How Not to Run a Start-Up Restaurant

Writing this post for those who’ve asked for advice on starting a juice bar.

Recently received an e-mail from someone opening a raw food/juice bar in a small Montana town.  She asked six juice bars from around the country to each provide her a couple of drink recipes.  Excerpt of her e-mail:

“A few years ago I attended Allisa Cohen’s raw food teacher training program, and last summer, I spent a month studying at the Matthew Kenney raw food academy in Oklahoma. In spite of my familiarity with raw food, I am heightenedly nervous about providing juices and smoothies that my Montana customers will like.”
She lacks confidence in her cooking skills. She lacks confidence because, in spite of her (likely useless, counterproductive) raw food education, she doesn’t know how to cook.  She can probably follow recipes, but she can’t cook, at least not for a restaurant. First paragraph of my response:

“But you live in a different region.  You’re dealing with different set of suppliers, prices, ingredients, palates, etc.  Unless cost is irrelevant (people are willing to pay anything for your products), or you have a sophisticated supply chain and food preservation system (like what Subway, Evolution Fresh, Jamba Juice have), you can’t be using recipes from different parts of the country.  Food business doesn’t work like that (unless you have sophisticated supply chain…).  I saw a juice bar fall apart immediately because owner thought she could use her favorite home recipes at work.  So she ended up with one drink made with red grapes, another with green grapes…too complicated and fussy.  Doing it this way, she had to price each drink differently and made produce shopping and employee training a nightmare.”

In other words, I told her that she doesn’t have the right attitude and mindset to run a start-up restaurant that’s trying to introduce a new concept to community.  Nor is she focusing on the important issues. Anyone who thinks running a successful restaurant is primarily about having the “right” recipes and friendly service should not open an unbranded restaurant — they’ll likely be crushed within a month.  These are the people who think that grandma’s meatloaf recipe, if just given a chance, will make a million bucks and make grandma famous (I’ve been offered several recipes that will supposedly make me “a million bucks”).  These people think running a restaurant is like hosting a 12 person dinner party, that the only difference is scale.

So what does it take to run a start up restaurant that’s introducing a new concept, new brand?  I’m still not sure but here are a few guidelines I’ve learned to follow.

Product is secondary, sometimes irrelevant.
Ever wonder how restaurants survive, even thrive, despite shitty food?  For instance, I’ve wondered about 13 Coins, Jade Garden, Buca Di Beppo and many others.  Or why restaurants that serve extraordinary food don’t survive?  The reason why we’re surrounded mostly by bad to mediocre food is because the quality of the product is secondary, and sometimes it’s irrelevant.

So how do restaurants get people to pay for, over and over again, shitty food sometimes paired with ridiculous decor and irresponsible service?  In some cases, they get away with it because that’s what their core customers are accustomed to and ultimately, taste is subjective.  People are creatures of habit, and if microwaved pizza is what they’ve eaten everyday for past 20 years, that’s what they’ll probably do for the rest of their lives, even if they hate it and acknowledge there’s much better pizza available.  Other restaurants, like Hooters and Buca Di Beppo, distract customers away from the food with kitsch.  A lot of Chinese restaurants lure customers with mounds of comfort food at low prices.  13 Coins thrives by attracting those who are either too tired or drunk to give a shit (open 24 hours!), or are easily impressed with exorbitant prices and faux upscale decor in diner setting.

People make choices about food based on interplay emotions, perceptions and rationalizations.  There’s peer pressure, there’s yearning for childhood memories, there are negotiations of social identity, there’s the comfort of habit.  There’s fear of the unknown, of pain, of failure.  There’s confusion about which “expert” is right, which is wrong.  There may be subconscious desire for self-destruction, a slow, hedonistic death.  Most decisions aren’t made based on objective standard and quality of food (taste is subjective, but quality is not).

