We’re excited to introduce you to the always interesting and insightful Steve Jackson. We hope you’ll enjoy our conversation with Steve below.
Hi Steve, thanks for joining us today. What do you think Corporate America gets wrong in your industry? Any stories or anecdotes that illustrate why this matters?
This was a significant driver in my decision to own my own restaurant and operate it the way I believe creates long term success. I watched too many corporate groups focus quarter by quarter on “creating shareholder value” by making short term decisions with long term detrimental implications to the business. I looked on as they dramatically increased pricing during any traffic decline to help mitigate top line sales decline, cut product quality for cost savings/efficiency and cut labor impacting service and overall employee engagement.
I wanted to combine some old school restaurant principals with a new school people approach. We create as much of our menu as possible from scratch, daily. Our core product has no preservatives and is incredibly labor intensive. There is no other way to achieve the product quality and we stick to it with no short cuts. We pay our staff members well above the average restaurant of our type and once the schedule is posted, never cut their hours. Our labor percentage is higher than the average restaurant of our size but that doesn’t bother me. This allows us to focus on Hospitality and driving top line revenue. In addition, because the team isn’t overworked and their financial needs are met, we have an extremely low turnover rate that benefits the business in multiple ways. The true cost of turnover driven by treating front line workers as a line item on the P&L is what hurts Corporate America the most.
Steve, before we move on to more of these sorts of questions, can you take some time to bring our readers up to speed on you and what you do?
I started my career with Showbiz Pizza in 1989. I worked my way through the ranks over the following 30 years to be the Senior Director for an Entertainment/Restaurant brand with 200+ locations with an average unit volume in excess of 10 million per year.
I now own Bagel Cafe 21 in Richardson Texas. We specialize in authentic New York style bagels, breakfast and lunch sandwiches all made fresh daily from scratch the old school way. I’m incredibly proud of the product we produce but I am even more proud of how we treat our people. Our focus on people over profit, paying a living wage, not cutting hours and genuinely caring about each person as an individual is paying off in our hospitality and top line revenue metrics.
Any advice for growing your clientele? What’s been most effective for you?
When I set out on the journey to own a restaurant I wanted to prove that Hospitality, Operational Systems, and treating employees the right way drives revenue long term more than any marketing program. I’m proud to say that we have proven this for our concept. The first step was to establish system integrations and processes and add engaged, well compensated staff members that could handle more volume during peak periods. You have to be prepared for and scheduled for the level of business you want, not the current volume you are doing if you are looking to increase it. This is a hard commitment to make but if done right pays off in the long run.
We’ve done almost zero marketing besides sponsored google ads and are up an aggregate 27.9% in revenue over the last 18 months.
Do you have any insights you can share related to maintaining high team morale?
Treat them as individuals and realize why they work for you. They have individual needs, challenges that you must adapt to at times. Labor yes is the single biggest expense in most restaurant operations but anytime you focus on or talk about managing labor what you are really talking about is impacting the needs of your team members. Cutting their hours may make short term sense for the business because of a slow day or sales period but doesn’t change the fact that they have rent due, bills to pay and people to provide for. They get tired of being sent home early, not feeling heard and end up going elsewhere. Then you have to overschedule and train their replacement. The cost of turnover is enormous. The industry averages in excess of 100% turnover per year. How do you maintain hospitality, product quality and morale when the people are constantly revolving? Keeping voluntary turnover under 20% has been a pillar of our success.
Contact Info:
- Website: https://www.bagelcafe21.com
- Instagram: bagelcafe21
- Facebook: bagelcafe21
- Linkedin: https://www.linkedin.com/in/steve-jackson-825abb7/
