Here is what I learned from Bruce about restaurants. He knows the folks are “Schultzy’s”:http://www.yelp.com/biz/shultzys-sausage-seattle for quite a while now. He’s a smart guy:
* Its a cash business. So if you aren’t there everyday, it is really easy for a liquor bottle to disappear or for an order not to get rung up and cash disappear. He told one horror story about how an owner discovered the bar manager had stolen tens of thousands of liquor. I remember going on a casino backroom tour and being more impressed with the liquor dispensing system than anything else. They have all the liquor in a central room and tubes run to all the bars. They measure every drink being poored and tie it in with video cameras.
* It’s cheaper to buy pork than rice. Commodity prices have a really direct impact. And food prices can fluctuate 100% from week to week. Right now pork is at $0.99/pound is cheaper than rice at $1.29 so teriyaki places that depend on a little chicken and lots or rice are in trouble. Ketchup was cheap one week and they ended up buying buckets of it.
* Restaurants are a barbell business. Either you have the systems figured out like Chipotle or you are owner/operators where you can trust everyone.
All in all, a reminder of how any restaurant business that’s been around for more than 10 years is a true tribute to achievement.
As an aside, if you are really old, you might remember Shutzy’s from 20 years ago, when another buddy Dave made them famous as a poster child small business. The food by the way was great. Try the Diablo sausage!
