Profit is a CHOICE with Kasey Anton

And welcome to the Restaurant Coach podcast. It is the cure for the common restaurant. I am so honored. This is an exciting guest to have here today. Casey Anson is here. She is the author of Profit first for Restaurants. Casey, this is such an important topic for restaurant owners. What inspired you? And, well, first of all, tell people a little bit about you, about your backstory, and a little bit about what kind of inspired, inspired you to start your company Spark, and specifically focus on the restaurant industry.

Yes. Hi, Donald. Thank you for having me here. And I would love to tell that. And as brief as I can, because I could go on and on, but here's the deal. So I spent over the first half of my life in restaurants. That's all I ever wanted to do was just restaurants, right? My parents did not want me to major that in college. They thought that was a grueling, it was a difficult industry to be in. And so because they were helping me pay for school, I got a more narrow degree, Communications and Business, from the University of Rhode Island. And then of course, the day that I graduated, I went and got a job at the Chart House Restaurant in Newport, Rhode Island. At the time, the Chart House restaurant was a bigger chain. I know there's still a few left, but it was one of the high end steakhouses. They had locations in all of these kind of resort areas. And their management program was renowned at the time it was called CHAMP for Chart House Administrative Management Program. You actually had to apply to get into it. It was like, you know, it was like a big deal. So even though I, you know, here I am with this bachelor's bachelor of arts degree and something else, I'm like, no, I'm still doing restaurants. Mom and dad, sorry. So I, I got this job and you start as a dishwasher. They moved me to Boston. So that's how I ended up in Boston at the Long Wharf Chart House. And you, you know, you work double shifts, six to seven days a week easily. And you, you prep fish and lettuce and learn how to butcher. And then you come back at night and you, you manage or you, I mean, you do everything. You shuck oysters. So it's a great experience, but it was just a lot of hours. And, and then I learned, you know, and then I discovered Boston and all these small boutique restaurants. I'm like, oh, give me some of that. So after being at the Chart House for a couple years, I got a job as a general manager at a small little boutique restaurant in an up and coming neighborhood in Boston that actually Won Food and Wine Best restaurant of the Year. When I was there, it was in Bon Appetit. Food. What else? The Wine Spectator. A bunch of things. So had a lot of restaurant experience. Everything was great. I loved every second of it. But then it culminated my. In my owning a restaurant. So I had a couple of partners, and we. Yeah, we owned a restaurant in Boston called Bomboa, and we had that for seven years. I ended up selling it in 2006. At the same time that was happening, my business partners were kind of going in different directions. I had just gotten married and just had my first child. So it was like a whole new chapter was opening. We sold the restaurant. Thank God, because if it lasted any longer, we would have had to close it. So we sold it, got out of it. And then I thought to myself, now what? Because now I'm home with an infant. And I went from working, you know, 80, 90 hours a week, going full steam, steam, to being at home every day with an infant, thinking there'd be no transitional, you know, issue for me. But it was. It was challenging. It was challenging. So I'm at home. I'm like, all right, I can't just stay here because. No. So what am I gonna do? I've only done restaurants. I knew I couldn't go back into the industry the way I was in it and. And have an infant, right? So, like, what. What else could I do? And when I took stock, it was like, oh, I got really good at the numbers. Like, I got really, really good. I surrounded myself with bookkeepers and CPAs over the years of being in the restaurant, because I really had to figure out how to make $1 become $10. Like, that's what I was looking for. So I just learned the books inside and out. So I'm like, oh, okay. I know QuickBooks, and I know accounting. Let me see if I can do that for some small restaurants, you know, a couple days a week while I'm home or whatever. So I put the word out, and I got a couple of restaurants just from my. Know, my colleagues in the industry. And I'm like, oh, I kind of like this. And this is fun. Like, I like this. So then I joined this networking group. It was called a BNI Group, a Business Networking International. Down by me, right, thinking, I'm gonna try this thing out. I. I'll never forget that first day. I showed up like, oh, this is Casey. And I have this bookkeeping service I had. I'm not even kidding. Like, 10 people lined up at the end of the Meeting waiting to talk to me about my services. And they weren't in the restaurants. So this. These were contractors and painters, lawyers, real estate agents. And I was like, oh, okay. And I'm thinking, I don't. I don't know if I can do this, But I think two plus two equals four, no matter where you go. And I. So I was kind of a little.

Bit like, let me usually.

Right. I was hoping. But I. I knew nothing but restaurants in my life. Up until this point, I knew nothing but restaurants. So I'm like, okay. But I wanted the work. And I was kind of greedy. I'm like, let me see if I can make this work. And it turns out the math is the same.

Yeah.

So I. So I ended up growing Spark because of. Literally because of that BNI Group and just my colleagues in the restaurant industry. I ended up just having so many. Within three months, I think I had 25 clients. It was like, crazy. People need this type of help.

It's funny. You were in Boston. I was in Boston about the same time. You know, I used to live in Boston.

I did not know that.

Actually, I. I used to work for Wolfgang Puck. I was a chef for Wolfgang puck in early 2000s. And I opened up the Museum of Science. The Wolfgang Pucket. The Museum of Science. There.

Oh, my God.

That's amazing. For a long time. And then I left Wolf King Puck, and I started my own consulting company in Boston. And I used to do. I did consulting for quite a few restaurants. Some stuff in the North End. I did the Barking Crab.

Oh, God. That's a classic.

That's a classic place. Yeah.

North End consulting.

Okay. Little places, they're not open anymore. A small little hole in the wall place called Carmen's. It was a big, beautiful. Right next to the Paul Revere house. I know it.

That was one of my favorites, to be honest with you. And I don't love the North End, but I did love that.

I love that place was awesome. Great little place. Small restaurant. Like, what, 10? So good.

Yeah, it was tiny.

