In episode 18 of the Your SocialChef Show, I talked to Wes Lambert, CEO of Restaurant and Catering Association, and discussed his latest book “Saving Hospitality One Venue At A Time”.
Podcast Download
Get Notified Of Future Episodes Apple Podcasts | Android | Email | YouTube | Stitcher | Spotify | RSS | More
Interview highlights:
0:43 – 5:38 The impact of COVID-19 to Hospitality Industry
5:47 – 16:20 The 7 Pillars to Pivoting Your Business Through a Crisis
Download the PDF Transcription
Transcription:
Mark: Wes, thank you for coming live today on Facebook. Wes is CEO of the Restaurant and Catering Association. And Wes just recently published a book, “Saving Hospitality, One Venue at a Time”.
Wes, can we talk a little bit about the state of the industry today, and then maybe a little bit about the book later on. Go ahead.
Wes: Sure. Sounds great. So the accommodation and food services industry, which is the way the ATO or ABS describes our total industry, has been decimated by COVID-19. It was the hardest-hit industry. We lost 441,000 jobs at the peak. Revenue just for restaurants was down 60% on average at the bottom in April.
Our industry hasn’t fully recovered, and it will not fully recover until the borders are reopened between the states for domestic visitors, and the international borders are opened for international tourism, which combined makes up over 30 cents on the dollar of every dollar spent in accommodation and food service.
So ultimately, our industry will remain down from previous years, pre-COVID. In addition, there are now further restrictions in Victoria, a full lockdown, takeaway and delivery only. And in New South Wales today, some additional restrictions were added, capping numbers in restaurants, pubs, clubs, and hotels, and also severely limiting the wedding industry, which had just begun to recover.
In Queensland, you can travel there from New South Wales, not Victoria, but if you’re from a hotspot, you certainly cannot visit Queensland, which is an ever-increasing list. In addition, Queensland has some checklists for businesses as well as caps in place to ensure that any outbreaks are limited in the hospitality industry, which is surely keeping the industry slightly depressed in Queensland. South Australia has for all practical purposes, moved into a fairly decent area as far as hospitality goes.
However, they continue to have the border shut with Victoria, which is quite damaging to domestic visitors. Northern Territory, Western Australia, have all but opened up their hospitality industry. ACT remains similar to New South Wales, as is Tasmania remaining with lockdowns.
And so ultimately, oh, excuse me, not locked down, there’s some restrictions in place, some caps. Ultimately, until COVID-19 vaccine comes to Australia, and comes to the world, our industry is going to need support from the government. It’s going to need Restaurant and Catering to lobby on its behalf to get the best outcomes, including some changes to JobKeeper 2.0, to some words and verbiage to ensure that more businesses remain eligible for JobKeeper 2.0 from the end of September through to the end of March.
In addition, continuing to lobby for the removal of caps, and the removal of the one per four square metres, so that hospitality businesses that are larger can continue to improve. As well as changes to the FBT, the deductibility of business meals, GST, and CGT.
Mark: Wonderful. In terms of easing restrictions and moving into a more optimistic climate, do you think when the warmer weather kicks in, things will look better in terms of virus spread?
Wes: Ultimately, that is not the case in jurisdictions that are in the summertime. In the U.S. the need to be inside and air conditioning created a scenario where there were more cases inside. And so the health authorities tell us that being inside and around others, in medium to large gatherings, is the number one most high-risk situation to be in for COVID 19.
There are ways to mitigate that risk. Certainly, taking of names and details for tracking and tracing will limit clusters from growing, and limit the spread, when inevitable outbreaks happen in a suppression strategy.
In addition, pre outbreak, Restaurant and Catering has created many resources, and worked with many state premiers and governments on departments to come up with COVID checklists, COVID safe checklists, COVID safe training, guidelines both for restaurants, cafes, caterers, small bars, and coffee shops, but also wedding function venues
The governments have adopted those plans for the most part, and they go that extra mile to ensure that patrons are, feel that that business is COVID safe, and also ensure that those businesses do not become the Ruby Princess of Australia, and create a situation where hospitality gets blamed for outbreaks and for behaviours.
Mark: Thank you, Wes. Wes, let’s talk a little bit more about your book, “Saving Hospitality, One Venue at a Time”. What is it all about? And congratulations!
Wes: Thank you. Someone last night told me that there’s a book in all of us, you just have to write it. And so this perfect storm of drought, bush fires, floods, and the coronavirus, it pulled the book out of me in the middle of the crisis. It took me a couple of months, and nights, and weekends, to write this book, “Saving Hospitality, One Venue at a Time, The 7 Pillars to Pivoting Your Business Through a Crisis”.
And ultimately, it draws upon my, and I say this reluctantly, my 30 years of hospitality experience. I turned 45 a few days ago, and I have been working in hospitality since I was 14. So 31 years of experience, and most people don’t know I started in hospitality, being a lobbyist to the CEO of a peak body. I could’ve come up with a policy or a different avenue, but I started flipping hamburgers in a fast food restaurant. And so this book draws upon the 31 years of experience to advise, to help restaurant tourists, to help restaurant managers, leaders in the industry, to have some ideas about how to pivot their business through a crisis.
I will reveal the seven pillars. The first is finding a trusted mentor, of which I have many, and I mentor many people. They’re gonna give you good advice outside of your partner’s, your spouse’s, outside advice, very important, especially if they’re in sister industries, or even different industries, to help you to see things differently.
When we all run in the same pack, when we all have the same ideas, oftentimes, we can get stuck in what’s called groupthink, and we all begin to say the same things, and most certainly mentors can get your mind possibly on a different path. So it’s very important.
