Building Your Kingdom
Managing Multiple Locations
We all start humble: a simple pub, make great beers, make people happy, and earn enough to live on. And that works for about a year or two. Then the itch begins. At first you don’t recognize the itch, but you start looking around at places and thinking, “hmm, that would make a cool pub.” Next thing you know you are talking to your partners about expanding because it would allow you to sell so much more beer, and it would also give your managers the opportunity to grow in the company. Yada yada yada.
So you open your second location and now you are running back and forth between two places. Both are busy so you shuttle kegs, food ingredients, and even share employees. Your day involves doing the books in both places, going to the bank, and dealing with labor shortages and equipment break-downs. No big deal, you can handle it and it’s even fun. Then after a year, the itch begins again.
I have found that running two locations, while keeping you busy, is manageable. However if you go to three, things may start to fall apart. Ask me how I know.
I started a restaurant with my old friends back in Albuquerque that grew to two large restaurants, one coffee house, and six wood oven pizza restaurants, three of which had breweries in them. Along the way (after some trial and error) we developed a pretty good system for managing all that, and I would like to share that with you.
Step 1 Each entity has to have a strong operation system
In Michael Gerbers excellent book The E Myth, the author explains how to become systems dependent rather than people dependent. In other words, you develop systems that the people in your organization can use to operate the business. You still care for and nurture your employees, but it is the system that operates everything. I outline how ours works in the book, Brewery Operations Manual, but here is the essence of that section of the book:
Identify all the positions in the business such as brewer, general manager, bartender, server, cook, etc.
Create a training checklist for each position to maintain consistent training and resulting performance .
Create a daily checklist for each position that explains how to open and close in each station. Inside each daily checklist include side work that is done on specific days. For example, scrubbing out the floor sinks or cleaning the compressor screens on refrigeration.
Create a GM Book that lists the things that need to be done only so often.
Create a Scoreboard to track the business’ progress in real time.
Have the managers audit the section of the business that they are responsible for. For example, a shift manager may be responsible for the overall condition of the restrooms. That is their area of ultimate responsibility.
Step Two- Set Up A Main Office
OK, now that each business is following the system, you need to set up a main office. You can initially use a space in one of your existing businesses. Here you will download sales for each day, from each place, into Quickbooks or some other accounting software. You will also maintain a score board for each business in this office so you can, with a glance, keep an eye on the health of the individual place. (Really, you need to read about the scoreboard!)
While you can download employee hours directly on line, it’s better if the General Manager puts together a sheet with hours and tips for each employee and emails it to the office. That way if there is a problem (like someone not clocking out when they should) the manager is more likely to catch the mistake than you are. Paychecks will be generated from this office.
For accounts payable, the manager can simply scan the invoice and send it over to the office to be placed into Quickbooks. The manager is responsible for checking the invoice to make sure it is correct, and to also make note of any price changes of things purchased. The office will also issue payments.
The same goes for accounts receivable. After the delivery has been made, the sale goes to the office and is accounted for through Quickbooks. The office can also send statements out and receive payments.
One of the most important functions of the office is the performance of external audits of the individual business. These audits are unannounced and the person who does this has a large checklist to see that the business is in good repair, the systems are being followed, and the business items that are reported to the office, really did happen. For example checking the bank deposit receipts against what was reported to be deposited. This takes about three hours per month per business.
As your business grows you will hire more people as part of the main office to handle marketing, brewing, bookkeeping, and new location scouting. Whew, this is a lot and more than you had in mind when you opened your wee humble pub. But, there is a way to grow and still have a life and keep things fun. There are lots of brewers who have come before you who have done this.
Certainly you can come up with your own growth plan, and what I’m getting at is to have that plan in the first place. Being proactive and planning is a strategy that will not only save you time, but your sanity as well. It will enable you to sustain growth and maximize your income. It can’t be just you getting spread thinner and thinner. It’s all about what you want to do.
For me, I left the old organization that I helped found when we had over four hundred employees in four states. It became less fun for me. I still like the concept of the wee humble pub. As long as you build one as though it is the first of many, you will have the vehicle to go wherever you want.