How Systematizing his Restaurant Business enabled Gabe DaSilva to Grow, Scale and Eventually Sell It!

In this interview Gabe DaSilva, the founder of My First Restaurant reveals How Systematizing his Restaurant Business enabled him to Grow, Scale and Eventually Sell It!

He also explains how he was able to find his strengths, delegate more of his work, and focus on creating quantifiable results for his business. You will also discover how he created the operations manual and Kitchen Bible for his restaurant.

Gabe DaSilva, the founder of My First Restaurant

 

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In this Episode You will Discover:

  • How by Systematizing his Restaurant Business Gabe was able to Grow, Scale and Eventually Sell It!
  • How Gabe was able to determine his strengths and begin to delegated tasks.
  • Why Gabe believes that no matter what kind of business you have, there’s time to reflect on what you’ve done and document it.
  • How Gabe documented every process for his business.
  • Why Gabe believes that whatever the customer touches is the most important part of your business.
  • How Gabe was able to get his staff to buy in to systems.
  • How Gabe empowered his staff to do their job to the best of their ability.
  • Why Gabe believes in addressing what impacts the bottom line and what frees up your time the fastest first.
  • Why Gabe believes in keeping the lines of communication open with his employees regarding systems.

 

Noteworthy items Mentioned in this Episode:

  1. The E-Myth: Why Most Small Businesses Don’t Work and What to Do About It by Michael E. Gerber

 

Episode Transcript:

OWEN: My guest today is Gabe DaSilva and he is the founder of My First Restaurant. Gabe, welcome to the show.

GABE: Hey Owen, thanks for having me.

OWEN: So let’s dive right in. What exactly does your company do and what big pain or problem do you solve for your customers?

GABE: Well, My First Restaurant is an online community that I built for new and aspiring restaurateurs. And it’s a place where they can come and get the tools and training they need to successfully open their first restaurant. Essentially a tool that I wish had existed back when I opened my first restaurant a few years back.

OWEN: Awesome. So, the listener right now is listening to this interview, they understand how you systematized your business, even though your current business right now is focused on training potential restaurateurs on how to create a restaurant, systematize, and whatever. The goal of this interview is to focus on the previous restaurant you had and how you systematized it. And I think as a result you were able to sell it, right?

GABE: Exactly.

OWEN: That being the focus of the interview. So at that time, before the sale how many full-time employees did you have?

GABE: At our peak, we had seven full-time employees.

OWEN: Awesome.

GABE: Yeah, it’s obviously very seasonal. So you can imagine that would be during our peak summer months, and as low as 3 or 4 during off-season.

OWEN: What kind of restaurant is this, I’m just curious.

GABE: It was a healthy lifestyle-inspired menu, wraps, burgers, salads, things like that.

OWEN: Awesome. And so, as much as you can share with us, what was the revenue before it got sold and stuff like that. That way the listener can get some context as to what you were doing before you sold it.

GABE: Yeah. I can give you kind of an estimate just because of the sale. I can’t be too specific, but about half a million dollars in revenue. And one thing I didn’t say about the restaurant itself is that it was a fast, casual concept, one where consistency was critical to our success, which lends itself really well to systematizing.

OWEN: Awesome. So, going back to that business itself, what would you say was the lowest point in that business and describe how bad it got at that point?

GABE: Yeah, I can tell a couple of really good stories about hitting rock bottom. As a first time entrepreneur, as a restaurateur you’re a full-time decision maker, you’re a full-time everything. And there were a few super long nights where you just had a bad service and just everything that could go wrong did go wrong. And I can recall one night in particular sitting there, crying in the basement over a lost sale at the end of the shift, 16-ish hour day. At that point you’re just physically beat, your mind, everything. And I remember sitting there thinking I knew it wasn’t going to be easy, but it doesn’t need to be this hard. And that was early on, that was before I realize the value of a system. And I was doing everything back then. And my partner and I, we went through the ringer.

OWEN: I’m just curious, what triggered the lost sale. I just want to put the listeners in that state of mind. So what happened when you started crying about the business?

GABE: Yeah. It was my fault. It was my lack of understanding of technology. It was the point-of-sale system that we had spent a ton of money on. And it was a super robust system, far too robust for us at the time. And I’d lost a sale because a glitch, something I didn’t do right. I didn’t close out a sale correctly. And it was the last sale of the night. We had closed the store and someone came through the door and said, “I have an order for a small group. Can you guys put this together?” We had turned everything off, we were cleaning. And I said, for sure, that’s what we’re there to do. So, we turned everything back on, we put this order together. He pays with a credit card. And on his way out as we lock the door behind him I realize the order didn’t go through, as he gets in his car and pulls away. And it was just the icing on the cake that day.

OWEN: And you mentioned during the pre-interview that one of the challenges at that time was finding time to do everything yourself. Can you explain that?

GABE: You can’t do all those things well. I was trying to do everything. I was trying to be our point-of-sale person. I was trying to be our grill man, I was trying to be our marketing guy. And my partner and I, we were spread so thin, and when you try and do too much that’s what happens. You can’t do all those things well. And we paid the price for it at the beginning.

