What if…?

What a deal: Christmas with the family in snowy Northern Vermont, then New Year’s Eve for two overlooking Biscayne Bay in Miami. My wife, Annie, and I went from the sublime to the sublime and said goodbye to 2007 from a prime table at Prime Blue Grille .

The new restaurant was everything that my client, Jim Dunn, had envisioned during his years with House of Blues and Smith & Wollinsky – high end, but not out of sight; well-appointed; exceptional food and service; a great view; and high energy. We had wrapped up the first six months of operation with a physical inventory that morning, and the preliminary results three days later showed us very close to our targeted bottom line.

The vision took hold in Miami and, according to the plan for 2008, it should work in the Natick Collection (Massachusetts’ newest upscale mall), as well as in Boca Raton, Las Vegas, and elsewhere. Despite the fact that unanticipated (and uncontrollable) problems in construction delayed the opening for three months, the build-out costs were on target, and operating revenues and expenses tracked the detailed projections completed a year ago.

A couple of days later, we had dinner a bit down the scale, at a little mom-and-pop pub on the West Coast of Florida near where we were staying. Over the course of a couple of visits, we chatted with “pop,” a/k/a Skip,and were impressed by his ability to turn out delicious meals for a modest price. That we got to know him was a function of our being his only patrons for the hour that we were there on our first visit – a phenomenon attributable to the fact that Lee County was to experience freezing temperatures that night for only the 45th time since 1931.

But weather was the least of Skip’s problems. After 39 years on the site, and 23 years of Skip’s ownership, the restaurant was losing its lease in favor of a hotel/condo to be built on the property as soon as the real estate market turns.

“Are you month-to-month on the lease?” I asked.

“Have been for two years now,” he said. “I figure I might have another two years before they get rolling. Meantime, I’ve done o.k. with the business from the adjacent construction work, especially at lunch, but that’s pretty much dried up now, too.”

“So,” said I, trying not to sound like a consultant, “what are you going to do?”

“I dunno. Just play it as it comes, I guess.”

Skip and his restaurant may not be there the next time that I get to Fort Myers, which would be too bad. He’s got a great product (“The best burger ever,” according to my other half, who knows a thing or two about the culinary arts) and service, and he’s a local institution.

On the other hand, now that I’ve acquired expertise in the restaurant industry, courtesy of Jim Dunn and Prime Blue Grille, here’s the way that a “visioning” process might start out with Skip:

  1. Q – What are the key elements to making money at this level of the business? Anticipated answer: controlling costs, and working your tail off.
  1. Q – What’s your economic model? Anticipated answer: By working long hours, my partner and I keep our food and labor costs at 60%, and at our level it’s mostly a cash business, which helps. It’s a living.
  1. Q – What if you raised your prices 25% (e.g. from the $7.95 currently charged for great spaghetti and meatballs with homemade sauce, salad, and rolls)? AA – We’ve never tried, even though the neighborhood has changed with the upscale condos nearby.
  1. Q – What if you doubled your marketing budget? AA – We typically advertise only when the Red Sox are here for spring training. We fill the place during that month. But then everyone goes north in April…
  1. Q – What if you bought the vacant storefront down the street and relocated? AA – I’d have to figure out how to raise the money, and determine the carrying costs of ownership versus renting…
  1. Q – What if you added a cook to free up some of your time? AA – It would increase costs, but maybe I could follow through on some of my promotional ideas to bring in more business and offset the added expense…
  1. Q – What if you invested in some new equipment? AA – We could be much more productive, maybe even save on utilities and labor costs. Do you suppose I could get a loan?

At this point, I would be pushing my pencil all over the white paper placemat that Skip spread over the table before taking my order. “What if…?” leads to “Well, then…” and “That would mean we could…” and before you know it the basic elements of a strategic plan begin to fall in place. And every one of these elements has a financial component: dollars in, dollars out (return on investment).

From the back of the envelope, it’s only a small leap to a spreadsheet and from there to a business plan for 2008. For organizations more sophisticated than Skip’s restaurant, there are intermediate stops at departmental budgets and the internal push and pull that comes with company politics and priorities. But the process always starts with someone pushing back from fighting the daily fires and saying “What if…?”

Now, what if I were to send Skip a copy of this issue of Howe’sBayou???

Alligator Bites

For a “what if” that became reality, try this:

“LYON, France, Jan 2, 2008 (AFP) – A French cafe owner put up protest art showing overflowing ashtrays and cigarette butts on Wednesday as he refused to apply a new smoking ban targeting restaurants and bars.

“Christophe Cedat, owner of the Cafe 203 in Lyon, said the photo and poster-art exhibit in his smoky cafe would bring the debate surrounding the new ban into the ‘artistic domain’ which he described as ‘neutral ground.’

“The trendy cafe’s entrance displayed a banner that carried the warning: ‘Cultural and social experimental zone: you are exposing yourself to the threat of second-hand smoke.’

“A smoking ban went into force on Tuesday in cafes, restaurants and nightclubs, 11 months after the measure hit workplaces and other public areas.

“After a one-day reprieve to smokers over the New Year festivities, police and public health officials began enforcing the ban on Wednesday.

“Smokers who light up in cafes face fines of between 68 euros (100 dollars) to 450 euros while business owners can incur penalties of up to 750 euros for violations.

“Cedrat said he would allow smokers to light up in his cafe between noon and 2 pm and plans to cover the cost of fines by selling small decorated ashtrays.”

Draining the Swamp

Evidence that you don’t have to be the most expensive to be among the best (though it helps)…

“A look at the least expensive [Boston area] restaurants that ranked in the top 25 of Zagat’s Most Popular [2006/2007]:

Est. single meal price Rank
Anna’s Taqueria, Somerville $ 7 25
Pho Pasteur,Boston $17 11
Elephant Walk,Boston $33 15
FuGaKyu,Brookline $34 16
Legal Seafood,Boston $35 1
East Cost Grill & Raw Bar,Cambridge $35 17
Aquitaine,Boston $45 23
Blue Ginger,Wellesley $49 2
Abe & Louie’s,Boston $51 10


– The 2007 Boston Business Journal Book of Lists