Restaurant Food Cost Solutions for Independent Restaurants

Hey there restaurant owners, it’s David Scott Peters and welcome to episode 8 of the Restaurant Prosperity Formula. I’ve been coaching restaurant owners since 2003 and the Restaurant Prosperity Formula is based on what the most successful restaurant owners I’ve worked with do on a daily basis to achieve their success. The basic premise of the formula centers around achieving prosperity, freedom from your restaurant and the financial freedom you deserve. To achieve prosperity, you have to follow a very specific formula made-up of leadership systems, training, accountability and taking action. Today’s topic centers around the story of 1 restaurant owner who learned how to change her business to not only survive the COVID crisis, but thrive and get her life back.

Now, I want to tell you about our guest today, Emmy Barnick, owner of the Captain’s Cabin in Washburn, North Dakota. She and her husband also run a farm. She opened a restaurant because she had a dream to provide for her small farming community. She wanted to give them a place where they could socialize, eat great food and have relaxed friendly service. This was something her community absolutely needed. But Emmy quickly learned the restaurant business was about to consume 80 to 100 hours a week of her time, that she would only see one day off in four months, and that a key employee would steal thousands of dollars in product from her. Fast forward.

While others closed their doors forever due to the COVID-19 pandemic, Emmy was able to harvest her crops 14 to 16 hours a day, grow her bank account from $7,000 to $77,000, have managers run the day-to-day and is now taking three days off a week. Listen in on our conversation as she shares with you exactly how she did it and how easily you could have the same or better results. I want to welcome Amy Barnick to the show today. I’m really excited with our guest today. Emmy Barnick is really a rock star when it comes to putting systems in place. I’m going to let her share her story with you.

But if you’ve kind of gone down this road of saying, why do I put in systems? Maybe you’ve gone down the road of, gosh, I’m not making the money I deserve. What do I need to change? Maybe you’ve gone down the road of, holy crap, I’m a prisoner to my business. you want to talk about somebody who’s felt every one of those things, lived it and made a change, really gone through not only a personal, but a business transformation? Emmy is that person. And I will tell you, I’ve blogged about her. I’ve podcasted about her. I’ve put emailed about her because it is truly impressive what kind of change she has made in her business. Emmy, welcome to today.

Thank you. I’m excited to be here.

I hope so. You and I talk quite a bit anymore because we work together. But do me a favor. Tell people a little bit about your background because you’re not really a restaurateur by trade. You kind of got into this to take care of your community. Tell your story.

Yes. So I was a social worker, still am at heart, but was a social worker and we farm and it was kind of opportunity and we had somebody that was going to run the front of the house, somebody is going to run the back. I was going to simply go in two, three days a week, do the books. It was just going to be this magical little investment. Well, probably about a year later, the guy that was going to be running the back of the house was literally robbing us blind. He was catering on the side and using our food and having the check wrote directly to him. 10s of thousands of dollars.

I didn’t even because I didn’t want to know. The front of the house was zero systems in place. People kind of just did whatever they wanted. There was no organization and that quickly became 10 pages of checklists of things that needed to get done. And we did not have structured meetings with me and the management team. And so it was always this perpetual list of stuff that just had to be done. And I got on the restaurant hamster wheel of just running and running and running and working and working and working. And I didn’t get anywhere. We were still, we were profitable. We were bringing in good money, but we had zero money in the bank account.

We were not going to make payroll. And so we started to, you know, I love the saying of you don’t know who’s naked till the tide rolls out. Kind of where this kind of led, it was like, okay, we really had to pull the sheets back and take a good hard look or this was going to go under. My pride didn’t want that to happen and I really wanted this to succeed and I didn’t have anybody to hire to figure that out for me. So I had to dig in one way or another and figure that out myself.

So you go from being a social worker by coming out of school, if you will, you end up you and your husband farm for a living and that is seasonal and craziness that I’ve learned so much about farming I didn’t know about before you and I met. But you opened, you got this restaurant kind of as an investment to take care of your small farming community. And then the next thing you know, like you talked about, you’re on that restaurant hamster wheel. You’re working your *** off. People are taking advantage of you. don’t have time away from the business. It started to pull you away from your family and your other livelihood of farming, correct?

Big time, big time. And to say small community, I think that’s a big thing. thing that might be attractive for people is that we’re not in Phoenix. We’re literally in the middle of nowhere in North Dakota with 1100 people, no stoplights. And so it’s very relatable because these people that did take advantage of me weren’t just some Joe Schmo I hired off Indeed that I took a risk on and I didn’t know what I was getting into. These were friends. These were people that we knew and they still took advantage of me. And so I was very naive. So having the systems in place takes that out of it. I don’t care. You can be my friend or you can be somebody off indeed, but we’re going to follow the same thing.

So you go through there. What were some of your major challenges? So obviously you didn’t know people were stealing from you or you willingly looked the other way because you thought, what the hell am I going to do? I can’t cook. I don’t know how to do this. So somewhere your deep gut said there’s a problem, but you failed to look at it because of those things. Talk about what was it like? How did you feel? How did it make you feel when you discovered that you’re being stolen from?

