Restaurant Owner Quizzes Restaurant Coach on Operations and Success

Hey there restaurant pros, it’s David Scott Peters and welcome to the Restaurant Prosperity Formula podcast. For over 2 decades, I’ve been guiding restaurant owners to success with the proven principles of something I call the Restaurant Prosperity Formula. I originally created the formula based on the daily practices of the most successful restaurateurs I coached and it’s now the foundation of what I teach restaurant owners like you so you can achieve success. What do I mean by success? Success is a restaurant owner who dictates the terms of their life and their bank account instead of their restaurants dictating those things for them. Success is a restaurant owner who has freedom from the restaurant and the financial freedom they never thought possible. How you define success is up to you, but I do know the way to achieving it is using the restaurant prosperity formula. This season, I’m diving even deeper into the core elements of the formula, leadership, systems, training, accountability, and taking action. Along with my insights, you’ll hear from special special guests, industry experts, and inspiring success stories from fellow restaurant owners who’ve turned their businesses around and found their definition of success. In this episode number 122, we’ll be doing a segment I call Flip the Table, where a member takes over and interviews me. Today, I’ll be interviewed by one of my most successful and inspiring members, Raul Gonzalez. Get ready because he’ll be asking the questions. Listen in and see how Raul asks some really powerful questions and gets really personal. Let’s get started. But first, a word from our sponsor. We all know managing costs is one of the most important parts of running a profitable restaurant, especially now. But between fluctuating vendor prices, waste, labor, and the never-ending list of tasks that demand your attention on a daily basis, it can be challenging for even the most experienced of us to manage costs well. That’s where MarginEdge comes in. MarginEdge is a complete restaurant management software that automatically uses data from your POS and invoices to show you food and labor costs in real time. Don’t wait until it’s too late. Margin Edge gives you tools to make decisions in the moment, like a daily P&L, price alerts on key ingredients, and real-time plate costs, all without ever having to touch a spreadsheet. Take control of your costs, work more efficiently, and be more profitable. Go to www..marginedge.com forward slash DSP to learn more and schedule your demo today. Raul, I want to thank you so much for doing this with me today.
You’re very much welcome.
So before we get started, this is the flip the table. This is where you’re going to ask me questions and we’re going to find out what the heck you want to know. But in the meantime, I want to brag a little bit about you because we’ve known each other for a long time. My old company, new company, gosh, we’ve probably been working together for, it’s been a, has it been a dozen years?
About 11 years.
11 years. And in that time, I’ve seen you make incredible growth. You started with a partner. You had the two locations-ish. He had one you were kind of involved with, but you had the one. It’s in a strip shopping center. It looked like a tiny little thing, but then you would jet it out the side and there were all these seats that would remind you of what most restaurants went during COVID. Like, hey, we’re popping out into this parking lot and we’re making it. But you made incredible seats there. You had bands. You’ve got great food, really incredible service in this area or in this original location that you’d go there’s no way in hell this is a busy restaurant and it’s pretty amazing to watch you see you grow and you open a second location on your own you bought out your partner you took a what was really not even a I don’t know, the second location was really kind of an anchor on you. It was tough to get it working to where it’s a successful high volume restaurant. Yet the original place that I just described, you have now redone. You’ve purchased the building on either side. You’ve blown it up into something beautiful. You’ve made an incredible bar. You’ve added all these different features. You are getting people to come and clamor like you have become the top operator in your neighborhood and it has been amazing to watch. incredible volumes, great management team, you invest in training, you do all the things right. Tell people a little bit about your background and a little bit about your restaurants because I can’t say enough good things about what you’ve done.
Well, first and foremost, thank you for the kind words, but I will tell you this before I even start off with me. It wouldn’t have been possible without David Scott Peters. I mean it from the bottom of my heart. This might even my management team always says that they’re like, David, David, you are our true mentor, like coach mentor. You’re you’re it. So I’m going to start off with that. Start off 2014 with the restaurant and Downey 998 square feet. The kitchen was 400 square feet. It was, you know, people had to get out the way to walk through the line. And, you know, we were doing 4 million. I remember when I first met you, you’re like, there’s no way. What? 998 square feet. They’re like, no way you’re doing 4 million. You know, it was it was a success. I will tell you, when I opened up that restaurant, I had no more money. The city threw me a curveball with some of the plumbing, grease traps, etc.. And I was a partner with some I was parting with some great people and I thought I was going to learn from them but little did I realize that by going on my own I ended up realizing and that’s how I met you at the restaurant trade show and the first time I saw you it was more like I was just in shock literally came back to the restaurant I was trying to change everything overnight everything literally I’ll never forget that um And the restaurant, on or around year four or five, I did buy my business partner off. But even at year two, at my current restaurant, we opened up a second location, thinking it was going to be complete success. And it wasn’t. Total failure. 100%. Bought my business partner out of there. I remember my CPA telling me, he should be paying you because you’re losing money. And I was like, I’m going to turn this around. And that was on my own, front of the house, back of the house. And literally turned it around. When I bought him out of Downey and we had already plans for expansion, millions and millions of dollars were going to go into the remodel. And I said, it’s either going to be him or me. I kept it. And I was nervous, of course, but it wouldn’t have been possible without you and my team. I mean it. And now where I’m at now about on my 11th year in the hospitality restaurant business, because I grew up in the fleet markets, I know customer service, I know all that, but restaurants, a totally different ballgame. Now I feel like I can do it all because I have you and your team also, which is amazing. And I have my management team. They’re amazing. None of this would have been possible without them or my team members.