OWEN: I think maybe you were trying to get at this during the pre-interview was that it wasn’t the problem because of you being a firm believer that before you systematize everything you need to know how everything was done. Is that why you were going through that overwhelm of trying to do everything?

GABE: Yeah, it’s superhero’s syndrome. It’s your baby so you want to do everything. You want to have your hands in everything. You become a micromanager to some extent. You almost have to do everything once yourself just so you know how long it should take and what it should cost. But beyond that if you’ve done the same task 5 times, it’s time to systematize and delegate. There’s no sense doing the same thing over, and over, and over. And we were guilty of doing all of those things over, and over, and over when there were plenty of capable people around us that we could’ve delegated those tasks too.

OWEN: Yeah, so besides the issue of you trying to be the superhero and trying to do everything yourself, what other thing was a big challenge at that time?

GABE: I would say the learning curve was especially steep for us because we came into the business with no restaurant industry experience. So, you’re trying to learn a business but then you’re trying to learn the specifics of your business as well. So that makes it increasingly more difficult. And that was something that we had to overcome. Just learning the business and then learning the specifics of our business.

OWEN: Okay, so now that you’ve mentioned two things, one of them being you trying to do everything and the other one was trying to learn the specifics of your business while trying to run the business. Let’s talk about what were some of the things that you did to solve the problem. So what was the very first thing you did?

GABE: I’d say the first thing was the divide and conquer method. I was fortunate to have a partner. And when it comes time to learn we focused on what our strengths were. We sat down and talked about what we were good at individually, and then attack the business from perspective. Operations weren’t necessarily my strength so that’s something that he took on. And then the things that were my strength, the finances, the marketing, the backend stuff, that’s the stuff that I took on. And you kind of divide and conquer, you take on as much as you can handle. And you get in there, you dig in, and you try and understand as best you can each and every process well enough that you can then delegate it to someone else. That was a critical mindset shift. It went from being the doers to the trainers.

OWEN: Yeah.

GABE: And that was a huge turning point for us.

OWEN: So the very first thing you did, you realized that you and your partner, you had several strengths. And you wanted to pay attention to your strengths. You divided the work based on the strength. And then the next thing I think you said was that you guys now decide to train the trainers. Was that next thing? Let’s talk about that.

GABE: Yeah, exactly. So you figure out what you’re good at and what you’re not good at. And the things that you are good at you learn them. And then you go– You don’t want to be the trainer forever either. So once you understand what each individual requires of you, how long it should take, how much it should cost, you delegate it and you hold people accountable. And you give them the authority to do the things that you no longer want to do. Because they’re just not an ideal use for your time. And that’s what we did, we would learn how to do each and everything and then find someone on our staff that we could delegate that task too. And then move on to something. What’s the best way to eat an elephant? It’s just one bite at a time. We approached the store as the elephant and each task was the bite. And you kind of approach it from that regard.

OWEN: I even skipped something too because I realized that you actually said that the very first thing you did was after taking the time to learn how the task is done you actually spend time to systematize this. Before you even got to the point of training the trainer. So, just to be on the same flow of how it actually happened talk about that very thing, you taking over the task, trying to do the task, and then systematizing it. Let’s talk about what you learned during that period.

GABE: So as you’re doing it you often don’t realize that what you’re doing is what you need to be teaching someone else to do is getting the habit of doing, which we did. You just get into the habit of doing the same things over, and over, and over for no particular reason. And it doesn’t matter how busy you are, no business, every business, there’s time when you can sit down and reflect on what you’ve done. When we had that down time we sat there with pen and paper and documented what we had done. And that’s what you ultimately use to train the trainers, the people that you want to then delegate the work too. And that’s something that we took. We did really horrible job up at front, but after we progressed we got better and better at it. And you start with an outline of what you did, you just hand write down the steps. What you did if you’re opening the store, what did you do to open. Come 9 o’clock you’ve been open for an hour and a half, you’ve done a handful of things. Just take a minute, stop, and write down each one of those things. And then the next day you come in and fill-in the times at which you did those things because you do the same thing over and over each day. You don’t even realize that you’re doing it a lot of the time. So, that’s how we then started creating the systems that we would ultimately use to train.

OWEN: Okay. So basically you started writing out what you were doing, gradually we’re building them over time. And one of the things you mentioned during the pre-interview is that you made sure that before you took the time, at least a month or so to handle the task yourself while at the same time documenting how you’re doing it. So that was the first thing. And now we’re talking about training the trainers. At this point now I’m guessing that for each of the task you want to delegate you have some form of process documents to hand-over to the trainers. Talk about that. What did they look like and how did you use it to even train the trainers?

GABE: So each individual task is different and you have to do certain things for a certain amount of time to get an understanding of how long they should take and what they should cost. The more involve the task is, the longer you have to do it to better understand it before you can document a policy, a process. So, it was dependent on that specific task. But we ultimately put together a binder of processes of policies for each and every task. And those things, they were step-by-step. And we mimicked ours after Subway’s. Subway has a 2,000-page ops manual. It’s insane, everything down to how to load the toilet paper in the bathroom is documented step-by-step. And we kind of mimic that. We got really deep. In some cases too deep I think for us. As a single unit, fast casual restaurant concept, it’s not critical that you have a documented policy on how to reload the toilet paper in the bathroom. But the things that were important we got down to the nitty gritty on. And specifically that’s things like menu items and executing. How to create customers and script for answering the phone, things that touch the customer, things that we thought are of utmost value. Those are the things that we–

OWEN: So let’s dive right into that because my question now is to find out what specific systems in the business that enable you to run it without your constant involvement. And one of the things you mentioned was that you had something called a kitchen bible. Can you talk about that? What it was, what it contains, and stuff like that.

