Most people would find it unthinkable that a businessman would be willing to spend anywhere from $400,000-multiple millions of dollars to open a business but then be unwilling to spend a few hundred or few thousand more to help that same business succeed but it happens every day.

     Right here in town 2 of our favorite restaurants have gone out of business (much to EL’s dismay) because of just such a mentality. Spend huge quantities of cash to open the place but not a dime on making it work. It seems that many unsuccessful business folks are willing to take financial risks but unwilling to invest time, thought, or small amounts of working capital into these ventures. Thus the business fails and the only people who made money on them were banks and the companies that provided goods and services for the initial set-up.

Case one: A Korean restaurant (Seoul Garden).

Pros

•      The best and most authentic Korean food in town

•      The only Korean joint with in-table grills

•      A nice location on a main drag and relatively authentic décor

•      The restaurant was spacious and well lit.

So why did they fail?

Cons

•      Amount spent on advertising = $0

•       # of waitresses employed = 1 (20 tables)

•      Number of dishes on menu ~150 (no cook does 150 dishes well  and this also means a huge food inventory)  

     The waitress in question was obviously either a friend of the family or a family member. She barely spoke English and couldn’t handle more than 3 tables of patrons simultaneously (in a 20 table establishment). This resulted in terrible service unless you were the only people in the place. Coupled with no advertising this is and was a recipe for closure.

     The restaurant did try a few changes just prior to closing it’s doors but the changes were far too little, far too late, and not customer focused (reduced the size of flagship entrées).

Case two: Q and Lou’s BBQ

Pros

•       Great tasting BBQ pork and beef

•       Only BBQ restaurant in a town of 30,000+

•      Large dining area

•      Simple menu (roughly 12-15 items)

•      Plenty of staff hired

Cons

•       Took take-out orders but refused to answer their phone.

•      Amount spent on advertising = $0

•      Plenty of staff hired (none of them helping anyone)

•      No delivery service

     Q and Lou’s BBQ died primarily because it would never answer the phone and secondarily due to it’s terrible service speed.

     BBQ takes hours to prep and so when the restaurant opens for the day that part of the food prep has to be already accomplished. When a customer orders a BBQ sandwich it should be a matter of grabbing the bun, plopping on the BBQ, plating sides (also pre-done) and serving it. Total time? Hmmm maybe 3 or 4 minutes tops. Q and Lou’s time? ~20+ minutes average.

     The owner refused to discipline his staff (primarily teen-age girls that he wanted to chat-up) and refused to allow orders to be placed over the phone for pick-up. In fact they would simply stand there while the phone rang over and over again ignoring it completely.  Even when you went to the restaurant in person it took 20+ minutes for them to fill a take out container with pulled pork.

     The attitude just baffles me. Why sink huge quantities of cash into a start-up only to let it fail over something as simple as making your employees answer the phone and wait on customers in a timely fashion? The hundreds of thousands are no problem but investing 15 minutes in employee discipline is a problem? A 30 second ad run locally is simply beyond the pale?

    Just throwing money at something initially is not enough. Business ventures take time and additional investments of cash to succeed in the long term. Sure lots of people will come on Grand Opening Weekend no matter what, but that doesn’t mean that they will come back.

P.S. If someone has a bunch of ready cash but doesn’t want to bother with the management side of a business I will be happy to spend your money for you.