The Restaurant Biz Blog

I just read a very thought provoking article entitled "The Internet devalues everything it touches"

After I first read it, I started to wonder what I was devaluing by using the Internet to help restaurants save money. Am I putting people out of work or reducing the value of alternatives?

If I take a step back, I think the Internet is the same as any technology. Did robots devalue the earning potential of an assembly line worker? What about the steno pool? Rooms full of typists were instantly devalued by the introduction of the photo copier.

It's a cycle, a new technology comes along and introduces new efficiencies, disrupts the market, then as the market gets saturated with the new tech, you have commoditization. Then repeat.

The Internet was a new technology, but it is also an enabling technology, like a microprocessor, or the ability to make steel. These foundation technologies (for lack of a better term), are disruptive, but also have amazing longevity as they are building blocks for the next great new innovations.

So while it may feel like everything around us is getting devalued by the Internet, we have to step back and see it for what it really is... a cycle. There will be another one coming. Green tech anyone?

I imagine that in the current economy restaurant owners aren't lined up with cash in hand waiting to spend money on a new POS system, but maybe you are opening a new store or your old system isn't quite giving you what you need. If this is you, then I encourage you to consider a few things while you're shopping around.

1) The Hardware Trap
If you're upgrading your existing POS system and your terminals are in decent shape, you should definitely try to find a POS system that will work on the hardware you already own. There are a few companies out there that force you to buy their hardware. Even if you're buying a brand new system, think carefully before using one of these companies, it's always best to give yourself options.

2) Closed Systems
I can speak as one of many businesses offering third party add-ons and back-office products for restaurants. We spend lots of development time integrating our software with our clients' POS systems. Many POS systems (especially the bigger ones) often make it difficult and expensive for you to use another company's solution with their system. They would rather have you buy their inventory system, scheduling program, or gift card solution and so they put up barriers to keep you from using other solutions. Again, don't limit your options, you never know what new shiny gizmo you'll want to incorporate down the road, wouldn't you rather be with a POS provider that is open to all those new ideas.

*** Free business advice for POS companies: First, if you're not on the web, get on the web. Second, if you're on the web, publish an API and build an app store like Apple has for the iPhone. This would be groundbreaking.

3) Recycle
Unfortunately, restaurants go out of business every day, so there are opportunities for you to pick up a barely used system for a great price. You still need to do your homework about the system so that you can avoid #2 above and also some POS companies require a license that is not transferable should you buy used equipment, so research this to make sure you can use the POS software after the purchase.

4) Help Me
The good news is you're great at operating a restaurant, the bad news is that you're not as skilled at operating a computer system. Well lucky for you, there are lots of companies out there that will help you find a great POS system, and companies to help you set it up and help you fix it when things go wrong. Ask for references and see how they've helped other customers at 3am on a Saturday night.

5) Upgrading
Software companies are always fixing bugs and adding new features so find out how often your prospective POS provider releases upgrades, how much the upgrades cost, and how easy or difficult the process is (i.e. can you do it yourself or do you need a consultant to help).

*** Web-based POS systems usually have a big advantage here, since updates are regular, often free, and can happen without you needing to lift a finger.

It's easy to be near-sighted, but make sure you think long-term before making your POS investment. The wrong choice will definitely haunt you and your staff for a long time.

If you are starting or already running a business and you haven't had the pleasure of reading any of Michael Gerber's E-Myth books, I would highly recommend that you grab one. E-Myth stands for the "Entrepreneurial Myth." In his books, Michael dispels many myths about being an entrepreneur and talks about working on your business vs. working in your business.

It's fairly common to see a struggling restaurant that was started by a chef or just someone with a passion for food. They own the restaurant, they run the restaurant, and they work at the restaurant. They have created a job for themselves that they can't easily walk away from. They are the restaurant. Now if you just want a job, there are better and less stressful ways of going about it, but if you want to build a company, then you need to work on it and not just in it.

What does it mean to "work on your business"? Basically, you need to spend some time outside of the kitchen and outside of the dining room and think. The goal is come up with a manual for how to run your company. Pretend that someone wants to franchise your restaurant, how would you tell them to do it?

What is the brand? How should the place look? What food should they serve? How should it be prepared? What kind of people should they hire? What kind of service should they give? What should their guests expect? What should their staff expect? How do they increase sales? How do they cut costs?

After you've taken the time to write down the answers to these kinds of questions, you'll have created a manual of what you do, how you do it, and why you do it. This manual, filled with all your systems and processes, creates tremendous value for your business. As you implement these systems, you become replaceable. The restaurant knows how to run itself. You can spend more time planning for the future and less time being the "key" employee.

It's easy to forget the "what", the "how", and the "why", when you're working 6-7 days a week, but it's time to step back and look at the big picture.

I look at it like this... It takes passion to start a business, but it takes process to build one.

It sounds like the title of a book from a self-help guru (maybe it is), but the power of one is an interesting idea for any business. Basically, I mean that one person or one action can have a tremendous amount of impact - good and bad.

I live in New York City where pizza shops are plenty. Most residents have at least 2-3 choices from which to buy pizza. My five year old daughter always wants to go to the same place because on our first visit, the gentleman behind the counter joked with her and now she loves to go back and see him.

That one person with that one action of connecting to my daughter brings them our business every week. Do you have one of those people working for you? Imagine what having three people like that working for you could do for your business.

On the flip side, my parents can't resist telling people their story about a particular chain restaurant because of a bad experience. That single experience has resulted in them never going back and they have shared that story several dozen times over the years.

Just imagine the different story that my parents would be telling if just one of the employees had noticed them and their issues and managed to turn around their dining experience into a positive one. Not only would that employee have stopped dozens of negative comments from spreading, but would have potentially sown the seeds for dozens of positive comments and at the very least guaranteed a return visit. This is quite a big swing and it's just one example. If you multiply it for every employee, for every guest at every location you can quickly see the potential.

I'm not suggesting that you merely comp a bunch of items to make someone happy. Your guests want genuine, authentic, positive interaction. That's what hospitality is.

Thank you New York City, you banned smoking from all the restaurants and bars that I visit. It's so hard to believe that the patrons and employees don't care that smoking is bad for you. But you care. Also thank you for making the Dunkin' Donuts down the street post the calorie counts for the donuts. I used to think that donuts were okay to eat now and then, but thanks to the sign, I now see that there are just too many calories for me. Finally, thank you for declaring a war on salt today. Chicken soup tastes so good, how was I supposed to know that goodness that I taste was really salt. Once you force the restaurants to stop trying to sneak so much salt into our food, I will rest easier.

If I could make a request for your next project. If you could just set up a scale at the front door of a restaurant for a quick weigh-in and maybe a blood test. Then you can make the restaurant only serve me the appropriate food for my body type, blood sugar levels, and blood pressure. When I moved away from home my mother said that I needed someone to take care of me. Well NYC, now she knows I am in good hands.

Eater.com has retired their Deathwatch stamp. Basically, this was where they playfully named restaurants that appeared to be near closing. While it is a gossipy blog that I enjoy reading, I appreciate this change. Restaurant life is tough right now, and it's hard to find anything to celebrate about another business approaching the edge.

It's a good time to visit your favorite restaurant and give them your support.