Super small. Yeah. But the food was so good.

Y.

So do me a favor.

Break.

Can you break down the core principles of the Profit first system and how specifically it can really benefit restaurant owners?

Yeah. So I'd say that the easiest and best way for me to describe it to the listeners if they're not familiar with Profit first is it really is just all about putting intention behind every single dollar that comes into your business and giving it a job. It's as simple as that. Because when you Don't. Which most people don't. Who aren't using profit first. Right. If you're not putting intention behind literally every penny that comes into your business, it's just like, to me, like the visual is like, you think of a. A clothes dryer and all the money is just like going in circles. The dryer's on, and when the bill comes in, you open the door, you grab a fistful, it comes out and you go pay that bill. Like, that's. That's how I feel. Like that's how I was running.

Yeah.

Restaurant for years. That's how I'd seen it as I managed other places for years. It was just. There was no intention that, oh, this is due. Oh, is there money? Oh, okay, let me pay it. It was like that. But there's no intention behind that method at all. And so therefore, it just becomes this fruit for all every day. And there's just, it's just out of control. So when I learned about profit first and I was like, oh, this is pretty cool. And then they make you, before you become a profit first professional that I am now, like, you have to do it in your business first. And I was one of the original in the first 50 people. And they monitor you while you do it in your business. And I will say this, like, at the time, I have a service based business, right. Like, I don't sell stuff. Like, I have a cert. And I was doing well. Like, I was doing well anyway. And I still had a team and I was doing well. But when I implemented profit first because I had to. To become, you know, certified, transform, like, I was doing well after that, I was. Whoa, whoa. I'll have to say it's like I was like, oh, my God, I just did what? Like, it was. My business skyrocketed in every way imaginable. Not just in sales and the referrals, but in profitability in owner's pay. It was a point where I was like, oh, my God, that, that's. That's me. That I'm supposed to take that money. Like, what? Yeah, it was crazy. So, yeah. So, like, when I did it, my business, it's just about putting. Yeah, it's just about being intention. And with the restaurant industry specifically, because it is all about like that windfall of Friday, Saturday nights that's gonna hit the account on Monday or Tuesday.

I can make it.

You know, coming in hot, right? And then all of a sudden you all, you know, you open up that bank account. Maybe Tuesday morning, you see all those weekend Dep Hit. You're like, now I'm gonna pay some bills. And then you spend all the money.

For you. Yeah. And you're like, I worked all hard this weekend for nothing. Right?

Yeah. There's nothing left. But you're like, oh, damn. All right, well, Saturday's coming up again. And then it happens all over again. All over again. Because there's no intention behind every dollar. So that's. That's really the principle that I hit home.

Yeah, I. And I kind of really relate the prophet first principle to that book, the Richest Man Babylon.

I have not read it, but I've heard of it.

Yeah. Where he actually tells. It is a story of these two guys. It's like a fable. And he talks about how this one guy became. These two guys went to, you know, grew up together. One guy became really, really wealthy, and they meet years later. So how come you're so wealthy? We went to the same schools. We got the same education. He goes, I pay myself first. He goes, I. I take out my money and I put it aside for me first. And that's, to me, that's the whole beauty of the profit first is that take your profit out first. So, so many times when restaurants look at a P. L again, we look. We run it from top to bottom, right?

Yeah, Right.

What if you reverse it? It's the same thing like with hiring. Most times we hire for skill and we fire for personality. What if you reverse that? What if you hire for personality and then train the skill?

Oh, same thing. Absolutely.

What if you. Instead of waiting till the end of the P and L to take your profit out, what if you take your profit out first and then it's just like a budget. If, like, if this is. If I take out my profit first now, this is all the money I have to spend. You're a little more conscientious of how you spend your money.

Oh, yeah. And then amazing. And then a thousand other amazing things happen. Because if you take your profit first, which profit is a choice. And I don't think anyone's been taught that. Right? Nobody's taught that.

As I go to hashtag, I always say, hashtag, write this shit down. Hashtag, write this shit down. Profit is a choice. Everyone write that shit down. Profit is a choice.

Profit is a choice. It is not a happy accident. That is what I say over and over again. And that. Because that's what happens. People think, like, profit is like this random number on the bottom of a P L that may or may not be good. And it's like a report card. Like, it's just. No, like, profit is. Should be money in a bank account that you point to, like, hey, there is my profit. You should be, you should see it, it should be there. And it's a choice that you make. And so I love that I write about this so passionately, I think, in the book, because it's for any business. Right. If you choose to take. If every business were taught that, hey, you're going to open a business, you're going to have some sales, you're going to sell this thing and the money's going to come to the account and then you're going to take your profit first. And it's not 100. I mean, I wish it was, but it's not. Maybe it's five, maybe it's 10. It's whatever your, you know, your business model should be. You set that aside and then you operate on what's left. How many businesses would be thriving today would not. You know, it's unbelievable because profit serves just so many aspects in a business that a common business owner doesn't know. So take it.

I would tell you right now, like, if you're listening to this and you want to implement this thing, remember, you start small. It's just like when people have high prime cost and they have to like control their prime cost. You're not going to make big jumps. You're not going to radically cut your prime cost. You're going to do it like a couple percent at a time to start narrowing it down and make a plan to start nailing it. Same thing with profit. First you start with a small percent to get used to it, 2, 3%. And then you work your way up to where you want to be. But it's not like I'm going to take 15% out right now because you might not be there yet. So you start small and you work your way up.

Yep.

What, what are, hey, what are some of the common financial pitfalls that you see restaurant owners fall into and how does your approach help them navigate these challenges?