The point is, it’s not the product that sells, it’s the hopes, aspirations, values, and lifestyle the product represents that people are purchasing.  That’s why it’s far more productive to focus on controlling customer expectations, building and managing supply chain and workflow processes, training employees, and refining business vision and culture than to worry about recipes and products.  If one really wants high quality products, focus on defining standards and culture and training employees.

Control customer expectations.
I once watched a restaurant describe itself, when it opened, in glowing terms, comparing itself to famous fine dining restaurants around the world.  Customers, expecting fine dining experience on par with Per Se and French Laundry, were disappointed.  Restaurant failed, not because of crappy food — food was mostly solid to excellent.  It failed because of inability to meet expectations (experience was more like French Laundry meets Cheesecake Factory).  There’s a reason why it’s considered crass to brag about oneself — it typically gets one in trouble (few can pull of an Ali).

We have extremely high expectations for ourselves but we don’t go around telling everyone that we’re the bomb, or that we’re something we’re not. It’s the customer’s job to grade us, to tell us what they think of us.

Control customer perception
Often, there’s mismatch between what your business is (or is trying to be) and how customers perceive it.  Some people judge a book by its cover or think they already know, without asking questions or conducting research or controlling for bias, what other people are about, their motivations and aspirations.  These are the same people who will think they know what a restaurant is about without bothering to study its menu.  Or they’ll make assumptions about operating hours without fact checking it online or in person.  They think they already know what’s on the menu, how everything is prepared, and why owner opened the business.  That’s the way the world works, you have to assume that people don’t think you’re special enough for them to devote time to get to know you.  No use in complaining about it (sign of self-absorption), just work on making yourself important to others by being responsible for them.

It takes much effort to change how people think about you and your business.  But it can be done as long as you’re persistent and don’t mind being repetitive.  Small and large established businesses have to deal with wrong perceptions.  For instance, UPS has been working on correcting perception that they only deliver packages, even though that’s a small part of their product and service offerings.

At Alive Juice Bar, employees control new customer perception the moment he walks into the door.  Every second counts, as new customers can form opinion about business in less than 3 seconds.  It is very difficult to change one’s opinion, so we get their attention immediately in order to control how he perceives the business.

Build products around existing utilities infrastructure
If you don’t have enough funds to build your ideal store, let the utilities infrastructure and refrigeration units determine products and recipes.  You need to make sure that you have the bins and storage space for ingredients used to build products.  (Another reason why you can’t just borrow random recipes, you’re not operating in a contextless environment).

Customers have offered me their recipes.  A few are simple and make sense, and we’ve incorporated them into our menu.  Most are fussy, complicated, and I have to ask them where I’m supposed to store the additional 8 ingredients that go into making their ideal drink.

Hedge

Food business is about calculating and controlling risk.  Many can develop their own recipes.  Few can write a menu that reduces risk.  For instance, it’s unwise to have one menu item with ingredients that aren’t found in any other item.  What if this item doesn’t sell?  Too risky.  Another example is how we use yams.  We get a good price on them because we purchase them in bulk.  To ensure that they don’t rot, we have to use them quickly.  So we offer baked yams.  Baked yams that don’t sell within a day and refrigerated and used in protein shakes (Power Meal).  Yam is also used to make yam chips.  We do something similar with kale.  Fresh batch we use for salads and smoothies.  Older batch is used for kale chips.  We give ourselves the option to use collard greens in green smoothies just in case price of kale quadruples (it happens).  Making a menu isn’t like making a music mix of one’s favorite songs.  It’s figuring out ways to minimize risk and waste. It comes down to math.

Don’t hire anyone
I learned this one the hard way.  If you’ve never worked in food industry and don’t have network from which you can hire good employees, work the job on your own.  It’ll help you build mental toughness and patience and get you accustomed to working long hours.  You’ll be surprised how productive you can be if you work on your mental muscles.  Hire only after you’ve developed workflow processes you’re satisfied with and are consistently profitable.  Don’t hire so you can be lazy.  Hire only so you can expand hours and/or devote energy to other aspects of business.