GABE: Yeah. In fast casual restaurants, the consistency is key. And what we realized upfront was that without a documented system we weren’t going to be able to execute anything consistently. So, that was one of the first things that we systemized was our menu. And the way we did that was we went and those are the kinds of things that I was talking about that take a month to do. You have to sit there and execute the same dish over, and over, and over. A handful of times, all the components, all the sub recipes, and you have to understand what it takes to make them, and how they should look and how they should taste. And that’s when you can put together, in this particular example it was a kitchen bible, which was a binder that sat downstairs in the kitchen. And each finished dish was pictured on one side of the page, and on the backside of the page was the list of ingredients and the steps you would take to execute that dish.

OWEN: Okay.

GABE: And that same image that sat in that bible was then posted in the kitchen where it could be seen by the line cooks. So, it was what ultimately led and consistency wound up being one of our strengths, something that people spoke to a lot on Yelp. And it’s just customer feedback in general, it’s just a lot of times people would say, and I’m sure you and your listeners can speak to this too. You’ll go into the same place today and then you there a week later, and the dish that you had last week that you loved doesn’t taste the same. Why is that the case? And that’s huge in fast casual. You have to be able to give the person a consistent experience every single time. And that’s how we went about doing that. We took each and every recipe and we made sure we understood how it needed to be done, what it took, how long it took, what went into it. And we documented that. And that’s what we would hold. And ultimately, once you have that document in place, once you have that kitchen bible, you don’t necessarily need to be the person making the dish anymore. You can be the person tasting it, spot-checking it. But then you no longer need to be the person doing it. But at first that was so critical to our success that we made sure that we did it every single time for a month I would say. The first three months we devoted to the kitchen bible.

OWEN: And I love that because I want to make a point to the listener that you’re talking about a restaurant and in this case the recipe is key to making sure– Because people are coming to eat the food. So the food itself, how the food is being created, that’s kind of liking to the operations of the business. Because people are coming to eat the food. And someone who’s listening to this might not have a restaurant, but you’re essentially saying the first step was to systematize the operations. That’s essentially what you’re saying.

GABE: The thing that means most in whatever touches the customer, whatever is most important in your particular business, that’s what you have to address first. I think what touches the customer is most important. The last thing we needed to be doing was worrying about like a cell phone policy, or– I don’t want to say uniform policy because that was important, because we wanted a consistent look. But there’s some things that we spent a lot of time and effort on that weren’t necessarily critical. The things that were critical, the kitchen bible, we addressed right up front. We just knew from the get-go that that was a critical piece of our concept. And we would need to make sure that was on-point to succeed. Everybody out there has something in their particular business that they know is of the most value and the most important thing. That’s what they need to address first, that’s what they need to systematize first.

OWEN: Especially since in your case the food itself, delivering the food, making sure that it’s the right taste and it tastes the same all the time. That is essentially key to the success of the business. So, the listener who’s listening to this now, you might be in the restaurant business but whatever steps that you need to take to actually deliver the results to your customer, that in this case will be a recipe in that sense.

GABE: That’s their kitchen bible, absolutely. That’s where they need to start.

OWEN: And so, you mentioned during the pre-interview that doing this also enabled you to calculate the cost and margins of each dish. Let’s talk about that.

GABE: So, aside from the freedom that– Ultimately, systematizing anything, it frees you up as an owner to do other things. To do things that are of more quantifiable value to the business. So, the first thing that getting a kitchen bible in place did for us was it freed us up to then start educating staff so that they know what to better sell it. One is a direct result of the other. So now knowing how dish is executed, what it cost to make, and how long it should take, you can then approach your staff and then start training them. And then you can educate them. There’s no sense in having someone sell your $12 salmon dish when it cost you 11 to make, and then can sell your $6 salad which cost you a $1 or $2 to make.

OWEN: Yeah.

GABE: A lot of times staff and just people in general think that the more expensive something is the more money you make on it. That’s not necessarily true. Often the opposite is the case. And you want to able to sit there and you need that kind in your back pocket before you can go and sit down with staff and start to educate them on how they sell, what they sell, when they should sell it. And that was I would say one of the first things we did once we had the kitchen bible. The first system developed was to then leverage that and start to train staff on how to sell what we now know.

OWEN: Yeah. And so you mentioned that besides the kitchen bible you also have something which you call the operations manual, which contained everything from how to greet the customer over the phone and how to lock up for the day. Can you talk about that in more detail a little bit?

