How to Choose & Work with the Right Restaurant Consultant
The honeymoon period of your new restaurant is over. Sales are starting to level off. Food and labor costs are moving in the right direction, but they're still too high. Customers say the food's good but you know consistency is still a challenge and the kitchen, which has been disorganized from Day One isn't getting any better.
You know there has to be a better way to market your restaurant. But marketing is not your strength, and it's not your manager's either. Besides, you and your key employees are working 70 hours a week and even if you knew "what" to do, there's precious little time to actually get it done.
Could it be the right time to consider bringing in a consultant? Is your problem something you can get over yourself with time and care? Or do you need the help of a specialist to really get well?
When to Consider a Consultant
Hiring a consultant, in principle, is difficult for many independent businesspeople. Often their attitude is, "If he is so smart, why isn't he running a business rather than telling me how to do it?" Independent business people often pride themselves on toughness and self-sufficiency. Finally, when you are squeezing every penny to make it through the early years of the business, it's hard to open the checkbook for anything that doesn't provide an immediate return. Does any of this sound like you?
There is some merit in this viewpoint, to a degree. Some operators prefer to look to themselves first and foremost to solve their problems. Ron Smith, operator of Chili Willi Inc. in Huntington, West Virginia, says, "I have been my own best consultant and I have found more information along those lines by reading, studying ... consultants can confirm or correct a picture you may have about your operation, but first you need to understand for yourself the complete nature of your operation."
As Smith suggests, you need to be smart and objective about your business. Consultants can't save a lazy operator. But at some point, even the brightest bulb in the pack needs to muster a little humility. The restaurant business is complex. For many operators of independent restaurants, hiring a consultant is inevitable. They realize they don't know as much as they would like about every aspect of their complex and multifaceted business. They need help from someone who has done it before.
. . . you need to be smart and objective about your business. Consultants can't save a lazy operator.
In fact, the better consultants have managed or operated successful enterprises, and found their passion is helping businesses grow rather than simply keeping a successful operation on course. As they gain experience with a number of different restaurants, they gain a view of the business that very few restaurateurs possess.
A good consultant can bring to your store ideas and solutions that have been successful in other operations. Consultants who are worth their salt bring with them specialized knowledge, skills and experience to assist the operator with a combination of problem-solving, planning or implementation services depending on what the situation dictates.
When a restaurant faces a nagging problem or is about to enter a new stage of growth, it may be time to consider a consultant. In the long run, the initial cost of a consultant can be recouped many times over by helping you overcome a troublesome operational problem or avoid a costly mistake in the startup or expansion phase.
For example, an operator I know hired a food consultant during the development of a new specialty gourmet restaurant. He wanted the consultant to help him create the menu and recipes, before he hired the chef. The project included tasting and modifying recipes, creating a recipe book with pictures, product specification and detailed preparation steps. The consultant also created a training video showing the preparation of each item. Result: Thirty days before the restaurant opened, the operator had all the recipes and cooking steps documented so all he had to do was to hire a chef to execute and not have to worry about being at the mercy of an employee who had all the recipes in his head.
The right consultant, being an objective outsider, may be able to recognize and employ solutions more effectively than you and your staff. When you're so close to a situation there is a tendency to favor a predetermined outcome, versus a creative solution. Consultants can provide a fresh, objective point of view without an agenda to push. The key is to know what types of problems warrant a consultant's attention and then finding the right consultant who knows how to solve them.
Is Your Restaurant a Good Candidate for a Consultant?
You need to do some soul-searching before hiring a consultant. Are you willing to listen to what a consultant has to say, even if it's not good news? Are you willing to change the way you're running your business? If you're not willing to listen and seriously consider someone else's opinion or are not willing to change the way you're doing business, then hiring an outside consultant would be a waste of your time and money.
Also, some consultants, the really good ones, are very selective of who they work with. They conduct their own screening process on prospective clients, just as an operator does in selecting a consultant. They want to know, upfront, that the chances of the engagement being a success are very high. Good consultants know that unsuccessful jobs damage their reputation and hinder their ability to get additional work regardless of who is at fault.
Defining the Problem and the Type of Consultant You May Need
There are many types of restaurant consultants who advise operators in virtually every area of the business. The most common areas to employ the services of a restaurant consultant include:
Initial startup & project management
Recipe and menu development
Operations and profit assessment
Operating systems & procedures
Staff training programs
Financial and accounting systems
To identify the type of consultant needed first requires accurately defining the problem or identifying the role you want an adviser to play. For example, while high food cost may be first identified as the problem, excessive food cost is actually a symptom. The problem may be the lack of standard recipes, poor systems, lack of good training programs or a combination of these factors. But, the real reason high food cost is high could also be due to a menu pricing issue, not a food use one. The type of consultant who is qualified to study your local market and evaluate your price points may not be the right person to advise you on kitchen systems and cost controls.
