Robbing Peter to pay Paul

This is my story of owning a restaurant from day one. It starts back in 2002 and includes all of my heartaches, triumphs, ups-and-downs, sacrifices, financial struggles and more.

In a college town like West Chester, Penn., where Avalon is based, most everyone goes home for the summer, making it a slower time for businesses. It was 2003, and we had been running our new menu for a few months. The response from customers seemed pretty good. Weekdays were still very slow, but weekends were consistently busy. To me, the kitchen still seemed rushed, but I managed to convince myself that this was the norm for the profession.

The restaurant’s financial situation, however, was a whole different story. Every day was critical and there couldn’t be any missteps. You see, my new business model was to rob Peter to pay Paul, pay Peter back tomorrow, then rob him again the same day. It was like living the life of an embezzler: You can never look away, not even for a second; you must always be two steps ahead of everyone else, and never a day off. One bad weekend of business and I could be finished.

Each day started with me getting out of bed, grabbing a cup of coffee and running to my computer. I logged into my bank account, not to see how much money I had but to see how negative my account was. I would look to see what checks were being presented to my account that day. Then, I would decide which checks I could afford to let bounce and which ones meant I needed to run to the bank and make a deposit to cover. I quickly became a master of banking (for people with no money, that is.) I learned which banks gave me extra time by re-depositing bounced checks twice (this means I give you a check, you deposit it, it bounces but your bank gives me a second chance before letting you know.) I also made sure I befriended the right branch personnel, so I could make deposits in the morning after the checks were presented and get the bank to still pay them.

Each day I would take the money from the prior night’s receipts and make a deposit. This was usually enough to get my checking account just on the positive side. The next day, new checks would again drain the account to a negative amount and I would repeat the process all over again. If I wanted the checks to bounce (because I knew they would get re-deposited a second time and I could use the money for something else) I would make the deposit later in the day, after the checks were returned. This way, I could use the little money I had for the most gain.

Oh yeah, did I mention that the bank would charge an additional fee of $30 per bounced check? At 5 or 6 checks a day, that added up.

This is a perfect example of how desperation in this business causes you to live in the moment. How we can easily end up in vicious cycles that cause us to be blind to a much bigger picture. I would manage each day to get new product in the doors, pay checks with no or very little money and never think twice about paying almost $2,000 a month in overdraft bank fees. My own solution was creating a much bigger problem. With one week of really bad business, the domino effect could be devastating.

Each day presented a new battle that I needed to overcome. I would revel when Saturday morning arrived. You see, Saturday had everything to offer: No checks are presented to the bank over the weekend, the electric and phone company won’t shut off service on those days and most importantly, I would receive a small cash injection that would (hopefully) get me through another week.

By Monday morning, after finishing my weekday banking routine, I’d be wondering why business was so good over the weekends and so slow during the weekdays. My food must be good, otherwise why would so many people come on the weekend? I realized that I needed something to boost the business, something that would bring in more business during the week. I needed that extra cash injection that would break this cycle and free me from the jail I was living. Some type of quick fix. Later that day my prayer may have been answered. I received a phone call from Philadelphia’s most important food critic….I was being reviewed!

In addition to being an irreverent blogger, John Brandt-Lee is chef/owner of Avalon Restaurant in West Chester, Penn.. Don’t worry, over the past 9 years, he’s learned many lessons and grown into a successful restaurateur. He just announced that he’ll be opening a second restaurant, Avalon’s Pasta Bistro, in Downingtown, PA in the Spring of 2011. Keep reading for more about how he went from a clueless restaurant owner (in 2002) to a thriving restaurateur, today.

Gotta Have Hand

From Seinfeld:
George: She has the hand; I have no hand. How do I get the hand?
Jerry: We all want the hand. Hand is tough to get. You gotta get the hand right from the opening.

