Restaurant Start Up & Growth
There’s no doubt that restaurateurs and their suppliers are critically dependent on each other. But sometimes the relationship can turn to a love-hate affair when each partner fails to look at the world through the other’s eyes. Operators deal with a continuous stream of changing prices, quantity and quality, handling late deliveries, or worse, deliveries that show up during peak service times. Then, when salespeople finally understand your particular restaurant’s wants and needs, they switch jobs and then starting knocking at your door as an employee of another supplier. What we don’t need is another credit application to fill out.
On the flip side, some operators treat suppliers like grease traps. Some owners always take the position that suppliers are full of garbage and can’t be trusted. They are rude to delivery drivers, abuse the salespeople and run them ragged. On top of it all, they think “net 30” means, “Whenever I get around to paying the invoice.” That’s one way to do business but for any startup it simply leads to a bad start and in just about every instance it’s a bad approach.
Issues aside, the reality is that purveyors are the link to goods and services necessary for this business. Like it or not, they’re an essential part of your business and you need them just as much as they need you. Period. Building a positive relationship with purveyors is more important now than ever.
As companies merge with larger suppliers, the selection of purveyors continues to shrink, making it tougher for a chef or kitchen manager to tell a supplier to take a hike. Consequently, it’s important that operators view suppliers as partners in the restaurant business. They have a vested interest in a restaurant’s success. As your business grows, so does theirs. If the supplier has extended a line of credit, your restaurant’s financial future is closely tied to theirs.
The first step in building a positive, trusting and lasting relationship with a purveyor is choosing not just the ones that best fit your needs but also the right ones, in general. The criteria should always include the “big three”: quality, price and service. What’s the best way to get those “big three”? Always ask for references and then take the time to really make the calls and interview the restaurants or retailers that your potential suppliers do business with. You’ll learn a lot early on and possibly save yourself thousands of dollars in both time and cash. Ask direct questions and inquire about their experience with the supplier, the length of the relationship and how long they’ve had the same salesperson. If they rave about the salesperson, get that person’s name. Often a salesperson can be the deciding factor in choosing a supplier. Treat the supplier like a prospective employee; look for motivation, passion, conscientiousness and dedication.
After the references are checked and you find that fellow restaurateurs have given your prospective suppliers good marks, meet with the sales manager and the salesperson. If it’s a small local company, don’t be shy about asking for a meeting with the owner. If the owners and sales managers are too busy to meet with a new customer it might be a red flag that you could have service problems later. Conversely, a face-toface meeting speaks volumes about the integrity of a company. It’s unlikely that a restaurateur would hire an employee without an interview so apply the same attention to detail with a supplier.
Another important rule: Never buy any product without trying it first, whether it’s mushrooms or floor cleaner. Ask for items that can be compared with currently purchased products as well as ones you would like to try. Sampling is an industry standard and is especially important with meat, fish and produce. Good distributors and brokers want you to compare because they are proud of the products they represent and know that in the end it’s all about making sure your customers are satisfied. You should also inquire about the handling of items in delivery. Suppliers typically handle products differently. For example, Farmer A may grow the same tomato as Farmer B but the latter may refrigerate the product — the type of handling that cuts flavor.
It’s essential to see, touch and sample the product before buying. A purveyor may send the highest quality, freshest product to you at first and then shortchange you later. Remember the quality that was sampled, and make sure that you receive the same quality level in future orders. The same goes for pricing. When bidding new pricing, beware of sellers who will low-ball prices to get your business. Once they have you on board, the numbers start to climb, hoping you won’t notice the increases. These are not the types of companies you want to do business with and is another reason to spend the necessary time on the early interviewing process.
If possible, visit the operation of the prospective purveyor’s business. Tour the warehouse. Look for an organized, clean storage space, free of debris and litter. If it’s a seafood, meat or poultry vendor, check out the cutting and packing room. Walk through the coolers and freezers. Look for a sanitary working area, which is neat and tidy. The best suppliers will welcome your interest in what they are selling and how they are handling it. These companies take pride in their product and use high standards as a point of difference from competitors.
Establish Ground Rules From Day One After you choose a new purveyor for your startup, it’s important to establish some ground rules. For a relationship to work there needs to be an upfront understanding of what each party expects. The supplier may want you to know the company’s delivery days in your area, and the cutoff times for ordering for the next day. You’d like them not to deliver during lunch, for example, and you may have some ordering specs for certain items. Whatever the information that needs to be shared, the key is it gets shared before the first order arrives at your backdoor.
Once both parties have agreed on terms, it’s very important that you keep your end of the bargain. And that means pledging to pay on time. Keep your order sheets updated, making sure that you don’t miss an order or forget to order items. This helps avoid miss-picks from your seller and limits the times you have to ask your salesperson for a favor to deliver an item you forgot to order. You’d like to save those calls for emergencies.