Sometimes restaurants can get so turned around that it's difficult for the operator to identify the difference between the symptoms and the problems. All that's obvious is that "something" clearly isn't working. Some consultants specialize in doing operational assessments to provide operators with insights on the underlying problems affecting performance as well as recommendations for solutions.
An operator may decide to seek the temporary services of an expert in a specific field to advise them on an important decision such as site selection or the preferred way to expand their business.
Edmund Woo, owner-operator of Saskatoon Restaurant in Greenville, South Carolina, has used several consultants in his career for different purposes. Early on in his career he used consultants to help him on projects to improve his operational systems and refine his concept. Today, Edmund is using a consultant to expedite the process of getting his Saskatoon Restaurant ready to franchise.
Having a solid grasp of your underlying problems is crucial to identifying the skills and experience someone must have to help you solve these problems.
Decide on Your Definition of Success
How should the restaurant look and act or what will you have in your possession when the consultant leaves? What changes should have taken place? What would be the financial effect of a successful consulting engagement?
Asking these types of questions can help you evaluate and quantify the potential effect a consultant could have on your business. You need to determine your expectations so that you can communicate them to potential consultants. They need to know exactly what you want them do to and the effect you expect them to have.
Knowing how you measure success will also help you determine how much you can afford to pay for the work. If solving a nagging problem is potentially worth tens of thousands of dollars to your bottom line, then it's easier to determine how much you'd be willing to pay someone to help you solve it.
Where to Find the Right Consultant
Perform a Google® search on "restaurant consultant" and you'll see there is no shortage of firms and individuals who hold themselves out as being professional advice-givers to restaurants. However, in discussions with several operators who have had successful consulting experiences, most said they found their best candidates getting referrals from other operators. Some said they met good consultants who were speakers or on panels at association food shows or conferences. State and local restaurant associations sometime maintain the names of restaurant consultants who are members or are active in the association.
Deciding who you bring into your organization for special expertise and advice is an important decision. There are several things to do and consider in this regard that can enhance the probability of making a wise choice.
Review his background. Don't just inquire about the consulting work they've done, find out how much time the consultant has personally spent in the restaurant business and in what capacities.
Jim Parkinson of the Piper Pub & Grill in Boise, Idaho, has worked with different consultants over his 18 years in the business and sees this as crucial. "My experience has been that the good ones are those who truly have been there and done that from an ownership viewpoint, preferably. They need to have actually felt the pain when food costs are out of line rather than just being able to tell someone the importance of knowing what one's food cost is or should be. There is no better teacher than experience and hard knocks, especially in this business. Without it, a consultant is only a theorist whose advice should be very suspect."
Also, don't let your guard down just because a consultant has a resume full of impressive-sounding projects or high-profile clients. Robert Page, who operates The Bisbee Coffee Company in Bisbee, Arizona, had a bad experience on a startup venture with an established consulting company with a lengthy resume of notable clients. "Everything up to the build was pleasant but it fell apart from that point. Failure to follow local codes, HVAC specwork inadequate, right down to the flow of customers was wrong. We spent in excess of $40,000 for this 'expert' help and it was our own experience and gut feelings that we discounted and ignored."
Conduct a thorough interview. While you can accomplish a lot over the phone, there is no substitute for a face-to-face meeting. Insist on it even if it costs you something for them to see your restaurant and visit you in person.
Ask probing questions. You want to be certain that the candidate truly understands your situation, problems and has the skills and experience to solve them. The following questions may be helpful.
How would you describe our situation from the limited amount you know?
What specific skills and experience do you have that will be particularly helpful to us? Have you worked on similar projects with restaurants having similar challenges? What did you learn from these experiences?
Describe your work process. How will you work with our management staff and other employees and what will you need from them?
How do you avoid disrupting ongoing operations? Do you anticipate any specific challenges in successfully completing this project? If so, how can we address these issues early on?
After each interview, ask yourself:
Does the candidate truly grasp our situation and challenges?
Did he or she ask good questions and really listen to the answers?
Did he or she bother to learn anything about our restaurant prior to the meeting?
Did you like the person on a personal level? Is he or she the type of person you and your staff would feel comfortable working with? This is important when working with a doctor or lawyer, so it certainly is a valid consideration for working with a business consultant.
- Did the candidate seem to be evaluating you and your organization, too? As mentioned, good consultants want to be sure they're getting into a successful relationship and project, too. The best consultants will pass up the opportunity to work on a project if they are not confident of a successful outcome for both parties. Be leery about a prospective consultant who seems to want the work too badly and doesn't discuss in clear terms everyone's role, including yours, in making the job a successful one.
