Book Excerpt – Accounting, Art, and Treating Partnerships Like Marriages

Richard Taubin owns Friends Coastal Restaurant in Madisonville, LA. Friends has seen an increase in sales, or the same sales, almost every month since it opened in 2006. Richard came from the IT world, and had no restaurant experience. He and his former partner split ways recently, but Richard has a new partner, and Friends is trucking right along and doing great business. Richard has learned a lifetime of valuable lessons over the last four years. Here are a few…

Be Wary Of Starting Leveraged – We started out leveraged, which is not something I would necessarily recommend to anybody. We had some other investors that were ready to back us up, but we started out leveraged. It makes you really conscious of exactly where your costs are, and your spending. If you don’t absolutely need something, you don’t buy it. It’s not something I will do again. It leaves you vulnerable to not having the cash flow to get through some swings. We had some cash in the bank, but not enough to carry ourselves for a few months. In fact, if you start a restaurant, you should be able to carry yourself for a year, to go through your exposure and stuff like that.

Take Care Of Your Staff, And They’ll Help You Succeed – We’ve maintained a good number of people that were here when we got started. We have an open-door policy, and we want to have a very good relationship with our staff. We genuinely care about them, and we try to have very open communication. Sometimes somebody might have lost a loved one, or maybe they run into financial problems. We’re very open about trying to help people out when we can, and at least at giving them an ear. And that’s really worked well for us.

A Good CPA Is As Important As Good Food – I highly, highly recommend hiring a CPA, especially one who is close to the restaurant industry. Without breaching confidentiality, they can talk to you about what other restaurants do to combat certain cost structures that you have. Our CPA has been very instrumental in helping us cut costs, and in telling us what percentages should be. He recommends the financial applications that we should use, and helps us with reading P&L’s, and how to make adjustments. And that’s really helped us out quite a bit. When you can work with a CPA on a daily basis, and have them help assure that budgets are aligned and cost controls are adhered to, it’s just as important as to me as the food you put on the plate. Without controlling those costs, you don’t make money. If you’re in it just to make a paycheck, just do it on your own. Otherwise, I highly recommend you hire a CPA and make that a big part of your restaurant. Just as much as you would design a recipe for your food, you need to design a recipe for how you’re going to track and adjust for financial costs and profits.

Negotiate Win-Win Deals With Your Vendors – We’ve also learned to lean on our purveyors and vendors, to do things like give us menus if we give them a little advertising. And that really cuts back costs. Once we realized they were willing to do that, and we had the volume to support it, we actually saved quite a bit of money on menus and specialty menus. When we have big events they’ll do a lot of signage, and have specials on eggs, and beer, and alcohol, and things like that. When we do non-profit things, they’re able to reduce the price even more. These kinds of things can really help you in the beginning, because you don’t have to do everything yourself. If you can’t afford to do your own menu, or don’t know how to put one together, or you don’t know how to put a flyer or a banner together, it’s going to cost you a lot of money to have somebody else to do it, or a lot of time out of running the operations of the business for you to do it. So if you can lean on your vendors to do those kinds of things, it’s going to save you a lot of time, and it doesn’t cost you anything.

Technology Will Help You Tighten Things Up – We’re bringing in technologies like Schedulefly, and Freshbooks, and Google email with calendaring. We’re bringing in a lot of very inexpensive, but powerful, tools to help us keep all of our information together in a central location, and keep it secured. And it’s really, really helped out our operations.

Game Plan Like You Would In Football – I played football, so I see it like a football team. You have a coach, which is the owners. You have assistant coaches, which are the managers. And you have the players, which is your staff. And you sell them on the plays that you’re gonna run to win the game. Our plan is laid out, and we show them how we want it to be executed. And then we refine it, and make adjustments, as the plan is being executed.

Hitting Food & Labor Cost Targets Is An Art, Not A Science – The driving force behind hitting those targets is to try to have the ownership stay really close with the managers, and make sure those things are being looked after every minute of every hour. We have a couple of different tools that we use to look at where we are at any given time during the day, as far as percentage of labor. And based on what those percentages are, and based on other factors such as weather, and other events going on around the community, we can make adjustments. Ultimately, it’s been a very artful thing to try to do. You never know when you’re just gonna get pops of people. It’s better to have more staff than you need, than less staff than you need, because you don’t want to have a poor customer experience.

Be Consistent & They Will Come – I think we’ve gotten to a point where, when people come here, they know what to expect. And what we expect is great food and great service. The location is there, and the place is beautiful. So I think it’s about executing those things. And I think because we have executed those things properly, we’ve built a relationship with our customers where they bring in their friends, and their family members, and it just grows from there. I think we’ve grown a customer base that counts on Friends as a consistent place to go.

Partnerships Are Like Marriages – Before you enter a partnership, you need to very clearly lay out those boundaries, and lay out those compensation structures, and lay out what the duties and responsibilities are, and keep great communication going, and deal with issues on a professional level. And always, always, always put the business as number one. If you can do those things, you have a recipe for a very successful partnership. We all hope that when you go into a partnership that it’s going to be great. But it’s like a marriage. You have to work on it. You can’t just let things happen. You have to essentially be on the same page. You have to really think out the partnership as much as you do the plan for the business. Because the issues and problems that arise from a bad partnership can cause the business to fail, and the friendship as well.

The Little Things Are Huge – The hospitality industry has a lot to do with perception. Little things mean a lot. How you maintain your facilities. Your bathrooms. Your baseboards. Your floors. Your walls. These things have nothing to do with the plate on the table. But they have everything to do with people’s perception of your place, and how it’s taken care of. You can say that about any business. But when you’re working around food and perishables, keeping a cleanly place is something that needs to be taken to the nth degree. Pay attention to the little things, because in the overall scheme of things, they are very large things.

The Schedulefly Crew