Category: FC Archive

A few times a month, I will post articles from my monthly "Food Consulting" Newsletter Click here to receive the newsletter by email.

Next week, I will spend a day observing the operations of a bakery in Brookline.  The owner wants to grow her business and we will be documenting the different jobs in the kitchen to evaluate how best to expand her operations and utilize labor effectively.

 As I prepare for this day, I asked for her prep-sheets, recipes and order guides – any standardized forms she has that streamline operations.  She pulled out her recipe book – a tattered moleskine book with handwritten notes in her native (non-English) language. 

 "Don't worry," she said.  "I'm always at the bakery to teach them my recipes."

 Oh, I worried.

In addition to the inefficiencies of constantly teaching her employees her recipes, there is an inherent risk in having one person the sole keeper of information.  If the owner becomes incapacitated for any reason, can someone else jump in to take care of operations?

This is just one example of the importance of knowledge sharing.  There are several approaches to ensure your business is covered when a key person is out of work.

•  Write down job descriptions with specific tasks

Job descriptions are helpful not only for the employees themselves, but also in the event someone else has to cover a shift.  How should the cook set up her station? What are the closing procedures at the end of the night? Which aspects of the operation is each employee (or station) responsible for?

• Write down recipes

It's also helpful for employees to have par levels – how much chicken for example, should be prepped and ready for service on any given night of the week?  Have a system where employees can track what needs to be ordered to maintain par levels on their station.

• Cross-train employees in multiple aspects of the business

With job descriptions written and recipes recorded, your employees will be better equipped to jump onto another job at the last minute.

As for my client, I will be transcribing recipes, creating prep sheets and order guides so she can manage her current business more effectively and stream-line operations as she grows.

 Do you have your recipes written and job descriptions standardized?

A few times a month, I will post articles from my monthly "Food Consulting" Newsletter Click here to receive the newsletter by email.

Every time I run into Chris Douglas, chef/owner of Tavolo and Ashmont Grill in Dorchester, he's talking about one of the great Future Chefs interns he has working for him.

The value of internships is clear for the student…. They are a great tool in exploring new careers, building resumes and garnering experience.  This is especially true for high school and college students.

As Toni Elka, director of Future Chefs explains:

"Lots of young people and career changers go into debt for culinary school.  Taking an unpaid apprenticeship in a high end restaurant can be a very effective way  of discovering if the field is a good fit and of building skills under a teaching chef without going into debt.  We recommend it for some of our students and two of them have done short unpaid apprenticeships this year in a small high end kitchen, one was recommended to Hungry Mother and is valued, paid staff there and the other is returning to NECI with invaluable experience under his belt and an impressive recommendation that will open doors

"This is particularly useful for talented inner city kids who need experience out of their comfort zone and a chance to show what they can do with someone whose willing to help them make the transition to unfamiliar territory.  For young people who are eager to learn and don't think they are one step away from being famous because they've been to culinary school this arrangement can be a win win for the apprentice and the chef/owner." 

In return for taking a grateful young person under their wing and giving them the experience they need to move up, the business gets tangible benefits as well.

First and foremost, business owners have a low-cost opportunity to recruit and measure talent in the next generation of workers. 

"The organization has the opportunity to observe the student at work and review work habits, technical ability, interpersonal skills, and adaptability before making a full-time commitment," wrote Larry Crumbley and Glenn Sumners in Internal Auditor

It's not uncommon to pawn off the menial tasks on the intern, but it is equally important is to pepper them with some of the more exciting jobs to keep their enthusiasm strong. I recall my own internship at Bix Restaurant where my regular jobs were chopping onions, garlic and cleaning lobsters.

And perhaps the most overlooked benefit of interns:  The fresh set of eyes and questions prod the manager out of the day-to-day business to think differently and more creatively about operations.

For more insight into hiring interns:

Live Blog

Reference for Business

 

Do you use interns? What strategies do find work for the most effective relationships?

I started working with a new client last week who wants to re-energize his business.  In our initial meeting, I asked him his goals for the strategic audit.  He replied, "I want to make a profit."

I followed-up with, "How will you measure success?"

To achieve his goals, my client needs to first define what success will look like.  With a clear picture, we can create a road-map to get there.   Success means different things to different people and businesses.  Here are some examples:

• Being Voted Best "Best Neighborhood Bistro" by Boston Magazine 
• Selling 200 subscriptions to your CSA
• Making a net profit of $200,000

For my client, success will be purchasing the building that houses his business.

Each of these definitions will require different strategies.

Success: Best of Boston Award

This strategy will focus on improving the quality of service and food.  It will be followed up with a PR and media campaign to ensure the public and press are aware of your quality. 