GABE: Yeah. Part of the operations manual is the stuff we just talked about. Just the offshoot of the kitchen bible. We have different menu categories and the customer comes in and they ask you what’s the best salad. They often don’t say “What is the best tasting salad in your opinion?” They say “What’s the best salad? What’s the best this, what’s the best that?” Well, you train your staff to recommend things based on margins. And you encourage them to interject their opinion when appropriate. But they need to know that the reason that they’re saying what they’re saying is because it benefits us as much as it benefits the customer. You can’t do that without the kitchen bible. That feeds in to the operations manual. And then other things over time we developed scripts for call lists when a customer calls in. The customer needs to be greeted the exact same way every single time. That’s something that you develop a script for. A customer walks through the door, how are they greeted. You often go on Yelp and when you see those 4 or 5 paragraph long, 1-star Yelp reviews, the very first thing every time.

OWEN: …is they’re rude.

GABE: They didn’t greet me when I walked in. The customer leaves unhappy and they start from the very beginning. When they go to draft those horrible reviews, they start from the beginning.

OWEN: And so, I was sharing the story about how I was looking for a bar and saw this review on Yelp. This person was basically complaining. To the extent they even took a picture of the bartender who happen to not even know they were taking a picture of her. But based on the picture you can see the bartenders face, she was probably pissed at something. And he left a whole paragraph of how bad that service was. But you’re right, it’s really critical to really address how people even greet and attend to your customer, the customer experience. Go ahead, take it from there.

GABE: Yeah, absolutely. You’ll often find that happy people will leave the shortest reviews. Happy will give recommendations but they’ll be the shortest. And the unhappy people will take their time and they will go out of their way to bash you. You need to turn haters into lovers anytime you can. And in our business there’s a love-hate relationship with Yelp and those other review sites for that very reason. You have to be constantly on there, it has to be monitored constantly. But that applies to everyone out there in all their businesses. You have to make sure every customer is happy. And the ones aren’t happy, just know that if you don’t do your best to make sure that they leave happy they’re going to go out of their way to make sure that no one else comes.

OWEN: And it’s not only about just making them happy, it doesn’t just happen like that. The reality of what you’re saying is it actually took you taking time to figure out how do we systematize how the customer’s experience is. That’s really what it boils down to. And the listener basically has to look at the experience they want to deliver to the customer. How can they create a platform or a roadmap in which the employees can deliver that same experience regardless of whether they’re there or not?

GABE: Yeah, it sounds like marketing speak, it sounds abstract, but you just really need to put yourself in the position of your customer and just thing. If you are on the other side of the counter how would you be best served, what would make you happy, what would make you want to go above and beyond and tell friends, family, and whoever would listen about your experience with whoever, what product, what store, what have you? And that’s something that we did, have been with zero food service experience. But we had been patrons plenty, just like everyone else out there. Everyone who wants to get in the restaurant business for example has been to restaurants hundreds of times. Just think about your favorite experiences and how you were treated, and how you would want to be treated. And then keep that in the back of your mind when you’re developing the system by which your staff will then treat your customers.

OWEN: Awesome. And so, this is a question that my listeners like is where I actually ask you to compare your business to like a conveyor belt. In this case, you happen to be somebody who’s hungry who’s trying to buy the product that your restaurant sells. Maybe they haven’t heard about you. They’re at the very extreme end of the conveyor belt. And on the other end they have come to your restaurant. They’ve eaten, and they love the food, and they’re out there raving crazy and happy, telling everybody about your business. But behind the scenes there’s a bunch of systems, processes, and people making things happen behind the scene to make that happen. So I want you to just kind of give us an overview of all the different parts that was happening behind the scene in that business to make that transformation for the customer.

GABE: In our particular business, we took a lot of pride in it. And part of the reason that the kitchen bible that we referenced earlier was so important is because we had an open kitchen, an open concept. So, that’s the trend, that’s something that’s happening more and more here especially in New Jersey. And people want to see the product.

OWEN: Chipotle

GABE: Right, exactly. The best example of Chipotle. And just a plug for Chipotle we mimicked our kitchen bible after Chipotle’s.

OWEN: And we’ll talk about that too.

GABE: Yeah. So that’s something that we took into account. So, you would come in and you’d see these abstract, not even images on our menu in particular there were just descriptions. And you see something and you’d say, “Okay, I want that dish because it sounds like something I feel like eating today” but you’d watch us assemble it across the line. You would order on the far right, and over the course of three or four stations we would put the dish together. And on the far left of the restaurant would be a pick-up window where you’d be handed your dish, which you saw assembled from start to finish. And I think in food service especially there’s a lot of value in that because so often you go to a restaurant and you see these swinging doors, and you don’t know what’s going on behind them. And you order a dish and it comes out, and it’s either good or it’s not. What happened back there? Why is mine not good. The guy next to me got the same thing. That’s why I ordered it. He loved his. Why am I not liking mine? Well, in our particular case you have to watch your dish assembled start to finish. And that’s something I think there’s a lot of value in for customers there.

OWEN: Yeah. So I get the system you had in place when the customer was already in there. They get to watch how the food is being prepared and they walk down the line. I’m curious, was there any systems you have in place to even attract someone who didn’t even know about you guys in the whole funnel in the first place?

