A Behind the Scenes Look at Restaurant Ownership
Whether you’re a solo business owner or part of a partnership, owning a restaurant is difficult. To learn more about the challenges of restaurant ownership, we talked with Todd McKenzie, owner of Chix Restaurant in Streator, Illinois.
What aspect of restaurant ownership is critical to success?
I’m a firm believer that a successful restaurant starts with math that works. Restaurant ownership is really not about great food. Of course, you need a hook or a niche for your market and one that people want (or need). But ownership starts with an idea that works on a profit and loss statement and a cash flow forecast above all else.
- It has to be financially sustainable through the valleys of business.
- Your prime costs have to be in line to be successful.
And though in my experience, I’ve seen many successful business owners that didn’t have this trait, learning how to get people to want to do what’s best for the business is another huge factor in being successful on a larger scale. People that work for your business have the ability to turn a successful business into an unsuccessful business very quickly.
How do you attract and retain new customers (and why does it matter)?
Throughout the years, this is without question the most difficult task of marketing in the restaurant business. The ways that people consume media has changed and will continue to change. You need to measure your results on promotions and find out what is working AND continue to measure results because before you know it, the consumer has found a different way to be reached, and if you aren’t there, someone else will be.
The easiest way I’ve found to get new customers in the door is, unfortunately, giving the potential new customer some sort of value (discount or free) aside from your normal operation to try you out.
The food industry is very competitive and surprisingly easy to get into. The newbies often come and go, but when they start, they’re taking away customers from your customer base on a daily basis. During these valleys, I’m thankful for every customer that I’ve retained. I’ve always focused my marketing on retaining customers as opposed to finding new ones.
But, finding new customers is absolutely mandatory to continue to be successful. With the advent of social media, I’ve focused on my current customers and hoping that their words and actions online can do a chunk of my new customer acquirement. Loyalty clubs/systems are now a mandatory aspect of the business if you don’t have one you’re behind. It needs to be simple for them to join, easy for them to understand, and the club needs to have perks and value for the customer.
What’s the toughest staffing challenge you’re facing?
A lot has changed in the last 25 years since I started hiring employees. The toughest challenge is finding out what you need to do as an owner to retain good staff. The different generations all want and desire different things. Some are motivated by schedule, some lifestyle, some image, and believe it or not, fewer and fewer are concerned with dollars and cents. Retaining good staff is key to building a successful team, but don’t hesitate when it’s time to let an employee go.
The millennials demand that you stay on top of things and want to be proud of their job and want you to be on the cutting edge. They also are looking at the next thing. They live with the idea that the grass is greener somewhere else. They’ve seen so much technology change in their life that they need constant stimulation to stay interested.
Gen Z, well, I haven’t quite figured them out. I have ruled out money as their driving force, though. But, they are loyal and content when made to feel valued. But, this is a tough group to retain.
Have you ever felt burnt out while running your restaurant?
Burn out always lurks around the corner. Most owners, in the beginning, are working much more than a five day, 40-hour workweek. Finding balance is a daily challenge. I’d suggest learning as early as possible that you still deserve a life outside your restaurant. Whether it’s doing great or not, a burnt-out owner will probably not improve the situation. Keeping your mind fresh and your spirit up can only help while waiting for the daily close, and a foul mood will not help morale with your staff or your customers.
But, as an owner, you must think outside the box and not feel the need to keep up with the rest of the world in regards to social activity. Your week isn’t Monday thru Friday, especially in the beginning.
- Learn how to make Sunday night when you’re off, feel like Friday night.
- Treat a Monday night like a Saturday night.
- Don’t lose sight of your family and friends.
- Don’t lose your hobbies and follow your passions with extreme love.
On the topic of the dream, remember the details of what your dream really is. I doubt the basis of most owner’s dream was to work 12 hour days, six days a week. It’s a means to an end. Enjoy the journey on the way, but always remember you are not your restaurant, and your restaurant is not you.
When feeling burnt out, I continue to mentally step outside of my body and look at myself and my restaurants as completely separate entities. As an owner, everyday part of your goal should be how can this business operate without me at the same level I’m satisfied with that it operates with me in it. For some, it takes years, some only months, and for some, it never happens.
But, working on your business instead of always in your business has always served me well. I often get off track, but I never lose the core goal of hoping for a company that runs as well with me as it does without me.
If you could go back to your first year of business, what advice would you give yourself?
I’d ask this question: Does this opportunity help me achieve what I really want? If the answer is no, I’d pass up and move on to the next opportunity while continuing to self educate myself in my field by hands-on experience.
Lastly, why do you think restaurants fail? And can some failures be prevented?
In my opinion, most restaurants are doomed to fail before they open. They don’t work for a few reasons:
- The market doesn’t need it, or it can’t support it.
- The location and facility are not suitable for the business.
- They just don’t work on a financial statement.
Hard work can overcome an obstacle. It’s been proven time and time again. But, your odds of success are infinitely greater if it fits the ideas of the right product for the right market, right location, and a financial position that can withstand the highs and lows of the business.