Success: Revenue Target

If your goal is to increase sales (for a farm, this may mean selling more CSA subscriptions, for a restaurant it may be reaching a sales target), then you will need to create a strategy for sales and marketing.  A restaurant may want to consider special promotions to bring in new customers.  A farmer may want will want to explore to increase awareness about the farm.

Success: Net Earnings Target

And if your goal is to increase profits, then your strategy will focus on increasing revenues (see above) and also evaluating all the business expenses for opportunities to trim them. 

For my client, we will take a multi-faceted approach.  We will explore ways to increase revenues and decrease expenses.  In addition, we will put together a capital plan to determine his financing needs.  With that in mind, we can evaluate his options to purchase the building and get his finances and business organized so that he can successfully get the funding he needs.

How do you define success?  And what are your strategies? 

Last week I attended a farmer to farmer conference put on by the New Entry Sustainable Farming Project.  During the lunch break, I listened in on a conversation between two farmers discussing the challenges of selling to restaurants. 

Given that my background is in restaurants, I understand the challenges of the chef.  It is certainly easier to purchase meats and produce from just a few vendors (like Russo's for produce and Kinnealey for meats) rather than sourcing from individual farmers.  Farmers typically don't have a sales person to answer phone calls, answer questions and take orders.  And the farmer cannot always guarantee they will have enough produce to fill the order completely.

Despite the challenges, chefs still want to buy from small local farmers because they want to support the local economy, the environment, and most importantly, they know the quality will be superior.

Here are several ways chefs can approach farmers to create a more sustainable vendor- relationship:

• Know that availability of any given product is never guaranteed. Write flexibility into your menus.
• Both farmers and restaurateurs work within very thin margins.   Farmers cannot always afford to give price breaks.   If discounted pricing is important, ask for "seconds." Typically these are vegetables that have some blemishes to them.
• If uniformity in the vegetables is important, let the farmer know. 
• Farmers are willing to grow specialty crops for loyal customers.  Let them know in January what you would like for the spring and summer menus so they have time to plan.  Be prepared to purchase the entire harvest in order to foster the relationship.
• Understand what is seasonal for your region.  For example, tomatoes don't come onto the market until mid- to late- July and strawberries are available in the spring.

Similarly, farmers need to understand the constraints of the chef:

• If you are unable to fulfill an order, let the chef know as soon as possible, and be prepared with alternative options.
• Understand how to prepare and cook your vegetables, so when you have an unusual crop, you can offer suggestions to the chefs.
• Sort crops into #1s and #2s.  For the chef that needs picture-perfect vegetables, you can offer the better looking crops at a higher price.  For the chef that needs a better price, you can offer the less pristine looking vegetables that may require more creative uses, prep and/or trimming.

What strategies have you used to enhance relationships between farmers and their customers?

Over the last few months, I spoke with micro-lenders – ACCION USA and The Carrot Project.  The story is the same, they have capital to lend, but are having trouble finding "qualified" borrowers.

If you are seeking financing to start or grow your business, creating financial projections is paramount.   Financial projections are based on historical performance and assumptions of future performance.    Potential investors will want to see projected income statements (Profit and Loss), balance sheets and cash flow statements for at least three years.

 This information helps lenders evaluate your ability to pay back debt.  Obviously, they will look at your cash flow statement to ensure you project enough cash inflow to cover your debt service.  Just as important, they will look at your assumptions so they can see how clearly you thought through your business.

When you create financial projections, start with your assumptions.  The assumptions of your specific business will vary, but here are some examples of how to think about it:

•  How much revenue will you earn? Break it down by month, day-part, and/or revenue stream.
•  What will your expenses be?  Break it down as far as you can … detailing each expense by month, day-part and /or revenue stream.  Create a sample employee work schedule to outline your labor needs.
•  What capital equipment will you need?
•  How long will the start-up take? How much cash do you need to get through the start up phase?
•  What will be your debt-service? What type of loans or financing will you get?

Once you are clear about your assumptions, you can start building your financial statements.   Start with the income statement – detailing revenues and expenses.  From the income statement, you can build your balance sheet – outlining what the company has (assets), what they owe (liabilities), and what they own (owner's equity).  From your balance sheet you can build your statement of cash flows – to track cash inflows and outflows from operating, investing and financing activities.

Be sure to create your financial statements in a way so you can test your assumptions.  For example, what happens if your food cost is 35% instead of 30%?  Does your business model fall apart, or can it withstand the increased expense? What happens if revenues fall short of your expectations?  Again, can your business model support this shortfall?