They certainly buy in. You created the culture. You invest in them all the time. You’ve invested in other coaches and consultants to come in and talk to your team from customer service to operations to food quality. Like you invest in your team. You create a culture where You teach people what they need to know. You support them, but you’re also willing to hold them accountable. And that’s the real key. Like you provide them everything they need to be successful and then you expect it. And that’s the big thing. You don’t just kind of like, oh, well, I do all these stuff. I hope it works. You ensure that they’re doing it. And that gets them results, gets you results. And it’s a testament to what you’ve grown at Marisco Chow. I mean, it’s just, it’s amazing to see. Now, enough about you. I brought you on here to flip the table and you get to interview me. So now I’m the subject. You’re the interviewer. What do you got for me?
How great is that? I get to interview my restaurant mentor. All right. Are you ready for me?
I hope so.
All right. Sounds good. Let’s get this started. David. Your systems completely transformed my restaurant. I went from struggling to profitable in ways I never thought possible. What inspired you to develop systems and when did you realize they were a game changer for restaurant owners?
So what inspired me to develop the systems was actually when I got separated from, this is when I was at Kaiyu Springs Brewing Company Cafe. I was an assistant manager and we opened a second location. So now I’m an assistant manager at two locations. The GM stayed at the original one. The other assistant manager became GM of the second one. I’m going back and forth every week, three, two days at each store. And I was supposed to get the third store. And the owner, Bill Girard, said, hey, separate David from your schedule for two weeks. He’s going to write a budget for me. And from that point in time, 3 1/2 years later, when I left the position of operations manager, I realized the importance of systems. I realized the importance of cash flow. And I learned systems in a non-traditional way. Some of them I learned from restaurant people. Some of them, like a perpetual inventory form, I learned from one of my regulars who was in manufacturing. And I learned because it’s controlling product. to flow in and out. And so as I was doing that back in the day, this is in the 90s when we had dial-up modems and we were using PC Anywhere and I’m going in and out and I learned to program in Visual Basic for Excel because I was an Excel geek and I would buy these $50 books to find one line of code because there was no internet yet there were bulletin boards. There was no reference other than buying these $50 textbooks that were huge. And I saw the power of what I could create. It’s actually, most of those are the foundation of the systems I teach today. Well, as I went through and I moved on to a franchisor and became the director of operations there, and I was seeing the success with franchisees, I was consulting at one point in time and teaching at Scots of Culinary, all these things led up to, ultimately, my mother went to a seminar that sold her into another seminar called Million Dollar Speaking. And I win as a free guest and I’m protecting my mom. I’m like, this is ********. How much did you pay for this? Four grand and then you owe 25 total? What did you do? Like I’m protecting my mom and after day one I went, the sky parted and I’m like, oh my gosh, I know exactly what I want to do. I want to take the knowledge that I have, the systems I created and share it with the world because I’ve seen it work as an independent. I’ve seen it work in the chain side of things. I was a speech comm major. My dad was an NLP speaker, motivational speaker. I’ve been in that kind of, you know, I was an improv comic. I’d love to stage. I’m like, man, I can do what I love and teach what I know. And that’s kind of how it began. It was kind of this long culmination of feet to the fire and seeing the power of what it can do from independent to chain and saying, hey, if I could create my dream job, what is it? Well, it’s what I’ve created today.
I said I smile as you’re telling me about you, your motivational speaker, your dad, and then you as a stand-up comedy, was it that you said?
Improv comedy. A little different. I want to do stand-up at some point in time. It’s on my bucket list, but very different.
Okay. Well, for those that haven’t seen you speak or haven’t gone to any of your seminars, they’ll know what it is. You’re the best at what it is. Like the whole time you’re just like listening to the fire holes of information that you’re throwing. But anyways, moving on to the next question. I could go on and on about you at your seminars just so you know.
Yeah.
So before meeting you, before implementing your methods, I made so many common mistakes you warned against till this day. What are the biggest pitfalls you see restaurant owners falling into today and what’s your advice for avoiding them?
