KEEPING YOUR NERVE IN TOUGH ECONOMIC TIMES
By George Carageorge | Torino Food Distributors

The editors have asked me to write an article about staying in business in tough economic times. I said, “Are you kidding? I have never known small business to be anything else but tough.” I made it through the recession in ‘91 and ‘92 and we had to have been paying 21% overdraft interest (thanks Paul).

You don’t need to be a genius to figure out how to get through a credit squeeze, and I guess what I am saying here may be common sense and nothing new. Sometimes though when you put pen to paper, like with this article, it will crystallise some of these simple but effective measures and ideas. But I don’t have a monopoly on it, ideas I mean.

Small business persons (note that I did not say ‘businessmen’) are very savvy too in business. Those that survive the first year of business usually do so because they are fighters; they adapt, read the mood of the public and their clientele and change for the times in subtle ways.

We, that is small business people, have always been easy prey for government taxes, greedy landlords and big companies who all think they can steam roll us. But we are survivors. Like I said, the survivors of small business ups and downs use their brains. They think out their situation and don’t overreact.

Here are some of the most common factors my mates tell me they consider in so called tough times (I said so called for a reason. I will come back to that in a while).

1. Consider your market and who your targeting

2. Consider your staffing

3. Consider the presentation of your premises

4. Presentation of food

EVERYTHING NEEDS TO LOOK POSTIVE & PROSPEROUS EVEN IN TOUGH TIMES
Look, a lot of smart operators think tough economic times are a god send because it may give a chance to pick up new customers. Say for example your business is in the family dining arena and the fine dinning customers want to have a feed out, but say, “Bugger this, I’m not paying $40 for a steak and then have to pay $8 for a bowl of a single vegetable or chips. I will take the missus to La CASA George down the corner. I can get an entrée, a main course and a bottle of plonk for $45 each including tip!” I was just joking about the tip. I might be exaggerating a bit, but you get my drift. So as this opens up the opportunity for various operators down the scale of dinning, it means new opportunities.

You have to be on your metal, don’t loose your nerve, make sure your service is always good, your staff smiling and all that stuff you know about. Watch things like plenty of portion size without being grotesque, because even if the bums are less on seats when the good times come back and you have survived you may get new customers... maybe from word of mouth.

ALWAYS BE POSITIVE, EVEN IN BAD TIMES
I know its hard to show a smile all the time, especially after a chef just chucked a wobbly because you looked at him inquisitively or one of your wait staff just phoned in 5 minutes after his or her shift was to start saying she was sick even though you could hear music in the background. You know the kind of nonsense I mean. We have all seen it.

This reminds me of a story. Another mate of mine who is the executive chef of one our biggest 5 star hotels once told me two of his chefs took out A.V.O.’s against each other because they couldn’t work together in the kitchens without trying to knife each other. They went to court and he couldn’t sack them. It became a work cover issue. Don’t laugh, it’s true. Just keep positive all the time, don’t lose your nerve even in the face of adversity.

Now with regards to the economy, do you all know what brainwashing is? Well, we have been brainwashed into thinking it’s doomsday. It is possible it may come true and be self fulfilling. Sure there is an economic downturn in other parts of the world that will impact on us, but does it warrant the government giving $10 billion to welfare recipients? There is still 95% of the work force, at the time of writing, who want to be employed still in employment.

The good news is that some household costs have fallen, like home loan repayments, fuel, clothes, so there is still more disposable income in households that are still employed with mortgages.

There is also 30 % of our population of on welfare. That has not changed and in fact it’s gone up. So those welfare customers, if they are yours, are still there. Mind you they won’t be fine dinners I guess!

In these sort of times people want to feel happy, not sad or poo faced The human psyche is like this, they don’t want to know about the bad things, just good times... like the races, the pub, the sport results, a family meal that doesn’t cost the earth, a bottle of good cheap wine (not impossible) or whatever it takes to make them feel happy and have a few laughs.

They have been brainwashed into thinking times are tough, but it’s not as bad really. You can help them feel good by staying positive and upbeat and showing you’re ready to earn their business. You can do this with the following:

1. Advertising.

2. Blackboard specials using local produce that’s cheap and seasonal.

3. Giving a bit extra. For example: what does it cost to give them a bread roll and butter, or a savoury bowl of warm marinated olives, or a dipping bowl of olive oil & balsamic? It costs peanuts but goes so far in terms of good will. You know what I mean. Most of you do, but so many of you don’t bother.

4. By no means try to cheapen your products by buying short dated stuff from supermarkets or low quality stuff. The customer will see through it, just like if your supplier tries to do the same to you.

5. Sometimes you have to take a step backwards to go forward at a later time. By this I mean don’t expect to make the same profit as you did when times were better. Temper your expectations. Turnover is everything, if you get people into your restaurant, even if you don’t make enough, they in turn will tell someone else if it’s good and bingo! You’re on to a multiplier effect by word of mouth. It’s the best and cheapest advertising.

6. As I said in another article, don’t be an absent owner in hard times. You have to be there to make sure it happens. Don’t trust your staff to do what you need to do to get those bums on seats. It’s not their business to look after. I know this is Uncle Tom stuff, but many people try to compare Melbourne dinning and Sydney dinning. I am going somewhere here, so bare with me. Whatever your market is, family restaurants, take away, home delivery, or up market, they are completely different. I mean Melbourne to Sydney.

Why? Answer: Price!
Melbourne is a cheaper place to do business; the geography makes it easier to commute to restaurants outside your locality giving you an easier variety of choices. In Sydney it takes a lot longer to commute and people get lazy so they don’t dine out as much. Another thing is the price of grog. Sydney restaurants get too greedy with prices (it is said they must to pay the rent as it’s much more expensive in Sydney) and in Melbourne it’s more B.YO. with no corkage most time or just nominal. One Sydney fine dinning restaurant charges $40 per person corkage...I am not kidding.

So what I am trying to tell you is if you can keep your costs in check, keep your prices reasonable and give value for money you will survive.