GABE: That’s something we didn’t put any thought our effort into upfront. That’s something that over time we started to grow and learn the value of– Upfront, when I opened the first thing I did before  I signed the lease for the space, I sat in front of it and counted passersby for days. For days I sat there. This is the kind of stuff we’re talking about. If you want to really dig in, you want to really put in the time and effort. This is what I did. I sat outside in front of the space that we were talking about signing a lease on and I counted passers-by. And I got to the point where I saw enough people walking by that I knew regardless of anything else we would enough people trickle through the door that we could break even. And that’s not the right way to do it but it’s a way to make sure. And that’s something that we did up front. But beyond that, within the first 6 months or so, that kind of starts to fade. And then you have to come to terms with reality. The “If you build it they will come” scenario, it doesn’t really work, it doesn’t exist. You’re not Kevin Costner. You need to really dig in and you got to go to work. You have to hustle. That’s something that we then started to do. We would prepare catering orders for people who didn’t order them and go on site and drop food off just as a gift. We would prepare and just pack a cooler full of food and partner would go, and he would drive to charter schools, municipalities, and places around town. We’d just drop off food and let them know that we were available to cater. If they’re at an event or if they were ever looking for a place to go to lunch we were there. And that’s what we did to try and get the word out once the initial buzz faded.

OWEN: Awesome. And I like that because I wanted to give the listeners kind of like what’s happening even before the person hears about you. And I’m glad that you shared some of the things that you guys did. And then once they now came in they can now also see the systems happening behind the scenes inside of the restaurant to produce the food and all that. And so, what challenges did you experience when you initially try to create systems for the business and how did you even solve them?

GABE: The first challenge is getting the buy-in of your staff. Because especially in our case when you don’t come in, in a position of authority, us with zero restaurant experience, you come in and then you do things–

OWEN: And they know that.

GABE: Right. They know it. You’re not tricking anyone. But you do everything enough times to where you become an authority. You become the expert on making this particular dish. And it’s almost like a game. I don’t want to say it’s a game, but you’re playing with personalities. You’re trying to get these people to understand and buy in to the idea that the systems that you’re trying to force on them. Because the system didn’t exist at first, that’s what made it hard. If you go and you get a job somewhere, and they tell you how your job is supposed to be done from day 1, you’re not as like to question it. But when you get hired based on your skill set and you’re asked to do a job. And then, a couple of weeks later they come in and they tell you how you should be doing the job that you’ve already been doing your way, it becomes really challenging. And that’s where we found a little bit of push back. And the way we overcame it was you have to kind of explain why this way is the way.

OWEN: During the pre-interview you said you used the trick of empowerment. I like that. So, how did you trick them and empower them at the same time. So let’s talk about that.

GABE: Yeah. So empowerment is the way to kind of– You know that your way is the best way because you just did it. You’ve done it a hundred times, you know that this is the way. But they have their ways and they come in with their habits. And you give them your script, you give them your process, and you empower them to do the work. And you expect they’ll do it your way. And most often they will because you’re the boss and they’ll accept that and they’ll do it, which is good. But a lot of times they’ll have bad habits, or they’ll push back, or whatever the case is. But the empowerment piece of it is I think what got them to commit in our particular case. What got our staff to commit was the empowerment piece and just knowing that we were giving them the authority to do something. We were just giving them the tool do it, the best way, what we thought was the best way. We were always very good about receiving feedback. And so, you empower them to do something. You give them what you think and what you say is the best possible tool to do it. But then you’re open to them coming back to you with feedback.

OWEN: So basically if they’d end up doing it better than you, you essentially win and you give them the feeling, hey, they actually improved whatever process you already had in place.

GABE: That’s the ultimate scenario, is for your staff to do the job that you empower them to do better than you. If your staff should be able to do the job better than you. That’s an ideal scenario. In our case, I never wanted to be good with the knife. I never wanted to be the best prep cook on the line. You don’t want to be those things, you want your staff to be better than you at that, you want your staff to be faster than you at point-of-sale, and you want them to be better than you at everything. Because if you’re better than them then that means you’re doing far too often and you’re not focusing on the things that matter.

OWEN: Yeah. And so what are the challenges besides the issue of push back which you solved using the empowerment trick. What are the issues that came to mind at that point?

GABE: Well, just the same things I referenced with the breakdown in the process. Not the breakdown necessarily but the process as you know it may not necessarily be the best way to do something a week from now or a month from now. You did it for however long you thought it took to best understand it. And you documented it, you systematized it, and you then delegated the task to someone. You empower them to go and do it. And then you’re open to them coming back to you with feedback. And then, a month later for example they come back to you and they say, “Listen, I’ve been doing this the way you told me to do it. And I’ve been getting push back, or this isn’t working, or this is taking a lot longer.” But here’s a better way. You have to be willing to accept that feedback, go back and revisit the process, rewrite it, and then begin to accept it. That’s the new way. Your way is not always the right way.

OWEN: So it’s kind of like being able to accept that you might not know what you’re talking about and your way might just suck. So, dealing with your ego basically.

GABE: Yeah, it’s like ego wrangling but on yourself, not your staff.

OWEN: Yeah, definitely. And so, given that creating systems in itself is a challenging thing. How did you stay committed to this whole direction of continuous improvement and trying to systematize the business on the go. How did you stay committed to this direction?