Yeah, I think I would go back to my Saturday night analogy because that is what I find the majority of restaurant owners when they're in a struggle, it's because they base all of their spending. So really they base their business off of Saturday night sales, even though logically Saturday only comes once a week. Right. So but if you're, but if you're building a business to have expenses around that sale night, that one night of sales, and no other night lives up to that you're gonna constantly be in the hole. And the thing is, even though it, you know, it sounds so I think like simple and logical for me to say it, but I was, I, I didn't realize that when I had my restaurants or when I was managing all the ones before the one I owned, like there was. You just don't think that way. You think that every night's going to be Saturday night, believe it or not. And you, you build your business and you build the expenses and all the things you want to do around that. And that just gets you into trouble. The other thing that I noticed, and I thought maybe it was just me, but as I interviewed and talked to so many different restaurateurs as I wrote the book, and just the ones that I've known in my life.

Right, right.

Is that debt is looked at very differently by small business owners and especially restaurant tourists in that it's almost like something that you win, like gambling. It seems like, like, oh my God, I just got approved for that loan. Oh yeah, let's go. No, I mean, but I was one of them. So I'm not even trying to shame anyone. I would like. I remember my business partners like high fiving as we got another one of those ridiculously high interest loans just because it was a band aid. But the thing was, why did we need that money? We weren't looking at that. Why did we need the loan? And then what did it really mean to have to pay it back? Because how do you pay back debt it through profit. There is no other way to pay back debt without profit. So if you're not profitable in the first place, then you go out and you get a loan because you're not profitable. And now you have to pay back the loan, but there's no profit to pay it back. But you're still paying it back. You have to backfill more debt to be able to pay the first loan. And it is a snowball to hell of debt. And I see this happen more often than not. And so I think just understanding debt and how it needs to be paid back, and I'm not saying that debt is terrible. Although an ideal world would be great to be debt free. Sometimes debt is super necessary. But how people engage with it, plan for it, and especially plan to pay it back, because again, it's profit that pays that you got to make sure you have it is a whole new ball game. And I just think that's, that's something, that's a pitfall that restaurateurs fall into all the time. And I wouldn't expect them to understand it. But if, you know, certainly if they read the chapter in the book, but if they can just listen to this podcast and understand that debt is a whole thing that you really do have to wrap your head around a little bit more or you're just going to get into more trouble.

I call it the gambler's fallacy. Always think that, you know, I'll, I'll win this next hand and I'll break, I'll get all my money back. Same thing. We start taking out those loans, you have this gambler's fallacy. You think that this loan is going to help me, I'll get profitable with this loan? This loan's going to do it.

Exactly.

This loan is the one thing that's going to make me profitable. Not running my business more effectively, it's going to make me profitable, but this loan is going to help me. And I just need this loan to get the pressure off me, and then I'll get profit and then I'll be fine.

That's exactly right. That is the exact mentality. And without actually diagnosing the problem, why you needed that loan in the first place, it's just going to keep happening and it gets worse. So I think that's probably the number one pitfall that I see. And then there's the other ones. There's like, you know, the chef, you know, not doing proper menu costing, you know, and, you know, number one thing.

I. I'm always shocked. I'll speak at audience, like a thousand people in the room, restaurant owners, and I'll say, raise your hand, everyone room. Who's costed out your menu down to the penny and 5%, raise their hand. That's it.

I'm like, they're being honest. Okay.

I'm shocked. I'm shocked. I mean, totally shocked. How many people don't cost out their menu? No. Their food cost.

Oh, yeah, Because I have. There was one of my first restaurant clients I worked with, he was swearing about, oh, I run 30. I run 30. And then we would actually do the numbers, like the legit, the money part. And I'm like, dude, you're at 42. No, I'm not. Well, here's. I'm sure I'm showing you, like, this is the math. This is the money, this is the invoice. What work? Tell me where I'm going wrong. And it would just be like, oh, you must be wrong. And I'll spend some time digging into your reports. Okay, let me Know what you find. And they. And then they never come back with anything because I know that I'm not wrong. It's not, you know, it's not simple. I mean, it's not hard to figure out. And then they go on and they keep just. They have the right. No, 30. And maybe because in their head, they're like, oh, I'm gonna charge 35 for the steak and I bought it for this. And, oh, there you go. What about the bread service? What about salt and pepper? What about the garnish? What about the. All the other things that go into it? They're not thinking about it. And that can add up.

I mean, or worse, they go on Google and they'll say, what's a good food cost for a restaurant? And Google say, 30 to 34%. And then they'll call me and say, hey, Donald, I get these calls every month, hey, my food cost is 30%. Is that good? And I'll say, I don't know. And they go, what do you mean you don't know? Aren't you the restaurant coach? I go, yeah, let me ask you a question. What's your theoretical food cost? And they go, I don't know. I say, that's the problem. You see, if your theoretical food cost is 28, then 30 is a pretty good food cost. You should run about 2% above theoretical. But if your theoretical is 21, now you got a problem.

Yeah, yeah.

So you're leaving so much. So many restaurants leave so much money on the table by not understanding that gap between theoretical and actual food cost and working consistently to close that gap. That's the biggest problem I find. Yeah. Yep. Yep. So when you're looking around and you talk a lot in your book about a business model mastery and especially about understanding and mastering business models, what you think are, like, some of the key components of a successful restaurant business model? Accounting is, number one, knowing your cost.

Number two, numbers. Yeah.

What else?

