This Youtube video is a must-see.
Just in case the video is deleted from Youtube, you still can find it here (click here).
The video is about the failure of a little restaurant at a touristic hotspot of Paris. You would not think that this could happen, but these casualties happen all the time. In Singapore, the average survival time for a food & beverages (F/B) outlet is less than a year. And that was before Covid-19.
If you are into business consultancy, the mistakes that you see there also happen to businesses that operate in other areas. You can skip the first part of the video which is about bad food. That one is not important. Start to watch right where the real problems are found, at minute 05:45. I promise that you will like this video.
Gordon Ramsay accepted that uphill battle and he even used this challenge for creating a new vegetarian food style: “no more boring vegetarian food” (see minute 31:40 of the video).
Please watch the movie above, this is typical for F&B failures. And I have seen a lot of failed restaurants, maybe 80 over the past 10 years in Singapore. I am a certified business consultant in Singapore (click here), and probably the only patent attorney in Singapore who has a food handling hygiene certificate. And this is why I work often with F&B businesses.
My Five Survival Rules For Running A Successful F&B Business
In the course of my work in the area of F&B over the past 10 years, I have discovered a pattern in failure.
Not following this set of 5 rules will almost guarantee that your own F&B business will fail:
- Have your restaurant open on 365 days per year, inclusive all public holidays
- Out of breakfast, lunch, and dinner, provide for at least 2 meals per day: lunch and dinner, breakfast and lunch, or breakfast and dinner. Better provide for all three meals breakfast, lunch, and dinner.
- Don`t throw away food.
- At the end of each (!) day, know whether you made a profit or a loss
- Start with marketing before you even open your restaurant, continue to do marketing when running it, and always listen to your patrons.
All the failed restaurants that I have seen never followed the above five rules. I conclude that this is in general why restaurants are failing.
Surprisingly, bad food alone is very seldom the reason why a restaurant fails. Food quality can easily be improved. And there is a clientele for each type of food, even for bad food.
In contrast to that, the bad attitude of the owners of a restaurant can almost never be changed. And that is the very reason why F&B businesses fail.
My Set of F&B Survival Rules Explained
Rules #1 and #2 mean nothing else than you need to be prepared that you will spend your life in your restaurant (see minute 21:18 of the movie). Only people that are really committed to run their restaurant have it 365 days per year open. Rachel only serves dinner, so Gordon Ramsey put rule #2 into practice by offering a tomato soup & garlic bread lunch for EUR 6.00 to people who pass by (see minute 22:10 of the movie). I do not recommend that the owner works seven days per week. If they work six days per week, this is more than enough. But the restaurant itself should run 7 days per week.
Rule #3 “Don`t throw away food” is important. In a restaurant, rule #3 means nothing else than NOT cooking food ahead, before even having orders for it. Maybe except for food that can easily be warmed up, such as goulash soup. But rule #3 means that you don`t cook much staple food ahead of time, such as rice, in order to save work time. You will probably have to throw away most of it. Or the guests will not like it. Gordon Ramsay found food that was spoilt and needed to be thrown away (see minute 12:38 of the video)
Rule #4 “On a daily basis, know your profit or loss” stems from a friend of mine who had an F&B business, but he had this insight only after his failure. Gordon Ramsay put this rule to practice by counting the money after his lunch gig with the tomato soup and the garlic bread. EUR 450 in one go (see minute 25:06 of the video). And Rachel said that this alone could make the business sustainable. A restaurant would always have a simple POS system that makes it easy to find out whether you are profitable.
And rule #5 “do marketing” should be self-evident for every business owner. You see Gordon Ramsay doing marketing throughout the entire video: in the park distributing free cookies (see minute 33:50 of the video), on the street carrying a signage for the restaurant (see minute 22:50 of the video), outside of the restaurant, asking the patrons how it was, etc. etc.