Check references. Talking to past clients of your candidates is absolutely essential. Do not hire a consultant if you are not willing to talk to at least three to four people who have worked with them. It's the only way to tell if someone has a history of genuine success or is merely a great talker and promoter in an interview situation.
Edmund Woo, Saskatoon Restaurant, always asks client referrals these two questions: "Would you hire them again?" and "What did they charge?" "About half the referrals I call would not recommend that I use the consultant and several have told me the quote I received was high and the consultant would do the work for less." Edmund says, "If you call four or five people, you'll find at lease one or two who will really level with you."
A good question to end such a call might be, "If you were to work with this consultant again, what aspects of the project would you change? Is there anything you would approach differently?"
Take the time to check references. Having worked with a variety of companies and having lots of satisfied clients are two totally different things.
During the Job
Once you've agreed to work with a consultant, provide them with as much information as possible before they arrive at your restaurant. Depending on the nature of the work, this may include financial information, marketing materials, business plan, menus or any other such materials they didn't receive during the evaluation process. The goal is to help the consultant(s) use their time as productively as possible. This increases the odds that the consultant will perform better work at less cost in less time.
Be involved in the process. Using a consultant requires not only your money but also your time. You still have overall responsibility for the success of the project, so stay in touch with every aspect of it.
Request that the consultant provide you with progress reports on a regular basis, even if is a relatively short job. Schedule and hold regular progress meetings. Make sure the consultant is progressing on track within their predetermined time frame.
Make sure you and your people provide input to the consultants as needed. Don't hold up their progress as this could end up extending the length of the assignment and cost you more money.
Communication helps avoid surprises. Make sure the consultant understands that you don't want there to be any surprises with regard to their findings and fees. If their product is a final report, you want to know immediately about any material or serious findings they may have uncovered, such as suspicions of theft or other such irregularities. Also, ask them to keep you informed of anything that may affect their ability to complete the job on time and on budget.
An Important Decision That Requires Some Thought
The decision to bring a consultant into your company is an important one. Some restaurant situations are tailor-made for a good consultant. They can save you time, money and help you solve nagging problems. But like anything in business you need to enter into the consulting process with your eyes wide open, aware that the ultimate success of the project depends on your ability to accurately evaluate your circumstances, choose the right people to help and then manage the process through to completion.
-- Restaurant Startup & Growth
Do You Need a Consultant or Not?
Every restaurant has challenges; that's just part of life in the business world. So how do you determine whether your challenges warrant a consultant? Here are a few questions to ask yourself:
Do you have a serious problem that just doesn't seem to go away?
Are you about to make a big decision in an area where your expertise is limited?
Do you need an outside, objective opinion of how your restaurant is doing?
Do you spend all of your time, and then some, managing daily operations and have little or no time to think and plan strategically?
Is the restaurant consistently falling short of achieving its financial goals?
Is the restaurant in crisis-management mode much of the time?
Is your business transitioning into a new stage of development or growth?
If you answered yes to one or more of these questions, a consultant might be able to provide you with the expertise, answers and solutions you need.
Always Request a Written Proposal
A professional-looking, well-written proposal is a good sign you're dealing with a good consultant. A proposal should contain these basic elements:
Background. Should be a brief but concise description of the problem and the effect it is having on your business. Does the consultant have a clear understanding of the problem and what's causing it?
Objective. The expected outcomes and results of the project, preferably in specific, measurable terms. For example, our objective is to assist in the development and implementation of procedures and cost controls in the areas of sales and labor that will lower the restaurant's prime cost 5 percent to 10 percent within 90 days. Deliverables, such as a report with formal recommendations, manuals, and checklists, should also be detailed here. Is this consistent with how you define success?
Scope of services. This section includes the functions to be performed and the plan for accomplishing the objectives discussed above. Who will perform the work, where the work will take place and a timetable for completion should be included. A list of information and personnel needed from the restaurant should also be provided. Does the plan make sense and are the functions and services to be performed likely to result in your objectives being met?
Qualifications. This includes an outline of the skills and abilities of the consultant. It should show related experience and resumes of the people who will work on the project. Do they have the skills and experience to guarantee successful completion of the project?
Fees, expenses and payment schedule. Consultants have different ways of billing for their services but it's usually best for the operator to ask for a fixed fee for the scope of services to be performed. Depending on the nature of the work, consultants may also quote an hourly or daily fee. If this is the case, make sure an estimate of time required to complete the functions described in the Scope of Services is included in the proposal. Travel and other incidental expenses are usually billed separately from the consulting fees and these items should be addressed in this section also. Does the total cost of the consultant appear reasonable in proportion to the potential benefits you reasonably expect to derive from their work?