I would say that a successful business model is going to be modeled after your break even. And this is what I mean by that. I. This is, this is where. Because that's kind of like the starting point, your break even on. And that includes everything, right? Like, what do you need to bring in? And like, what does that look like? What do you absolutely need to do every day or any day of the week to just break even? And is that a walk in the park? Is that an easy. Like, will you do that? Because that's where. That's where you need to start with your business model. Is what's the, what's the lowest sale I can go sales wise? Right. What's the lowest I can go before I start to panic? Like, what is that? And what I find so often, especially with people coming to me because they want to start up a restaurant and they consult on that or ones that have been upside down for so long they can't see the forest through the trees type thing, and they don't understand it. Is that when we, we drill down, like, okay, well, you needed, you know, your restaurant, your, a thousand square foot restaurant needs to bring in $5,000 a day in sales. What's it been doing? Oh, 1200. Okay. Like, you need, like we need to understand that. So I think, I think I start the book by saying I feel like, you know, my days are filled with talking people out of starting restaurants all day long. And it is because they'll come to me with, I want to start a food truck. Great. I love food trucks.

Yeah.

Okay, let's, let's, let's back engineer it. How much money you want? Oh, I want to make 150 grand a year. Oh.

Oh, wow.

Okay, well, that's that.

Yeah, that's a couple million dollar food truck.

Oh, it is. And how are we going to do that? And we keep, we keep going backwards. How. Okay, so how many tacos? Oh, you're so.

With a $10 guest check average, that's a lot of tacos.

Yeah, that's it. And we'll be like, okay. Do you think that you can service 10,000 people a day? I mean, logistically, do you think that's actually going to work by yourself? Because you can't aff. So it's just, it's really like chiseling away. Oh, you know what it is? I just heard this story and this, this book, I don't know if you've read it yet. It's called 10x is easier than 2x.

Oh, it's a great book. Yeah. Dr. Benjamin Hardy.

Yes. So I have not finished it, but I've started. I love it.

Yeah, it's a great book actually.

It's so good. In the beginning, one of the opening stories is about Michelangelo and the story of the statue of David. And when he was asked, when Michelangelo was asked years later, like, how did you do it? How did you bring this David to life? Like, he's like real life. He just said, that was simple. I stripped away everything that wasn't David. And it was just such a pure statement. Like if you just go back to your restaurant thinking of the Statue of David and chisel away anything that isn't just that. That's your business model. That's the core. How does. What does it need to sell to sustainability Stain and be okay. Be gut okay with that number. Because if you're not, don't like, oh, I hope it gets better. Like, that's. That's not actually.

It's actually. One of my favorite quotes from Michelangelo is that one, and I use it a lot for us, since I say my favorite quote Michelangelo is, I saw the angel in the marble, and I chiseled until I set it free.

Oh.

That'S like my favorite quote. It's like, Isaiah. That's your life. Your life is like that marvel, and every day you're just chiseling away until you get the life you want.

I have not heard that, and I love it.

That's my favorite. I'm a. I'm a quote freak. I love.

Yeah, I probably.

My other favorite quote for restaurant owners is from Mario Andretti, and the quote is, this is great for. Is perfect for restaurant owners. If everything seems under control, you're just not going fast enough.

Oh, that's another. He's down everything.

Everything seems in neutral. It's not going fast enough.

I like that one a lot.

So you talk a lot about falling back in love with your business, and you encourage rest, you know, entrepreneurs especially, to fall in love with their business. Can you elaborate on why this emotional connection is so critical for success?

Yeah, I definitely can. You know, it's interesting that you asked this question, because when I kind of implemented that theme throughout the book and have it, you know, a chapter on culture and, you know, internal, external culture and things like that. My editor and I had a couple, and the editor was like, this doesn't really, you know, this isn't accounting. There's no numbers with that. Like, that's like a separate book. I'm like, okay. And I went to go take it out. Like, all right, maybe I should write a separate book about love in the restaurant industry. I don't. But then I was like, no. Then the book was, like, bare to me. Like, it didn't make any sense to me. Like, the math made sense, but the whole thing didn't work for me anymore. I'm like, no, I'm sorry. I'm bringing it back in. So I just tried it a different way because here's why I find it to be so incredibly important. And. Oh, we're gonna go back to quotes. There's like, that Maya Angelou quote. Everyone sees it you know, people will forget what you said, they'll forget what you did. They'll never forget how they made. So to bring that back to your question, like, have you ever, you know, even gone to a restaurant? Or even like, this morning I went and got my coffee at a local, like, little coffee shop. And like, the barista is just not having a good morning, right? Have you ever had that?

Like, you could tell that they're having a really bad day.

They're just like, you know, and I, that's. Everyone has bad days. But like, in the service industry, I don't, I don't want to feel that from you.

And I feel like negative energy.

No, if you, if you, as the leader, the owner, the head, the front face, whatever you want to say of your restaurant are, Are feeling like that shitty barista, like, having a bad day, if you're not Disney World all the time, people are going to feel and sense that. Not even just your employees, which we'll just start there, because then that just emanates off of them onto the clients, but the guests. It will infiltrate every part of your business. And that, I think that also seems like a simple thing to say, but I see it all the time because a business owner is so just a restaurant owner especially, they're so busy, all the things. There's a million moving parts and they're not like, oh, no one cares how I feel. What do they care if I'm in a bad. Like, they're thinking that nobody's affected, but trust me, they're affected. Everybody is affected. And it comes out through your employees, into the food, into the glass, into the every part of your business. And there's just an energy there. Without sounding woo, because I don't mean to, but there is definitely an, A negative energy there that your guests will feel even before they enter your door. I guarantee you they will feel it. And if they're not feeling good, why would you come first to mind when they're thinking about the next place they're going to go out to eat? Like, why would they. They're not, they might not be able to pinpoint and say, I'm not going back there because my server was in a bad mood. Like, they might not. They might, but they might not be able to say that. But they'll just know when they're thinking, oh, let's go out to. Let's go out to eat this week. Where do we want to go? It's just not going to come first of mind, because of the way you made them Feel, whether you knew it or you didn't. So if you're a business owner and you can really fall in love or back in love, let's face it, nobody goes, nobody opens a restaurant because they want to start a business. I mean, they should start any other business other than the restaurant business. Right. People start restaurants because they're building a dream. And that dream comes from passion and love and just an enthusiasm like no other in any other industry that I work in. And so you have to maintain and keep that in order to be great at it. Otherwise you're just gonna wither on the vine.

