How to Market a Business in the World's Toughest Industry (with Celebrity Chef Daniel Shemtob)

Hey guys, today we are at Hatch Yakitori with my buddy Daniel Shemtov, and we're going to talk about the restaurant business and how you can get started. Without further ado, let's go. Welcome, Daniel. First and foremost, how's it going?

Good. I'm happy to be here in my restaurant where I spend countless hours hanging out. So good times.

Let's jump into that a little bit because people are always wondering, like, should I start a restaurant? So Maybe you can talk about the restaurant business and how you got into it and like, should people get into it? Like, how is it in general?

Sure. So I started my first business as a food truck operator. So literally had no idea how to be in the food truck business. Called my friend up from high school and we did it. And that was one week before my 21st birthday and we were ready to go. And we hit every roadblock, no pun intended, when we opened the food truck. And what we learned was because we didn't really know how to make a consistent menu and it was boring, we did a brand new menu every day. Which is really ambitious, but it's because we had to. Fast forward, you know, 9 years later, we have a few restaurants. I opened this new restaurant concept, Hatch. The food trucks are doing really well, and the food trucks turned into brick-and-mortars. So that's kind of the story of how I got into the food business. And then as far as starting a restaurant, so I hear this a lot. I get a lot of emails about it, a lot of questions about it.

Mm-hmm.

I don't think it's smart to just go into the restaurant business. It is probably the hardest business to be successful in.

Mm-hmm.

But if you're very passionate about it, and you really want to do it, then do it. I mean, that's just kind of the, the 2 cents. I think starting with a food truck is a really great way to see if you have the climate for it because it's low risk. You know, you can put in theoretically— I started my food truck with $15,000, so you could start your business with less than $15,000 if you're willing to operate it and just see if you like the grind, if you like cooking, if you don't. Granted, I think a food truck's actually a little bit harder than a restaurant. It's a lot easier to kind of get your feet wet and then see where you want to be.

So how did you go about So tell me about growing the food truck business first and foremost, and then we'll talk about this business.

So when we launched the food truck, like I mentioned, we did almost a brand new menu every day. We were really big in social media, and I think that FOMO mentality became really, really prevalent in what we were doing because we'd do like a dish, and then if someone didn't try it, they'll never have a chance to try it again. And we had a big group of followers that would want to come to the truck, and they'd be like, oh, Eric, did you try the beef tongue and duck cheek? Like, you know, and they'll be like, no, I didn't get to try it. And then they'll be all bummed out. Don't try it next time.

Oh.

And so because of that, we ended up having lines of like 50 to 100 people every time we opened, and we'd sell out of everything. We never spent any money on marketing. So I had this crazy idea that like, if you're gonna— what can you do to your business that's gonna make people really want to talk about it? And at the time, I was on the truck all the time, and I was like, okay, so my biggest resource is me. And so I tried to remember everybody's name, and it had a crazy process. They would come in and I'd be like, okay, John, John, John this, John Davey, John Riles. And then I would— and they would come back like 3 weeks later and I'd be like, hey John, how is everything? And they would be blown away. And then I would also give away a free limeade to anyone who's been at the truck before. And I think it cost me on average 35, 40 cents a client, which is probably less than any real marketing fee. And these people would come back.

Smart marketing.

Yeah. And so it was just like, that was our game plan, was word of mouth and, and how we can market through just doing really cool shit, like really focusing on our craft and then Really creating an experience that you would never see on a food truck, which is this 5-star experience of remembering their name, offering them something for free.

How much were you making per truck?

Okay, so on our first day we went out and we did, I think, $300, and we came back thinking we like hit the jackpot. We were so excited, and I went to the guy who, uh, like is the food truck commissary guru. Like, he basically owns all these trucks, been doing it for 50 years, and he's like, That's cool. You should be making $500 a day, every day. And I was like, okay, well, that's not a bad goal. We could get to $500. We were already at $300. And then, like, fast forward, like, a month later, we were doing, if it was a good day, we were doing like $2,300, $2,800.

Wow.

So that was kind of where we put our goal. But our first year, we probably did, I wanna say it was like $600,000 maybe. And then our second year, we won the Food Network show.

Wow.

And I expanded from 1 truck to 3 trucks and a private label truck. And that year we did like $2.3 million.

What kind of food did you have in the food trucks?

I would say it's new American because we did a brand new menu every day. We take a lot of inspiration from Orange County where I grew up. So for me, that's Spanish food, that's Asian food, and then I grew up with Persian food. So the 3 of those were heavily inspired in our menu, but definitely not hatch or Japanese food.

Yeah, such a drastic change, right? So what are the challenges that you went through transitioning from food truck to My first transition to brick-and-mortar was the fast-casual version of the food truck.

And so that was an easier transition because it was just— I picked our favorite items that we did over the years and I just got better at them. It took me a really long time to really work Hatch in. Japanese food is the exact opposite of everything I've cooked. California Mexican is how many— you can put a lot on the plate. You're taking humble ingredients and you're creating something really special out of them. That's kind of the culture's food. Japan, quite the opposite. They use very minimal ingredients, but the ingredient needs to be the shining star of everything, and you're really not supposed to do all that much to the item in the plating. And so to retrain my mind and be able to cook that kind of food and deliver that kind of minimalistic service but have it be really dialed in took a lot of time.

So what I'm hearing is food truck, okay, that was one challenge, and then you kind of did an in-between where you did the whole fast casual thing, right? That was another learning thing. And so you kind of have to level up a little bit before you do something like this, right?

Yeah, I think so. I think if you want to do it right, it takes time. It takes time to really dial in every part of it. I mean, I'm still learning. Like, I still have mentors in the restaurant business, and I still am working on like our cocktail program and being able to manage the labor, because on some nights we're not always that busy, and to be able to have cocktails is an expense that— and we make way more money on sake, but I think cocktails are part of a full dine-in experience. So Being able to manage all of that and do it correctly, I mean, that's— yeah, it's hard.

Cool. So any final bits of advice for people looking to start in the restaurant business or just business in general?

If you're really passionate about food, that's the first step. I think if you're passionate about business, I don't know if restaurant business is necessarily the best one. Most people who are good businessmen come into the restaurant business and they get chewed up and put out really quickly. So I think the first step is to be passionate about hospitality and food. Then go buy Setting the Table by Danny Meyer because there's no better book I've ever read on hospitality. And then go do a farmer's market, go do a food truck, go do a pop-up with your friends. See if you like the grind because the grind won't change whether you're in it 20 years, whether you're in it for 5 months. The grind exists. Granted, you can scale and you can put in really good systems and you can have good people with you. It's always hard work. This project, I mean, without talking too much, it costs $1. $9 million to open. I mean, we spent a little less because we had some help from, you know, the landlord and things like that, but it's a $2 million upfront investment. It's gonna take time for us to be able to make our money back. And if I didn't know I loved this business and this was my first venture, I would say that's a really big risk.

Yeah, just to let you guys know, when I come here, so Daniel's actually in there, like in the trenches cooking, right? Still doing it, still practicing. So you gotta have the passion. So guys, check it out. Look, Kachiaki Torii, downtown LA. Food's great. Um, and we'll see you in the next video.

Thanks.