I was literally sick to my stomach. I did not dig into it further because I think it was much deeper than I anticipated. But it was sickening. And you do, you kind of put this guard up then and think everybody’s stealing from you and they might be, But it really opened up my eyes that I needed to take a look at the bucket and I might not be able to fix everything, but I’ve got to fix those big leaks. and then move on to the next one and the next one and the next one. And I didn’t have anybody do it for me. So I needed to figure it out.

So I know in the beginning before COVID hit or just right at the beginning, you barely had money in the bank. Like you said, it was profitable, but you were working your *** off for almost nothing because there were times where based on cash flow, you may have been profitable, but you didn’t have cash in the bank to make payroll and do those things. So you were always tight for the beginning. You’d work your *** You felt like you couldn’t leave the restaurant because people, if you weren’t there, they were stealing from you and so on. And then you had the weight of money on your shoulders. What was that like to say, I can’t leave this business because if I do, I can’t afford the labor and I can’t make payroll and they’re going to steal from me? How did that work on your psyche?

Bad, not good. It’s not a good feeling. And I didn’t know what to do. I am a big believer in education and education costs money, whether that’s going to college, whether that’s getting in a car accident or whatever that may be, different life experiences, it costs money. And so I listened to Dave Ramsey a lot and that kind of really got me thinking at the beginning of the year. He is big on, you have to treat your business no matter what business it is. Like it’s a, like you’re going to have 9-11 happen tomorrow. And at this point, we literally had probably weren’t gonna make the next payroll. I’m like, okay, well, how do I plan for that? I’m so far away from putting savings away, let alone paying the bills that are knocking at the door. So that really got my mind clicking of like, okay, we gotta change this one way or another, and then COVID hit.

The Dave Ramsey thing is a great example. If I take two things you said, one is about education. you and I talked before we started recording was, I’ve always talked about that getting a Harvard education is often cheaper than running a restaurant because every mistake we make as an operator, it costs you money. And it doesn’t matter if you’re in a small town of 1100 or you’re in a big city with millions of people. It’s the same damn business. And then you sit there and say, oh, Dave Ramsey, I’m not a big follower. I catch a podcast or two throughout the year, catch them on YouTube and so on.

But I know so many business owners, restaurateurs that are avid listeners. And the truth of the matter is, it is taking care of those debts. It is taking care of yourself, digging yourself out of the hole. Because a part of that is that transformation of internal peace that you own this, you have money, you’ve got a future and retirement. But owning a restaurant sometimes is the complete utter opposite of that, right?

Yeah.

So you start down this journey, you’re listening to Dave Ramsey. We don’t know each other yet. You are sitting there thinking, man, I need to make a change. What were some of the things you started to try on your own? Did you search out other experts? Did you go on YouTube? What did you do to say, I need to make a change?

You’re probably going to laugh. I haven’t told you this part yet. So actually, the first thing I did was I like to read, I liked audio books and stuff like that. I was like, well, there’s a restaurant for dummies book out there. There’s a book for dummies. Maybe they’ll learn something. And I didn’t learn a lot from the book, but it got my wheels turning. And so it at least got me going in the right direction. I actually then stumbled upon US Foods, right when the COVID stuff hit, they were sending out different blurps and stuff, short videos of, and you happen to be one of the little snippets on there of five ways to cut food costs or something.

I don’t even remember what particularly it was, but I just loved your personality and it was kind of the no ********. We can still be friends, but let’s get **** done. And I started following the podcast or the, this was before podcast, the YouTube and ordered the book and loved, loved, loved the book. It’s full of highlighter marks. And so loved the book, started following the podcast, then did the.

I’m just going to do a plug here. For those of you who don’t know, I have a book called Restaurant Prosperity Formula, What Successful Restaurateurs Do. That’s what she’s talking about when she says the book. I like it. It’s the book. It’s almost like the Bible, the book, right?

For sure. It is. It’s yeah, if anybody gets anything on it today, at the very least, go get the book.

Thank you.

For 15, $20, you can totally make some.

Well, they got it down like 13 on Amazon down. They’re killing me. It’s supposed to be 15, but anyway, go ahead. So you got the book, you’re launching YouTube. What else were you doing?

Then I started, we did the consult and that was really eye opening for me because it gave me real data on my business, not what the average should be nationwide on food costs. It was like, no, this is what you are doing. And if I change nothing, nothing’s going to change.

So when you say consult, you’re talking about my free restaurant evaluation, go to my homepage, take 15, what take you 15 minutes to fill it out?

Yeah, super easy.

Good. because then you immediately have a 24-page report with every opportunity. So what did you learn from that report? What were the big ahas?

You know, I’d have to actually go back and page through the report, but a break-even point is interesting to me because I truly didn’t really know. what we had laying on the table. That was kind of the deciding factor for me. It was like, okay, we have this much laying on the table. If I do this program, it might cost me this trunk of change, but in return, even if I get 1/4 of that back, I’m still gonna be ahead. I’m still gonna be better off than where I was in the beginning.