Be cautious when hiring.  As Anthony Bourdain has declared over and over again, food industry isn’t for most.  Inevitably, you’re going to lose a lot of money hiring employees who produce negative value (produce value less than what they’re paid).  You’ll likely have to train someone to gradually become the sort of employee you’re seeking.

Don’t be afraid to piss off customers
If you’re not pissing people off, then there’s something wrong with you and your business.  If you’re not pissing people off, then you’re probably scared and lack passion. Don’t give customers a reason to look down at you, be dignified. And you shouldn’t be in this business if your goal is to be popular.  Be in it because your convictions are deep and you believe it’s your higher calling to improve the world, to change the way people eat and think about food.

Burn your business textbooks
Some of the ideas in business textbooks are asinine.  Like focus groups and marketing research.  As Steve Jobs put it, “how are people supposed to know whether they like something if they’ve never seen anything like it?”  Other ideas only work with large companies.  Start-ups require recklessness, instinct, adaptability, tenacity, and flexibility, not book learning.

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There’s more, like defining business culture and vision, developing human resources, etc.   The point is, don’t start a restaurant just because you think you have great recipes.  There’s a lot to think about, which is what makes getting into food business so much fun.

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Multiple Choice Version of Application

Seems that many are having trouble with open ended questions.  So, reconstituted application questions, now in multiple choice format.  Still have a couple open ended questions so we can assess writing and logical reasoning skills.

Earthquake during math class!  Big enough to topple bookshelves.  Nobody is hurt, everyone is okay, just jittery.  What do you, as teacher, do?
a) Stop class, act jittery and anxious because that’s how you feel.
b) Have students clean up mess and continue class as if nothing happened.  Assign double amount of homework and quizzes for rest of the week.
c) Stop class, bring in school psychologist to discuss how everyone is handling the event and “post-traumatic stress disorder.”

How many hours a week does the CEO of Walmart work?
a)100
b)65
c)40

Fight in the Kitchen. What do you throw?
a) Hot soup
b) Butcher Knife
c)Last month’s receipts and bookkeeping records

Why are you so lazy?
a) I’m not lazy.
b) I don’t have enough responsibilities.
c) I have chronic fatigue syndrome.

Why are you so lazy?
a) I get stressed out easily.
b) I’m self-centered and self-absorbed, so I don’t like making sacrifices for others. It’s too much work.
c) I like having fun.  I need rest and relaxation.

Why are your friends boring?
a) They’re not boring.  They’re a lot of fun.
b) They never want to try anything new.  They talk about and do the same things over and over again. They’re really conventional.
c) I don’t know.

Why are you so lazy?
a) I daydream a lot.
b) I get anxious and stressed easily.
c) I make excuses and blame others too often.

Kofi Annan is:
a) Select grade coffee bean found along Owa Tagu Siam river, used by locals for medicinal purposes
b) Some black dude with cool name.
c) Some white rapper whose real name is George Smith

Why are you not special?
a) I am special.  My mom thinks I’m special.
b) I haven’t done anything extraordinary.
c) Everyone is special.   We’re all unique.

Paul Ryan
a) Looks like Anthony Wiener
b) Is a renown health food guru with his own TV show
c) Is a dickhead.

Are you good at researching facts?
a) Yes
b) No
c) Don’t know, you tell me.

OPEN ENDED QUESTIONS SECTION

Mary hires Peter and Paul to dig two ditches, assigning one to each.  Peter finishes in one hour because he used his latest invention, the super-duper soil remover zapper.  Paul, using a shovel and hard work, finishes his in 8 hours.  How much should Mary pay Peter.  How much to Paul?  Who should she hire if she wants a third ditch?

Person A from age 5 to 25, attends school 6 hours a day, studies 4 hours a day, spends 6 hours of leisure time learning to build and building, with like-minded friends, random things, like a tree house, a bridge, a dog walking robot. A also spends an hour per day daydreaming of building something that will improve world’s standard of living. At age 25, he graduates with a Masters degree in electrical engineering and is offered a salary of $150,000 to work as a product developer for a green tech company. He gets 3 weeks vacation, full benefits. He accepts the position and works 60-80 hours per week, and is expected to be available for phone calls and e-mails during his vacations.  He pays Federal Government 30 percent of his earnings.

