Ask Dave
(Or, What does Jeeves Know?)
December 2000
Please send your questions to dave@dinersoft.com

Q. Recently, I made a career move from a corporate level, back to a floor management position.  In general, I am much happier working "in the trenches".  However, I guess I had forgotten about some of the rude and demanding "guests", or maybe things are much worse these days.  Can you give me some advice on how to keep my own sanity, treat the customers with respect but not put up with unnecessary B.S. from overly-demanding whiners?

From "Back in the trenches"

A.  Dear "Back in the trenches",

I have made similar moves in my career and have had the same difficulty you have in dealing with customers. I will try to give you my system for dealing with customer gripes.

Customer gripes fall into four categories:

1. Legitimate with normal reaction to situation
2. Legitimate with abnormal reaction to situation
3. Non-legitimate with normal reaction to their perceived or made-up situation.
4. Non-legitimate with abnormal reaction to their perceived or made-up situation.

My first piece of advice to you is always to listen to the customer with an open mind. What I mean is sometimes your circumstance or mind frame may cause you to be less receptive to criticism than usual. Once you have evaluated your state of mind then you can deal with each situation individually.

For situation number one it's obvious you want to rectify the situation. This is a no-brainer for most managers.

For scenario number two I try to have empathy at first with the customer. Apologize; let them know we all make human errors and try to diffuse the situation. Hopefully this works but don't let them continue to demean you and the staff. In some instances I ask them to step outside to talk about the situation. In many cases this calms them down immediately because you have just told them they are acting irrationally without really telling them so. If this doesn't work I just tell the customer to leave as I don't need this type of guest in my establishment.
  
Scenario number three for me is the hardest to deal with because they seem to always want something for free. I first try to listen, explain our side of the incident and appease them but without giving the house away. In most cases this works but there is always that person who persists until they get what they want because you just don't want to deal with them and they don't upset you enough to tell them to go take a hike.

For the last scenario I have a short fuse. I will try to calm the guest down and explain our side and leave it at that. If the customer continues to be irrational I will evaluate each situation separately to see how I can best work damage control. Sometimes they have had too much to drink and I may enlist other people at the table to calm the person down or I may simply ask the person to leave if they are disturbing other customers.  I also look to the ambience of the restaurant as my guide.

Two things I do not tolerate are swearing or calling the staff names. I don't care what the restaurant may have done this is unacceptable and will be treated as such.
 
Lastly remember this isn't life or death so don't put up with B.S. if you don't have too. Walking away and taking a step outside works wonders.

Good Luck and don't forget most people have good hearts sometimes it just takes a little searching.

Dave

Q.  Dave, I am a student at the University of Washington partaking in a mock feasibility study of opening up a bar/nightclub in the Seattle area. I was wondering if you would be able to give me some ballpark figures concerning the opening of such an establishment. I would like to know what a good estimate price for operating a full service bar for one month is. We haven't been able to get any good information from the local bars or distributors, and I was hoping you might provide some concrete answers. Thank you for your time. 

Paul Jacobson,
 University of Washington

A.  

Dear Paul, 

To answer your question properly I need a little more info but I will try to give you a ballpark figure based on some assumptions of what rent, labor, COGS (cost of goods sold), DOE (direct operating expenses), utilities, other variables and fixed costs run in your area. I will also have to make an assumption of sales totals for the month and that you will not be selling food. 

First, let's say your sales are $60,000 a month. Next assume rent is 8,000 (this varies greatly from area to area). Typically liquor cost runs 20% - 25% in your area from my experience (I helped operate a restaurant in Vancouver, WA.) so we'll input 23%.  DOE costs for a bar would be between 2.0% to 4.0%--we'll make it 3%. Labor costs run from 20% to 30% (for a small bar) average that to 25%, including management.  Next, you have variables such as utilities, repair and maintenance, advertising& promotion and administration.  We'll take a stab at this and say it is 10.5 % of sales. Last there is your equipment lease or depreciation which could be anywhere from $1,000 to $10,000 depending how much you put up front but use $77,000.

Okay ready to total it up? Here goes: 

$8,000=rent
$36,900= cost % figures (based on a percentage of sales)
$7,000 = Equipment lease or depreciation
Total costs= $51,900

Please be advised that my answer is informal and you should consult a qualified accountant if you are serious about this venture.