Biggest pitfalls I think are a few. Number one, getting into the restaurant industry without a passion for it. Like this freaking industry will crush you. If you do not have a passion for hospitality, a passion for wanting to deliver an incredible experience for your guests and get through all the challenges that come with it, it’ll eat you up. So you better have a passion for hospitality. And if you didn’t at the beginning, you better gain it while you’re open. The next thing is going in ill prepared. It is by not having a budget. Like your budget is your proactive plan. If you do everything off your gut in your bank account, you’re doomed. You will waste too much money. It’ll be too late when you look backwards and go, holy **** how do I pay my bills? And then we’re into the credit card loans, which are damn near an 80% interest rate. And we’re into to the borrowing money from friends. We’re running credit cards to make payroll. We’re doing all those things. So budgeting. The biggest thing is I will tell you that you have to understand that your role is to be the leader of your business. If I went backwards when I first started training people and doing what I do, I would have told you that the number one killers for restaurants were being undercapitalized before you opened, you spent too much money, you couldn’t bring in enough sales to support the debt. And couponing, that was 22 years ago. Then somewhere along the line I realized, it’s food costs, it’s labor cost, it is prime cost altogether. Like those are the major things. It’s my managers won’t do the work. I’ve got employees that are idiots. Those are their main challenges. I’m like, oh, I got to help you with the systems. If you remember when we first met, I was the systems guy. Numbers, numbers, numbers, prime cost, systems, systems. And then over the years when I ended up before I was bought out of my last company, I created my book, I wrote my book, Restaurant Prosperity Formula, What Successful Restauranteurs Do, and I realized that the number one piece, the number one killer for restaurants is lack of leadership. And just because you own a restaurant doesn’t make you a boring leader. And this is where the systems come in. They make up for your weakness. If you’re a numbers person, they give you the ability to communicate what you want from service and cleanliness and all your standards for operations. If you’re the giver, the social worker who wants to just give, give, give, and it’s about the and you forget about the numbers, the systems give you KPIs and systems to how to achieve those numbers. And that’s ultimately it. And if I were to use that as an example, it is literally following your path. When we met, you were using your gut, you were using what you hoped your partner knew that you didn’t know, and you got yourself into some deep, deep trouble with one location that maybe you shouldn’t have gone into in the beginning, and you weren’t making the money you were supposed to in this really high volume, dinky little restaurant. and all of a sudden you became the leader your restaurant needs. The moment you bought your partner out, you started doing things your way. You started investing in your people, putting the systems in place, making the changes. And as you’ve become the leader and you work on budgets, marketing, lead your team, develop your managers, hold them accountable, move the company forward, work strategically on the business, that is your role. You don’t go jump on the line. You don’t go host your restaurants. You don’t get behind the bar. You work on the big picture you’ve got a whole team of people because they’re following your systems, you’re successful as hell. And that’s really it. That transition you as an example is the prime example of what it means to potentially fail to being extremely successful. It’s leadership. I’d love to tell you it’s something else, but it’s not.
That’s the reason why I always tell my team, thank you for being an amazing team and why always continue training, training, training, training and training. There’s one thing we invest in heavily is training.
Oh, yeah.
All right. Moving on to the next question, David.
All right.
If you had to narrow it down, what are the three most critical system that no restaurant owner should operate without? I already hear you right here, just so you know.
Let’s see if I’m right. The number one is the foundational system or checklist. If you do not have checklists to impose your will without being there to set the standard to create a culture of closed open, you got nothing. You’ve got dirty restaurants. You got people ******** and moaning every morning they walk in, who closed last night? They didn’t do this and they didn’t do that. And they’re right. And now they’re behind because they have to close a restaurant before they open it. And so our culture starts to go. So checklists allow you to impose your will without being there, set your standard Ensure they’re being followed. And oh, by the way, set up every shift for 100% success because every shift leaves a restaurant 100% ready for the other. So that’s kind of the standard part, the keystone to all your systems. The next you should know right away and that’s recipe costing cards and budgets. What are the two things most restaurants never have? Budgets and recipe costing cards. Why they’re too freaking hard. Boo hoo. They are the two most critical proactive systems that I teach and everybody should do. Because a budget is literally your plan, your proactive plan for success versus reactive being your P&L. What are you going to do? What systems are you going to put in place? How quickly are you going to put in place? What are the results? You and I get together on a routine basis, if not every month, every other month. And we go through your actuals versus ideals. We say where you hit or miss. We adjust the targets going forward and you keep adjusting your rudder to keep your ship on course, which is your restaurant and your profitability. The recipe costing cards is the biggest tool because if I remember correctly, we were able to make a change and when I say we, you. I believe your food cost when we first met was in the high 30s and now you’re in the low 20s. Is that correct?
Yes.
That’s a game changer, right? And so what else can do that? What else can give you the power to make that kind of financial change in your business? It’s the recipe costing cards and all the systems to control. Those are three broad brush strokes, but there’s so many other systems that go along with them that support it. But Those are the three. Did I give you the three you thought I’d say?
Yes, checklist, recipe costing card and budgets.
100%.
And David, I didn’t do none of that for the first few years in business. It was by miracle that I was able to survive. And I’m telling you, it was once that I got into know you and it was more like, okay, we’re gonna do this, we’re gonna do that, we’re gonna do this, we’re gonna do that. But it was, it’s, Things that sometimes you don’t think are important, but they’re the most important.
Well, and to use you as an example, it wasn’t like you were failing. It was that you were struggling on the cash flow because the one thing you always did well is took care of your guest. Almost to a fault, meaning it was costing you money. And when you learned how to derive your restaurant and still provide value but make money, that’s when it all changed.
It sure did. Okay, moving on to the next question. The restaurant industry is always evolving. I’ve had to adapt myself along the way. How have you seen the industry change in the last five to 10 years? What should restaurant owners be doing now to stay ahead?