So you figured, you said that got this evaluation, you saw that there were solutions, things you could change. And then you said, my gosh, I need to make these changes because again, whether break even point or prime cost, the changes you can make that you learn in that report, you can see the hard cash that change. If I go down this journey of systems, this is what I can put in my bank account. Was it the money that’s sang to you? Was it the having managers know their job and be able to leave the restaurant? What was the first attraction to make that complete utter pivot in what you do in your business.

I think at the beginning, it was definitely money. We didn’t have it to make payroll, like it was going to be coming out of our savings account. And so I knew I had to change, but this was literally going to go under.

So you fill out this report, next thing you know, you jump on a call with me. And that is kind of the opportunity for me to review that report with you. And quite honestly, it was for me to offer membership to you. So What kind of, what were the first things you joined? What were the first things you put in place and what did that do for you?

So it was very overwhelming to me in the beginning because it’s like, oh my gosh, there’s all these different systems. There’s 23 stages and I’m a organizer. So I’m like, okay, I should be starting at stage one, but stage one might not be where I need to start. And so simply starting with the pre-shift notes. It sounds super simple. It’s is, but it’s easy to not do them as well. But something as simple as that really started to kind of get the ball in motion and get the communication flowing a little bit better. It started to hold people accountable of, okay, you signed this, right? You read this when you got on shift? Yep, I did. So you just didn’t do it?

So you all of a sudden were able to communicate your expectations and now you had something that you’d truly say you couldn’t have somebody go, oh, I didn’t know. Because that’s the biggest way people get out of accountability. Well, you never told me that, right? You’ve got nothing in writing, nothing, communicated and whatever. So when that started to give you, know, I often tell people, I can tell you exactly the process I want you to go through. But sometimes it’s that little thing, whatever you want to do that gets you success feeds into the next thing. What was it that opened your eyes and said, I’ve got to start diving into the financial side? Because you literally started with probably the easiest thing you could think of.

Yeah, and that was it. I just had to start somewhere. And then we went to the three key systems of the key waste tracker, key item tracker, the waste tracker, and the restaurant checkbook guardian. But even before that, there was the three that we did. What was the third one?

So you started working on checklists, you were working on manager log, you were working on pre-shift meeting, the invoice log paid out.

The invoice tracker, the waste tracker. But it was even just going on to those two, it was huge and eye-opening for the two managers as well. When we started tracking, holy crap, we threw away $300 today in the kitchen. No wonder we don’t have room for a raise. And so just even being cognizant of how much waste we are having.

And the other part just popped in my head. It’s the DSR tracker, tracking your sales. Because that was a big thing. I want to talk about that in a second, but go ahead. I’m sorry.

Yes, no, that’s okay. And I guess to back it up back in January before we started working with you, that is something that it was like, I am a data person. And we didn’t really know how much we were losing until we started tracking stuff and we were the bar that every employee got a free meal. There was no restriction so they could have a $27 steak meal every single day times 15 people. And you wonder why there’s not money in the bank account. There was no budget or cap on the beer and liquor orders. So we had a liquor room full of $60,000 in inventory, the cash flow just sitting there. Because it was easier to order a case and the salesmen are great, if you order a case, you get this $3 shooter for free and So really just kind of digging in and starting to track stuff, even if you don’t know where that’s going to lead or how it’s going to change, start to track stuff.

So let’s kind of walk through. So we’ll start off, let’s go backwards with the one that popped in my head. I knew the three things like what was it feels like so long ago, but it really was only maybe six months ago was the DSR tracker making sure every sale right every dollar makes it in and actually being able to balance. So I often talk with restaurant owners and eight out of 10 POS systems don’t balance. And when you start to try and balance them to try and find out if all the money made at the bank account, you’ve got these wild swings, $100 over, $50 under and so on, which breeds the ability for managers to steal from you. were that restaurant.

Yeah, for sure. Our POS did not balance and it was those huge swings were $200 over, $100 short. Is somebody stealing? We couldn’t really go to the staff because we didn’t really know. Maybe it was our fault. Well, how do we accuse them? But it sure could have been. So that was a big relief for me to know that it is balancing and these numbers are right.

And how long did it take us? I mean, it took us two meetings, you, me, your management team, and then a little reprogramming of your POS system. You know if every penny makes it to the bank account now, right?

We had spent hours on the phone with the company and they, we just don’t really know. It’s like, you’re the expert. How do you not know? But yeah, they didn’t and they didn’t really care. They get their monthly subscription. They don’t care.

So how does it make you feel now to know that when you look at your numbers, you can say that money I can tie it to the bank account and know that it made the bank account? What does that do? What kind of relief does that give you?

It helps me look to, okay, if I am off $50, what the heck’s going on? I can go back on the cameras, I can talk to certain staff. It gives you, it takes away a whole part of that equation that was like, I don’t know where that’s going.