GABE: I think the benefits are immediately quantifiable. No necessarily bottom-line wise, don’t look to see the bottom-line, don’t look to see dollars right away. But think of your time in terms of dollars, and see how almost immediately your staff doing the task that you’ve delegated to them and empower them to do buys you the time to go and do the things that matter. Because the things that you were doing over, and over, and over that you’ve now systematized and handed off to someone, they don’t matter. What really matters is building a brand. Doing the things of value for your particular business. In our case it was building the brand. It was making sure the word is out there. You get to see that come back to you, and that validates the effort that you put into creating the system in the first place. And that’s what kept us going.

OWEN: During the pre-interview you asked the question basically how did you know which systems or processes to create first for the business. And you gave this answer, which I liked. You said basically, walk on anything that would affect the bottom-line first. Can you expand on that for the listener?

GABE: Yeah, the bottom-line piece was the food cost and labor. In our particular case in food service, food cost and labor combined are called prime cost and they’re often 60% 70% of gross. So those are two things that we needed to address upfront. And the first way we did that was by creating and implementing a kitchen bible. And that’s a perfect example. In our particular case that kitchen bible, we benefited from it in two ways. It’s an immediate bottom-line impact but it’s also the thing that’s most time consuming as a restaurateur, food and labor. And you get to address them both at once. And then it frees you up to go and do a ton of other things. So it may not necessarily be the case for a lot of the listeners and their particular businesses but when you can kill two birds with one stone you obviously do. And in our case, developing and implementing a kitchen bible hit the bottom-line right away and freed us up to go and do all the other things.

OWEN: And you also mentioned one mistake you made initially where you tried to use the Subway operations manual to basically systematize everything. Can you talk about? Let the listener learn from that.

GABE: That example I gave earlier about the 2,000-page operations manual that Subway hands over to franchisees when buy in. We got access to one of those and we sat down and we used that to kind of mimic our own. And you sit there and you see, well, they talk about how you load the toilet paper in the guest bathroom. We have to get down to that level, we need to do that. And that’s not the right mindset. The first thing you do is what impacts bottom-line and what frees you up the fastest. And in food that’s the kitchen bible. So that’s a mistake. When I look back on it, I think we spent far too much time on that didn’t necessarily yield value immediately. Look at the things that you do the most, the things that touch our customer most often, the things that hit the bottom-line first and address those.

OWEN: Yeah. And so, we’ve already talked about some of the systems you have in place. So my question really was trying to see if there was something else we’re missing. So besides the basically what systems we had in place to enable the employees know what they need to know. And we’ve talked about the kitchen bible, and then we talked about the operations manual, was that something else that you wanted to cover?

GABE: For the most part all the different policies and procedures in our business, in the foodservice industry fall into the operations manual. And we address things like uniform policy, cell phone policy. Those things, they weren’t as critical as the kitchen bible was. They weren’t as critical as a lot of things have touched the customer and we focused on everything at once when we should’ve started with the things that hit the bottom-line, the things that touch the customer first. And slowly you work your way down to all that stuff.

OWEN: Okay. So you also mentioned something about how– I think maybe this has to do with the system of making sure everybody knew what exactly– You don’t want to be the trainer and you don’t want to be the guy who’s training people forever. Talk about how that played a role and how you kind of got yourself out of being a trainer in the future.

GABE: That speaks to the whole thing about empowerment again. It’s like you did the task for as long as it took for you to best understand it and to know what it takes to do, how long it takes to do it, how much it costs to do. And then you go and you empower someone else to do it. And you delegate that task to that person. But you don’t want to be the person constantly delegating that task. If the idea is to grow beyond the point where you’re doing even that you need to make sure that they person you just empowered to do it understands the value in what they’ve been taught to do. But then the value in teaching others to do it that was as well. And that was something that we saw value in upfront. And we made sure that the person that we empower to do the thing that we were doing then realized why they were doing it and why they needed to teach the people that came on beyond them how to do it that way.

OWEN: And is this something like things, which the listener should pay attention to, or look out for when they’re trying to– Because what basically you’re saying is one level you were doing the implementation yourself, that was the first level. Then you took yourself out of being the one doing the work to getting somebody else so you can train them to do the work. But then there’s another level after that where you’re no longer even doing the training anymore. You’re getting somebody else to come in and do the training based on all the different levels. And I’m wondering is there something on that level where you’re trying to replace yourself as a trainer. Is there anything the listener should be looking out for to pay attention to and stuff like that?

GABE: Yeah, that speaks to personality. You staff, when you go and you start empowering them to do the things that you’ve been doing and you delegate that task, you’re going to see that some people are more receptive to it than others. And the ones that are most receptive to the new process, the process that you’ve developed, and understand why you went through the process of developing it. Those are the people that are ultimately going to be your advocates and you’re going to train the trainer, they’re going to be the person that then goes on train new hires. Because realistically, if you’ve done it– All right, you understand how it needs to be done, you’ve documented the process, and now you’ve handed it off to someone else. If that person leaves, do you want to be the person that needs to then train the next person and the next person after that? That’s still not an ideal scenario for an entrepreneur. You want to be at the point where you can now then have the person that you’ve empowered to do the task and sees value in it, you want them to now be the person that trains you new hire, and the person beyond that, and the person beyond that. So, it’s kind of just finding somebody step in to that role so you can focus on the things that only you can do.

