Some thoughts on longevity for independent restaurants:
Everyone knows how hard longevity is in the restaurant industry; most of us understand that the statistical average life of a restaurant is unnaturally short due to the number of restaurants that fold in their first few years. The ones that make it past four or five years tend to linger, and a percentage of them just never go away. Those restaurants that do stay permanently relevant in their markets tend to rise above the need to appease regulars, to coddle staff, or to defend themselves to critics. Be it high end dining, family dining, diners or food stands, the places that last forever learn how to deliver the expected products and services to long time regular guests while continuously reaching out for new clientele. The ones that survive and thrive have at least two things in common which undeniably prove their success: first, they have guests, maybe lots of them, maybe just enough, but enough to satisfy the second thing, which is money. They make money. A successful restaurant will always be primarily a business endeavor. The owner’s passion, be it food, beverage, social considerations, or any other reason for choosing to be a restaurateur instead of a landscaper, can’t be realized unless the business can pay its bills and provide more financial security than liability for its owners. Without that security, there is no future. Only idiots open restaurants simply because they love food and cooking yet have no interest in being successful as a business. Those who obscure or overlook the business aspect are the ones that meet the high failure rate in the early days. So to anyone reading this who might be thinking about doing so, don’t bother opening a restaurant if you’re not interested in making money, or even if you don’t need to make money. Do us all a favor and spend your money cooking for your family and friends; it’ll cost you less and make you more in the end.
On 20 April 2011 in “After Two Decades, Savoy to Close“, Sam Sifton of The New York Times broke the news that the popular SoHo destination Savoy would be closing. Sifton reported that “simple economics were behind the decision”. Simply put, that means everything. Savoy lived a good life by independent restaurant standards; it had fame, fortune, and carried a loyal clientele through a couple of decades in one of the most competitive markets in the US. But “The clientele got older,” Sifton quotes owner Peter Hoffman as saying. This is something I hear often about restaurants that reach acclaim early and hold it long. I’ve seen it firsthand, battled it, battle it, and watched my friends and colleges do the same. If owners are not very careful with an old restaurant, they risk death by regulars.
The fish rots from the head: owners who can’t convince their staff that they are fanatically obsessed with being a great restaurant begin the process. The staff becomes more focused on its own needs than the guests’ needs, and worse, the staff and owners become utterly preoccupied with one segment of the guests, the regulars, who are seldom a physical majority but are the ones who get the staff’s ear. New guests, first timers, second timers, even the silent majority of regulars slip between the cracks while management and staff dote, hover, converse, and suck up to the regulars. There are the regulars who love to say they have been coming since you first opened and insist you do not change a thing. There are the ‘off menu’ regular guests too, the ones that come in almost daily and don’t eat off the menu anymore — they know what they want — they are the lampreys of the regular crowd. When afforded the opportunity they will attach themselves to their host and suck the life out of it. Often the more renowned the establishment, the more ‘elite’ and numerous are these exclusive diners. Owners and managers are afraid to offend them, the wait staff become obsequious servants to them, and the cooks loath and curse them.
Death by regulars is slow and painful. The regulars who come because they truly love the food and experience are overshadowed in the minds of the staff and management who misappropriate their resources tending to their more needy guests. They see these same faces day after day and convince themselves that they actually are the face of their “guests”. What the owners and staff forget is that they don’t really know the vast majority of their guests. Over years of mistaking regulars as the entire face of the guest, they begin to mistake what the market really wants; they mistake the needs and the desires of the new potential that walks in and out of the restaurant every day. Day by day, that potential withers until ‘the clientele gets older’ and if you don’t know when to change gears you will eventually end up calling 911 to assist a regular who has died of old age at a table; once that happens you are toast.