Let’s dive into the waste tracker and the key item tracker. Now, the waste tracker is a waste sheet for most people. What we throw away, we ordered too much of this, somebody made a mistake, burnt that. What was the eye opener for that? I mean, because it’s just a clipboard system, putting it in place, no time, getting it used every day, you’ve learned that is a challenge. Talk about just the idea of getting it in place, the challenge of getting people to use it, and what changed for you.

I think it’s kind of like a babysitting tool. It’s kind of like with your kids and you say, you feel like you say 200 times a day, did you pick up your toys? Did you pick up your toys? It’s the same thing in the kitchen. Did you put that on the weight sheet? Did you put that on the weight sheet? And finally, they are starting to call each other out. And I like in your talks, you say that’s when change is happening. Your culture is starting to develop and that doesn’t happen overnight, which is frustrating because you want it to, but you didn’t get where you are overnight either. So it does take time for that to evolve.

But when they start to call each other out and say, hey, did you put that on the waste tracker? Who burnt these? Why did this happen? Why did we make two extra garlic toasts today? What’s going on? Who, you know, where is that? I think Part of the waste tracker as well was explaining to the staff that it’s not a, hey, you’re in trouble if your name’s on here. It’s maybe we need to change the way we have that worded in the POS system so when it prints in the kitchen, it says 5 eggs, not an order because that might be a single egg or five eggs.

Maybe we need to retrain people on keep burning steaks, or maybe this item needs to be proportioned that we didn’t really think about before, but we’re throwing sauces away because we over sauce the wings. We just stick a bunch of sauce in the bucket and there’s a gallon of sauce every day being wasted. And so that has been helpful that they understand the backside of it.

Well, it stopped making the ******* mistakes. It costs you money. You see the problem today, you fix it. It’s one of the most powerful, proactive tools to lower your food costs. And it’s stupid easy, but it’s so hard to get them to use it. And I love the fact that the way you analyze it, just keep looking every single day. That’s the only way. And yeah, your culture is really changing when you have one employee look at another and say, hey, man, that’s not how we do that here. And so my hat is off to your management team and everybody because that’s a major change from, I don’t give a ****. I mean, which was kind of the way your kitchen was before we met. Now, key item tracker was to prevent theft. That was an eye opener, no?

Huge, yes. You know, and I like that you can use it for things other than just what you don’t want wasted or stolen, especially during this time, we’ve used it for gloves. because there’s such a shortage and I had no idea how many gloves we go through. It was, oh **** we’re out of gloves and then you’re panicking and you’re paying $25 because you’re out of gloves and you need gloves. So that’s been eye-opening to help us set pars for some things that are maybe a little bit unique right now in this situation. But yes, definitely we did find some theft and especially on things like tobacco, not just your big steak items, but also helping us set cars on when we need to smoke wings, how many should we be preparing. So it’s helped us with that as well, prep, the prep side of it.

Yeah, no, that’s awesome. You know, then we went one step further and we went to the restaurant checkbook guardian, otherwise known as the purchase allotment system, where you give up ordering without giving up your checkbook. That was probably your biggest change in food cost. One, stop the ******* mistakes with the waste tracker, reduce theft with the key item tracker. But talk about what it was like, because it took a little bit to even understand the spreadsheet in the 1st place and how to use it. But what do you do now when it’s time to place an order? Does your kitchen manager just order whatever she wants?

No, they go in and they look at, okay, it’s not the next truck, but the following delivery truck. What do I need on the shelf to get through to that truck? And it’s not perfect, but it’s kind of like the budget or the North Star. We know it’s there. We are moving towards it. We’ll probably never get there, but it’s not perfect, but it’s better than $60,000 sitting in inventory in the liquor room because we just order happy because we don’t want to run out, you know, and that is a fine line of you don’t want to run out of things, but you also don’t want $60,000 of your cash flow tied up on your shelf.

So nobody can over order anymore. You have control. You know if money’s in the bank, you know that if there’s a problem. By the way, if I come to you and I’ve got to order $1,000 more than the budget, what it says I can spend, what’s your first question to me as a kitchen manager?

What’s your reasoning?

Why? Right? And then they’re supposed to tell you what the key item report showed this, the way she did this, I did this, here’s portion control. All of a sudden you’ve got your management team tied in and trying to find the problem today, not 15 days the next period, right?

Or just not even trying to find it at all. It’s not money out of their pocket. Who cares? We threw Sirlein away. Who cares? They still get their paycheck. So it’s really taken some of that. even though it’s not coming out of their paycheck, it’s kind of have them take ownership of this is my budget, not Emmy’s budget. This is my budget.

What has it meant to you financially? I know we’ve worked on budgets together. We have targets. We’re just now getting the accounting in line that you can measure and truly see what success looks like. But There is one major thing that had me fall in love with you and your restaurant as somebody who takes action. You started in February, right before the pandemic hit. You had $7,000 in the bank.

Yep. We were going to have to pull from savings to make payroll.

