Have you ever gained weight in such tiny increments that you didn’t even notice til you finally stepped on a scale? Well, the slide from profitability to UNprofitability was the same for Hell’s Kitchen. Today’s True Story From Hell is to give you a peek into how embarrassingly easy it was for us to get mired in our daily operations to the point of not noticing until we were within inches from falling off a cliff.
In our case, the owners were working an exhausting number of hours each week. Dancing so hard to keep all the plates spinning, we kept kicking the “watch your numbers can” down the road. But in late 2017, our anemic cash flow forced us to stop spinning our heads long enough to look into the reason. When we saw the figures, we dropped our jaws and fell on our knees. The reason we were all so exhausted was that our sales had rocketed to $8.8 million, which industry advisors call an astonishing volume for an independent restaurant without investors. The reason we were shattered when we saw the numbers was because in spite of all our work, we incurred a loss of $128,145. All that energy and effort…
We instantly flew into action and invited everyone on our team to send us cost-saving ideas. With a goal of cutting out the fat without cutting into the bone, we immediately implemented most of their thoughtful ideas, from huge ones such as eliminating our fledgling podcasts from our stage (brilliant idea, but way ahead of it’s time and super costly) to tiny things (“who woulda thunk” switching from red paper bar napkins to white ones made a difference?)
Learning from our fkups not only resulted in an almost instant turnaround –we were back in the black the next year– but also unknowingly made the stars align better for us when covid hit. Yes, we’re tired of talking about covid, but having already done the cost-cutting analysis in 2017 saved us from becoming deer in headlights when everything abruptly shut down for almost 2 years. We had already trimmed the fat.
Here’s why we’re taking time to publicly pull the curtain back about our profitability/unprofitability: the next time you step into a wonderfully busy restaurant in your own area of the country, keep in mind that old adage about ducks calmly gliding on lakes while paddling furiously underwater to stay afloat. No matter how busy and successful looking, many places might very likely have owners still trying like hell to be profitable. A guy in Ohio closed all 4 of his restaurants last week, calling it a "gut punch." Here in NE Mpls, Able Seedhouse just announced that today will be their last day. Betty Danger's AND Psycho Suzi's are both for sale. As for ourselves, although sales are continually increasing as downtown comes back alive, we’re still climbing out of the red, but rest assured, we'll absolutely get there.
So support your local gems wherever you are; tip well, be kind if you notice short-staffing glitches, accept that labor, supply, and food costs have increased exponentially (butter cost $47/case in 2019 and now is close to $150), and continue to show your understanding and appreciation to all the ducks that are still furiously paddling .