Ask Dr. Frankenbrew

9/24/23

Our third restaurant in Santa Fe

I love this weeks question. It goes to the heart of what I am passionate about in business. You may be surprised that my number one interest in business is not Frankenbrew, but rather how to run the business. Read on.

Question: Long time listener, first time caller. I've been compiling information on opening a brewery for quite some time, including reading a couple of your books. I am a believer of what you preach and your Colorado Boy brew pub model. The more I read blogs and articles about starting from scratch, the concept of buying an existing brewery has a lot of merit, provided it were the right situation. 

I wanted to get your thoughts on owning a brewery but not being able to be on site "full time" right away. It would be a minimum of 1x a month, with other periods throughout the year that would allow me to be present multiple weeks at a time. I do not want to be a "hands off owner", but is it feasible to be a "hands on owner, remotely"? I know the answer to this is "it depends...." - this is assuming there is a competent brewer on staff and a competent tap room manager on staff, is this even possible or should I toss this idea right out of the window? 

With proper SOP's with the right team members, coupled with technology that allows real-time communication such as Slack, team meetings via zoom, and real-time monitoring of business and sales data, does this sound insane for thinking this is possible? 

Answer: You bet this is possible, in fact it is vital to the success and longevity of your business. Let me give you a bit of history as to why I think this way.

When my partners and I opened our first business, a restaurant in downtown Albuquerque, we were in our twenties, clean cut, energetic, and personable. The building our restaurant was in housed New Mexico’s largest bank, and the two largest law firms. We were open for lunch and happy hour Monday through Friday, and our customers loved us. The business was based of course on the quality and value of what we served, but just as importantly, our underdog personalities, striving to be successful. Who doesn’t love an underdog? Young, broke and working their asses off.

The problem was, we wanted to open our dream restaurant (this first one was all we could afford to do) which was an upscale Italian restaurant called Scalo. How could we open another restaurant and still maintain the business in the first if it depended on us being there?

The answer was in a little book I read at the time called The E-Myth, by Michael Gerber. In a nut shell, or at least what I got out of it, was there is a myth that business success depends on the drive of the entrepreneur who created the business. What the book say’s is, business success depends on all the things that the entrepreneur brings to the table but also, and even more important, the business systems that actually run the business. This way the business doesn’t depend on a personality to operate it. In other words, the owner needs to be in control of the business operations, but doesn’t need to be in the business running it. This is a radical idea and I wouldn’t be writing this here today if I hadn’t followed this advice.

So we implemented a business system that ran our restaurant based on roles and check lists and audits and a whole bunch of ideas we either came up with or stole from large successful businesses. This allowed us to not only open that second restaurant, but go on to open about ten more, including brewpubs (my other passion).

This was back when we didn’t have the communication devices we have today. So the answer to your question is yes, you can run your business without being there every day, and in fact it will run better if you aren’t. I know that is a radical idea, but next time you go for a coffee at Starbucks, ask to see the owner.

To do this you need to instigate a complete operation system. My book shows you how, but you could also read the E-Myth and come up with your own. Either way, you must run your business with a system. If you don’t (hear me now, or believe me later) after about five years you will burn out and your business will suffer, resulting in either closing down or selling for less than it should be sold for.

One of the important tools in the business system are the audits that you do. This makes sure the systems are being followed. Also you as the owner should be the one with Quickbooks or some other accounting software who inputs the daily sales - which can be done automatically through your point of sale system, or directly by you based on the reports your P.O.S. system generates

. There is a once a week manager meeting to talk about what is going on in the brewer and you can zoom that if you are not it town. Your point of sales can show you in real time what sales are like, and I don’t mind a camera with sound just so I can check on the music and lighting as well if I’m not there.

So getting back to your question, yes you need competent staff, but much of that comes from your operating system that trains that staff and reviews them. I think it is a mistake to build your business based on the qualifications of the staff. It is more sustainable to have training systems (and hiring and interview systems) in place that will create the best staff you can get. It’s not easy. But it is still better that hiring someone who has a great resume, but only wants to do things the way they did it in the past, regardless how you want it done. Or it turns out they have a toxic personality that only comes out once they are working. Oh the stories I could tell….

One last point. No matter what I’ver just written, for your first business you should be there full time and more for the first six months of operation. This will allow you to learn the new business inside and out and will firmly put you in charge as the owner. You can also develop your brewer and managers to follow the systems the way you want it done. Then you can ease off and let the systems themselves take over. From the get-go, your brewery won’t be based on your personality, but rather the personality of the brewery itself, and then you are in a good position to grow the business.