In July, during the pandemic, after starting to implement small changes and truly, truly seeing the impact of these things, where did your bank account go from February to July? 77,000. $77,000. So you were making payroll, you were paying your bills, you had a surplus. Forget about what profit margin was or major change from food cost and labor cost and so on. But you have a little bet that. So your prime cost, total cost of goods sold plus total labor cost, and this is an over $1,000,000 business a year. You started at what level? What was your prime cost? Do you remember?

You know, that was kind of hard to figure out because I had no idea. I didn’t know what food costs were because the guy that was running the kitchen was stealing and he was supposed to do all that. So I didn’t really know. But rough and dirty, we did kind of pencil some numbers out in January and we were at probably 85%.

Which is not unusual. A typical restaurant doesn’t take inventory, doesn’t track labor, doesn’t have budgets, don’t do a lot of things you put in place, run about a 78% prime cost. So that is not unusual. Where are you today?

To be honest, you’re probably gonna get mad at me, but I don’t know the exact number, but I know that we’re doing a lot better than we were then. So by July, July is when we actually started to implement the system. So January to July was just tightening things up, kind of getting a grasp, understanding the numbers, diving in a little bit deeper, trying to figure out what was going on. And July was like, okay, we gotta do this for real because There’s so much more we can do. And that’s kind of where I’m at today is that it sounds like I’m really far into your program and I’m not. We have the restaurant checkbook guardian, the invoice tracker, waste tracker, manager log, which is a simple Excel spreadsheet, right?

DSR tracker. And we’re working towards labor systems as we speak.

Yeah, but that’s pretty much it. So it’s not like I’ve got all your systems in place and I’m making all this money. It’s not that at all. There’s a lot of room to grow yet, but I know we’re definitely better off than where we were.

So how exciting is it to know that you’re only you’re at the tip of the iceberg in far as implementing systems?

It’s amazing. It’s like, my gosh, there’s so much more to do yet. But, and that part can get overwhelming in a restaurant of there’s so much to do. There’s always stuff to do. And there will always be stuff to do. Even when we get through all the implementation, there’s going to be other stuff to do. But I, you know, we talked about delegating tasks and stuff a little bit with the staff of being able to hold them accountable. That’s also been helpful with the managers of when we have our weekly meeting, it’s okay, you’re going to do that, right?

Just the fact there’s a weekly meeting because your meetings were every day in the office with the management team just kind of in passing with no clear vision. So that one.

And then the following week you’re talking about the same stuff and I didn’t know I was supposed to do that. I thought Joey was going to do that.

Well, here’s the big part, because I work with you and your management team, the buy-in they gave you. What could have sent them down the path because your fear, tell me if I’m wrong, your fear was we were going to implement these systems, become corporate, disgusting, cold and sterile, which is not true. You’re still the owner, same set of core values, same caring about the community and your employees. But there was that fear and you had the opposite effect from your management team. They freaking stepped up, no.

I think they were super nervous at first because they were like, my God, this crazy lady, she wants to implement all these things. We can’t even keep our head above water the way it is. Now she wants to add this, and this to our plate. And now they’re like, my gosh, it’s like when we started out, there were no books, okay? Everything was done pen and paper, pencil and paper, no computer. And we look back and say, how did we do it without a computer? Oh my gosh, how did we do it without a POS system? We had none of that. We started from scratch.

And I think it’s getting to the point where we’re only what, two, three months into the DSR and the checkbook guardian. It’s like, how did we live before DSP? This is just weird. And So it just, I love your analogy where you say you fold your hands, you’ve been doing this for 40 years, 30 years, and all you’re going to do is go like this. And that’s exactly what it is.

Feels uncomfortable, but you can do it. It’s easy. And if you keep doing it over and over again, then all of a sudden that’s comfortable. Just shift those fingers and go, oh, in the beginning it feels like it’s somebody else’s hand. It feels gross, right? And that’s sometimes that fear of taking on change. What if, what if we keep playing these terrible mental tape recordings of negative behavior. And we go back into, if you want it done right, do it yourself. Now you are the complete opposite. I shared with people at the beginning, you shared with people, you and your husband are farmers. Well, to somebody who’s not a farmer, we don’t know what the hell that means. It means during harvest, you’re in a tractor for 14 to no **** 16 hours a day, yeah? How do you run a restaurant when you got to be in a tractor?

Yeah, you hope last year you hope and pray that it doesn’t burn down. Nobody dies, nothing crazy happens and that there’s money in the bank at the end of the day. That’s how it was last year. And this year it was like, okay, tell me how this happened. What happened here? How did the kitchen run tonight? You know, what are our numbers for today? And I could do a lot of that from the tractor.

Because you could log in on your phone and look at the spreadsheet that’s in Google and the cloud. You could log into any software that you had, your POS system, you could see. So you could trust and verify. Truth of the matter is, before, for most people, COVID was this awful thing that destroyed them. COVID became a blessing for you because it forced you to make a change in your business. You had to all of a sudden say, I can’t continue doing what I’m doing, right.