I would say hashtag, write this down. Your vibe attracts your tribe. Your vibe attracts your tribe.

Oh, another good one. Yep.

Yeah.

Yeah.

And I always say, culture flows down, doesn't flow up. You are center of culture in your restaurant. Your energy, your vibe, your core values infiltrate and permeate your team, and that flows down to the guest experience. So if your vibe is off, your team's vibe is off, which means the guest experience is off.

Yep. And that is not an opinion. That is a fact.

That's a fact. That is not opinion. That is a fact. Hashtag facts.

There it is.

We got a lot of hashtags today.

Yeah, now we do.

So let's talk about some sustainable growth strategies for small business owners who are just starting out. What are some foundational steps that you would say ensure sustainable growth? Number one. We know, break even, right?

Yeah.

What else?

Yeah, yeah. So it would definitely be to implement the profit first cash management system right away, As a matter of fact.

Right away.

Right away. So I just. Right before I got on this call with you, I was speaking to a couple of gentlemen out of Brooklyn who are about to open up a cafe. And they read the book and they're, you know, they're great, and they're wondering, like, when, you know, when should we do it? Because it's an investment to work with us, for us to do it, and we're happy to do it with you. There is an investment. It's a small cafe. It's, you know, not going to do huge money. And I'm like, well, I wrote the book, so, like, technically you can just, you know, take the book and implement it. But if you really want the coaching behind it and consulting, we can certainly, you know, work with you for an engagement period. But, you know, just know it's an investment. But the whole point was, is like, is start the foundation now. Because if you start now, like, knowing, like, okay, here's my income account. I'M going to have my, my point of sale point to that. So I know my money is going to pile up in that account and then my next account, maybe that's going to be my, my sales tax, my meals tax. Because let's not screw with that because that's not your money, okay? It's not your money. You know, you're a trustee of it for the state or, you know, wherever. So you need to like, just take that off the top and move it aside so that you never have to worry about meals tax compliance because it is not fun. There's never a winner other than the state.

That's true.

Don't mess with it. And I see, and I just see it's so common, it's such a common mistake that people think it's their money. So I would do that, okay? And then the next thing I would do is, you know, just to start with a baby step, I would probably have them either do a payroll or a COGS account or maybe both if they're feeling sassy. Just again, just to give intention behind that money. If you're running, you know, a 30% payroll and you want to make sure, then, hey, transfer 30 cents on every dollar to that account and that's your payroll. So when your payroll sweep comes out, it should cover it. And if it doesn't, what happens? You got to cover it from somewhere. But now you know there's an issue with payroll immediately because you didn't have enough money to cover it. Guess what? You're not running out of 30% payroll, are you? You're running more. And now you know where to spend your time, figuring out your scheduling, etc. And the same, the same tactic applies to the food and beverage, the COGS account, right? If you think you're running a combined 30, 32, 35% and you move that money over and then you sit down to go write out your checks to pay the vendors. If you, if there's not enough money in there, well, then guess what, that's not the cost that you're running. And now you know where you need to spend your time going to fix, you know, menu prices, whatever it is, that's what you need to do. Once I love about the system is that it bubbles up to the surface immediately. Any issues that you're having, whether it's payroll, it's too high, food, beverage, food and beverage costs too high. Whatever it is, it bubbles it up to the surface so that you can fix it immediately rather than wait till the books are done and they're closed and this accountant looks at it and then you find time to meet with them. And then maybe you look at them, maybe you don't, who knows? But now two months have gone by when you could have known something two months ago that you could have fixed. Right. And it could be a simple dollar menu increase or whatever it is. Somebody leaves, goes home an hour early on the schedule. So that's what I love, is just setting up accounts wherever. I would say wherever you think you, the restaurateur, I think that you might, might be a big cost for you, whether it's payroll or food and beverage or both. Set that money aside, put the intention there and start there.

Very, very cool. That's perfect. No, you can see how the profit first kind of system actually helps you stay in alignment with your budgets and also with your, your cogs that you're trying to hit. Because that's another thing for most restaurants. They either have in their prime cost problem, they either have a food cost or a labor problem. And nowadays a lot of times it's labor because, you know, they're not managing overtime, they're not managing clock in, clock outs. Team just kind of does what they want and it's like, and they have this certain set or they think in their mind that their labor is going to be this. But then when the payroll comes around, it's like, wow, what happens? Oh, yeah. Oh, how did that happen? I didn't see that coming. Right? Yeah.

Oh, I see that all the time. And then the thing is like the restaurateur's response is like, well, I needed everybody. So that's what, that's what always like gets me. Okay, well, if you needed everybody and you couldn't afford everybody, then your business model is broken.

Exactly. Then that means, yeah, there's something broken.

Right? Yeah. And, and know it now and fix it now because otherwise you're just going to backfill it with debt. And that's going to be a whole other issue than you have, other than a high labor cost.

Yeah, yeah. Broken business models are, they're so common, more common than people think. It's like you said, like the food truck guy wants to make $150,000. I get the same thing. I got a small little cafe he's doing. He's got like 20 seats. And I'll say, what are you estimating doing sales? 3 million on 20 seats.

Wow. I mean, anything's possible. But let's take a look at the model and see what that means. Is it.

Yeah, you're like a linear, and you're charging 200 a plate. Okay, that might work. You might.

Exactly. Exactly.

But how much is your. How much? Your guess check average $15.

It'll be a lot of turns. 24 hours in a day.

Yeah. You're gonna have to, like, walking by, taking people's plates from before they finish. Get out. All right, next. Let's go.

Yep.