Analysis Of The Case
Gordon Ramsay’s observation in the movie is right: Rachel – the owner of the restaurant – is lacking commitment for her business (see minute 21:50 of the video). It is not that she has no commitment at all, but her priorities were not slanted towards her business (see minute 16:10 of the video). Her pregnant cat was ultimately more important than her restaurant (see minute 22:35 of the movie).
Before he started with revamping Rachel`s Restaurant, Gordon Ramsay did all the things that every business owner would do before starting his business. Not only that he knows how it is to successfully work in F&B in Paris, because he spent years there. He also tested the market for vegetarian food in Paris, Rachel`s self-inflicted niche: bad, very bad (see minute 13:58 of the video). French people love meat.
Rachel did not take ownership. Gordon Ramsay told her to not behave like a waitress, but instead like an owner (see minute 13:25 and minute 36:30 and minute 40:20 of the movie).
There were no Rules. Even Rachel – the owner of the restaurant (!) – did not issue a proper ticket for the deserts, until Gordon Ramsay reminded her to issue one (see minute 31:08 and minute 37:55 of the movie).
There were also no consequences. Chef Daniel has been dancing on Rachel`s nose all the time (as we say in the German language) by disrespecting her. Gordon Ramsay had to carry this incompetent chef out of the restaurant because he refused to leave (see minute 10:25 of the movie).
Rachel never planned to leave a legacy with her restaurant. Gordon Ramsay shows us what legacy looks like when he introduces the replacement chef India to his own team (see minute 45:50 of the movie). And this restaurant even produces income when Gordon Ramsay is not there because he is looking after someone else`s restaurant.
Entrepreneur Assessment – Rachel Is a Wannabee
There is another twist to the story that we can see in this movie.
After one point in time, I felt angry about Gordon Ramsay. Not angry about him, sacking Daniel, the incompetent chef. And I am not blaming him for giving a straight talk to the millennial waitress Stephanie who could not stand being “harassed and insulted” (see minute 17:50 of the video). Both deserved it. These are must-see parts of the movie.
What made me feel uncomfortable was that I saw Gordon Ramsay wasting his time with Rachel (see minute 37:40 of the video: “her constant careless and her unprofessional attitude is really depressing me”), who turns out to be the daughter of a Daddy (see minute 20:50 of the movie). Daddy Brian had to realize that you can`t buy success for your offsprings with money alone (see minute 35:15 and minute 42:51 of the movie). Kids of a Daddy have to get skin in the game if he wants them to be successful. But how difficult is it for a dad to realize that your kid is not an entrepreneur?
Rachel was at least honest to herself. She said that she was relieved by weight from her shoulders (see minute 44:40 of the movie).
There was a role model in the movie: India, the new cook from Edinburgh/Scotland. She was willing to explore new things, learn French, go to the market, taste things (see minute 28:10 of the movie). Where was Rachel when this happened? She should have been that person.
Rachel is not only a spoilt brat, she also does not have the personality for running a restaurant (see minute 13:50 of the video). She is not an entrepreneur. She cannot easily say “no”. She probably has a low IQ. She is also low in orderliness and she is not at all industrious. She probably also has a deficit in assertiveness, paired with a tendency to easily withdraw. Some call that personality trait “lack of tenacity”. She is simply not sewn up for being an entrepreneur.
But how can you find out at an early stage whether it will work or not?
Does Rachel now need to commit suicide? Probably not. I would recommend that she finds out about her strengths and to focus her life on these strengths, instead of trying to improve her weaknesses. Life is too short for fighting nature, and there are more worthwhile fights to pick out there.
If you plan to open an F&B business then become a member here on my website. Ask questions in the Q&A forums.
Gordon Ramsay even has his own Youtube channel “Kitchen Nightmares” about failures in F&B (click here). This Youtube channel is a must-see if you run your own F&B business. Watch thoroughly all episodes before you even think about starting your own F&B business, and follow the channel for new episodes. Analyze each video for entrepreneurial failure signs, using my method.
Martin “Business Success” Schweiger