OWEN: Awesome. And I’m curious, what tools or ways did you even want to actually document the procedures and processes you had in your business. Feel free to share the tools that you used at that time.

GABE: Everything was very archaic. Everything was done–

OWEN: Whatever works.

GABE: Right. Everything done via Word and Excel. Everything less the kitchen bible there was software for the restaurant industry, for food service in particular. There’s a ton of different versions of it out there but there’s a software that helps you do your menu engineering and turns out recipe cards, and things that you can use for that. Like for us it was just about, we started with handwriting and making our notes, and ultimately typing it up and putting it in a nice Word format that could be referenced in a binder. So nothing earth shattering, but that binder in turn saved us tons and tons of time, money, and energy. So, you may not see a lot of value in sitting there and handwriting, and then ultimately typing up what you did this morning, but just know that when you get to hand it off to someone else and then hold them accountable for it you’re going to benefit from that in the long run.

OWEN: And that just goes to show that systems don’t have to be complicated. In your case it was simple and it delivered results. So, how did you track and verify the results being delivered by the employees?

GABE: The systems that you put into place, well, since we came in to the business with no experience. We had to be understanding. We had to know that there would be push back and we had to be receptive to it. So we would sit down especially after implementing something new. And we would listen to what the staff had to say about it. And it almost reinforces the buy-in and that element of empowerment when you let them tell you why they think what you told them to do doesn’t quite make sense, and be willing to adapt. And in some cases they may have some insight but it’s not right, and you can go back and forth on why it’s not, but just do it the right way. In other cases what they had to say made sense more so that what you’d given them to do in the first place. You go and you make adjustments.

OWEN: You also mentioned that in order to track result that it delivered, you started using customer surveys and also sales reports as well. Talk about that.

GABE: Yeah, you’ll see, customer feedback it’s the first thing. If you implement anything, if it touches your customer they’re going to be the first to let you know. So, we had customer surveys, we monitored Yelp, we did all those things. We talked to customers, we touched every table whenever possible. So you’ll get feedback almost right away. And if something’s not working, be willing to adjust and don’t be stuck in your ways. And that’s something that we were good about too. So we would track it that way. Customer feedback in our case was the first and foremost. But then there’s also peer evaluations, self-evaluations, opportunities for us to sit down with staffers one-on-one and talk to them about how they think things are going. Just keep it open and let them tell you if you ask them to do something a certain way and they’ve been doing for a week, and they have some feedback on why they don’t necessarily think that’s the best way, let them tell you that. But then also be ready to ask them what is the better way. If you heard of a better way then you’re not adding value by saying that this isn’t the right way.

OWEN: You also mentioned that it gets to the point where you have a lot more employees and it becomes a lot more difficult to do the one-on-one sitting down, so you then begin to rely on reports. Can you talk about some of those reports that you guys started relying on to help guide tracking of the results?

GABE: Yeah, in our particular case were able to leverage point-of-sale, back office point-of-sale reports. I don’t know how often the listeners and other businesses can do that. In food service everything is tracked so it makes it a little easier. But there’s reports in every business even when I worked corporate finance. There were reports, there’s ways to track performance. So, in our particular case we were able to look in the back office. You’d look in point-of-sale and you’d see who did what on which day. Those reports were invaluable to us to then go and revisit things that we thought were working well but the report said otherwise, that’s when you go and you address those specific things with staffers. So, it’s going to be–

OWEN: Trust but verify.

GABE: Yeah. It’s going to be different for everybody. Different businesses are different but you know how you measure success in your particular business. So, think about what those key performance indicators are, what are your KPI’s? Address those. Those are where you need to start.

OWEN: So at that time in the business it became at the point where you were able to now have systems in the business. But I was curious, when did you now start focusing on when you started having systems in place that allow you be freed up and you didn’t have to be more into the nitty gritty? What did you start focusing on in the business at that time?

GABE: That’s when the shift happened. When you talk about the tipping point, that was the tipping point when the systems were there and freed you up to do the things that only you can do, which is be a mouthpiece for your business. Essentially, that’s something only you can do, only you can sell your business the way it ought to be sold. And when we got to the point where the systems were there and we were able to focus on that, that’s when I think things really turned for us. And that’s where we went from being a breakeven business to a business that was thriving, and a business that people were going out there and talking to each other about. And a brand that was consistent, and the color, the look, and the feel, it was huge for us. I can’t emphasize enough how important. It’s hard to quantify but it’s huge.

OWEN: I know you can’t give us specific details of the sale itself but I’m just curious, how did systematizing the business play a role into the actual sale? Maybe from the buyer’s perspective, I’m just curious.