The next is understanding your finances. I talk to restaurant tourists, time and time again, that do not understand their business P and Ls. They turn information over to their accountants, to their advisors through Xero, or in some cases, a box full of receipts, God forbid, but they don’t actually understand how to read a P and L, and put one together. It’s very important that you understand it’s your business, it’s no one else’s. There is no one else to blame, if your numbers are not right.
Creating a forecast to predict the future. Ultimately, you need to know if the efforts that you’re making today will have a return on investment or if your business will continue to be in the red. If your business is going to continue to be in the red, you either may need to find other funding sources, equity, debt, mom and pop, or friends and family, there’s lots of sources, but ultimately you need to know if there is a future doing what you want to do in your financials.
Oftentimes, people don’t realise that a year or two from now, if they borrow a lot of money, without thinking about the ramifications of interest, and principal, and balloon payments, that they end up in a tough spot, because they didn’t forecast their sales and their costs through that point. Then you use those financials and your forecast to make the plan, and you use those numbers to measure against it. Making a plan is typically a financial plan, a business plan, but it oftentimes will include the things you want to do, which is the next pillar, which is creating new revenue streams.
So your plan based upon your finances, if you’re in the red, needs to include new ways for you to make money, if you wanna stay in business. Some of those new ways could be grocery, takeaway, self-delivery, app delivery, bespoke teaching, cooking classes, teaching experiences. They could be any number of things to add to, or supplement your bums on seats. Ultimately, you will need to create new revenue streams, and pivot your revenue streams through a crisis, especially when there’s a second wave, and you may have to go to ideas that you once thought you would never try.
Then you execute your plan. You do it. You have to try, you have to do it. You have to get stuck in, you have to get in the trenches, you have to lead from the front. And then you have to continue to pivot, some things will work, some things will not, and make any changes that are necessary. Don’t be afraid to say something failed or doesn’t work for you. It’s your business, it’s gonna be different than the business next door, it’s gonna be different than the business around the corner, it’s gonna be different than the business of your peers and your friends. Every business is different. There’s a little bit of fairy dust magic in every hospitality business. So they’re all going to perform differently. They’re all going to present to customers differently. So it’s just very important that you don’t give up.
However, there is nothing wrong with failure. And I know the F word is not used very much in Australia because we just don’t like to fail, however, lots and lots of famous people, the founder of McDonald’s, Michael Jordan, Oprah Winfrey, all had major failures in their life that they learned from, grew from, and they became billionaires. So please, don’t worry about a situation where you do have to hang up the towel, it happens. It happens very often in hospitality. The turnover rate in our industry is one of the highest in any industry, but do not get discouraged.
Ultimately, if the forces are outside your control, sometimes hitting Control-Alt-Delete, and starting over, maybe the right thing to do, walking away from a lease, walking away from a situation that you know will not improve, it’s not you. The COVID-19 crisis, the perfect storm of 2020, it’s not you, it’s not your management skills, it’s not your business skills, it’s not your brand. It’s not you. So don’t be afraid to learn from a failure and grow.
That is “Saving Hospitality, One Venue at a Time.” Yeah, I encourage any hospitality professional to grab a copy. You can get it on Amazon, you can get it on Blurb. You can go to www.weslambert.co and order directly. You can order it in physical copy, which is one of these. Or you can order a digital copy and receive it, same day. So there’s certainly lots of ways to get the book. It’s free for Restaurant and Catering members, please contact your member manager in your state, and they will guide you to getting a free copy.
Mark: Wonderful, Wes. I did want to comment on the first pillar, the “getting a mentor”. I recommend all the time that people do get a mentor or a coach, because most of the time, business owners don’t have access to boards of directors, or shareholders, or general managers, that they can get some kind of wisdom, or a kind of a mastermind. Having a mentor or a coach is very, very important. So starting the book with this point, I’m absolutely loving it already. And I can’t wait for my copy, Wes.
Wes: Thank you.
Mark: No problem. Well, is there anything else would you like to add, before we wrap it up?
Wes: No, just ultimately, this is just one of many, many resources. Restaurant and Catering, if you’re a restaurant and you’re not a member, please join. We are here to advocate for you. The membership value is tremendously more than what we charge in a very tiny membership fee for you to be a part of Restaurant and Catering, if you wanna have a voice. I take a rainbow, excuse me, a cran box of colours from Arctic white to midnight black into the back of my head every day. There’s that many opinions, comments, critiques, praises, and it has to come out of my mouth, the rainbow. And so ultimately, if you wanna be one of those crayons, if you wanna have a voice of what you believe should happen in hospitality to both local, state, and federal government, we are that voice. That is what we do on behalf of hospitality every single day. And we love to hear from members, we love to hear ideas, we love to hear potential changes and pivots, and you name it. So it’s not just about us telling you what we’re doing for you, it’s about you being able to communicate through us to the government. As well as many other member benefits, like the awards recognising your business against your peers, and the wonderful service, and hospitality, and food quality that you have, and the ambiance and atmosphere within your restaurant. To industrial relations advice, migration advice, and training and education, and certainly our member benefits and discounts with many of our partner suppliers. So that is Restaurant and Catering.
Mark: Thank you very much for your time today. I really appreciate it. And probably I’m looking forward for another one to have you here, and then maybe we can get another update on the industry, and what’s going on, hopefully no more restrictions, and things will start to get better soon.
Wes: Okay. Anytime, Mark.
Mark: Wonderful, wonderful.
