Restaurants as a way of life

With the current challenges the world faces and with those who mouth-open prevaricate over everything they don’t understand, it’s sad to see so many restaurants going into administration.

I just wrote this and it may be of interest.

Jon.

 

RESTAURANTS AS A WAY OF LIFE

I find it amazing that the doomsayers out there are actually believed when they pontificate at length about not being able to make money in a restaurant.  Glib statements like, ‘Make a small fortune by opening a restaurant with a big fortune’, don’t help.  That is re-said by those echoing others lack of knowledge.

Indeed they blame the economy, war, sunspots and/or anything except their own inability to run a business.  Yes, run a business, not just buying a few tables and hope, but run a business.

Personally we do just that, unlike a past life in finance, hospitals, downsizing and litigation, we have fun.  We run a business which happens to be a restaurant and we have been doing it in just this restaurant for some 23 years and we only seat 16 inside.  I am the cook whilst my wife runs front of house.  Just the two of us and no staff. 

Luckily people like what we do and we are full most of the time and it’s not life threatening as we only trade some 25 hours a week spending quality time travelling around the world about 8 weeks a year whilst attempting golf, archery and pickle ball. [‘Hopeless’ at all three but still fun’].

Our boutique business has won many national and international awards reaching ‘institution’ status by and through longevity if nothing else.  It’s the business itself which funds all our excursions and we are very very careful with all costs including rent, cost of sales and margin pricing which reflects our chosen business focus, defines us and anchors our reputation.  We have no debt, no leases and controllable costs.  This is not cook and hope but planned with zero waste of any kind. If we have quiet night or two it doesn’t affect or worry us

If we can do this whilst I am approaching 80 then imagine what a mere lad of say 50 could achieve?

Is it cheap?  No.  Can risks be controlled?  Yes.  Is it a business challenge?  Yes. Is it lucrative?  Yes.  Are results guaranteed?  No.  Is it fun and life affirming?  Absobloodylutely!

Ambition is a wonderful thing but ‘planned’ ambition is indeed life affirming.

Apart from all of the above, be careful buying a cheapish dud with discernible ‘bad-will’ as the risks are significant.  Any business is only worth it’s fair value assets plus nett profit for a prospective owners ‘hands off’ returns.  Do your homework and understand capitalised future earnings as a valuation tool as well as scrutinise claimed revenues [BAS is good] and overheads [independent landlord provided] and complete a margin analysis to get a good idea of what’s actually happening.  This is simple good business purchasing as is scanning past booking records for any anomalies before purchase. 

Then cook your heart out and love the experience because you are financially in control with low risk.  It won’t always work.  Some years ago we also had a dud.  Bugger!   Life doesn’t come with guarantees but life without controlled challenges would be as boring as that well known bat excreta.

Restaurants are fun and you are dealing with happy people rewarding them with an ‘experience’ and they even pay you for the privilege!   Wahoo.

Go after the brain dead keyboard dropkick negative reviewers if they are not warranted, live with an attitude of gratitude for the good reviews and ‘fill every hour with sixty minutes worth of distance run’ albeit not too many at work. [With apologies to Kipling for his masterpiece of a poem, ‘If’].

Life is good.

UBER

Introduction ...

The world of business survives on a simple concept of supply and demand in that the charge for supply can vary based on how many people want that supply.  However, this is regulated to stop price gouging, greed, extortion, fraud, misrepresentation and like unlawful actions by specific verbal or written contractual obligations on concluded agreements protecting the so-called weaker party.  Not all is fair in business.

In simple terms, both parties must agree to any transaction for it to be legal otherwise anyone could bill anyone and expect payment with no recourse.

A seller has little obligation to supply at a price other than when advertised at a certain price which leaves a vast grey area when the price is advertised as a variable based on demand.  