Person B, from age 5-25, attends school 6 hours a day, studies 1 hour a day, spends 6 hours of leisure time passively watching TV shows and films like Jersey Shore and Twilight, 3 hours a day daydreaming about being wealthy and pampered and adored by everyone. At age 25, he graduates with a degree in Socks, Drugs, and Rock and Roll. Unable to find a job in his field of study, he takes a job as a cashier at McDonald’s, making $10 per hour, 40 hours per week, or $20,000 for the year.  He doesn’t have to pay taxes.

Let’s assume one of them is “underpaid.”  Which one and why?


Mind-Body Connection and Psychosomatic Illness

Some doctors think that 50 percent of physical illnesses are psychosomatic in nature.  Psychosomatic disorders defined:

Psychosomatic disorders are conditions where mental stresses and problems create or contribute to physical symptoms that are not associated with any particular physiological disease. While almost any physical symptom can be psychosomatic in nature, the most common psychosomatic disorders are pain disorderhypochondriasissomatization disorder, and conversion disorder. Additionally, mental stresses can cause or worsen physical symptoms, such as migraines, tension headaches, sexual dysfunction, hypertension, and gastrointestinal problems.” (Full wisegeek.com entry)

In short, there’s a mind-body connection, and this connection has significant role in determining physical health.  Health is an expression of one’s emotional state.  Those who handle stress well suffer fewer physical ailments and have fewer allergies, while those who struggle with stress will be sickly, likely costing businesses and taxpayers billions in lost productivity and health care costs.

Some think the best way to ensure physical health is to avoid stress.  They seek stress-free vacations, stress-free jobs, stress-free neighborhoods, friends, kids, pets, and events.  They reduce amount and scope of their responsibilities.   For them, heaven is the absence of stress and competition.

Then there are those who welcome stress, prepare for it by putting themselves in stressful situations over and over, working through it again and again.  They try to make themselves inured to stress, even motivated by it.  They seek stressful careers, stressful moments, like taking the game deciding shot.  They seek challenges, they’re not afraid of competition and failure.  They thrive on stress because it gives them an opportunity to test themselves, to gain self-knowledge.  They aim to become mentally tough enough to handle anything.

The problem with stress avoidance is that shit happens all the time, no matter how much we try to create heaven on earth.  So much of life is cruel, lonely, unpredictable, and filled with random acts of violence.  Stress is inevitable and those unprepared to handle it crumble emotionally and physically.  It’s not surprising that poor management of stress can manifest itself in physical symptoms.  Medical historian Edward Shorter:

Most of the medical symptoms your typical American suffers from are psychosomatic–in other words, they can’t be traced to any organic cause but are rather the result of some mind-body interaction. The symptoms may be real, but the cause is psychological, stemming from depression, anxiety, or stress. Today, this manifests itself in the headaches, backaches, fatigue, diarrhea, dizziness, and joint pains that concern so many patients.”

While psychosomatic disorders have always existed, with symptoms changing according to cultural trends, I wonder if there’s been an increase (relative to population) in such disorders.  Epidemiologists have noticed and are puzzled by a dramatic rise in asthma and food allergies in the US.  One theory is that increased use of antibiotics have made people much more susceptible to certain illnesses.  The “body’s normal balance of gut microbes, antibiotics may prevent our immune system from distinguishing between harmless chemicals and real attacks,” writes New Scientist writer James Randerson.  Others blame diet and/or over-sanitized homes and lifestyles.  Could the rise also be attributed to Americans becoming less prepared to handle stress? If that is the case, what can we do about it?

As mentioned earlier, stress avoidance isn’t effective and can significantly lower productivity and increase incidences of illness anytime heaven isn’t on earth.  Other option –  for businesses, this is the only option — is to accept that life is “short, brutish, and nasty” and build mental toughness so one is better prepared for random shit that happens daily.  So how can we become mentally tougher?

