Letter to a Son Entering the Restaurant Business

I came across this while cleaning out some files. It summarizes what I think is a sensible approach to building a business.

Dear Steven,

You haven’t pulled it off yet, but you’re close. While you have to focus on completing the deal, you have to seriously think about how you can make this business truly succeed. A certain percentage of the population has the courage to start a business. A much smaller percentage make it succeed. It takes work, guts and smarts.

Here are a few things I’ve learned over the years:

Cash flow is like the air you breathe. If you don’t get it, you die. If it’s poor, you are sick. Cash flow is the most important thing for a small business.

Don’t hire anybody unless you have absolutely no other choice. People need to be paid every week; you may not have the money to pay them and still pay your creditors.

Read the above paragraph a few times as it is very tempting to want to build a mini-empire of employees. Remember the name of the game is cash flow.

Don’t believe anybody who says you can’t miss. You can. You need to get people to come in and to keep coming back.

Sell things people want to buy not what you think they should buy. Customers pay your bills. (Repeat the last sentence every day.)

Time is an asset, but a diminishing one. You have less today than you did yesterday. Use it wisely.

Make the business a part of your life, not your whole life.

You are running a restaurant business not a social club. Be careful of how you treat friends. Be careful of hiring friends. A boss is not a friend in the same way.

Work harder than anybody working for you. Do the lousy jobs. Do every job well and make sure everybody else does. Every job is critical or someone shouldn’t be doing it.

Give employees a fair shake but don’t be afraid to fire anyone.

Be a good neighbor.

Have fun!

Good luck.

Dad