In conversation with Zsuzsanna Rozsa, founder of restaurant consultant group Art of F&B, on troubleshooting problems and maximizing profits
Tell us how you established a career in restaurant consultancy and why you felt there was a need for it here?
I have been living and working in HCMC for over five years, after spending six years in the restaurant industry in the UK, Spain and Hungary. Before starting Art of F&B, I worked as a general manager and operations manager at several F&B establishments, including restaurants, a lounge/night club and a resort, so I have a good overview of the entire spectrum of the F&B (food and beverage) sector in this city.
I saw that whenever I started a project at a new place, the owner(s) or top management had a specific project goal that could be solved within a short amount of time, so my extensive knowledge and experience were needed for that short period of time only. I also felt that once the initial, most pressing problems were solved, the restaurant stakeholders were no longer interested in further, long-term improvement of the restaurant. In other words, they saw that their house was on fire, called me in to put out the fire but once the fire was out, they didn’t think that making the house fireproof would be a wise idea. And, of course, in a few months the house catches fire again…
That’s why I see more potential in helping establishments as a consultant to solve their short or middle term problems and/or help them with a long- term growth strategy. In the short run, hiring a consultant may be a bit more expensive for a restaurant, but in the long run businesses can save salary costs of hiring a foreign manager as an employee. Also, as an outsider, I am not involved in the problems of daily operations and smaller issues, so I can see the structural challenges more clearly and I can really focus on tackling these.
You’ve been in the F&B industry in Vietnam since 2013, what trends have stayed and what fads have come and gone?
When I moved to Vietnam, restaurants in District 1 and 3 were mainly focused on serving tourists from the West (Australians, Europeans and Americans). Since Vietnam is seeing more Asian tourists the focus has shifted from pleasing Westerners with single-dish menus (which are usually too heavy for the tropical climate and are hard to share) to attracting Asian customers by adapting menus to Asian flavors as well as accommodating Korean and Japanese style dining customs, such as open fire BBQ places and sharing plates.
We must also keep a close eye on the emerging young, urban Vietnamese middle class who are eager to have fun, either the Asian or the Western way, and are willing to pay for quality culinary experiences. I have organized some very successful wine dinners targeting this social group and tickets in the price range of USD50 to USD100 were sold out within days.
It’s estimated that 60 percent of new restaurants do not make it past the first year, and 80% go under in five years. What are some of the common reasons why they fail?
There are three main issues that business owners here don’t take seriously and usually why their restaurant fails:
1)Lack of planning: HCMC is not the “Wild West” anymore. You cannot just jump into a project because your friend said that it will make you rich. Seasoned F&B professionals do a lot of research on how to set up their business in the most efficient way and how to minimize the risks of failure. Fortunately, or unfortunately, HCMC (Vietnam and Southeast Asia in general) is changing very rapidly and changes are not easy to follow, let alone predict. Local owners tend to underplan and “play it by ear”, hoping that they will be able to solve problems one by one if and when they arise.
Rarely do they have a clear idea of where they want their business to be in five years. This approach saves a lot of money and effort in the initial phases of the business and works well if there is a clear blueprint (either from Vietnam or from abroad) that local investors can copy. These businesses fail usually because they don’t have the cashflow to survive at least the first 8-12 months after opening. Ironically, this lack of planning and the absence of documented processes also becomes a problem when the business becomes successful because it will make it difficult to quickly “clone” the concept and open new branches or get an outside investor onboard to finance expansion.
In contrast, foreigner owners tend to overplan their business and have a hard time making their management and staff understand to follow this plan. Also, these very specific business plans often prove to be too difficult to change or adjust if and when the market or the business circumstances dictate.
2) Leadership failure: Local owners still prefer to hire a family member or close friend to take care of their business instead of hiring an outside professional. They supposedly do this to avoid risks and to be sure that their investment and revenues are “safe”, but in the end they actually take more risk by giving full control to a general manager or director who clearly has neither the knowledge nor the experience to run a restaurant.