Home life and school.
Mental toughness is first developed at home and at school.  Just as infants protected from germs and bacteria will develop impaired immune systems, children who are free of responsibility, protected from failure, and coddled after every failure or difficulty or looming crisis will lack the mental toughness to adapt to new situations and will likely seek coddling and escape throughout life.

Schools without high standards (any college will do, AP and SAT scores don’t matter, just make sure everyone graduates) will produce weak and whiny graduates who demand undeserved attention and status and salaries.  The main difference between a middling school and a top school isn’t resources or class size.  It’s the school culture and standards (set by leadership).  The reason Phillips Academy Exeter is able to produce Mark Zuckerberg, or Lakeside a Bill Gates, or Stuyvesant Nobel Laureates is because their students are placed in the most competitive, stressful, over-scheduled environment (many New England boarding schools schedule classes 6 days per week and require participation in athletics) they have ever experienced so that they will someday be able to handle working 100 hours a week.  These students are not coddled and are given a lot of responsibility.  They’re expected to grow accustomed to non-stop work, to compare themselves against the best in the world. I don’t understand why some parents think that childhood and adolescence should be about the absence of stress, the carefree life.  Adolescence is the ideal time to make building mental toughness a habit.  Those who don’t work on mental toughness during adolescence likely won’t ever develop mental toughness because they’ll likely be placed and stuck in low stress jobs and thus never be given opportunity to develop mental toughness.

(I suspect some parents, wanting the best for their kids and desiring upward mobility, try to parent as they perceive those socio-economically ahead of them do.  Some may think the wealthy pamper and coddle their kids, provide for them stress free environments and whatever resources they want to make them “successful.”  Some do, but many, especially those of Puritan lineage, deliberately don’t.  Gossip Girl isn’t an accurate representation of the American aristocracy).

Work
If most “schools won’t let children grow up,” as educator John Taylor Gatto tells it, then work will.  Well, more so than school at least. Work is the last chance for those who never worked on their mental toughness while in school and is probably what most should be doing instead of wasting critical learning years in ineffective schools that instill bad habits and teach outdated knowledge (most people should drop out of school after 8th grade).  Problem is (especially in a recessionary economy), those who’ve never worked on mental toughness have a tougher time finding and keeping jobs.  A parent once asked me why his kid couldn’t keep a job he secured for him, why he “can’t act rationally and responsibly, do what’s best for him.”  My response was that he never developed the habits, the mental toughness to keep a job.  Got nothing to do with doing what’s best, what’s reasonable, rational.  Irrational habits are everywhere (drug addiction, controversial diets). We’re irrational because we’re not robots.  More than anything else, we’re creatures of habit. He’s just doing what he’s always done.  It’s unreasonable to expect him to make a sudden lifestyle change.

Armed forces is probably the best option for those who didn’t have an opportunity to work on mental toughness.  I’ve been told that they’re far more patient employer than most private businesses, and have a good track record at instilling a sense of responsibility and improving mental toughness. They’re one of the few organizations that deliberately tries to make its employees mentally tough. I’ve been impressed with every retired colonel and sergeant I’ve met, and most who’ve been honorably discharged from service.

Attitude
My hunch is that attitude toward life and work can also affect physical health.  Those who are optimistic and find work fun and purposeful are probably more able to handle stressful situations, more likely to grow mentally stronger.  Those who are pessimistic and unsure of their purpose in life are likely to quit life or seek escape in the form of cheap thrills.  That’s why I focus so much on developing employee attitudes.  If they have the right attitude toward life and work, everything else will come together.

The point is, emotional health is as important as diet and exercise for the maintenance of physical health.  It’s important we spend some time each day reviewing our decisions and attitudes and make little changes to improve our attitude and mental toughness.  Doing so will not only improve our productivity and reduce health care costs, it’ll help us live happier, more meaningful lives.