That quote from Seinfeld shows sums up my relationship with my chef. Not knowing where to turn after I nearly lost my restaurant in a sheriff’s sale, I decided to have a sit-down with him. Let me first say that attempting a sit down with no balls, no plan and basically no clue is a bad idea. You can’t confront someone and hold them accountable without pure confidence in what you’re saying. Otherwise, you put yourself in a position to be quickly manipulated.

To any seasoned restaurateur, the kitchen is a really good place to start when trying to fix a huge debt-to-income ratio. To a newbie restaurant owner like me, running a cost-effective kitchen was a tremendously difficult task -- almost impossible to complete when we couldn’t even keep our kitchen clean!

But I was desperate to get my restaurant on track and could feel my frozen blue lips slipping beneath the surface. I didn’t know how to fix the problems. Unfortunately, I was seeking advice from the core of the problem itself, the chef. Our conversation started with a careful explanation of the situation. I said we were bleeding financially and we couldn’t pay the bills. I asked for his suggestions for fixing the problem. Like a dummy, I just opened myself for manipulation-- I gave him “hand.” Instead, I should have said, “Your kitchen is a screwed-up mess, your staff is disorganized and every night the trash cans are filled with usable product. This is completely unacceptable, especially while I am taking one call after another asking for the money that you just threw away.”

Once again my lack of experience left me in a position of ignorance. The chef turned to me with a smile. He said the menu and the restaurant were too big for the number of staffers we had. He said we needed to redefine who we were. He said we needed a new menu and that we needed to update the décor. In my head I was thinking, “You have got to be kidding me! This restaurant is in the crapper. I can’t pay the bills and you think increasing payroll, buying some new decorations and a smaller menu are going to fix the problem?” But not having an answer of my own, I moved forward with his ideas.

So, I buried my head in the sand. I borrowed some money from bank Italiano (let’s just say cash in a brown bag from Vito), changed some decorations, bought new menu covers and brought an extra set of hands into the kitchen. Now it was time to unveil the chef’s new menu, and if all of the calculations were correct …. problem solved!

The Sheriff Wants to Sell my Restaurant for Me

No tourniquet could possibly be big enough to save the restaurant from the geyser of blood spilling out and its impending doom. Although business was good on the weekends, the weekdays were slow and the debt continued to mount. It was August 2003, a little over a year into my new venture and more money was going out than coming in -- never a good business model. As I switched from one purveyor to another (leaving a large un-paid balance with each) I found new ways to justify my blind eye to the current financial state. Payment plans extended some time, followed by COD deliveries and lastly payment with bad checks. I pushed the envelope for as long as possible before being cut off. As a personal justification to never paying, I would initiate a fight mounted with lies, stiff them on the bill and just kept trucking along, self blinded.

As time went by and I continued to fool everyone (mostly myself), I noticed the game began to get harder. Did purveyors actually correspond with one another? Did they discuss their accounts -who was good pay and who was a deadbeat? Did Joe’s Fish Company tell Billie’s Produce market that I gave them a stiff one and then told them to go screw themselves. YES THEY DO! And, one day while sitting at the restaurant two deputies from the sheriff’s office came walking through my front door. I cordially said, “Hello” and they cordially said, “You have been served.”

I wasn’t concerned that my restaurant was being offered on the public auction block for a $15,000 seafood bill. I thought that with a phone call, some money down and a payment agreement we could have this matter resolved quickly. Far from the truth…I had finally met my match. I wasn’t dealing directly with the purveyor anymore but rather a collection lawyer who worked for all the purveyors. He was good at what he does. We exchanged a few phone calls and tried to come to a resolution. (I didn’t have nearly enough money to pay the debt off.) During one phone call he said “Mr. Lee, you have one week to come up with the money and, as a courtesy, I won’t call any of my other clients and let them know they shouldn’t sell you anymore….see you at the sale.” I can probably count on one hand the amount of times the words “me” and “fear” had come out of my mouth in the same sentence.