Huge. It totally pulled the covers back and it helped me see. I think a lot of people just, you know, even me before COVID was that just You just get through the day and hope there’s money in the bank at the end of the day. And okay, we must be doing all right. Well, we had enough income to mask those things. And with COVID, it was like, okay. Curtains are pulled back. Here it is. We got to fix this.

So you not only went from 7,000 to $77,000 and climbing. Who knows where you are today? You’re the only one. You don’t need to share. But that’s a major change because that is breathing. When you’re at $7,000, you’re in a cash flow nightmare. At 40, 50,000 when you’re in $1,000,000 business, that’s about what I need. Maybe 60 that I can always make payroll pay that next thing. So you’re now at a point where you know whether things slow down or whatever. You can pay your bills. leftover is yours. But the time frame, harvest season is over. You already have fricking snow, dude. I’m in Phoenix. We’re still 95 degrees Fahrenheit here, okay? Like it is beautiful. You have snow and you’ve converted from harvest to trucking. Your husband’s now trucking things in there. How much time do you spend in the restaurant now? that harvest is over, you have a new habit. You took how many days off last week?

I took three days off. It was like, whoa, now to put that in perspective, if you back up January until we reopened May 1st, I had one day off and that was Easter because we were closed.

So you worked every single day from the beginning of the year to Easter and now you are confident in your systems and your management team. And oh, by the way, like you shared, you’ve only started this process. You have money in the bank and three days off in a row. And how is your restaurant running with you not being there?

They call with little hiccups here and there, but I trust in them and they know that I have their back and they know that just follow the systems that we put in place and I’ll back you with the decisions you make and we’ll go from there. We’ll figure it out together.

So paint a picture for me. If you wanted to spend time with your family, can you do that now?

Yes.

Can you make it home for dinner with your family?

Yes.

Just a restaurant run.

Yes.

Are you thinking about coming to visit me? Not really visit me, but visit Phoenix in January and feel comfortable that your restaurant’s going to run without you being there.

Yes, we are planning on two weeks in January. So that’s huge for us.

And that’s from working every single day last January through Easter.

About 80 to 100 hours a week.

And I mean, I started off by saying you’re a rock star, but you really fricking are. I share your story and to many people it’s like, that doesn’t sound real because it’s such a wonderful story because you couldn’t ask anybody to truly come at this with not knowing the restaurant business, make every mistake possible, be stolen from and allow it to happen because you don’t know what the hell else to do to, you know, again, giving away your profits from, you know, drink chips we didn’t even go into the employees taking and eating whatever they want to things that never made the register to over ordering and throwing away, tell me if I’m wrong, throwing away cases of product because you over ordered so badly because nobody cared about your money, right?

Yeah.

These are all true stories, yes.

Yep, 100%.

What do you think the next year is going to be like for you? know there’s still a **** ton we got to do.

There’s so much to do yet and so many positive changes that we’re going to be able to make. We haven’t even dug into recipe costing cards, labor allotment, that kind of stuff, ordering, pars. Inventory, we haven’t touched any of that. We’re just getting started with Anne with the Largo Group. I’m super excited for that.

For your accounting, get that all tied in finally.

Yep. They log directly into the point of sale system. We’re getting going with marginage. That is super exciting. I’m most excited for that about the recipe costing cards. Cause in January, we did sit down for about mainly the managers and staff, but they did sit down for about two four of them, three or four of them, and figured out food costs. a month later, it was obsolete because nobody updated the product codes. You ordered lettuce from a different vendor because they were out and nothing got updated. pretty soon you’ve changed products and they’re obsolete.

So talk about that. So we had a conversation the other day where you kind of internally, you guys were all ******** and moaning at me because why didn’t I tell you to get software right away? But then we talked about it because I did a whole podcast on it of basically you’re not ready for software until you understand the numbers and where they come into and how they fit. Share that being ****** at me because I didn’t share that with you to understanding that I was right.

When we log on to Margin Edge and they’re doing this demo, I’m like, what the hell? Why did he tell me about this six months ago? Like I could have had all this in place and all these recipe costing cards. Everything’s automated. It’s just wonderful. But I really had to compare it to I was not ready at that point. It’s kind of like handing a kindergartner a calculator. They’re not going to know how to use that calculator.

They need to learn how to add and subtract with paper and pencil and make the mistakes, need to eraser because of all those mistakes before you hand them the calculator and they can do equations and division and all this fancy stuff on there. That’s kind of how I equate marginage into the system is that now I know what’s going on. I know what those numbers mean. I know how important recipe costing cards are because we’ve sat down and weighed every piece of lettuce and Yeah, I’m excited for what Margin Edge has to offer us. So we’re just getting started. Last week was our first full week of submitting all of our invoices to them.

So that’s all the further we’ve gotten with that, but we’re getting there.