Yeah. The only time I've ever seen, like, a small restaurant, I mean, crank out. Crank out huge numbers with a small restaurant was I. I did a consulting job back in the 90s in Telluride, Colorado, for a small restaurant called the Floridora. And the owner at the time, his name was Howie Stern. Howard Stern. Not the radio guy.

Right. Wow.

But Howie was the master at French seating. He only had 50 seats at this little B restaurant. French seating is where he would, like, say he had a fort. It would be a line at the door, right? There'd be a line at the door. He'd walk up, and he had a four top. He goes, how many. How many people in your party? Two. All right, who's got two? Who's got two? You two, come here. Let's go introduce them to each other. All right. And he'd sit him at the same table. He would see every seat was always full. How many people you got in your party? 3. Who's a single? Who's a single? Who's a single? Come on, let's go. And he would pull them over, and he would sit at one person at the table. Every seat was always full because the most expensive thing in a restaurant is the empty seat. How he understood this. He did this French seating where he just, like, sat everyone together and everyone got to be friends. And it actually really contributed to the atmosphere because you got to meet some people from around the world. It was pretty cool.

It was a pretty cool concept. Yeah.

And I tell you. I mean, you talk about doing, like, a small restaurant doing 400, 500 covers for lunch. It was only time the printer stopped is when it ran out of paper.

Absolutely. Those are unicorns. They're great.

Oh, yeah. It was crazy. It was crazy. Yeah. I write about it in my very first book, your restaurant sucks. I tell a little story about. Because when he hired me, I went in and tried to change his menu, and he didn't like me changing this menu. So he was like, I don't. I want you to just help accentuate my. Don't change my menu, because this menu's not broken. I just want you give me A couple different options. Don't do a radical, you know, because you're going as a consultant thinking, I'm gonna fix everything.

Yeah, yeah.

Sometimes you don't need to fix it. You just gotta go in and listen to what's really.

Yeah, I totally agree with that.

It's like the old joke of the guy, like, machine's not working. Guy calls the service guy. Service guy looks at it, kicks it one time, writes the service bill, hands the guy goes a hundred dollars. All you did was kick it. He goes, well, I charge. He goes, kicking it was free. I charged you a hundred dollar to know where to kick it.

I love that stuff.

Yeah. How come your fee is so high? It's good. You didn't do a lot. Well, it's because I knew where to kick it at.

Yep.

Where you kick you. That's all. So let's look ahead and say, what emerging trends do you kind of see in the restaurant industry and how should owners adapt to stay ahead financially?

So there's. I have two different answers. So what I see as emerging trends and what I want to see are two very different things. This is why I'm out here doing this. That's why I wrote the book. What I see as emerging is a lot of technology. And I am not anti technology. No matter how old you think I am, Donald, I am not anti technology. I love it when it works. It's great. And I love efficiencies, obviously. Of course, I'm queen of efficiencies. But when it takes away the experience or any of the personal connection. And hospitality and restaurants is really all about the connection. I mean, you're usually going out with someone because you're going to connect with them or a group of people for a. And, you know, a birthday or a holiday or a celebration of any kind. It's. It's about connection. Even if you go, like, I go out to eat by myself a lot. I travel a lot. I love. And I sometimes just like to be by myself, get away with my kids. So I will go out and I just. It's the connection with the bartender. It's what. So there's connection there. And I feel like that is getting lost. And then I really want to bring it back. And here's how I'm doing it. I'm gonna tell you how I'm doing it right now and on my small scale. So I became a little guest teacher at my local high school last year. Yeah, I. I went to them and I said, I want to come teach a class And I was surprised they actually said yes. And I was going to do it on, on accounting, managerial accounting. But when I got into this class and I kind of got the feel for these kids and they were sophomores, juniors and seniors, I thought they needed something more. Like none of them were thinking small business wise. They all like at that point, either they didn't know what they were going to go do or they thought they were going to get a job in a cubicle somewhere. Like, they didn't. None of them really saw that there was a world out there that you could really love what you do and have an impact. Like none of them saw. It's a big classic. 35 kids. So we started a business together. I actually went to the town. There was an abandoned concession stand, a snack shack at the, at the athletic fields. So with this class, I said, we're going to start a business together. And we legit started this business. So we did the business plan, we got the supplies, we got the equipment, we learned how to use it. And then the day comes in April where we open and we open and these kids come down and they work the shifts and they're like on their phone and they've got the back to like where people come up in order because they're chatting with their friend. I'm just standing there. I'm a guys, this is your community. You got make eye contact, smile, ask the 8 year old how his game just went. Like, yeah, this is. Communicate. This is your community here. Like, this is. And they're like, wait, what? What do you want us to do? I was like, okay, no, like. And so I started doing it and then I would like pull them. Like, no, like have a conversation like she's wearing a softball shirt. So then they, so then they're like, okay, you're weird. But then they started doing it. And I am telling you, Donald, the look, the smile on their faces of the reaction they were getting back from parents and from the kids, like there was like this thing. I'm having goosebumps telling you the story. There was this thing happening where they're like, oh my God. If I just smile and ask somebody how their day was, they can do it back to me. And now everybody's happy. What? And they're going to pay. They're going to tip me and I'm going to. They were like, this is unbelievable. And so, so every weekend I would go down and work it with these kids and I'd be like, this is about hospital. This is where how we're Going to engage. We're going to make somebody's day every day. And we're going to. This is how we're going to do it. And so I ended up, you know, probably working with 100, 150 kids down there.

Wow.

From spring throughout the summer, and every time it was like, this is how you communicate. This is called hospitality. We're all. We're just going to try and bring joy to everybody's day. As many people as we can. That's it. And we're going to do it through Skittles and Gatorade. Why not? So this is how we. And they loved it. And now people are like, they wrote me letters, and they're like, I think I'm gonna go into hospitality now, like the seniors. And I'm thinking, this is what's missing. This is what they need to understand. There is joy in hospitality. And I think a lot of it has been driven out of the industry because it's such a hard, grueling industry, and that's become the norm.