Fundamentally, the restaurant industry has not changed at all in 50 years, meaning it’s people and product. It’s great hospitality. It’s manage your people. It’s take care of your guests. None of that has changed. What has fundamentally changed is our costs have changed. So for instance, 22 years ago when I first started, most industry experts were calling our prime costs, which is total cost of goods sold plus total labor cost, targeting about 65%. and 60% for a quick serve. Well, today that would have you making a nickel and 8 cents on every dollar like an average restaurant. You’d be working your *** off for not much. And most restaurants are probably undercapitalized and overleveraged and they’d be breaking even and battling doing one, $2 million a year in sales using that target. So over the years, I moved the target to 55 and we get people there, 55% or under. And as you get to 2 million, 3 million, 4 million and so on, we start to get closer to 50%, which becomes life changing. If you go to 65% to 55, that’s 10 points on $1,000,000, that’s $100,000 every 10 points. So your $2 million business, that’s $200,000 a year doing the same sales you’re doing today, taking care of the guests without giving up guest satisfaction, without giving up product quality, without going against your core values. Can be done. It’s being done all the time. Hell, when somebody’s listening to us go, oh, but I’m in California, California, you pay the highest wages in your marketplace and you’re still able to do it. So let’s take that one off the table. So if I look at it, I say, wait a second, I made that shift after 9-11, literally from 65 to 55 because our food costs went up. What’s going on today? Our food costs going through the roof. and staying apolitical, as I stay out of the political side of things, I got news for you. At the time of you and I recording this, we’re about to go get a 25% tariff for Mexico, which your avocados 80% come from, I think 50% of our vegetables come from. Like we’re going to start to see higher costs again. And take away whether it’s the tariffs or it’s the chickens dying from the bird flu or whether it is mad cow disease or whether it’s a hurricane that wipes out the citrus crops, there’s always something that is driving our commodities up and we have to react, but it means things are going up. And so all of a sudden my proteins are going up, my vegetables are going up, my produce, all these things are going up. I got to be able to react. Oh, wait a second. Minimum wage. Do you remember when we feared a $15 minimum wage nationally? Dude, you don’t even start a dishwasher less than $18 in your marketplace.
Oh wait, that should be higher than that.
Yeah, I mean, it’s like, holy **** $15 laughable. I mean, it’s laughable. So our costs are going up. And then what do we have today? You’ve got software for food and beverage, recipe costing cards and things like that and inventory and ordering. And you’ve got software for scheduling. You got software for reservations. You got software for reputation management. You got software for to-go orders and online ordering. You got software for catering, you got software for, like the list goes on and on and on. Now all of a sudden we have this thing called tech stack that we didn’t have 20 years ago. Hell, we had floppy disks for that matter. And all of a sudden you start looking at your margins and they’re going away. And a typical restaurant, I want you 5 to 8% occupancy. Well, because of landlords and things, we’re running 10 to 12 in so many places. You can’t follow those things. So you have to adapt, which means The biggest thing that is on the horizon is you must be willing to change, but more importantly, be willing to change your menu. And that has been your greatest strength as a leader in your business. You have looked at your menu and go, this is wonderful stuff. And you go, that’s not making me money. That’s costing me money in labor as far as prep. And you have had no problem ripping things off and adding things in and changing, staying true to your core values, true to your concept, but everything’s on the table. Whereas so many restaurants see these rising costs and they stay, they hold their menu like it’s a freaking ransom note. I can’t let go. I’m so terrified to read this and let it go. And they don’t raise prices, they don’t change items, they’re not willing to get rid of things. and they’d wonder why they’re not making money. And so I think the biggest shift is our costs keep going up and now we have to be in a position that we’re willing to take our food cost into the low 20s. And that is probably starting to come across the board. Maybe in Atlanta I don’t when I still have a $2.13 an hour tip credit server where you have a $22 an hour server plus tips. And the higher labor goes, the lower we’ve got to go with cost goods sold. I just will say one last thing. My fear is after the years of COVID, people jacking up their prices, inflation, people jacking up their prices, We’re getting to a point where we raise our prices much more, depending on what you’ve been doing. You may not be providing the value to your guest anymore. And they’re going to start to look at you and go, this ain’t worth it. So we’ve got to really get creative and change what we’ve got on our menu instead of just one trick pony raise prices.
100% with you. Okay, moving on. Independent restaurants faced a higher closure rate.
Hold on one second. Move the computer again. Your microphone dipped out. Let me write down this time again. This is at 24. Okay, try it again.
Can you hear me?
Yep, now do it again.
Oh, it almost seems that after you talk and I don’t, it just cuts off.
Yeah.
Okay, ready.
Yep.
Go, okay. Independent restaurants faced a higher closure rate than chain establishments, with estimates suggesting that nearly 30% of independent restaurants might close by 2025 due to financial pressures and competition. What is your advice to any restaurant operator listening to us today?
