Sunday, August 30, 2009

Know Your Business, Employees, and Customers

In 1994 the husband and wife team of Dewey Johnson and Wanda Oland purchased a rough and tumble saloon in Apple Valley, Minnesota, that had metal doors so that glass wouldn't break if anyone got forcefully tossed out into the parking lot. Over the past fifteen years-- through hard work, determination, and a passion for the business-- Wanda and Dewey have transformed that former rowdy watering hole into Rascal's, one of Apple Valley's most popular family restaurants.

Not only have Wanda and Dewey adapted and demonstrated flexibility in building their business over the last-decade-and-a-half, they have shown particular savvy in navigating through the current recession. Wanda and Dewey have a strategy for success that can be summed up as follows: know your business, know your employees, know your customers.

Wanda and Dewey know their business. Wanda has spent her entire professional career in restaurants. Dewey's background is as a general contractor, but much of what he learned in that discipline translates to the restaurant industry.

When business started to slide with the economy, Wanda and Dewey applied the principle, "If you want to find out what's happening with your business, work the back room." Dewey spent months in the kitchen working hard, talking with employees, and discovering potential efficiencies.

For example, Dewey built a laundry room and Rascal's now washes its own linens at significant savings. The couple decided to shop different vendors for such things as paper, chemicals, groceries and credit card processing, and realized additional savings. Wanda says, "We took a good hard look at everything."

Wanda and Dewey have gone through three significant remodels, and Dewey has in effect acted as the general contractor. Dewey hand-built every table in Rascal's. He custom built the bar with thick maple planks formerly used as bowling lanes. Yes, bowling lanes. He has raised and lowered flooring and installed windows. He put in auto-paper towel dispensers because they are more efficient. He has done it all with the physical facility.

The couple went to a part-time bookkeeper and because margins are small, Wanda pays extremely close attention to every penny that comes in and goes out. She says, "Everything we touch matters." All a part of knowing your business.

Wanda and Dewey know their employees too. A number of their people, including kitchen help, servers, and at least one bartender, have been with them from the beginning. How do they achieve such loyalty? They talk with and listen to their folks, and they treat them right.

With the recession, like countless other businesses, Rascal's watches labor hours closely. But instead of releasing people or reducing hourly pay, Wanda and Dewey developed a flexible schedule that allows employees to swap hours and take time off when they need it. They have not backfilled some positions. Wanda does her best to manage labor efficiently based on the flow of customer traffic and to spread out available hours fairly among the staff.

From a morale standpoint, Rascals' employees see the owners there virtually every day, dressed in blue jeans and ready to work. Wanda says, "Don't ever ask an employee to do something that you're not willing to do yourself."

Finally and perhaps most importantly, Wanda and Dewey know their customers (Wanda calls them their "guests"). They understand their guests expect high quality food and excellent service, and in these two areas nothing has changed. Many menu items are home-made. They make their own dressings and sauces. They fillet their own walleye, always fresh, never frozen. They whip up their own batter. They boil and mash their own potatoes. Portion sizes have not changed.

During the down economy, Wanda and Dewey figured their guests would appreciate an opportunity to still go out to eat, but save money. They devised a daily calendar-- featuring enticements like inexpensive burgers, free video games and musical entertainment, or a kids-eat-free from 10 to 2 deal on Sundays-- that encourages people to come out and enjoy themselves any day of the week without spending too much.

They have also tinkered with the menu, focusing on foods that remind people of good old-fashioned home cooking. Guests can now eat meatloaf, turkey, or pot roast at Rascal's.

Rascal's offers catering, serving corporate groups, weddings, local schools, and others. Rascal's hosts fundraisers, most recently an event in support of the Courage Center. In short, Rascal's does whatever is necessary to market their product and reward-- and hopefully build upon-- a loyal guest base.

Survival in the current economy is a struggle even for the healthiest of businesses. But those organizations that understand the business they are in, treat their employees with respect, and focus continually on the needs of their customers will do best. Wanda Oland says it well: "We touch a lot of lives. We'll make it through and we'll be stronger for it."

Two final but important notes: The metal doors are gone, thanks to Dewey Johnson. And I can personally testify that Rascal's homemade meatloaf is to die for. What could be better during a recession than comfort food?

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