Your investors will want to know your business can survive through conservative estimates.  And you will have the peace of mind knowing that you have room to breathe should there be an unforeseen circumstance.

A few times a month, I will post articles from my monthly “Food Consulting” Newsletter Click here to receive the newsletter by email.

The prevalence of social media has created new, low-cost marketing tools for the entrepreneur. It also presents challenges as we seek new ways to maximize our efforts and stand out in the sea of tweets, buzzes and status updates. While these outlets can enhance marketing efforts, they should not replace more traditional methods of print advertising, email blasts and press-releases. Traditional marketing still plays an important role.

Facebook is perhaps the most dynamic marketing tool a business owner can use. More and more, restaurants use Facebook as their primary web-presence, and the more traditional websites become a static afterthought.

Bergamot uses Facebook to post its nightly dinner specials. Pizzeria Posto engages its customers by asking their opinions – on anything from naming a new drink to whether they should open for weekend lunch.  Toro announces special events. Rialto and Chez Henri post musings from behind the scenes giving their patrons an insider’s view to their restaurant.

Atlanta-based Vitrue offers several tips to make the most of your Facebook posts:

•  The most successful posts have photos, rather than plain text or video clips.
•  Posts in the afternoon have more engagement than those in the morning – when potential customers are thinking about dinner.
•  Wednesday posts garner the most attention, over weekend or early-week posts.  Thursday and Friday posts come in second in attention grabbing potential.

Twitter does not have the reach as Facebook but has become an important tool for mobile food trucks such as Clover. With easy access from mobile phones, food trucks can easily announce their location in real time. Restaurants also use twitter to announce special discounts and new menu items.

Dr. Ola Ayeni, Chief Idea Officer of Dining Dialog, offers these tips for using Twitter:

• Announce your new menu or drink specials of the day to your followers
• Promote a happy hour event or special restaurant event to customers via twitter
• Start a promotion and allow people to sample your food and in-turn invite their friends to your restaurant. 
• Ask for ideas for new menu items or specials of the day from your followers on twitter
• Offer a special prize for people who follow you on Twitter by a specific time and date, to be entered to win something free like a free bottle of wine or gift certificate.

The newest entrant into the world of social media is Foursquare. It requires less attention from the business owner, but still offers the potential for buzz.  According to Foursquare, “Foursquare aims to encourage people to explore their neighborhoods and then reward people for doing so. We do this by combining our friend-finder and social city guide elements with game mechanics – our users earn points, win mayorships and unlock badges for trying new places and revisiting old favorites.”

Subscribers to Foursquare announce where they are through the mobile phone application, and then it is posted to their facebook page. Users can post recommendations and tips for a particular spot, allowing the restaurant owner to follow what their customers are saying.  Business owners can also offer specials to its Foursquare users.

Inc. Magazine offers tips on how to promote loyalty and drive revenues using Foursquare.

What social media tactics have you found most helpful?

A few times a month, I will post articles from my monthly "Food Consulting" NewsletterClick here to receive the newsletter by email.

Every March and August, restaurants in the Boston-area offer discounted prix-fixe menus as a way to lure customers into the restaurant as part of the well-promoted restaurant week. While it doesn't cost anything for a restaurant to participate in restaurant week, they pay an annual membership fee to the Greater Boston Convention and Visitors Bureau. In exchange, the restaurants receive free promotion and marketing through the GBCVB website and other affiliates.

For many it seems like a no-brainer to participate. Many of the new and trendy restaurants have no trouble filling seats even during the slow months, but the more seasoned restaurants welcome this burst in business.

The restaurants benefit from participating in that they get free marketing and promotion. And diners tend to be more open to trying new restaurants during this period, so the restaurant has the chance to lure new customers into becoming regular patrons.

Like this and any other promotion, the added business can definitely help the top line – even with the reduced prices, revenues pick up significantly. The real question is: does the added business do enough for the bottom line – with the cost of participation as well as the higher food and labor costs.

As a business owner, you must decide if this promotion can effectively increase business. And if not, does the promotion offer other long term benefits beyond the momentary uptick in sales.

A few times a month, I will post articles from my monthly "Food Consulting" Newsletter.  Click here to receive the newsletter by email.

Samantha's (the name has been masked, as the company was recently sold to a new owner) was a local food service company with retail cafes in the financial district of Boston. They catered to the lunch-time crowd with salads, soups and sandwiches. After 10 years in business they had garnered a reputation of high quality food, albeit slightly expensive compared to the competition.

The Challenge

Over the span of 6 months, food costs climbed over ½ percent, from a precariously high 36.5% to 37.1%.  With revenues over $2,000,000, that ½ percent translated into $10,000 of lost profit. And trying to get to get the food cost to a more manageable 32% would bring an astounding $102,000 straight to the bottom line.

