Wednesday, May 20, 2009

If You Can't Take The Heat, Get Out of the Kitchen

The lead article in this Sunday, May 17, 2009 New York Times Business section was entitled "From Frisée to Finance, It Has to Be Perfect". The article shared some of the challenges faced by famous chef and restauranteur Daniel Boulud as he works to open a new restaurant that will extend his gourmet brand from the high end to the affordable.

The article discusses many challenges in the marketplace - from the tough economy to handling debt in restaurant ownership. One amusing anecdote was the forensic accounting that needed to take place to determine why bad margins existed at one of Boulud's venues:

“A few years ago, at Cafe Boulud, we couldn’t figure out why margins were so bad month after month,” says Lili Lynton, one of Mr. Boulud’s two partners. “Even the chef was baffled. We looked at everything and we finally realized — it was this reduction sauce, a really expensive reduction sauce, with truffles and mushrooms, which was in a bunch of dishes. Who would have thought? We figured it was the fish or the chicken or the meat. It was like a game of Clue, and the culprit was the gravy.”
Prendismo's collection includes a specific topic on this issue which is called Maitre D'emons - Challenges of Being a Restaurant Entrepreneur We've included a couple of our favorite war stories on handling cash flow in the hospitality industry below:

"One of the keys to operating a restaurant and any business really, but a restaurant especially, is keeping track of what is coming in and what is going out the back door." - Kurt Zitzner, Founder, Mugzee's

"I basically say you have a choice you can go into the restaurant business or you can take that cash and burn it." - John Metz, Chairman & CEO, RREMC, Ltd

"So within our third delivery, our foods started showing up either wrong products, it started showing up four pounds missing out of a 40 pound case, then six pounds missing, then ten pounds missing..." - Kurt Zitzner, Founder, Mugzee's