Turnaround Coaching

All business can hit some rough water sometimes. Even though it might not be smooth sailing right now, there's usually a way to get to calmer waters achieve business turnaround.
April 2019
Brian Cairns, Shannon Olivares
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 years 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.

Problem: No Longer New

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”. They were off to try new places to experience

Solution: Explain the Process

If you've read a number of these cases, you'll see this a very common theme.If you only cater to you base you have no room to grow. And, that’s the first issue 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. He needed to drive more. We recommended that he keep the existing menu, but add either a creative special or a have a designate a themed day. This way he could keep his current customers while attracting new ones.

Problem: More Than Food

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.

Solution: Diagnosing the Issues

We helped him to 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.
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. It's time consuming, but they were the face to the brand to the diner. If they under performed, so did he.

Problem: Pricing Strategy

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.

Solution: Fixing Pricing Plus

After showing Dante how to add the overheads, we helped change the pricing on a few of the menu items. We also trimmed spending a few other ways. We cut back a few hours, and cleared a few tables. Since his reviews were old, and he didn't have newer ones, we stopped advertising. Newness of the reviews is a key factor in Yelp! click-through. Instead, we offered discounts on the next order for Yelp and Google reviews.
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