3) Playgrounds restaurants: Many restaurants in Saigon are only side businesses of the owners, and their money- making business is unrelated to F&B. These owners are not really interested in their restaurant making a profit and are willing to finance eventual losses from their main business, but they rather like the idea of owning a place where they can take their business partners out for lunch or dinner to impress them. I call these restaurants “playgrounds” because they feel like the playgrounds of the owners, who enjoy the attention they get from their management and staff when they visit the restaurant. Once the losses become unbearable, they quickly close shop. These playground restaurants always fail because of lack of planning and bad leadership.
As a restaurant consultant, what do you notice first when you enter a restaurant, whether you’re there to work or as a diner?
The overall experience begins at the door with the welcoming and ends at the door with the goodbye. So a rude “welcome” by a moody security guard can immediately set a very negative attitude towards the restaurant. At the same time, a smile can work wonders, even if the host does not speak the language of the guest.
How the staff moves is also a good indicator of the quality of the restaurant. If they move calmly and confidently then I know that someone is in control and the staff knows what they should be doing and they are doing it. However, when I see that staff either isn’t moving or is running, it’s a sure sign that there is a problem and they are not able to pay as much attention to guests as required.
There is more to the restaurant industry than just consuming food and paying the bill, a lot goes on behind the scenes to make a restaurant run smoothly. What are the main areas that Art of F&B focus on to ensure both diners and restaurant owners are 100% satisfied?
Imagine a restaurant as a living organism. The main concept (or the DNA) of the restaurant is decided by the owners, but the actual service quality (or the “health of the organization”) is determined by the output of the people who work in it on a daily basis. In restaurants in Vietnam, the service staff is usually very young, motivated and eager to learn. However, this motivated staff is often managed and supervised by an upper management that has neither the knowledge nor the leadership skills to professionally manage a restaurant. One possible reason for this deficiency is that people currently in upper management positions got to this position fairly quickly (due to the explosive growth in F&B in Vietnam over the past 5 years) and didn’t spend enough time in lower level positions to learn “the trade.”
We can help with training these managers to equip them with the necessary leadership skills, so they can set an example of work ethics to their subordinates. Of course, we also train service staff in other areas of F&B service, including food and drink (wine!) knowledge, service knowledge, upselling and cross-selling, customer service, conflict resolution.
Many times, improvements in customer experience do not require large investments. With careful analysis of the available space, the layout of the restaurant can be altered to make it more functional and attractive to guests so the per-square- meter revenue can be increased without customers feeling overcrowded. In addition, profits can be increased by not only raising prices, but also by keeping prices intact and rationalizing portions, which are often surprisingly larger than necessary, thus adjusting food cost to actual customer consumption habits.
What type of projects does Art of F&B work on?
Each of my projects is unique and special to me, but there are a few basic types of assignment. My favorite assignment is opening a new establishment where we can let our creative energies run freely. We are a one-stop-shop and can provide advice, planning and project management services, from coming up with the details of the concept through finding a contractor for the construction and fit-out works, to training service staff and organizing the grand opening party.
We help with smaller projects as well. Currently, we are running a project to create the documentation and blueprint
of the daily processes and inventory management of a restaurant with two branches in D1 and D3. They want to expand and are preparing to open 3-4 new outlets in 2019 and need the blueprint to be able to easily clone their units.
We had another client who admittedly had no formal F&B training, but he has been successfully running a small bar in Binh Thanh. He asked me to review his place and their processes and paperwork to make sure that their daily operation management is on the right track. He is planning to open a new outlet in Thao Dien.
Recently, there has been a big demand by foreign investors looking to purchase existing restaurant businesses and we can help these investors by doing an F&B due diligence on the target restaurant. Needless to say, that such a screening can save the investor tens of thousands of dollars, especially when report is negative, and provided that we can come in and check the business before the sale purchase agreement is signed and the purchase price is paid.
Our team of experts have a large network of not only F&B professionals, but also musicians, entertainers, photographers, video producers, model agencies, make-up artists, etc., so we are also able to organize and manage large events for our customers.
When’s the right time to call in a restaurant consultant?
That’s easy, whenever the owner feels that their restaurant is not going as well as they think it should. The first hour consultation is free of charge.
Visit www.art-of-fb.com for more info