GABE: That’s huge. In a food service business in particular, the value is in what you’ve created as far as a brand goes. Because often times you’ll hear about restaurants in particular trading in and all they really buy are assets. They buy the used equipment, the furniture, the FF and E, the furniture, fixtures, and equipment in your space, they give you pennies on the dollar for that. But when you talk about having built something, a brand, a color, a feel, a look, a menu, something that someone can really attach goodwill to there’s huge value in that. I can’t speak to exactly what it was worth but just know that by–

OWEN: I’m hoping that you can spill some beans.

GABE: Yeah, just knowing that by putting in the added effort and just building a consistent brand, something worthwhile, think about they can’t even value the goodwill behind the Coca Cola brand. People often try and they say it’s a billion, it’s 10 billion, it’s whatever it is. You can’t even put a number on it because that’s how rich that brand is. And think about what you can do once you systematized on the operation and you start focusing on brand, think about what you as the owner can really do.

OWEN: Okay, awesome. And so, what’s the very next step to listener should do in regards to being able to transform their business so that it’s systemized and can run without them?

GABE: Chances are they’re probably already doing it. If you’re running your own business you’re doing a handful of things every day. What you need to do is do them today, tomorrow, or at some point when you have a break in your day write down what you did. Tomorrow do the same thing, the following day do the same thing. And over time start putting in what time you did them, what did you do, who did you do it with, when did you do it. And then over time I think you’ll start to see repetition, you’ll see the things that you can–

OWEN: See a trend, yeah.

GABE: Yeah. So, in a restaurant business I can speak specifically to that but I’m talking about in business in general every proprietor is doing something every day. When he comes in and he opens the doors he’s got a list of tasks. He may not realize he’s doing them because he’s being doing them for so long, but he’s doing a handful of things in a certain order. If he writes that stuff down when he has a break. When he has his coffee at 9:30 or 10:00, if he writes down what he did from when he got there until then, he’ll start to quickly realize that he’s done the exact same things in a very similar order over the course of a week. It’s time to delegate those tasks. And that’s the first step. You’re already doing the first step.

OWEN: So basically you’re already doing it. Take the time to journal what you’re doing and then create kind of like a trend to see specifically how is your day is being spent. Now, looking into delegating the work, I like that. What books have actually influenced this way of thinking about building the business from a systematized standpoint. Share those books and why they have the influence on you.

GABE: For me, I didn’t know it existed at the time but the E-Myth. The E-Myth is the bible. Michael Gerber and The E-Myth is a must for anyone. I think it should be required for every entrepreneurship class at any university anywhere. At the time I didn’t even know it existed and I learned the hard way. And I had to figure this stuff out. But read The E-Myth and that mindset, that approach to business is what we’re talking about today, it’s everything we’re talking about.

OWEN: I like that. And so, what’s the best way for the listener to connect with your and thank you for doing the interview?

GABE: Well, I’m over at myfirstrestaurant.com, they can get me there, and they can see what we’re working on. If there’s any aspiring restaurateurs out there they could just book a free coaching call there. I’d love to get on the phone with them and just listen to what they’re thinking about doing, where they want to do it, and what’s going on. It’s something I do all day pretty much every day and I love it. And I love the idea of building, creating, and restaurant food service stuff in particular. They can find me there. And I’m across social media just about everywhere, gaberestaurants on twitter, and you can find me at My First Restaurant on Facebook. And I respond to every single email. So they can find me at gabe@myfirstrestaurant.com, and I’d love to hear from everybody. What are you working on and if I can help you in any way I’d love to be able to.

OWEN: With all these ways to connect with you I might as well get the address as well.

GABE: Yeah.

OWEN: Okay. Besides that, is there a question that you were wishing that I asked you during the interview that I didn’t ask you. And if so, post that question and the answer as well.

GABE: That one question. You asked a lot of really good questions about figures, which I think, gives perspective. In my particular case it was tough. I wish I’d been able to answer more of those. I think a lot of times people need quantifiable figures to help them better understand what’s being said and just give them a little bit of perspective. So you tried. I wished I could’ve spoken more to that stuff. I think that’s important for people to understand. So it doesn’t sound quite as abstract when we’re talking about what systems are which and why they’re important. Just know that there is quantifiable value to all this stuff.

OWEN: Awesome. And so now I’m speaking to you the listener who’s been listening to this interview all the way to this point, if find it valuable I want you to leave us a positive review, hopefully a 5-star review on iTunes. And to do that you got o sweetprocess.com/iTunes and it will redirect you to our iTunes channel where you can leave your review. One of the reasons why you should leave a review is because the more people who leave reviews, people are going to read the feedback and wonder why you actually left such a good review and come back and listen to the show. And the more eyeballs and listeners we have, the more we’re inspired to go out there and get entrepreneurs like Gabe who will come in here and breakdown the reason for this success in their business and how they systemize their business. So that you can learn from their success. And finally, if you’re at that point in your business where you’re tired of being the bottleneck in your business and you literally want to get stuff out of your head and document step-by-step how you get stuff done so your employees know exactly what you know so they can deliver results without you being there, well then sign up for a free 14-day trial of SweetProcess. Gabe, we’re done.

 

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Here are 3 Steps to Take After Listening to the Interview:

  1. Start documenting everything you’re doing in detail.
  2. Take notice of any trends in the tasks you’re doing every single day.
  3. Start delegating the tasks that can be handled by others.

 

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