What indies know

What does it take to create and maintain a restaurant that cracks Restaurant Business’ Top 100 Independents ranking? Really, it’s all about attitude: When Michael Jacobs, partner at New York City’s Corner Table Restaurants, thinks about all the challenges that 2016 has thrown the industry’s way, he sees something positive. Rising labor costs? Fluctuating food costs? Skyrocketing rent and real estate costs? Tipping problems? Overtime problems? Healthcare problems? Sure, his group has to deal with all that. But he’s undaunted.

“I think it’s a good thing,” he says. “What came out of it were things we may not have thought of had we not gone through it. We’ve been able to come up with ways not only to be more efficient, but also that allowed us to focus more on the guest experience and ask, ‘What can we do better?’”

There is no secret to success other than answering that question, and the Top 100 Independents for 2016 found answers that put them or kept them at the top. Together, these 100 restaurants had aggregate 2015 sales of $1.76 billion, a 5% increase over the $1.67 billion for the previous year. From Miami’s elegant Prime 112 and its $115 average check, to the $26 tab at Harris Ranch Inn & Restaurant in Coalinga, Calif., operators of the most successful restaurants credit their success as much to their attention to small matters as to big plans.
 

Michael Stillman, founder and president of Quality Branded—operator of Quality Meats, Quality Italian and others—says he, like others, is trying to keep ahead of changes in the business of running top-flight restaurants. And he adds that it’s not getting easier.

“We’re challenged to find ways to make restaurants economically viable. All restaurateurs are trying to answer the question, ‘How do we do that?’” And all operators are trying to figure out the key elements and defining features that drive business in today’s economy, where a good menu has become table stakes. “Does that require that we pay even closer attention to all the elements of our business? For sure,” Stillman says.

Outside of looking at its staff or menu, Acme Feed & Seed tries to be part of the Nashville ethos as well as the community to bring in local diners. Its self-funded Acme Radio station, accessible via the restaurant’s website, plays music by some of the up-and-coming artists who flock to that city. “Our mission is inclusive of Nashville’s longstanding tradition of music, honoring the past through preservation and the future by discovery. We will reintroduce heritage acts while shining the light on those musicians and artists who subsist on a dream and a day job,” the station’s website says.

The Original Fish Company restaurant Los Alamitos, Calif., just missed the cut for this year’s Top 100 due to a major remodeling in 2015 that cut down the number of available seats. But Managing Partner Vanessa Travis predicts the restaurant will do $12.5 million this year.

The makeover—including an additional 26 seats at a full-service bar—helps, but it’s the small measures taken that are building sales even more. “We’ve really gone back to the basics on a lot of fronts,” she says. “We’re making our servers salespeople again, not just order-takers. We make sure they try menu items so they can talk to guests about them. And in training sessions, we go over the steps of service, and we’re talking to them about our history and how we got here. We have a 36-year tradition we want them to know about and uphold.”

Stillman and others have had to perform hard examinations of and rethink the staff. Who are the most important people? Are the right people getting paid the right amount? Who is delivering the important things that make guests want to return again and again? And what makes customers happiest?

“That’s a really good challenge to have to face, because restaurateurs can be ego-driven people; we all have our own visions. It’s good to get out of our own heads and ask, ‘What is my audience taking away? And who are the people who are bringing that to them?’” he says.

“If you have great employees who are well-trained and who love the company and embrace the culture, they stay,” says Corner Table’s Jacobs. “The longer tenured employees certainly become more efficient in managing the business. We’re focused on attracting and keeping great talent, because that alone will make you more efficient.”

It’s not just up to the heads of brands to pay closer attention to their operations, says Rich Wolf, principal partner at Tao Group, operator of four of the top 10 independent restaurants. “People ask what our secret is, and it’s simple: It’s our people. Our greatest accomplishment is the talented people we’ve accumulated,” he says. “To grow to our size, you can’t have just any old manager running the store.” Wolf wants his managers in the restaurant to ask themselves, “What would Rich do?” And 95% of the time, they’re right, he says.

Part of that means allowing staff to think outside of a restaurant’s four walls. Tao Group has a Lunch & Learn program. Staff visit neighboring businesses to learn potential customers’ interests, and not just to sell Tao properties.

Technology that manages staffing, scheduling, cost controls and more can help efficiency, too. “There are tweaks you can do. Like other operators, we focus on being as efficient as possible and on using technology more and more,” Jacobs says. While the industry is lagging in technology adoption right now—42% of independent operators, in fact, say they are behind in their tech usage, according to the National Restaurant Association’s Technology Landscape survey—Corner Table has been an early adopter in the pursuit of finding smart tools to make the business more efficient. At this point, just under a quarter of independents are using digital recruiting tools, and only 20% are using digital scheduling, compared to half of chain restaurant operators. The big reason for the lack of adoption: costs, both upfront and ongoing. Technology, even if it can help efficiencies, doesn’t typically come cheap—and there aren’t always available dollars—but Jacobs is finding ways to piece together a small budget for it.

“Everyone’s juggling ways to deal with the economics, recognizing that there are many competing factors,” says Stillman. “We’re all trying to find efficiencies that let us reward the best people in our organizations.” Some of his common questions: Is there fat, and can we be smarter and better about what we do?

Myles Chefetz, owner of Miami’s Prime 112, has had a lot of employees with him since day one, 12 years ago. Kitchen staff started at $8 per hour, but have been getting raises, and now are at $16 or $18 an hour. “They hit ceilings, but to keep them there you have to constantly give raises. You become a victim of your own success in that. You want consistency. You don’t want turnover. So we have to do more sales to cover. And then you hit product costs. It’s not easy to balance.”

If there’s any aspect of the business that has gotten easier, say some operators, it is marketing, thanks to the explosion of social media. In a social world driven by food porn, many of the Top 100 operators who play in the fine-dining realm have an edge—the focus on in-restaurant plating. “I attribute a lot of our success to ‘other people’ marketing, because I don’t do it,” says Chefetz, who admits restaurant marketing has shifted. “If I have 800 reservations on a Friday night, it’s possible 400 are taking pictures of the food. They’re all personal marketers for me.”

Jacobs says his first task of the day is to check what’s being said about his restaurants on social media. “A New York Times review in print used to be important, but it’s all changed,” he says. “The one thing that is important today is what the guests are saying day to day.” Every morning, he gets a report of anything said the previous day on Instagram, Facebook, Twitter and Yelp, plus other social mentions. 

The speed of social media can be both jarring and disruptive. A guest at a restaurant can have a picture of their dish up on Instagram in minutes. “Sometimes it’s too real-time, but they’re not shy about voicing their opinions,” says Jacobs. They may still even be in the restaurant, he adds. 

So paying attention is a non-negotiable for those who want to succeed, a challenge for a lot of independents who have lean staffs and don’t always have someone dedicated to watching the web. “In today’s environment, there’s so much competition, so many great operators out there, that if you don’t stay on top of it and use that feedback and pay attention to it, you’re missing a great opportunity to stay in touch,” Jacobs says.

Rosie Davenport, director of sales and marketing for Harris Ranch Inn & Restaurant, says it brought control of social media in-house last year. The result: a 55% increase in consumer reach and engagement, she reports.

Prime 112’s Chefetz says he’s always concerned about competition, but ultimately this consumer commentary makes him focus even harder on what’s going on within his four walls. “I’m aware that you’re only as good as your last meal, and I go on Yelp and TripAdvisor and the others to check feedback. I always say, ‘Strive for perfection, settle for excellence,’ but it’s difficult. There are so many variables. I hope we deliver on most of them.”