Stormy Seas

Based on the results from the Business Assessment, it looks like your business may be facing some challenging issues. Even though it might not be smooth sailing right now, there’s usually a way to get to calmer waters.

There have been countless other businesses that have sailed these waters and found their way through.  We’d like you to meet one them.  His name is Dante.

Dante's Story

“I started my business to follow my dream.  The business started out fine, but lately, we haven’t been doing that well. Sales are falling and bills are getting harder to pay. I’m spending so much time thinking about the business that it’s not as fun as it used to be.  I’m beginning to wonder if I made the right choice”

Dante owns a small upscale dining establishment in Manhattan. During his first few years, Dante has had great success with his restaurant. He had a good location. He had solid reviews. His cuisine was new, and the design of his restaurant was awesome.  However, during his second and third year of operation, that situation had changed.  He was losing money & customers.  He was having a tough time.

How We Helped Dante

Dante was referred to us.  When he came in, that initial picture had changed.  During his second year of operation, he noticed that he had more tables open than usual.  He thought he would change up the menu, spend some money on advertising, and push for more Yelp! And Google reviews.

After 6 months of this, he started to become increasingly concerned. People had simply stopped coming as often. He didn’t know why.  The lack of customers was putting a financial strain on the business. He was late paying some suppliers so his business credit has taken a hit.  There were  of the company that Dante couldn’t identify. A friend recommended that he talk to us

Dante was worried about how he was going to stay in business. He had all the normal concerns. He was worried that the risks they took were the wrong ones. He blamed himself for how the business was going. He was anxious about what people would think if it didn’t work out. He was worried about living paycheck to paycheck in order to keep his business afloat.

He wasn’t alone, we told him. We said that nearly every small business goes through a period like this. We wish he had come sooner before things were in the state they were in, but after reviewing his case, we believed we could help him.

Back to Basics

We looked at how he made or lost money, and what the biggest mistakes were behind the scenes. The first place we started was to look at his customer base. We started by talking to them. We talked to the regulars, and we talked to the past reviewers. We wanted to know why they came, and if they weren’t coming back, why was that?

What we found:

We learned a lot. For his regulars, it was a comfortable routine. They didn’t mind if the service wasn’t the best. The loved Dante’s food and enjoyed the experience. For the reviewers, the loved the experience, but they felt that there wasn’t anything new. It was “been there, done that”.

It’s a common misconception that satisfying your customers is enough. And, that’s the first mistake that was hurting Dante. People are driven by our emotions. The people who stayed were emotionally attached. Those who wanted a more varied experience were not. Unfortunately, his regular customers were not enough to keep the business afloat.
pain-free delegation

Staff Evaluation

The restaurant business is rife with turnover. It’s the nature of the game. Dante was a chef, not an HR manager so his hiring and screening practices were not consistent. Therefore, the servers he hired were inconsistent. This led to varying degrees of service and varying degrees of satisfaction. Dante’s food was excellent. So, the first time you go, you might forgive the service because the food was great. The second time it happens. You aren’t likely to come back.

Operational Review:

One of the most common mistakes that restaurants make is not accounting for overhead in the menu pricing. Dante was a master at knowing what was popular, and he knew the cost of his ingredients to the penny. What he didn’t factor in was the cost to prepare, serve, and the other fixed costs of the business. Why would he? After doing all the math, we found that a few of his most popular items were his least profitable.

Spending

Dante was spending on advertising, but it wasn’t working. Why? We asked some of the people who saw his advertising, why they weren’t interested in coming. The major reason was his Yelp! and Google reviews were old. Since they didn’t see anything recent, they didn’t think it was good and didn’t trust the star ratings. Dante didn’t know how much these reviews were driving demand so he was spending on the wrong tactic.

Results of the Review:

After all of this, we came back to Dante with a plan. The great news was Dante’s food wasn’t the issue. Since Dante’s financial situation was a stumbling block for additional financing, we needed a plan that could be implemented cost-effectively.

Dante's Turnaround Plan

We recommended the following 5 steps:

    1. Conduct a top-to-bottom review of his servers, outlining the specific expectations of the role. After secret dining a few nights, we had some immediate recommendations.
    2. Implement a consistent hiring process, plus institute a performance evaluation for servers at 1 mo., 3 mos., and 6 mos. to know if everything is remaining on the up-and-up.
    3. Keep the existing menu, but add either a creative special or a creative evening to keep his current customers while attracting new ones.
    4. Change the pricing on a few of the menu items, cut back a few hours, and clear a few tables.
    5. Stop advertising, and offer discounts for Yelp and Google reviews

This cost next to nothing to implement. There was extra management time required for the reviews, but knowing they would be reviewed by customers, immediately improved service.
It took a few months, but Dante was able to turn his business around

How can we help you?

(646) 543-7804

available from 9:00 – 5:00

Address 505 W. 37th St. New York, NY 10018

Email contact.us@prostrategix.com