discounts, family-business, restaurantsI recently took over ownership of a small restaurant from my parents on their retirement. It’s the classic “they’ve had it forever” kind of business and I grew up around it, but business has been stagnant for quite some time now. We’re doing okay and I have no complaints, but like any young entrepreneur, I want to see us do fantastically.
I see lots of options opening up to build the business through social networking and event hosting, and I’ve already begun to do that, but we still have a couple (very welcome!) long-time guests and friends of the family that I’d hate to see go. However, mostly at the hand of my parents, they’ve developed a system of getting freebies, like drinks and sometimes even food. What started off as a friendly gesture from my father to them (they’re friends, which complicates things) has become more of a regular occurrence than I’m really comfortable with.
To be clear, my concerns stretch beyond finances, which I think makes it a bit more difficult. They know that we’re doing, well, okay, so it’s not as if they’re really taking precious pennies from us, but if nothing else I’m worried about the principle. As we enter a new phase of our business, I don’t really want to carry the indefinite tradition of giving free food or beverages out to friends.
In general, they’re pretty good about it. They certainly hold no malice in taking the food, but every once in a while I have to take a step back and think about that I’m essentially paying meal bills for these people, even if it isn’t super commonplace.
How can I begin or conduct a conversation with them that effectively and kindly conveys “you need to start paying now” without offending them? Part of my hesitation, I should reiterate, is that they’re really my father’s friends. They are mine in that I’ve grown up around them, but I have a hard time viewing them as equals with me. I love having them around, they’re definitely fun to talk to, but at the end of the day, they’re thirty years my senior and honestly I’m a bit intimidated.
Is this just one of those things that I have to rip the Band-Aid off for? I’ve thought about approaching my father and having him speak with them, but I’m not sure that would be any less awkward for either of us (I think he probably doesn’t see the same problems with offering them the products as I do). Does anyone have any experience with a similar situation, or any tips for going into either of those conversations?
Tricky one… Imho, approach this from the point of view of whether these patrons are a net positive or not.
The most important consideration you should have in mind is that a restaurant business is like a hotel: you cannot roll over stock. A table that stays empty cannot be sold later; it is lost for good. As such, any patron that covers your costs is potentially good to take.
The other important consideration is that an empty restaurant isn’t inviting to patrons who might not know you. It can mean the locals are avoiding the place because they know the food or service aren’t great. (This is obviously less true in the age of Yelp, but I’d gather it still counts.)
As such, they bring potential value even with freebies. Do the math… Is what they’re paying covering the cost of serving them (meal, staff, etc.) over the course of a month?
If not, or if you think they’re not currently worth your time, politely ensure that they do: “Sorry, the best I can do is free drinks.” They’ll understand. And come on, it won’t hurt you to give them a free drink if they’re regularly eating at your restaurant.
If yes, cool… this is extra income which you wouldn’t have gotten had they not been there. Also keep in mind that they bring intangible value, since a full restaurant is more inviting than an empty one.
Once you’re regularly turning down higher value patrons because of them, and you feel that risking their regular business may be worth doing, consider a compromise: “Can I suggest coming outside of rush hours next time?” … which gets them back to bringing intangible value.
It’s a tricky situation. Here’s what I’d do.
For the next month, keep track of their spend and those freebies. That gives you something to do more positive than worrying about it. Then, if when you do the math it’s an issue, take the result to your father. “Dad, I love that [Mr X] has stayed loyal to the restaurant since I took over. But here’s what that’s costing me, just at the time I want to put every dollar into developing the restaurant. What would you do?”
That creates a bit of creative space around a shared problem. Your father may do something about it directly, or contribute ideas, or run away from the issue. Either way, you’ve made it easier to choose and action a next step.
All content is licensed under CC BY-SA 3.0.