It is easy for owners and long-term staff to become too attached to the regular guests and to each other. Sifton writes: “It has been almost 21 years now and it’s been great and I’m proud of it,” Mr. Hoffman said of Savoy’s run. “I’m proud of who has come here to work and to eat, and I’m proud of the people who have grown up in the restaurant, and who have celebrated marriages and mourned passings here, too. It’s a real honor to have that kind of intimacy with people for years and years. There is no replacing that… But this is a high-traffic neighborhood now,” he said. “I need high-traffic flow in the dining room to match it.”
When the money runs out it’s easy to look back at the relationships and their value. I’d trade “that kind of intimacy” for positive cash flow if I had to. It is possible to have a successful intimate life outside of your busy successful restaurant. It is nearly impossible to have a successful intimate life inside of your busy successful restaurant. When this sort of thing happens the big picture becomes obscured by the immediate needs of individuals and the greater mission of cooking and serving gets lost in the social order. A full-on genuine effort by the restaurant to achieve real hospitality to all of its guests becomes impossible. Mr. Hoffman’s quote acknowledges the core truth that it all comes down to money. In the big picture there is personal profit in being a good employer, helping folks along the way, supporting local producers and promoting wholesome food, but you can’t bank it. It’s fun to be a good host, to have a beer with the staff, to get to know your clientele, but too much intimacy is antithetical to any business.
Isn’t it just a matter of time for every restaurant? It is too bad for any great restaurant to outlive its goodwill. Goodwill is not self-perpetuating, it is grown and nurtured. One thing about regulars is that after a year or so the goodwill is all used up. They have told their friends and brought their family in. There is no more word-of-mouth. A restaurant needs new guests to thrive. New guests bring new networks and new word-of-mouth and the restaurant that can stay focused on bringing in and pleasing new guests, while not pissing off all of the regulars, will be the one that never goes away. In most cases though, restaurants that are elevated to greatness by their trendiness and temporal relevance are long lived at two decades.
To be sure, ‘death by regulars’ is really my not-so-subtle way to blame the guest for the owner and management’s lack of vision, energy, or will. Everyone in a successful restaurant begins to feel they are part of something bigger than themselves and they forget why they came to work there in the first place, which was to earn money and or to build their resume to earn more money. Every restaurant has its share of large egos and when you mix those with success you get a sense of shared greatness. The staff starts to fall in love with itself and its greatness, and if the owner does too, it’s a runaway train. The only real way to avoid death by regulars is when an owner or management can maintain the emotional intensity and focus on its mission that it had in its first years. Usually this means turning over staff members that get complacent or become needy — the very people that Mr. Hoffman referenced who need to have the ‘intimate’ relationship with the business. It means explaining to regulars that in order to please all of the guests the cooks cannot rewrite the menu for them nightly. It means rigorously warning staff off from personal conversations with guests and intimate relations with each other. These things can’t be avoided, but they can be forced outside the walls of the restaurant. It also means changing things often and keeping the whole organization unified in “beginner mind”. That is the mind which is aware that there is more to learn than has ever been learned, that there is more to do than has ever been done. Perhaps for some owners they simply can’t believe this. However, what a shame to think there is nowhere to go but down, unless that is where you wish to be.
Some owners really don’t want success. They glimpse it and realize it is much harder to stand on the pedestal than it was to climb up it. Resting on one’s laurels isn’t really resting; it’s more of a sliding back to mediocrity. Considering the fickle nature of diners in competitive markets, it might be a perfectly good business plan to ride out the whole cycle and move on. I had a friend who, during the early days of Portland, Maine’s restaurant renaissance, had a good deal of success opening the cool new restaurant and then simply moving on, by sale or by closing, to a new project every few years. It may sound tiring, but to me it is a heck of a lot more interesting than death by regulars. I can say from experience that staying relevant takes a lot more work and attention than becoming relevant. I say this knowing many who have done so, and by having some success — and good fortune — doing it myself (knocking on wood). On the other end of the spectrum, I admire owners with a successful exit strategy, maybe because I lack one myself. Whether you sell it, transform it, or create a foundation with it, it is often smart, good form, and appropriate to leave the party early.