Enter ‘surge’ pricing from UBER.  UBER says that their surge pricing is designed to get more drivers into areas of high demand thereby supporting those wanting to travel.  On a prima facie test this would seem logical in that drivers would flock to ‘surge priced’ demand locations thereby increasing their revenue and basic supply.  But this would also reduce supply from other areas as demand goes unmet resulting in those areas also suffering surge pricing because demand exceeded supply and Uber’s algorithm kicked in.  A vicious circle not benefiting customers in any way shape or form but hugely benefitting Uber and their drivers.  Surge pricing just follows demand.  Uber obviously target demand areas and automatically add surge pricing which creates further areas of demand because supply has left to chase the first area.  A ‘self inflating’ cycle.

Imagine if this surge concept applied to the average supermarket ... “Sorry Madam but your bill was for $23 but because there was a queue of 4 people waiting to pay there will be a surge charge of 4 leaving you a bill of $92 but as we already have your credit card on file it was automatically deducted.  Have a nice day”... If Madam had accepted this surge in full and absolute knowledge before the event then she was accepting paying $92 for a $23 bill.  But if the surge is not known or accepted before the event then it’s unlawful. 

However, law surrounding extortion, fraud, blackmail, price gouging, deception and misrepresentation can mitigate Madam’s problem.  Is it extortion to charge 4 times a normal price when demand is high or is it just normal business practice?  I suspect the latter albeit we all have a choice not to shop at that supermarket or ride with Uber as companies extorting clients [extortion - a demand without a reasonable cause with an intent to gain a benefit]. There is a difference between demand pricing and fee gouging and a huge difference to charging after the fact without consent.

 

Case study ...

In our case, we accepted a confirmed charge of $115.32 as a concluded agreement by phone app despite Uber’s surge pricing of 3.9 because we had little choice.  Uber’s algorithm had calculated the fare based on known traffic conditions.  Pay 4 times the fare or walk!

What we didn’t expect was a further loading of 50% with a charge of $57.55 deducted from the credit card without our knowledge or consent.  We had not accepted this further charge.

This final fee was a clear misrepresentation of our already concluded agreement.  It was and is tantamount to fraud.  Intentional theft of funds without consent.

Conclusion ...

Before travelling with Uber make sure you know what is being charged and make sure it is accepted as a concluded agreement and don’t accept ‘after the fact’ charges.  Better, support normal taxi drivers.

Andrews again!!

 Why am I upset with the Victorian government [small g]?

When Alan Bond was caught and had to answer questions he had inexplicable memory failure yet some time later he came good-ish both physically and mentally.  Go figure.

This current enquiry into the hotel quarantine mal administration also seems to attract similar memory loss .  Chris Eccles [Andrews department head – slight similarity to 1950’s ‘The Goons’] admitted to receiving email re ADF offer yet couldn’t remember passing it on to anyone.  An offer this important just slipped from memory.  If this is the case then he is incompetent in the extreme.  If he did in fact pass it on then the plot thickens.  It is reported that Andrews did get the offer but, inexplicably, also had his own bout of memory loss.

And, if that’s not bad enough, Andrews wants more power through and by the brand new Omnibus bill.  This would allow Andrews to authorise anyone he sees fit to detain [arrest] people whom they ‘deem’ a health risk.  This health risk can be as little as passing someone who is ‘suspected’ of say having COVID19.  Imagine a scene where a few pimply faced untrained so called Andrews authorised health official goons [no similarity to 1950’s the ‘Goons’] arrest people walking around Albert Park lake during their allotted 2 hours of exercise because they happened to pass a person, also walking, who had the temerity to sneeze during hay fever season thereby being deemed to be a health risk.  Perhaps Andrews could re purpose the physically larger tram inspectors, as no one rides trams anymore, with say 10 minutes of training, a few warm handshakes and a special mask covering their identity.  Their kit could include truncheons, spit masks, pepper spray, Tasers and of course cable tie wrist and ankle restraints.  Only the select few would have assault rifles.  To be fair they would have to treat all the same including kids, the disaffected, the weak, the stupid and all gender varieties.  Now the Andrews goons have pounced they would have to do something with the deemed infected.  Enter Gulag 13 which is a razor wire fenced off area on a golf course somewhere [unused as Andrews banned golf] where miscreants are re-educated with electricity to the temples and sent to forced labour [not labor] camps [the new hotel quarantine] for 14 days.  There would be wall to wall photographs of Andrews with thought bubbles – me me me me].  Trite?  Perhaps those of lesser risk could be transferred to nursing homes as they are now nearing empty because past residents have succumbed to the same Corona Virus mal administration.   As someone was reported as saying [paraphrased],’the greatest failure of a public health management event ever!’