Awesome. And anybody who’s listening to us, MarginEdge is just a food and beverage costing software. I don’t care what one you use, the one that you’re going to use, whether it’s my old company or it’s an all-in-one or whatever, that’s the one that’s going to make a change for you. That’s the bottom line. And so, and Gannon, Largo Group is who you’re referring to, if people don’t know, that’s the accounting firm that I recommend. A good friend of mine does restaurant accounting, flat feed, love them. They’re rock stars. But the fact is to make life easier for them, they steer their clients into this piece of software. And they all do the same thing. But the beautiful part is it ties to your accounting. So it’s also saving you time with bookkeeping and saving you money in that respect. So that’s really nice. So Go ahead, go ahead.

Sorry, I was just going to add that was kind of, you know, I, when we first started working with David’s stuff, your stuff, it was like, okay, is this a scam? Because there are a lot of scams out there, especially right now. And same with the Largo Group. It’s a big decision to turn all your finances and passwords on stuff over. And it’s like, okay, what if these guys are scammers? They’re not. Like Marjavage, they’re not. You, you’re not. So it does take some trust in a little bit of that. But we were looking at, even just with you a couple of months ago about hiring basically an office manager because we needed more management presence on the floor, not in the office, paying bills, writing checks, balancing this, balancing that. And so that’s where I think the financial piece of that, is this worth my value? When we figured out the cost between Ann, Margin, Edge, and Jolt, it’s like, okay, well, for this amount of money, that can replace an entire person.

Hours off of your plate and who used to be your office manager, now a manager on the floor, we’re actually able to move your people into better utilized positions, meaning managing the floor and the operation, not just the numbers, because you’re able to farm that off and still get the same amount of information, if not better than you had it before, right?

For sure.

And that’s that journey with systems. It’s tough to give up that money, man. It’s like, oh, I’m going to spend this money. But here’s the deal. If you didn’t like with software. If you didn’t understand the numbers, you could pay for software and it’s worthless to you. It’s a waste of money because you’re not going to get the benefit. But when you truly understand and you start to implement and you trust in the system, verify, of course, trust and verify, it really makes a difference. So was there any unexpected shifts for you? Anything that really kind of you didn’t expect going down this journey?

I expected more resistance from the staff and they actually have really embraced a lot of this. I think a lot of them were longing for some structure because it wasn’t fair to the people that weren’t. doing what they’re supposed to just because they’re good human beings versus the people that were doing what they could to get away with stuff and not doing their side work and this and that and didn’t close the bar the same way every night and then they come in the morning and that damn night shift they didn’t do this or vice versa. And so I think there were a lot of people that were thrilled with the process and the structure and the checklists and stuff. I think personally, I didn’t expect quite as much personal growth out of this, of truly becoming a better leader and that I don’t have to be there 100 hours a week to be better at that, if that makes sense.

Oh, amen. We talk about restaurant. What do I preach? Restaurant prosperity, freedom from your restaurant and the financial freedom you deserve. You’re on that path. And what just blows my mind is how fast you went from zero to 60. And when I say 0 to 60 is that transformation, personal transformation into the leader your company needs and wanted. And being willing to, you stepped off the cliff and said, this has got to work, it’s got to work, got to work. You didn’t ever question why. You question, how do I understand it? How do I use it? Not why. No, my restaurant’s different. You never came at me with any negative thought of whatever the hell you’re giving me, there’s no way, let me tell you why it won’t work in my restaurant. Now, there were times where you, me and your managers, we had a discussion and I drove home one point. Don’t tell me why it can’t be done. Tell me how it can be done.

Which I love. I love, love, love that. And it’s helped me put that back on staff, not only management, but staff as well of not don’t come to me, but don’t tell me about your problem. Tell me how your solution is going to work. It’s really helped just kind of take the focus off the negativity and brainstorm and find other ways. And a great example of that was, okay, how do we hire a front of the house manager? Okay, they’re making $70,000 a year bartending. How can I afford to pay them 50 to be a manager or 40 or 80 or whatever that is? They’re making good money bartending. So how do I convince somebody to be a manager? And so that really shifted when it was like, okay, well, what are our managers doing? book work so we can hire Ann and Jolt and Margin Edge to do all this and shift that up here. And so it’s how do we make this work? Not this is never going to work.

Yeah, no. And you’re proof of it. And again, as everybody talks about, like you shared, you’re only at the beginning. So it’s amazing when you go down this journey. And so you’ve got money in your bank account And personally, what ultimately, if I were to sum the, if you were to sum it up and say, how do you feel as a person? Like, were you in the downy dumps and now you’re skyrocketing and the future’s bright? What was it like for you just as a person?

I think it’s really helped my marriage as well, not being there 80, $100 a week. Brooklyn feeling like I don’t have time for her or time to go to her sporting events, those kind of things. You’re always working used to be, and that hurts, and then you’re stuck choosing between your family and your job and both are important. So I think just personally being able to take that breath of air, it felt for so long, like we were just, I couldn’t even keep my head above water. And I am not a person that gives up. And there were times where I really called my parents in tears and said, I cannot do this anymore. I can’t, I’m gonna break.

I can’t mentally do this anymore. And so I knew one way or another I had to change. And so yeah, I think it’s definitely came a long ways to be able to kind of take that breath and just take a minute for myself and my family has been really important and helped me be a better leader in that same sense then.