Let’s go back to the root cause of why there’d be more independents that are going out of business. And that has a lot to do with not having a budget and not understanding the importance of cash. So let’s back up. When COVID hit, there was a mass, a mass exodus of the restaurant business, because why? Most restaurants were making money and paying their bills because they had two weeks of cash flow in the bank. So that meant as they were paying bills today, they had money or paying bills from 2 weeks ago with money today, for all intents and purposes. They were just staying ahead of the wave of cash. And then when we closed for a week or two, all of a sudden they used all that money and they still had bills to pay and no money coming in. And that shook our industry. because too many people are operating with too little money in their bank account and understanding that cash pays your bills, profits don’t. So I think at this point in time, the important. of budgeting is one piece. The other is the importance of managing your cash flow. Because there are P&L things like accounting issues, like what’s generally accepted accounting principles, where you could look at your P&L and we’re going to use accrual accounting, which is earn OUs. So I bring in food product, I take inventory. So if my inventory goes up or down, I adjust my use in my purchase column, if you will, and it’s use divided by sales. Well, fantastic. Well, that doesn’t mean I didn’t spend more money and I didn’t put more money on the shelves. It doesn’t mean that if I over purchase that I don’t have my food at risk to be stolen, wasted, spoiled. Oh, by the way, every time I’ve got an employee coming to the door and they clock in early, clock in early, clock in late or clock out late and they’re stealing at the time clock for me, all of a sudden I look backwards and I go, my money is gone. And so we’ve got to understand that it is more about dollars in how efficient we are with them, but more importantly, do I have enough dollars to outpace my expenses? And so when you learn to manage cash, which is your inventory, which is your people, I guess greatest example is this. I can show you, I’ve been doing this for 22 years, I’ve worked with thousands, literally thousands of restaurant owners and their managers. I can show you restaurants that on paper show they make money and they have no money in the bank account because they have so much product on the shelf. They’ve just literally, they can’t pay their bills because it’s all on the shelf doing nothing, just sitting there. Vice versa, I got people who’ve learned how to play the tax advantage game and purchase trucks based on whatever the tax law is there, equipment based on that, investment in property, dot, dot, dot, and they show a loss, but they got lots of money in the bank account because That’s the lesson of profits don’t pay your bills, cash does. And so when you learn that you’ve got to have budgets, you’ve got to manage your cash flow, and more importantly, what are the systems to achieve your KPIs, your key performance indicators? That’s really what it comes down to. Boils all the way back to that leadership question. What makes up for our weaknesses are systems. You have a system, a process, a way to doing anything and everything in your business. And oh, by the way, owner, it is your way.
Okay. All right, I’m gonna change it up a bit. Implementing your systems not only change my restaurant, but also change how I see myself as a leader. What keeps you motivated to keep teaching and helping restaurant owners like myself?
It’s exactly that. It is to see the change. I feel like a proud dad. It’s easy for me to brag about you specifically and the change that I’ve seen you make because it is more than a 180. It is an incredible turnaround because you went from not knowing, trusting, and just using your gut to you have got to be one of the top operators I’ve ever worked with, period. And does that mean you’re perfect? No. Do you have issues? Yeah, don’t we all as entrepreneurs? But you never stop towards learning and changing. And so it’s people like you, it’s people that are like in our Mastery Plus group, it’s people in the RTI group. When I see that light bulb go off and we see the incredible change they make in their business, that they realize that they have the power to change it and they actually do, it just, it energizes the **** out of me because I can say I led the horse to the trough. You guys decide to drink and then the benefit is just unbelievable. Do we have people from time to time that disappoint? Yeah. They come in, they think they’re ready for change. You’ve seen it. I’m going to do all this stuff, but they fail to change. They fail to take action. They fail to hold people accountable. They let three employees tell them why this **** won’t work in their restaurant and they don’t do anything. It’s the only time I’ve ever seen anything that I have not work is because it wasn’t used. So it’s really that incredible experience. I mean, let’s use Avery Ward, who’s a member mentor for me, but also in the Mastery Plus group with you. And he’s in his 20s. And the incredible change from coming into his parents’ business and increasing the sales and then realizing he needs to learn systems and then trying to take care of his parents and buying his dad out and taking over and building a new location and building this conglomerate. And all of a sudden the success is amazing and he is like you, very systems oriented, invests in his people, has an org chart with people doing the things that he needs done and him working on the bigger picture. It’s example after example after example of that. That’s what motivates me.
All right, it’s good to hear. Owning a restaurant is tough and there were moments I doubted whether I could turn things around, especially if you’re in the wrong partnership like I was. Have you ever faced moments of doubt in your career? How did you push through them?