The Andrews government is heading towards the above.  He continually seeks more and more power yet has been proven absolutely incompetent and unable to manage.  He has the blood of hundreds of people on his hands as the second wave has been 99.9% caused by hotel quarantine failures.  Would you let a failed bus driver take your kids to school day after day?  Answer, no!  Yet we allow Andrews to remain as the man in charge despite selling us out to a foreign power, bringing in companies owned by that power to control infrastructure, sending us bankrupt and mal administering a simple hotel quarantine which everyone else got right.

Perhaps we Victorians are all evil and we are getting Andrews as punishment for our sins?

AFCA and Zurich insurance

Dysfunction ... 

The Australian Financial Complaints Authority [AFCA] has been and is seemingly supporting Zurich insurance to avoid paying out lawful travel insurance claims.  Despite clear evidence.

 Zurich as a global company with teams of researchers, actuaries and analysts all mitigating risk through known events knew there was a pandemic looming circa 2019 [Covid19] which would [standard terms and conditions small print] negate any insurance claim yet they still took people’s money for travel insurance in that exact knowledge and knowing quite well that they would never have to pay out.  ‘A false pretence’.  Obtaining money under false pretences is at the very least fraudulent misrepresentation.

As long as AFCA fail to curb obvious dysfunctions there can and will be no change.  Following the Royal Commission’s scathing reports on companies such as Zurich and indeed the AFCA itself, it is indeed obvious that there is no change to past practices.

You may gather I am a little tense.

andrews [small a]

Dear all,

Angry does not describe how I feel about Daniel Andrews. 

His government’s absolute mismanagement of our state has cost us, Victoria, literally billions.  Billions we don’t have because he’s spent it and had to borrow squillions from the Chinese just to feed his ongoing funds mismanagement.  The last time it was this bad was under Cain / Kirner. Go figure. 

Worse, Victoria is now the pariah state and seen as such by the rest of the country.  It’s cost us personally circa $30,000 over the 10 weeks of the last lockdown and something similar this time - and we are only one tiny little restaurant.  We will survive because we are financially secure – ish, have a great customer base and have planned for this sort of contingency.  Hundreds of businesses will not survive.

In terms of sport, he has finally figured out that we can still play golf because it’s naturally self distancing.  The rest of the country figured this out long ago and continued to play during the last lockdown.  We were then seen as a joke.  I despair.

Similar, archery is a non contact, naturally socially distancing sport.  This is a no-brainer.  Yet it’s banned.  Why, when golf driving ranges are open?  What’s wrong with archery when it’s so similar to the golf driving range?  No logic – no sense.  [UPDATE 15/7/20 - HE'S NOW BANNED DRIVING RANGES AS WELL]

We have a second pandemic wave because the premier sent a whole raft of mixed messages.  For example, allowing 10,000 people to march in the city.  She’ll be right mate. 

It’s not right, mate!  Idiot.

Now we have security guards also allocated by Andrews looking after hotel quarantine allegedly screwing detainees then tootling back to their family's with a healthy dose of COVID.  Fantastic.

How about a few religious festivals where bunches co-mingle generating more and more very healthy COVID infections which are on the march - with a healthy disregard for humans.

Then he gets on TV and espouses responsibility without taking blame for the absolute mismanagement.  Mismanagement which has cost us money, lives, huge disruption and a loss of reputation.  The KIWI travel bubble just burst. 

This is not a liberal / labour gripe, it’s a plea to get rid of Andrews before he destroys Victoria. What does it take for Victorians to see through this shambolic disaster?