That’s awesome. Just awesome. Because you just described what a typical restaurant owner all over the world goes through. it’s that, hey, are you going to make my T-ball game? Well, the restaurant needs me. Like, you know, I lived it the 80 hours, 90 hour weeks and so on. And that’s where I cut my teeth. But I knew there was a better way. And the fact of the matter is, You are what energized me to keep going and providing. And that’s going to lead me into a quick question because as most people may or may not know, I’m a restaurant coach and I’ve got programs and as far as learning programs and coaching and membership models. What would you say to somebody who might be looking at David Scott Peters and my restaurant prosperity formula and my coaching program, what would you say to them if they were trying to think about it? Like what were some of the things you had to go through to justify investing in yourself and your business?

I think I had to go through the hard times to realize. I had to have that curtain pulled back to be like, whoa, I got to change. Had COVID not happened, had I not been stolen from, had I not been taken advantage of, I probably would have never dug into that kind of stuff in the systems and the business aspect of it. So I think I had to go through the hard times to get where I am and appreciate where I am as well. As far as looking at a coach, like I said, it is kind of scary because it’s like, oh, is this a scam? Am I going to be taking advantage of?

Are they just trying to sell me something? And I think that you are very different in that sense, that you truly want us to succeed. You want the best for us. You’re not afraid to call the ********. And I appreciate that. I think it’s, for me, it came down to that eval where you really laid out the numbers of what was on the table. And it was like, okay, if I spend this and even if I get half of that, still going to be ahead and I’m going to be better off than I was in the beginning. So I think that eval was very nice. But even if somebody’s not going to do that, start somewhere.

Start with the book, start following your podcasts, and they’re going to understand and fall in love with the systems and realize that there’s so much more beyond the book that you can truly help people with.

So you feel like one, book is obviously learn a little bit. Go to my YouTube channel, learn a little bit. Again, some people feel like, I’m not going to lie to you. I had a call the other day and the new member said to me, well, I don’t like to pay up front for certain things because I’m afraid and disappear. And I looked at him because we do it through Zoom and I’m like, dude, I’ve been doing this since 2003. I’m all over the internet. Where the hell am I going to go? Right. And so I get that, you know, a fear of being taken advantage of because I’ve done it.

I have coaches from time to time to learn something new. I don’t know what I don’t know. And so I got to practice what I preach. But yeah, there’s a little bit of skepticism. So what would you say to get over the skepticism? Go take the eval. see what opportunities are. You learn a little bit more about me. The book, you learn a little bit more about me. But it’s really not about me, is it? It’s about you and your journey. So is it really when you say skeptical or worried about investing the money, is it more fear in me that I’m going to take advantage of you? Or was there more little fear?

Am I going to actually do the fricking work? If I pay this money, am I going to do it?

Probably both. Yeah. it was like, it’s the difference of sticking your big toe in a little bit. And then it’s like, okay, I got to make this plunge and make the change. Or if I don’t change anything, nothing’s going to change. So yeah, I think there’s definitely some internal fear of, and not only am I going to do the work, who’s going to do it with me? Because remember at the beginning, I was working 80 to 100 hours a week. So it’s like, I don’t have time for a college course and restaurant right now. How am I going to fit that in? And so that’s where it can get overwhelming.

But for somebody that’s ready to make change, I say just jump on board with you and take one system at a time. If that’s pre-shift notes, that’s what you can do for the month. That’s what you can do for the month. But it does take work. I wouldn’t say it’s hard. I wouldn’t say that it’s more time, it’s different time because for example, the DSR, the daily sales report that took over our daily books. So we just replaced one thing with another. So it’s really not adding a whole lot. The checkbook guardian is, I don’t think it’s adding a whole lot of extra work. It’s changing the way you do it.

Sure, absolutely. I appreciate that. Is there anything else that you’d like to share with anybody? Just whether it’s personal advice, whether it’s business advice, whether it’s, you know, don’t listen to David. What would you like to close with?

I go back to the whole COVID thing. Like you have to be okay one way or another. And this is a way to dive in to your business. You talk about restaurant or recipe costing cards and a budget. And the two things that most people don’t have are those two things because they are hard. But if you don’t have a budget, you don’t know where you are leaking. and you got to start your programs then on those little, the big holes and then move on to the next hole and the next hole and the next hole and keep implementing little systems at a time, I would say go for it. And I am very conservative, frugal. I can do it myself type of person and I don’t think we would be where we are without your coaching.

Well, I appreciate you. I’m excited to see where you’re going to be in six more months because quite honestly, you’re at the tip of the iceberg of getting these things in place. You’ve made incredible progress. The biggest thing that gives me joy is not as much the money part. It’s the fact that you have time with your family and your managers have stepped up and they’re now taking care of business, the day-to-day business. You’re leading your team and that’s just, that’s magical. So I appreciate you from the bottom of my heart and we’re going to be working together, whether you like it or not for a long time to come.

Yes.

Thanks, Emmy.

Thank you.

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 3, 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 ***.