I would say, I hate to say, like, a lot of those reality TV shows, like, emphasize the stereotype. Yes. You're gonna get yelled and screamed at. You'll be called a donkey. You know, we're gonna just humiliate you. You're never gonna see your family. Your goldfish is gonna die, because you're never gonna go home.

Yep.

You know, and so we've done a really great job of alienating people from wanting to join the restaurant industry, the hospitality industry, because we've created this divide ourselves.

Absolutely.

I'm like you. I believe that we have to have this mission to bring the hospitality back to hospitality, you know?

Absolutely. And. And everybody wins when you do that. It's not like we're saying, guys, you got to go run. You know, a 10K. I mean. I mean, it's actually a win, win, win all the way around. I think it's just been. It's just been forgotten. I think that's as simple as that. It's just been forgotten that the joy is a thing and that people go to restaurants because they're celebrating. Usually there's some type of celebration in there whether. No matter what it is, and that's where joy comes. And if we could do that, if we can bring that back in a substantial way, that I feel like there will be a line of people waiting just to get into the industry, and then we'll have the pick of the litter in terms of employees, which I know there's a labor shortage. I understand like, that that's happening. It's a real thing. But if we can kind of change how people see our industry and what it's like to work in the industry, what it's like to make a career out of this and really, like, who doesn't want to have a mission of bringing joy? What's wrong with that? I want to go to work every day and do that.

I want to. I want to put a challenge out to everybody, like listening to the podcast or watching the video on YouTube. I want to put a personal challenge out to everyone is, please, you have to do a better job of marketing your culture. So many times when people are marketing on social media, you're showing me the same boring pictures of your food, which is. Which is nice, but it gets overdone. Show me your team having a good time. Show me your team having fun. Show me you training your team, showing your. Show me your team learning. Show me your team developing. Show me your team having a great time working in your restaurant. And that is going to start spreading that message back that the hospitality business is about hospitality. We're not going to treat you like dirt. We're not going to treat you like shit. We're not going to, like, you know, take you for granted. Probably the most powerful thing you can do in a restaurant is one thing. Every day. Make a promise to yourself, make a promise to your team that you never leave the restaurant without walking up to everyone on your team looking in the eye, shaking their hand, and saying the two most powerful words in human language. Thank you.

Yeah.

Yeah.

I love that you just put that out there. I think that is awesome. And you're right. I mean, that will spread like wildfire if enough people will do that and put it out there. And it will change the face of what the industry is now. And this is interesting that you said that, because it brings me back to, like, my early, early days with the Chart House, because the Chart House was very much about culture. I mean, a thousand percent. I remember at the Newport Chart House, there was a door before you walked in the back door into the. Into the dish area. That's how you entered the restaurant. It says, leave your bummer at the door. It was above it, and it just said that. Leave your bummer at the door. And even though you could roll your eyes or you might miss it after you've been there 100 times, whatever, it just.

It was.

It's. It was ingrained in me, and I'm sure it was ingrained to everyone else because nobody ever dreaded working there like you loved. Everybody was on the same page. Everybody was there leaving their bummer out the door. And you're coming in and you're high fiving. And man, I was the salad bar girl for a while. And you better believe that was the best looking salad bar in the world because I just love being there, which is great. It was all about the culture.

Yeah. I always have all my clients, they have closed kitchens especially. You know, a lot of times you're. You're back in the kitchen and you're going out through a door into the dining room. And I always have all my clients put on their. On the door or on the wall above the door. You are on stage. Smile.

Oh, yes.

This is reminders. You're walking out that door. You're on stage and you got a smile every time you walk out that door. And I'm like, you like, leave your bummer at the door. I use the same kind of analogy. I'll tell. I always say leave your bags because everyone has emotional baggage.

Oh, God, yeah. Don't we?

Me included. Everyone has emotional package. We all have. If you, if you don't have emotional baggage, you're not a human being. All right. That's what.

Yep. Everyone does.

You gotta leave at the door and just like.

And everyone. Yes. And everyone can set it aside for a time frame and actually, we'll all be better off, including yourself.

So, yeah, a lot of times I'll do this exercise. When I do, like group workshops, I'll say, I'll tell you right now. If you took your problems, which you think are horrible, and you think they're over, over. I mean, overwhelming and just too much. If you took your piles and we'd have everyone in the room put all their problems in a pile and I said, go back and pick out two problems. When you solve some other people's problems, you'd grab your problems and say, you know what.

I want to write down.

I'll take. You know what? My. My problems aren't so bad.

Yeah.

I think I'm fine with these two. I'm good, I'm good. Thank you.

So awesome, man.

You're dealing with some crazy, you know? Yeah, yeah, yeah. And then I would say right now. So if you need to contact Casey, go to her website. It's www.profit first, the number four restaurants.com I'm going to put forward. You know where it's almost December of 2023. We're heading into 2024. I would say two initiatives you wanted to do for 2024. Number one, you gotta do profit first for your restaurant. You have to do profit first. Restaurant, you gotta change your mindset. Remember, the Saturday sales model is broken. I wrote that down. Saturday sales model is broken. You got to take your profit out first. Pay yourself first. This is the only way you're going to really, really find that. I mean, talk about falling in love with your restaurant. You fall in love when you find I'm making some money. You do? Yeah, you do. I love the restaurant when I'm making money. So number one, 2024 first initiative. Profit first has to be at the top of your list. Number two initiative. I'm going to challenge everyone to do. Teach your team about financial independence. Teach your team about. The number one problem I think that permeates the restaurant industry is financial illiteracy. People don't know how to manage their money. And that's why servers live paycheck to paycheck, tips to tips, all the time. Because they don't know how to budget their money. Take these tips that you're learning for profit first. Teach them to your team. Teach them how to manage your money.