Oh yeah. So as a restaurant manager, I can remember, let’s kind of go backwards. I swore I’d get out of this business three times. This is me growing up in the business, let alone we’ll talk about me as a coach. So one of the times, just growing up working for my mom, I hated it. She rode me twice as hard as anybody else, my sister and I, and I’d be like, this is awful. I don’t even like working in the dish pit. I don’t like busting. I like the tips, but I don’t like working, let alone my mom just right on me because there’d be no favoritism. I thought, man, I’m done with this. And then in college, I started, I was a doorman at a bar. I was a host at a restaurant. I was a doorman at another bar. And then when I got out of school, I was like, I’m going to go apply to be a manager at the restaurant at the Hyatt Regency in the food and beverage program. My mom’s like, you said you never wanted to be in the restaurant business. All right, so I jump in, have a horrible experience. And What a lot of people don’t know is it was so bad that is the one time I walked off the job. It was so, the culture was so bad. My manager was so bad. And I’m in my young 20s and I’m like, I’m out of here. And not proud of it, but I’m telling you it was that bad. And then when I was at Ciadou Springs at one point in time, I had a bad GM who was literally just unfair with people and policies and procedures, not enforcing them and just rude to people and treating them like ****. And I approached the owner. At this point, I was a bar manager. I’m like, I’m going to quit. I can’t work for this dude anymore. And he said, I’m not accepting a resignation. And that moved me along. And then I was at Famous Sam’s at one point in time. I had these guys who bought the company, wanted to take it public, brought me in and a group of other people, damn near bankrupted the company. I was working, I had, if I was lucky, one day off a week, but I would plan with my new bride, my wife, two days off in a row a month. That’s what I would plan. And I’m like, I’m done with this. As people were leaving, as it was starting to fail, Before I came back to it, I went and taught at Scottsdale Culinary Institute. Every one of those times, it wasn’t that I didn’t love the hospitality business. It’s that I worked for bad people. Like, I don’t believe people quit your restaurant. They quit a manager. And I’m no different than anybody else. If the culture is terrible, why do I wanna stay? And we talk about that in the group all the time about becoming an employer of choice, doing the things that you do to attract the best people, to keep them happy. It doesn’t mean we don’t hold them accountable. It doesn’t mean we don’t expect more from them. We just raise the bar and we give them the tools to get there. And I can tell you one other time as a restaurant coach that I thought I was done. In my old company, as you remember, because you’re still in it, I developed software. Because at some point in time, I got all these spreadsheets and so on and so forth. We’d love to connect them all. I’d love to create a system, put your invoices once and it all ties together, da, da, da. Like in the infancy when there wasn’t a lot of software out there, I created the software. Well, my very first programmer sold me a bill of goods and I’m like, is this a release date? We got, oh yeah, this is a release date. And I pulled in people into Las Vegas to release the software. It’s going to be incredible. And 2 days before, he goes, well, it’s not ready. I’ve got to do this. And he had nothing. And I’m like, you tell me right now. I mean, I am screaming. You tell me right now, I got to tell these people not to come to Vegas. Oh no, I got it. We’re going to do this. And I show up to Vegas and I got nothing. I’ve got some of my team, he’s got them on computers trying to help him program. Nobody’s a programmer. And I literally stayed up all night long, created these screenshots, if you will, and told people it’s not ready for prime time. I’m sorry I pulled you in here, but I’m going to teach you what the system’s going to do. And I can remember we finished day two. I got behind the curtain and I thought I was so sad. Like I thought this is over. My career is over. My business is done. You know what? I have the most incredible members in the world. I had one person ****** ***. There was almost 100 people in that room, one person. Everybody understood. And I think those are the milestones, right? In the business, in franchising, I’m done, I’m done, I’m done. But what’s interesting is through all of those, what did I do? I persevered. I took control of what I could control, changed my surroundings, left a bad situation, went into a better. I think there’s no better industry than the restaurant industry if you love taking care of people, but it doesn’t mean it’s easy.
Amen to that because I say the same thing.
Yeah.
If you could go back and give your younger self one piece of advice about leadership or business, what would it be?
One piece of advice for leadership or business.
To a younger David.
Yeah. You know, I don’t think it’s gonna be something you’d expect from me. And I think it’s a part of the fact that I’m 58 years old. Stop caring about what other people think of you. See, in my 20s and 30s, I really cared that you liked me. And that would allow, that would get in the way of me managing people. Like, because I wanted to be a friend versus your leader, versus your manager, versus your mentor. And so when you become friends, it’s very difficult to get a friend to do side work. It’s very difficult to get a friend to go, I’m going to respect you when we went out drinking last night, you throw up in the backseat of my car and you want me to do side work. Like, whatever, *******. Like, it’s that lesson of, hey, I need people to respect me, they don’t have to like me. And oh, by the way, not everybody’s going to like me. And I think that’s probably the biggest thing. I don’t know if I would have followed it, right? Because a part of that is age. But the fact of the matter is, when you can be confident in yourself, when you can be authentically you, you are not gonna make everybody happy. Not everybody’s gonna like you, not everybody’s gonna be a friend, it doesn’t matter. In the restaurant space, as a manager, as a leader, You just have to be authentically you. You’ve got to be genuine in your communication. Stay true to yourself and let people, let the chips fall where they may. If they like you, great. If they don’t, they don’t have to. They either have to respect you and work for you or decide to find another place to go. It doesn’t mean you’re a jerk and you drive them out. It’s just, this is the culture we’re creating and I want to surround myself with people that are attracted to what I bring to the table.
Okay, great. Moving on. Your mindset strategies help me and my team become more disciplined and focused. What are some of your daily habits or routines that contribute to your own success?
