It’s not that I’m a consultant or coach for the hospitality industry, but man there’s a ton of lessons to be learned from what I see here in town – this time, courtesy of a different establishment than the one I wrote about last week.
“I need another waiter”, said my buddy the restaurant owner. “Just for serving drinks, but I can’t find anyone”.
I suggested he attract a quality waiter by paying above average wages – say 20 or 30% more, but he said he can’t afford that.
Which seems to make sense in winter: Not enough diners to make up for the extra cost.
Except it’s backwards thinking. Short-term numbers games, and it does his business damage.
Because if today a large family shows up – and the Spanish love to dine in groups of 8, 10, or 12, and because you’re understaffed they get sub-par service, it might be the last time you see them.
10 diners is easily 500 euros worth of food and drinks, and if you treat a group like that well, they’ll easily be back at least two or three times before summer is over.
And, they’ll be telling their friends how awesome the service was and how well we were taken care of.
So losing the support and loyalty of just that one family can cost his business anything from 1000 to several, or many, 1000s in lost sales, over the course of a year. And that’s just one family. If ten families decide to never return, he loses tens of thousands in sales.
Contrast that against an extra 300 euro per month in paying a waiter above-average… i.e. a total increase of wages of 3300 per year (11 months) and you’ll see it not only makes sense to hire a superb waiter at higher prices… you also see that it’s outright stupid not to.
But such is the mentality on the coast: pan para hoy, hambre para mañana. Bread today, hunger tomorrow.
Short term thinking is expensive.
Long term thinking works to leverage current costs against future returns.
In other words: If you want your business to be fun and lucrative, you can’t afford to make short-term decisions that clip your earnings later on.
And if you HAVE to make short term decisions in order to protect cashflow, the last area where you ought to save money, is in customer experience.
Also published on Medium.