Last week, I accidentally stumbled upon Food Network’s Restaurant Impossible and was immediately intrigued by a scene I saw. For those of you, like me, who doesn’t watch TV often – Restaurant Impossible is a show where Chef Robert Irvine is given the mission to save failing restaurants through various means in just two days and $10,000. (We’ll save the “value” he creates for another post.)
The part of the episode that I was so fascinated with was when Chef Robert asked the two owners of Off Street Cafe (located interestingly close to DeepSky) to identify the top five selling dishes at their restaurant. And they did horribly. Both owners, who’ve been running the restaurant for 17 years, only got 2 out of the 5 top selling dishes right. That’s a failing score of 40%. Now before us entrepreneurs start commenting along the lines of, “wow, how is that possible?” or “they don’t know what they are doing,” let me remind you that I see this situation more often than most people will guess.
Truth is, us humans are terribly bad at numbers (yes, accountants included) based simply on our feelings. Unfortunately, entrepreneurs often choose to run their business based on exactly that. Carrying the attitude of, “I know how we are doing (financially) because I oversee the entire operation of my business.” Guess what? You are most likely wrong.
More often than not, when we go through the first sets of numbers with our new customers, we’ll hear comments like, “Wow, that wasn’t what I thought it was.” or “Really? No way? You sure?” That is because we are lousy guessers. Good news is, we can rely on good accounting and understanding to help us navigate our business better. Knowledge is power. And by knowing, we can make choices.
Chef Robert ended up getting rid of most of the dishes on the menu at Off Street Cafe (keeping the top 5 selling ones) and invented a few new ones that utilize the same ingredients to save cost and reduce risks of waste. As for how is the “new” restaurant doing? We might just head down there to judge for ourselves one of these days.
Image of Chef Robert obtained from Wikipedia, originally by Yodel Anecdotal.