Some of my daily routines. Well, I’m going to say that the biggest thing is it’s kind of like the book that I recommended we all went through at the Mastery Plus meeting at one point in time, which is Atomic Habits. It’s setting up some habits that set you up for success every single day. Whether it’s for me when I go row, I gather all my rowing gear the night before so it’s in one spot so I can go right out the door and make it there on time, that I’m not searching for **** and whatever or coming up with excuses of why I’m not going. The same thing happens in my workspace in the sense that I block off time. There are things on my calendar that say do not book. There are things on my calendar that say, do not book, working on PowerPoint. And it shuts down the whole world from being able to communicate with me so that I can focus for this little bit of period of time to get something done. Because otherwise, I’ll be on Zooms for 8 hours a day. That’s not unusual, if not 10 sometimes. I’ll have my team slacking me and asking for things that they need, which is not bad at all because they really don’t bother me and they don’t Slack a lot, but when they do, I look over and I’ve got to stop what I’m doing and I want to be present for them, let alone emails and text messages from members and other coaches and things like that I work with. My day can get away from me very, very quickly. So I think that the biggest thing in time management is setting yourself up for success with habits and the other is blocking off time that this is what I’m going to do far in advance. That way you get it done.
Okay. You’ve helped so many restaurant owners, including me, but who were the biggest mentors or influencers that shaped your own journey?
There’s probably a couple in the restaurant business. Number one would start with my mom. My mom was an award-winning trainer at Showboat Hotel Casino and Food and Beverage. She is an incredible hospitality professional, incredible baker, recipes beyond belief, hospitality off the charts. And she taught me as a single mom when my parents got divorced when I was 8 years old initially, and then my mom got remarried when I was 13. She showed me that nothing could stop you if you’re willing to put in the work. So as an example, as a leader, as just a mom and a provider, and as a restaurant person, that’s where I think most of my foundational everything comes from. there would have been Bill Girard at Coyote Springs Brewing Company Cafe. This was a banker who retired and opened a brewery in the early 90s when brew pubs were opening up once a week. And it was magical. But this was a guy who said, I don’t care what happens in the restaurant business. What are we going to do? Like forget about industry standards. Forget about norms. We’re going to look at a problem and we’re going to create a solution. And I thought that was incredible because that’s where I developed these systems. Again, this is where I bought those books. This is where I got to cut my teeth in that we don’t have to do it just because somebody else has done it that way. We can develop whatever we need. So problem solving, being creative, I think were probably the biggest things that he provided me. That you can do anything you put your mind to as long as you take the time to learn.
Interesting. All right. Switching it up a little bit. One of the best moments for me was finally hitting my target, food cost percentage. What’s one of your favorite success stories from restaurant owners who applied your systems?
Favorite stories? There’s so many. That’s a tough one to say, a favorite story. I’ve already bragged about you. So you don’t get the, you don’t count. I’ve already bragged about you. I’ve already bragged about Avery. I would probably say that one of my favorite things is a good friend of mine and member mentor now, David Militello. He was one of my first five members ever. Like my very first coaching group, there were five people in it. David was one of them. Very first five people I worked with. And over the years, I watched him have, at the one time, he had four restaurants going, including one of those was a catering hall. He’s a seasonal location, beating his head against the wall. But one of the best hospitality people I’ve ever met is spreadsheet geek, but couldn’t keep up with it all. And all of a sudden he learned budgets. And all of a sudden he learned that he needed an operations person, a right-hand person, aka implementer. And all of a sudden, things started to fall in place. And he had time. He had all these locations used to suck up all this time. And then he became a coach for me. And then he was a consultant with me. And then he was full time for quite a while until one point in time, we went different ways. And We stayed really good friends. He came out and surprised me with my other good friend, Brad Hackert, for my 50th birthday. And time has gone by. And in the last two years, we reconnected. And he’s now a member mentor for me. And he provides the most incredible advice for people. It’s to see that journey that somebody went from being in the weeds and struggling to ultimately being able to share that same knowledge with other restaurateurs. It’s pretty wonderful to see that it’s not just me, it’s people like you, it’s people like Kim, Avery, Deja, my friend Brad Hackert, who is probably the best operator I know, period. And just seeing these people make the changes and be able to share it with others and improve the independent restaurant industry as a whole, That’s pretty cool because it’s like, multiplies. It’s not just what I do. It’s what the person I train does that trains other people and what they do and all of a sudden we got people that know good stuff and make a change.
Okay. If you weren’t coaching restaurant owners, what do you think you’d be doing instead?
Question is, am I independently wealthy or do I need to make money? if I’m independently wealthy, I’m going to tell you right now, I’d start coaching rowing. I’d probably spend all my time, I’d row, train to become even better as an athlete, but I’d also coach others. It was something I wanted to do right out of college. I thought maybe I would become a crew coach. So that would be what I would do. But you don’t make money doing that. It would just be a passion project. Otherwise, I’d probably try and become a standup comic.
Okay, it’s good. Big laugh here. Okay, restaurants are full of surprises and I’ve had my fair share of crazy moments. What’s one of the funniest or wildest things you’ve ever seen in this industry?
