customer visits and spending.  ~ Most sadly, another one of the rare person to person relationships left in our social life will vanish.
~ Based on my past as a tipped server in the past, and my years in many different aspects of the hospitality business, in concepts from low to high end, I think this is a mistake across the board.

~ Everyone will lose if we get rid of tipping.

Here’s a 9-18-16 update from the Chicago Tribune on how the no-tipping experiment is failing.

a tipster not just a hipster tip sign

 

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Top 10 Reasons for Bar / Restaurant Failure and 5 Solutions

UPDATED :: In over 10 years as a key player in more than 40 successful openings and long term success of bars, restaurants and nightclubs, I have seen a lot of competitors fail.  As much as I’d like to claim we “killed the competition,” often they actually kill themselves, sometimes before they even open.

Following are the Top 10 key reasons bars, restaurants and nightclubs fail. We are currently offering a free consultation to help in any areas needed!

TOP 10 REASONS FOR FAILURE

(1) The restaurateur/owner does not understand what business they are actually in. Their fantasy does not match the reality of running a successful operation. No one thinks they can hang a sign and have a dental practice with no training because they brush their teeth every day, but many people think they can launch and run a restaurant or bar because they like to go out for dinner and drinks, or maybe they worked in a bar for a while.  There’s much more needed to succeed.

(2) Typically when developing the restaurant too much is spent on construction, equipment and decor and not enough on staffing, training and marketing. Many new owners love to spend on “things” and are reluctant to spend on people which are the #1 key to a good guest experience.

(3) Careful research is not done prior to opening on politics in the community, and vital relationships are not forged with people in local power positions (over your liquor license and inspections for example!) Particularly, beverage driven venues can set themselves up for constant trouble from authorities once they are open. “Connected” experts are needed on the team, as no single person or owner knows enough about the various players and issues. This is survival stuff that all too few pay enough attention to!

(4) Concept Development is not led by someone with a successful track record of launching multiple bars and restaurants, so the right concept is not chosen to fit the demands of the market and the team fails to maximize the best opportunities to make money at the particular site and in the various desired target markets.

(5) Four walls marketing (inside the venue) and generating repeat business are given minimal attention when they should be the most important two parts of the marketing mix after opening.

(6) Lights, music, atmosphere (temperature/comfort) are not consistent and appealing. These are simple basics yet hard to maintain. Circling back to point (1), many who open restaurants don’t realize it’s the details that make or break you.

Continue reading Top 10 Reasons for Bar / Restaurant Failure and 5 Solutions

Good News for the Restaurant Industry

The latest House Bill redefining full time work at 40 hours per week is good for the restaurant/bar industry including its workers, as it will decrease the amount of shift cuts for part time workers.  40 hours has traditionally been the definition of a full time job and 30 hours should not be seriously considered full time work.
Read about it here.

Learn how to survive Obamacare from restaurants that started it early.

Learning from early adopters:  Illuminating article on the ACA from RestaurantBusinessOnline.com.

“Don Fox was busy designing a health-insurance plan for his workers when he got an unexpected reprieve from Uncle Sam: an extra year. Unlike many of his colleagues, he decided not to take the delay.

Before Obamacare’s rules kicked in, he wanted to shake down his insurance program, to find out how it would hit his operations and his bottom line.     …

For at least some early adopters, Obamacare may not be the apocalypse they had dreaded. “The numbers have generally gone down from what people feared would be the worst-case scenarios,” says Scott DeFife, executive vice president of policy and government affairs at the National Restaurant Association. There are several reasons, say benefits consultants.

One is that many employees just don’t sign up. Thirteen percent are covered under spouses’ or parents’ plans, according to the University of California Berkeley Center for Labor Research and Education. Others decide it’s cheaper to pay a tax penalty for going uninsured than to pay their share of premiums. “You’ve satisfied the obligation to offer the coverage,” says Keith McMurdy, benefit-plan attorney with Fox Rothschild in New York City. “There’s no requirement to force people to be covered.”

Some insurers are softening the blows, too, by offering lower-cost options tailored to restaurants. “Insurance companies have been nimble,” says Gary Levy, hospitality-practice partner with accounting firm CohnReznick in New York City. “They’ve gone out and designed plans that meet the act’s requirements that are very affordable.”

Speaking of work hours, millions of restaurants will need to start tracking them in January, even if they’re not yet offering insurance. That’s because they’ll have to report those 2015 hours to the IRS, to document who’s eligible. Michelle Neblett, director of labor and workforce policy for the NRA, recommends making sure your payroll system is set up to gather the numbers. “You’ll have a hard time if you wait to rebuild this data at the end of next year,” she says. “This is a massive hidden compliance cost, which a lot of people are not paying attention to.”

Try to remove whatever uncertainties you can, experts say, because there will be plenty remaining that are out of operators’ control—such as 2016 insurance rates, most of which won’t be set until next fall. By then, NRA lobbyists hope Congress might raise the definition of full time to 40 hours. That would exempt another 21 percent of restaurant staff from employer mandates, according to UC Berkeley Labor Center figures.”

Read the entire article here.  And thanks to RestaurantBusinessOnline.com, a great site and resource for F&B information and guidance!

 

 

Think you’re too cool to smile a lot? … Then you’re saying you’re cooler than Richard Branson.

Great advice from Sir Richard Branson:

“If you’re looking for the next big investment for your business, but don’t have much money to spend, start by looking at yourself in the mirror. A smile won’t cost you anything, and the returns to your business will start right away.”

Or as I like to say regarding the food and beverage service business, “SMILE, AND MAKE MONEY!”

Read the inspiring short piece in Entrepreneur Magazine:  Richard Branson on Smiling as a Competitive Advantage

If you don’t believe me or Richard Branson, maybe you’ll listen to Nat King Cole’s opinion.

Nat King Cole - Smile (single)

Have a great week and don’t forget to smile!  — TTBG

When does a restaurant group become “A Chain?”

A posting on Boston.com October 15 discusses the objections of Boston’s Legal Seafood Group to being described as a Restaurant Chain.  Many groups especially higher end concepts, don’t like the image of being called a “chain restaurant,” even if they have over a dozen locations.  So what makes a restaurant a “chain restaurant?”

While there are some legal definitions from various government authorities, when it comes to image it’s opinion of course.  My view is that it depends on how much local level management authority exists in each location.

If there is a local Operating Partner or GM with equity who works a location daily with significant authority on primary issues such as food and drink menus, local advertising, decor, product mix, specials, promos, HR and community involvement, I think its possible for even a larger group to skirt the “chain restaurant” image.  But if nearly everything comes down from Corporate and even the GM is merely an employee, I think the “chain” description can become accurate as early as 5 plus units!

And sorry Legal Seafood, but I’m pretty sure having locations in airports makes you a Chain.  But then again, in the restaurant business a necessary part of becoming a “chain” is “growth!”  So maybe it’s not such a dirty word…

Learn more from this insightful article re Legal Seafood at Boston.com and let us know your take via email, Facebook, Twitter or WordPress!

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