We have been forced into this second and now necessary lockdown because of absolute mismanagement.  How many lives have been ruined by his continuing out of control crap.  No, it’s not easy but then there are supposed to be bunches of very bright people advising the Victorian government supporting good decisions.  Apparently not so.

This needs to be treated just like the rogue local councils which were stood down because of ineptitude and replaced by an interim bunch of ‘change agents’.

I look at the Victorian government hierarchy and, as I said before, despair.  Unfortunately the ability to get elected does not mean talent at anything other than getting elected.

Victoria has a narcissistic rogue government which is out of control but before we succumb and fold let’s bring in a focused management team to take over and try and resurrect disaster.

This is not a change in government, it is a change in responsibility.

And boy, are there several people who could make this happen in the short term, even if they were very very reluctant.  Paul Keating, Julie Bishop, Geoff Kennett, Peter Costello, Julia Gillard et alia.  Give me 10 minutes and even I could think of a team of 10 which could change the world.  People who are respected for their intelligence, ability to recognise and create change in the face of great odds and garner a following from us mere lemmings.  It would be nice if just one person could lead the change but there just aren’t too many Churchill's around.

If I can see this disaster as an overworked cook / dishwasher [now currently underworked] then everyone can. 

Speak up and stop the crap.

Regards,

Langevad J  [MBA et alia]

Covid and restaurants

Why do we do things in hospitality driven by knee jerk reactions and short term thinking?

My wife and I own and run a small restaurant which has been forced into just 8 diners per sitting because of very appropriate Covid restrictions.  In order to survive from day 1 after the reopening we ran two sittings which we are fortunate enough to have oversubscribed.

We do not force people to book online with a credit card and draconian penalties and we don’t stupidly surcharge a bill for using that credit card.  Both of these very very short sighted actions assume people are basically dishonest and financially stupid.  We do not have no-shows and welcome our guests as friends – some for over 17 years.  Friends who are indeed financially astute and honest and who enjoy and indeed respect the trust placed in them. 

Further, there is a trend to try and make people spend more money through the use of set multi course menus and/or minimum spends.  Once again a negative short term cash flow ‘solution’.  Except, it’s not a solution as people rightly don’t like having choice removed.  We have clients who don’t spend much [non drinkers usually] and lots who do.  The balance is appropriate at around $120 per head.  The key is that it’s a ‘balance’ and people spend because we spend a lot of time developing a product which people want to buy, not forcing something they don’t want.

Wonder why there are so many restaurant failures?  One reason, among many, is that restaurateurs show no respect for their clients devolving their offering to their own perceived bottom end financially stupid and disrespectful thinking.  When we opened some 17 years ago Telstra failed to connect our EFTPOS et alia so we had no method of taking credit card payments.  At the time we said to all clients, ‘don’t worry, just pay us next time you pass’.  Every bill was paid within the week.  I have a very healthy respect, for respect and no, it’s not earned, it’s a God given right.

This whole Covid thing is a real bugger on so many fronts causing real financial and emotional stress.  Restrictions placed to protect us against disaster are appropriate but then we see 10,000 people allowed to protest ‘cheek and jowl’ by our government.  Mixed messages from the idiots in power obviously with a brain-thinking disconnect.

We as a nation are going to ‘bolt’ out of this forced conundrum because as that nation we DO have respect for all peoples, we are not idiots and we live in the best country on earth with freedoms of everything. 

People choose based on how they are treated.

We choose Australia and people choose our little restaurant because we respect them without demanding and without hidden charges.

Covid, Golf, Archery, Business...

One of the things about being human is that we tend to self preserve.  For example, driving a car we don’t swerve into oncoming traffic or we don’t go too near the edge of a cliff.  This is a given even for the dross but always excepting those fantastic people who put themselves in harm’s way for others - like any person dealing with Covid19 on the front line.

The other axiom about being human is the fact that it enables the ‘bullshit’ meter.  We can tell/feel when something is array or doesn’t meet the common sense test despite that something being touted as true and correct by the pontificators often with an obvious brain / mouth disconnect.