Wildest things I’ve ever seen in this industry? Scene, that’s the… Or funniest. Well, let’s, instead of, I don’t know about funniest, but I’m gonna tell you, I’m gonna share a story with you. So in most restaurant bars, we have a policy that our team can have a shift drink. In the 90s, this was really big. In the 80s, it was even rampant. So alcohol was kind of a motivator for all intents and purposes. And at Caiatou Springs, we would give you a shift beer. And that was fantastic. And then all of a sudden, if you have a bar, restaurant, restaurant, bar, but bar is a component of it, you tend to see your employees coming back and wanting to drink at your place. Like they just work together. That’s their family. They come back and they spend money. Well, at Coitie Springs, we had half our seating inside, half our seating outside. We had a patio with a cover and misters and so on. At one point in time, I had come back to the restaurant. One of my friends, Eric, was a bartender at the restaurant. Ray was at the restaurant. There was a group of us employees sitting on the patio drinking. And we were, I’m just going to say, we were drinking pretty heavy. Next thing you know, Eric and I are wrestling on the grass in front of customers. And while we had a blast, I was the reason why shift drinks were taken away from the team. Just an FYI.
You’re getting down to the final two questions I have for you. I draw a lot of inspiration from great restaurants and chefs. Do you have a favorite restaurant or chef that you admire?
I do have a favorite restaurant. They’ve been a favorite restaurant of mine for, and it’s close to two decades, and it’s Okeechobee Steakhouse in West Palm Beach, Florida. They are by far the best restaurant when it comes to hospitality. The quality of product. Curtis would literally inspect all the meats that come in and use CAB beef and he inspects it and he will send tenderloins back. This does not fit our spec. Like he needs this product. They are incredibly successful. He was like, there’s no way we’re doing this. Ralph, his son, who’s now taking over, is same way. Like it’s going to be the highest quality product. They dry age their meat. They wet age some of it. They have a 20, what’s it, a 20 ounce bone-in ribeye that is just to die for. Their desserts are incredible. Like they put so much love and care into the food. But as a fine dining restaurant, they’re very casual. Like they’ve got the, you know, the vests, the tux vests and so on and so forth. They’ve got the crummers, they do all the things that you need. They bring out the meat tray, they do these things. They’ve got incredible hospitality, yet As formal as it is, you feel like you’re potentially in the neighborhood bar. They get to know each one of their guests. They develop a relationship. They make it easy for you. And I just think they do probably the best overall job on everything. And that is not to insult you or any of my other members. They were members of mine in my old company. I will tell you that if I’m in two hours driving distance of West Palm Beach, Florida, I am going to make my way to the restaurant and I do it all the time.
Okay, sounds good. On to my last and final question.
All right then.
I feel like now I know a lot about your business philosophy and impersonal, but what’s one thing most people don’t know about you?
What’s one thing most people don’t know about me? It probably don’t know because I put off, I’m A lot. I’m a character, you know that. Like it is, it’s game on. You know David Scott Peters is in the room. Hell, I use my first, you know, I have three first names, I use them all. I’m confident in everything that I do, but in the same respect, I have a lot of empathy, almost to a point where there are days that I listen to restaurant owner stories and I see their struggles. from being undercapitalized, how am I going to make this work, to I’m going to lose my spouse if I don’t make this change. I’m going to be in a position where all these people are going to be out of work and I’ve got to go bankrupt and all these things which happen all the time. And it’s tough. I feel those things. I will express to you on the Zoom, on a one-to-one, the confidence, and I will boost you up. I will do all the things I can to help you. But I’ll also internalize all of that and feel your pain and think about it for days and think, what else could I have done? What could I do? Because some of this stuff is out of my control. If you have dug a ditch so deep financially, unless I have the money to bail you out, there’s nothing I can do. And I feel it. I think most people think that I don’t because I put out such a big bravado, a big personality. But when I’m off Zoom, when I’m not in front of people, I feel your pain. I internalize it and it sits with me. There are days where I feel pretty down because there’s somebody I couldn’t help. I couldn’t help them fast enough because they came to me too late.
Well, thank you very much for your time, David. I highly appreciate you. That’s all I have for you.
Thanks for doing this with me and I’ll probably see you at the next seminar.
You definitely will.
Thanks brother. Appreciate you.
Sounds good. Bye bye.
Ready to take the next step towards achieving restaurant prosperity, freedom for the daily grind, and the financial success you deserve? Book a discovery call with Ryan James to learn about our group coaching program. Ryan will guide you through how our program can transform your restaurant and help you achieve the prosperity and freedom you’ve been striving for. Click the link in the description below or visit DSP.coach forward slash talk dash to dash Ryan to schedule your call now. Hey, that was an awesome episode. I want to thank you for taking the time to take action on building a better, more prosperous restaurant. Before you go, I want to give you these three thoughts. One, by combining leadership and taking action with systems and training being checked by accountability, you are on your way to creating prosperity for you and your restaurant. Two, I have something I need from you. Please leave a review on Apple Podcasts, Spotify, or wherever you happen to listen to podcasts. By leaving us a review, other restaurant pros seeking out this information are able to find it. I read the reviews and hearing how this information has benefited you does wonders for me. And three, if you find any of the discussions helpful, share them. The more restaurant pros who have access to them, the better we become as an industry. For more restaurant resources or to get in contact with me, connect with me at DavidScottPeters.com. Be passionate about what you’re doing. Be persistent. But more importantly, become better and help everyone around you become better. And your restaurant is going to kick some ***.