If the person checking in the product is different from the person who placed the order, use purchase order forms so the exact item information is at hand. This way mistakes can be handled when the driver is still at your door, making returns efficient, and limiting the number of trips your salesperson needs to make to your restaurant. Imagine yourself in the shoes of your salesperson; it should help to appreciate the benefits of working together.
Comparing products and prices takes a lot of time. But it is a necessary component of quality and cost control. Believe it or not it’s the difference between staying in business and closing your doors. You need to know that you’re always getting the best product at the best price. Make sure you let your salesperson know when you’re shopping their prices. At least once each year compose a sheet of items you’re using for grocery and produce. If you think you can get better pricing and quality, send out bids. Just make sure you’re comparing apples to apples; the product list needs to be as specific as possible, and of course, without the prices of your current supplier. You may or may not be looking to change your purveyor, but you have to keep your purveyor’s pencils sharp.
Also, keep yourself up-to-date on the current pricing of suppliers other than the ones you are using. Simply tell these companies that although you’re happy with the supplier from which you’re buying, you want to keep up with the market and not ignore opportunities to find better deals. You may have to take time for an occasional sales call or visit from these folks, but it’s always good to have options. Take the time to compare the prices of these companies to what you’re currently paying. This way you can stay on top of market prices for commodity items like dairy, meat and potatoes from your supplier’s competitors. Purchasing is one of the most critical jobs in a manufacturing company, as it ensures that necessary unfinished goods will be available, of sufficient quality, and at a reasonable price. In many ways, the back of the house is a manufacturing operation, with raw goods coming in the door as inputs and the finished products being delivered to the customers’ tables.
As your relationship builds with your supplier, items of their appreciation will start to come your way. These are lovely gestures; however, accepting tickets to a ballgame, free boxes of ribs for your company cookout, or an expensive round of golf, as inviting as it is, can be risky business. You need to know where to draw the line. My mentor always said, “Don’t make friends with your purveyors, or you’ll end up putting their kids through college.” Point being, keeping an arm’s length is solid business practice. Getting too close to suppliers can be dangerous. They start to take your business for granted and loose their competitive edge, as will you. You’ll stop comparing prices, and the level of trust you worked so hard to build could become foolishness. You still need to keep business first with these working relationships. This doesn’t mean that you treat your suppliers in an unfriendly manner; it just says that you realize the importance of keeping a business relationship first.
Don’t Forget the Drivers
Another important player in the purveyor relationship is the driver. They are the final link in the restaurant supply chain. The delivery people are as important as the sales representatives. They do all the hard work, battle traffic and are responsible for getting product to your door in good shape and in a timely fashion.
Drivers who deliver produce; meat, poultry, and fish; and linen need to be treated like royalty. These guys represent the foodstuffs and products that cost the most, are critical to your menu, and can easily be mishandled. Get to know the delivery drivers’ names and even a little bit about them. It’s nice to be able to ask a guy how his kid is doing in little league. Offer drivers cold water or soda in to-go cups when they make their delivery. Let them know it’s good to see them. Treating your deliverymen with respect and affability will lead to your product and delivery times getting the best consideration.
When I need product early on a Friday, I know my drivers will shuffle their route to hook me up first. When I’m busier than expected, my linen driver will leave us extra product, and often, off the invoice. A great driver can serve you serious savings by adjusting your pars with your business, keeping inventories low and saving you money. My linen driver gets fed lunch once a week, and during the holidays we send him off with a case of good beer. I know that when I’m stuck, he’s going to help me out.
On the flip side, if you love the company you buy from, but your driver is not doing his job or is disrespectful to your crew, call his or her boss. Any solid supplier worth their weight in kitchen towels will want to know if they’re not being positively represented. It’s important that your hospitality becomes a two-way street.
Overall, though, I’ve found that most drivers and salespeople are good people, who on most days have to take some guff from their stops. Keeping your delivery from being a negative one will only make your job, and that of your deliverymen, easier and more profitable. Embrace them and watch your level of service rise, and your blood pressure fall.
Be the Talk of the Town in a Good Way
Restaurant people are the most gregarious lot you’ll meet. They talk to each other, and create “the word on the street.” They can tell you how the other restaurants are doing and what they are doing. They know who’s doing well and who’s not paying their bills, where the crowds are going and which trends are hot. Some might call it gossip but it’s good gossip most of the time and it is amazing just how much your reputation and the reputation of your business is based on “the industry has it” commentaries of those calling on and delivering to you. If you’re a son-of-a-gun, everyone is going to know it and likewise if you’re tough, but respectful and fair, that word gets around to everyone. And that includes restaurant customers hunting for a dining recommendation from somebody in the business — whether that be a supplier or another restaurateur.
As reprinted with permission by Restaurant Start Up & Growth