There is a preconceived notion in the restaurant industry that small business cannot achieve the same level of excellence as big business. Over the past decade I have seen missed opportunities in which concepts consider themselves too small to perform well enough to take advantage of the opportunity. Vendor Negotiations and Operational Documentation are, in my experience, the top issues in which this self-fulfilling prophecy takes shape.
Vendor Negotiations
Vendor Negotiations are key to the profitability of any restaurant as it relies heavily on the cost related to vendor partner's pricing and relationship. The most obvious reason for feeling small businesses do not have enough leverage is volume. While volume of transactions, sales, and traffic is a significant challenge, it can be overcome. All businesses, both small and large, want to become as profitable as they can through growth of their existing business or expansion into new locations. Vendors want to be a partner in your growth regardless of how it may feel sometimes. Business owners must lean in and develop the relationship into a mutually beneficial partnership in which everyone is more profitable long-term. Explain your 5-year plan in as much detail as possible to prove to the vendor that you are committed to growing the business with a solid plan in place to achieve your goals.
Once the relationship is established it is time to move to the collaboration portion of the negotiations. All too often the process flows like this: Business or Vendor reaches out, Vendor requests the requirements of the deal from the Business, Business replies back with their needs, Vendor provides proposal for approval/denial, and Business makes a decision to move forward or decline offer. The problem with this process is that each step is one-sided with little understanding of how each request and proposal impacts the other side. The solution is to collaborate with each other to better understand the impact of the relationship on each side. Once that understanding has been found, both sides need to develop a creative solution that works for the operations and profitability of both parties. I have seen this alternative approach to Vendor Negotiations work time and time again that produce long-term relationships that are profitable on both sides.
Operational Documentation
Throughout the last decade I have toured dozens of different concepts that vary in size, volume, and unit count. During those tours there was always a significant variance in the amount of operational documentation. The amount and quality of documentation was drastically different between a larger, more successful concept and the smaller, less successful concept. What is commonly mistaken by those with less documentation is that they do not require documentation due to the simplicity of their concept. However, there are several large concepts with simple (or perceived as simple) operations that have a broad scope of operational documentation. Documentation is seen as only there for liability purposes or on-boarding of new employees but that is simply not the case. Operational documentation helps concepts establish standards around portion control, food presentation, and references for employees. Without standards documented and readily available for employee reference the standards become whatever the employee believes to be true. Every concept I have trained in proved this theory with nearly every employee having a version of the standard they feel was correct, and even resulted in heated debate around the standard between multiple established employees. Focusing on documenting your standards and providing them as references for your employees has a direct and profound impact on the profitability of any food concept.
Operational documentation can and should come in multiple media types and differing levels of detail depending on the need for the documentation. This will result in quick buy-in from employees to understand the standards in the unique way in which they learn. To continue implementing the standards it is imperative that the leadership shows they believe in the documentation and are involved in the process of training staff on the standards. If the employees do not see leadership taking an active role the employees will inevitability write off the documentation and job aids to go back to what they were comfortable with. Consistency is one of the most important qualities of a restaurant and it is not attainable without clear and thorough documentation of the standards.
Build Your Strategy
Vendor negotiations and operational documentation are crucial to the profitability of any restaurant establishment, yet rarely get the attention they require to perform for the business. I encourage any small business to take time to brainstorm, evaluate, and implement strategic initiatives around how they are going to improve on these two critical areas.
If you have any questions, comments, or feedback regarding this article or would like assistance with your business needs please reach out to myself at jconerly.arc@gmail.com or visit our website.
Joseph Conerly, CEO
904-502-2408
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