Add Covid19 to these two axioms and the pressure mounts on those charged with preserving our way of life to get it right whilst taking people along with the logic on the way to getting it right.  If that fails then people will ignore any edicts seen as failing the so called ‘pub test’. 

There is no ‘one size fits all’ when we discuss protecting ourselves from Covid19.  Blanket restrictions are easy but will be ignored with the instigators mocked.  But, there are always exceptions – closing our borders quickly was a great move and if there were doubters the Ruby Princess validated that position. 

But, pontificating without substance is a crime against humanity because it treats people as idiots and we are not!  Self preservation and the bullshit meter kick in and we begin to see just how lacking in common sense those in charge are and/or the ‘look at me’ lengths they will go to try and prove they are actually intelligent and doing something.

Just as examples.  People need an outlet or they will go troppo and disobey.  As far as I understand it, staying at home is a blanket restriction to stop interaction thereby stopping exponential infection.  We have the experts telling us that Covid 19 can live on surfaces we touch and can only spread by close contact with an infected person or off that surface.  1.5 m being the distance of safety and face masks are not necessary.   Therefore, it follows that as long as we sanitise by alcohol or soap and keep 1.5 m apart total isolation is not necessary. Why is this important?  Because the economic damage caused by ‘over the top’ restrictions is haemorrhaging our country.  The exception to this is isolating people returning from a known ‘hot spot’ or identified as possibly infected. 

How about Victorian [only Victoria] golf courses being closed costing millions of dollars in job keeper / seeker and lost revenues.  The way I and most others play golf is in absolute isolation spending far more time in the bushes than anywhere near others or indeed real grass.  With a few simple rules golf can help people avoid going troppo.  For some reason, golf driving ranges were also shut down.  Driving ranges are designed around self isolation with each person in their own bay at least 1.5m apart.  This is a no brainer as it’s basic self preservation against getting your head knocked off.  The people shutting driving ranges down are seen as stupid pontificators avoiding actual thought.

The other activity / sport is archery which was shut down and now suffers from a 10 person per acre edict.  In archery each target is roughly 1.5 m to 2.5 m apart centre to centre with easy changes to separation.  This automatically complies with the 1.5 m rule yet archery was shut down.  Now it seems archery can only have 10 people at one time in a field of over an acre.  Where is the common sense?  Archery is another activity which automatically practices self distancing.  Logical really as no one wants to be shot!  More millions lost.  Now, do we count the number of people on a train, tram or bus to make sure there are just 9 before we jump on? There goes a few more million.

People will self preserve.  Just look at the behaviour of people walking on a footpath.  They will go to great lengths to make sure they keep 1.5m apart.  I do.

The key to people protecting themselves seems to be the 1.5 m separation and fanatical hand washing.  This is easy.  As Patsy from ABFAB said, “I would never have thought my hands would consume more alcohol than my mouth.”

It is imperative we protect ourselves whilst doing stuff such as golf or archery to stop going stir crazy and both make and spend money.  OUR government is not a separate financial entity, it’s our money they are taxing and spending and it needs to be both sourced and judiciously spent.  I reckon our State’s debt alone with our current government will approach $100 billion with a small part being due to Covid19.  The interest alone on these borrowings is eye watering.

If I can make a plea – think through edicts before proclamation because they can be too encompassing remembering we will self preserve and one size does not fit all.  The excuse, erring on the side of caution, just shows a lack of thought.

People will protect their patch given logic and proof.  As they are doing with 1.5m separation and hand washing.

We need to return to normality ASAP for our countries’ sake.   Business and personal activity must be preserved.

Our restaurant is take away only and my wife and I now play extremely competitive table tennis for money [$1] on the dining room table.  The first stops us haemorrhaging too much money and the second keeps brain and reflexes alive.  We went to the driving range yesterday as it’s now open – no change in talent [ho hum] – look forward to scrabbling through the bushes on the course – ‘preserving’ the grass.