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Mark Godward

A Bad Economy Is No Excuse To Give Up
May 5, 2008

I just returned from a conference in New York, where I had the opportunity to discuss a wide range of issues with restaurant executives, as well as listen to the perspectives of Jim Cramer of MSNBC’s “Mad Money” (who, by the way, has earned his “Madman” moniker). While there is a lot of excitement about the opportunities in Asia and Russia, the general mood among executives was “doom and gloom.” But I don’t buy into it.

So, people are not spending money now. We’ve been through this before. It will end.

Capital expenditures to remodel and expand are not a top consideration. But having the right plan in place so that when the economy breaks loose — that’s very important. In order to do that, you must use what you have wisely and to its fullest.

Labor Deployment
Be careful not to pare down your workforce too much. They will be in high demand once the economy turns, and you will have to have the capacity in place for rebound. Use labor wisely in assembling food and for customer service, and offer training and other perks for those star performers you want to be sure to retain.

Equipment
If it’s not time for you to add any equipment, think about how you can use what you have as efficiently as possible. Some simple smallwares could extend capacity in a pinch. Ensure that your lines are adequately set up, for example, using larger-volume containers. You might consider purchasing different pans to allow you to use your ovens more efficiently.

Guest Is the Priority
This seems simplistic, but it deserves a closer look. Focus labor on activities that will be visible to the guest and that will impact the guest’s experience. Make your food tastes as good as possible. Make your store as clean as possible — both inside and out (guests make lots of assumptions about the quality of your food by looking at the cleanliness of your store). Make certain that no employees are idle in front of guests. Promote items with the highest value — from the perspective of both price and consumer preference. Fundamentally, make sure that it is clear to your guests that you are doing everything you can to make them happy. And, clearly expressing your gratitude for their business remains key.

If you do all these things, which you can control, you vastly improve your chances of success. You won’t need to be so concerned about sales, because they will eventually happen. Remember, there are a lot of concepts that are doing well, such as Chipotle, Papa Murphy’s, and BJ’s Restaurants. So, don’t fall in the trap of using the economy as an excuse to do nothing.

Posted by Mark Godward on May 5, 2008 | Comments (0)