7 Characteristics of Highly Effective Restaurateurs

Ken Schiller – CEO of Rudy’s

I reread the book earlier this year, and began to think again of the applications of its principles for the hospitality industry. Here’s my take on it with unrequited appreciation to the original author.

#1 They have a passion for the business.

Every restaurant owner/manager/exec chef I’ve ever known who enjoyed long-term success in the industry had an absolutely unmistakable fire-in-the-belly for their craft. They were immersed in the business, and wanted to master every aspect of it. 12-hour days were nothing to them. It was their pleasure. They were never satisfied to rest on their laurels, and were always thinking a step ahead.

#2 They have a realistic business plan.

I recently keynoted a City of Austin small business development seminar for people who were interested in opening restaurants. In reviewing business plans turned in by would-be restaurateurs, it struck me that most were incredibly optimistic. They projected that they’d be running their stores off cash flow within three months. For all but a few restaurants, this is a virtual impossibility. Most will inevitably lose money in the first year: possibly in the first two. This means they have to have sufficient cash to carry them through the brutal start up phase. Alas, most have not stockpiled the resources (forget getting a loan from a bank). And that is why so many restaurants don’t make it through the first five years. They also have a realistic number for the percent of their budget that constitutes food costs. This can make or break any restaurant,

#3 They know how to synergize.

Most restaurants that fail lose an inordinate amount of money on labor costs. The key here is to avoid redundant positions, and create a team atmosphere to achieve goals no one person could have accomplished alone. The winners also have an abundant respect for each and every employee at the restaurant because they know how important they are to the bottom line. Every employee, especially the ones visible to your customers, is a PR rep in addition to their job. They set an image and tone for their job. The order takers and meat preparers/slicers at Rudy’s are a great example of this. In turn, they are rewarded so they tend to stay which solves another Austin problem: frequent employee turnover.

#4 They understand their customers and their target audience. They never let a customer problem go unsolved.

Successful restaurant execs understand their customers: they know their likes and dislikes and what’s important to them when dining out. They do everything they can to solve a problem when it occurs: the goal is not to let the customer walk out the door without a successful resolution. Ironically, bad news travels much more quickly than good news in this business. Hence every restaurant, fine dining or casual should have a manager on the scene who is empowered to make a decision, even if it means comping an entire dinner. That’s a small price to pay for having a disgruntled patron head out the door, and start the negative word-of-mouth which can then spread like a Texas wildfire.

#5 They know how to listen.

This is a vital skill possessed by all restaurant winners. Whether it’s employees or customers, take a moment, put your ego on check, and really listen. You’d be amazed what you can learn. This example also filters down through the employee ranks and becomes organic.

#6 They know the idea of abundance mentality.

This means there’s enough abundance so that everyone in your employ believes they can be successful without their success negatively impacting another employee. The opposite of that is the scarcity mindset where if someone wins or succeeds, that it must follow then the co-employee will not. Covey points out that in an abundance mentality, everyone believes that they can win and can celebrate the success of others, as opposed to being intimidated or threatened by it. I’ve seen that abundance mentality at many successful restaurants.

#7. They have identified all the barriers to entry at their restaurants.

This is from the Rob Balon playbook. All businesses, particularly restaurants can create barriers to entry on many levels. It may be the teenage girl who answers the phone on a busy night, and creates the first impression someone may have of that restaurant, or a menu that’s far too long, a non-functioning prep line, a color scheme that doesn’t set the right tone, servers who are not entirely versed in EVERY dish that emerges from the kitchen. You get what I mean. Successful restaurateurs have identified every possible barrier to entry that exists and have eliminated them. And they are honest enough with themselves to acknowledge that yes, even in their restaurant, these barriers exist.

Given the phenomenal success of many Austin restaurants these days, it appears that these characteristics are shared by many in our local industry. Good for them, and more important, good for us!

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