Teach.

If nothing else, teach them just how to set up a simple budget and how to live within their budget. That will help you out so much. If you can get your team off the, you know, the day to day like or paycheck to paycheck wagon, they're on, you know, this kind of hamster wheel they're stuck on. If you can get them off that hamster wheel and teach them about financial literacy, how to improve their credit score, how to get credit cards, how to use credit responsibly, not irresponsibly. You don't need that goddamn Louis, Louis Vuitton bag. You know, if you're, you know, well.

You might need one, you might get one if you have this. If you do profit first, you'll be.

Able to find a lot of Louis Vuitton bags. Yeah, but yeah, but yeah. Contact Casey. Please reach out. If not read. She has a great book out there. It's profit first for restaurants. It also has it on audiobook too. Available. I have to give a shout out to one of my certified restaurant coaches. Her name is Fatima. She lives in Australia. Fatima is probably your biggest fan in the world. I love your biggest fan. She has read your book three times.

She told me that she, she messaged us on Instagram and she's. I love her. Oh, my God.

She loves your book. In fact, she's the one who said you gotta have you Gotta have Casey on your pocket.

Oh, no, I love her even more.

Fatima, like, Fatima, like, was so adamant. Her one thing that she wants to know is, like, are you coming out with a book for profit first for restaurants for Australians? Because their tax system is so messed up that she needs. She needs you to help her. She's like, I really need help because, you know, because the book is written for American taxes and my taxes down here are so messed up.

Our.

Our. You know, the way we do it. She goes, if you could just ask Casey could she write a book about profit first for Australians, it would be great.

That's awesome that she said that. Because actually, the woman that wrote Profit first for Tradies is Australian. I just met with her this past September at a conference. She's lovely. I love her. So maybe she'll help me do like an addendum just for Australians. Because I will say, because I can see, like, the stats of who's downloading the audiobook. There's a of lot. A lot of people in Australia who have downloaded and purchased the book. I was like, wow, who knew? I've never been. I guess I'm gonna have to come that way.

I, like, I have books out and I have audio books. I find my audiobook sales do so much better than my heart, than my paperback books.

Oh, yeah. Mine are starting the audio starting to surpass the paper.

Yeah, yeah, yeah. So here's the thing. If you. If you don't like to read, I. I know I have a lot of members of my coaching program that don't like to read.

Oh, I'm sure.

Just have the audiobook. All right.

That's right.

Profit first for restaurants. Okay. Go find it.

Restaurants.

Yeah. Or if you go to our website, profit first, number four, restaurants dot com. Reach out to Casey. If nothing else, just have a conversation with her. She'd be more than happy to talk to you, see your situation, if she can help you. Yep. Of course, you know, it's an investment. But here's an investment I think is always well worth. Because anytime you invest in something like that, it's like marketing. A lot of people say, well, marketing is an expense. No, marketing is an investment. If you do it right. It's an expensive.

Should be an investment. Absolutely. Yeah. And I say that it is an expense.

If you do it wrong, you just throw money on stupid posts and just boosting posts. You get likes and not really targeting an audience that's really going to actually convert into guest and butts and seats. Same thing. You need to invest in someone who's going to help you grow your brand and help you grow your profit. They're probably the best advice I got. When I had my first restaurant, I had a. And I was failing my first restaurant. But I was very lucky. I got a business mentor, a business coach who turned me around. And the best advice he ever gave me is this. Never go cheap on accountants and lawyers.

Actually, I agree with both that and I've never heard anyone say that, but I totally agree with that.

Never go cheap on accounts or lawyer. They will save you so much money if you invest in, in a good accountant.

True. Yeah.

So, Casey, I want to say thank you so much for being on the show today.

Thank you. Yeah.

So again, if you guys need to reach out to Casey. Profit, profit first four number four restaurants dot com. I'll put the link in the show notes. You can reach out to her anytime you like. Head over to Amazon, grab her book Profit first for Restaurants. If you like audio, go to Audible, download her audiobook Profit first for Restaurants. It is a fantastic. I've listened to. I've already read her book once. I haven't read like Fatima three times, but I read it once and I listened to her audiobook too. I'm a huge audiobook freak.

Yeah, me too.

I have 880 audiobooks on file.

Okay. Got me be. Wow.

I'm an audiobook fanatic. I listen to audiobooks all the time. Awesome. You know what? I should, I should talk to you. We should talk about having you out. I have an annual summit every year in Phoenix.

Oh, I love Phoenix.

Yeah. So every October we do a three day restaurant success summit. I should have you come out and do a session at the restaurant success summit. I think all my, all my people would love that.

I would love that.

Yeah, yeah, yeah. All right, so look for Casey at the 2024 Restaurant Success Summit. It's gonna be October. I'm pretty sure it's October 21st, 22nd, 23rd, Arizona.

I'd love to be there. Amazing. Thank you.

Thank you, Casey. Again, anybody has any problems or needs anything, please, you always reach out to me. Donaldrestaurantcoach.com Also, if you don't know, I have a new coaching program launching in January called Warrior Restaurants. It is coming out with a new book I have called Savage Restaurant Success and also with a new podcast. And it's basically this whole Warrior Restaurants program is about coaching about what we call as the core focus for it's not about just business. We're going to talk about having the whole have it all lifestyle. I'm going to coach you on having the body, the being, the balance and the business also. So look forward to that. You can go to apply right now@warriorrestaurants.com and that's starting in January. So Casey, thanks for being here. I appreciate you so much. It's great talking to and it will keep this conversation going in the future.

I hope so. Thank you so much. This has been awesome, awesome.