The Process

In order to find opportunities to reduce food cost, we examined the entire operation:

1. We determined theoretical food cost for the entire menu by reviewing invoices, recipes and portion sizes.
2. We analyzed food handling procedures
3. We evaluated the value proposition of Samantha's to its customers. 
4. We analyzed the competition's pricing structure.
   

Each process, yielded valuable information which provided opportunities to reduce food cost:

1. Based on sales mix and volume we determined that in a best case scenario, food cost should be 35.5%;
2. By exploring food handling procedures, we accounted for 2% shrink.  In addition, cooks were serving customers portions up to 11% higher than recipes dictated.
3. The value proposition of high portions of high quality food at responsible prices contributed significantly and directly to high food costs. 

The Outcome

By understanding all the contributing factors to high food cost we had many opportunities to reduce it:

1. Modified recipes to yield better food cost.
2. Negotiated prices with vendors
3. Improved training so that portion sizes match set recipes.
4. Reduced overall portion size.
5. Modified prices to match the competition. 

By tackling the problem from many angles, food cost decreased 2% points almost immediately, with indications that food cost would decrease even further.

Click here to receive my monthly Food Consulting newsletter by email.

 

Perhaps a sign of a recovering economy, entrepreneurs are opening new businesses.  Lydia Shire and Jasper White’s new restaurant, Towne Stove and Spirit opened this summer at the Hynes Convention Center.  Farmers Juan Mendez and Andrew Rebula, broke ground at their new farm: The Hammock Farmers in Western, MA. You can find them selling produce at the Central Square Farmers’ Market on Mondays. More businesses are slated to open this fall, including Akimenko Meats Butcher Shop and Back Deck Restaurant.

As varied as these new ventures are, the one thing they have in common is that they are all seeking funding.  Money is needed to secure a lease with a deposit, purchase equipment and cover operating expenses until the revenues grow to a sustainable level.  And money is available. The entrepreneur has several options for funding ranging from traditional to unconventional.

Traditional funding can come from a bank loan or individual investors.

Farmers like Juan and Rebula can seek grants from the MA Department of Agriculture or loans from The Carrot Project.  For more established farms looking to grow their business Farm Credit Bureau has a variety of funding options.

Restaurateurs like Towne and Back Deck seek funding from individual investors and banks.

And sustainable food ventures can seek funding from individual investors or bank loans.  Slow Money can help connect entrepreneurs with funders.

CSA’s – community supported agriculture – is a way for farmers to fund their business by getting the customer to pay upfront for a season’s worth of produce.  In a similar vein, some crafty entrepreneurs have requested funding in the form of donations.   The future business owner may offer some sort of in-kind return to the investor.

More so than ever, investors and lenders will want to know that the entrepreneur will be a good steward of their money.   And a good business plan is crucial.    This will include not only information about the business venture and operating plan, but also an assessment of risks and revenue and expense projections. 

You can find business plan templates on the SCORE website.

If you need further assistance evaluating your financing needs or writing your business plan, we’re happy to help.  Just send us an email.

 

Click here to receive my monthly Food Consulting newsletter by email.

As a chef, making sustainable choices for fish can be confusing. Is farm-raised better than wild? Is cod on or off the Monterey Bay Aquarium seafood watch list? And can you even trust the Seafood Watch list as Paul Greenberg, author of Four Fish, questions. Your customers demand Chilean Sea Bass, but you know it's not a sustainable fish option.

I have heard arguments for and against farm-raised fish. Farm raised fish can be considered more sustainable and environmentally friendly because this practice does not deplete stocks or threaten extinction by overfishing. However, they pose a threat to the environment by spreading disease when the fish escape. Additionally, farm raised fish also rely on wild-fish for fish-meal… a prime source of nutrients.

Further complicating the issue, consumers seem to latch onto each new fish. First it was salmon and tuna, then Chilean Sea Bass. Now even the lowly cod has such high demand that wild stocks of the fish are being depleted.

Here are a few tips to help support sustainable seafood sourcing:

1. Incorporate low cost fish and seafood on the menu. The higher demand fish command a higher price, and typically these are the same varieties that are being over-fish.

2. Maintain diversity on your menus. As more consumers adapt this practice, the impact of over-fishing a single type of fish is reduced.

3. Consider supporting a Community Supported Fishery as a way to incorporate diversity into your menu.

Resources:
Monterey Bay Aquarium Seafood Watch
Cape Ann CSF
Port Clyde Shrimp CSF

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