My encounter with this lawyer was one of the most pivotal moments in my career as a restaurateur. He used tactics I was unfamiliar with and they scared the shit out of me. With a sheriff sale looming just days away I began to beg borrow and steal (by steal I mean robbing Peter to pay Paul) as much money as possible to offer some sort of payment. I didn't come up with nearly enough, but the lawyer was willing to work out a payment arrangement (something I now think he knew all along he would do) and finally let me off the hook -- 24 hours before the sale. Never had an affirmation been so clear…I was a bad and blinded businessman. I needed to re-evaluate my entire business model in order to stop the bleeding. I needed to change my business practices in order to restore my reputation. So I called every purveyor, apologized, and made what I thought could be affordable arrangements to pay them all back. Some hung in there with me and some told me to go screw myself. My inexperience could no longer be a crutch, things needed to be fixed—fast! But was I already in way too deep?

Time to Take Off the Rose-Colored Glasses

“…I screwed myself—and, eventually, had to work hard to get un-screwed. And I am not going to tell you how to live your life. I’m just saying that I got very lucky. And luck is not a good business model.” – Anthony Bourdain

Anthony Bourdain was talking about his drug addiction when he said that, but in my life, this quote applies to the bad business decisions I made early in my career as a restaurant owner. I now know that with some of my decisions, I screwed myself, and like Anthony, I was using luck as my business model.

Despite our Valentine’s Day disaster, we were able to get our act together and run a functioning dining room. But we were already in a financial hole, and the slower summer months were now upon us. I was lucky enough to have the opportunity each day to keep my restaurant open, but it was definitely time to clean up the business model and stop the bleeding … time to get un-screwed. I had made some bad decisions and owed quite a bit of money. I needed more money to continue to run my business. Purveyors were starting to give me crap, and keeping fresh, new product coming through the door was a real challenge. Making sure my employees remained calm became as important as making sure the mounting debt went away.

Unfortunately, with my lack of restaurant experience, I had absolutely no idea where to start. The businessman who sold me the restaurant (to whom I made a large, late mortgage payment every month) suggested I look at the kitchen. He said he noticed it was extremely disorganized and I had lots of money -- via spoiled product and usable scraps -- going in the trash. “That is your money being thrown away and one of the main sources of your bleeding,” he said. My kitchen did always seemed to be scrambling, still prepping when the first customers were seated for dinner, running out of product and, well, simply put… always in the weeds.

On a typical Saturday night, we served an average 80 covers with four people in the kitchen. It was like watching a human tornado. Sauces splashed all over the place, sheet pans were thrown all over, dirty sizzler platters, wrappers and papers were everywhere. If it could be thrown, crumbled or squished, it was on the floor. Even cigarette butts.

For two blurry hours the staffers ran frantically, always two steps behind. Customers’ emotions were mixed. Some were happy, some were quiet and some complained. In the end, everyone received average service and food at best, yet, the staff felt great. The general consensus each night was that we’d won the battle and lived to serve another night. Unfortunately, I believed this too.

When Saturday dinner service was complete and everyone was coming down from the high of dinner rush, the line cooks would give the equipment a quick scrub-down (stepping over the immense pile of refuse and dirty pans on the floor), do a half-assed wrap-up of the remaining product and rush out the door to find the next high. Then, after everyone was gone, I would watch a Mexican guy use a push broom to clean the kitchen line for $8 an hour. He would work meticulously while shaking his head in disgust. His objective, non-jaded view allowed him to see things clearer than the owner, even though he didn’t speak English. If I took off my rose-colored glasses, I would see what he saw … a screwed up restaurant!

But this was all I knew; this was how I thought a kitchen was run. Customers seemed to be happy - for the most part – and I had a good, capable chef. So why would I think otherwise? We may have won the battle, but the war was just beginning and my luck was running out.

Valentine's Day more difficult than we had anticipated

The date was, February 14, 2003 - Valentine’s Day, an extremely busy restaurant day. This would be our first really challenging shift as restaurateurs.

We had only owned the restaurant for a few months and after hiring our new chef and kitchen staff, my wife and I were busy concentrating our efforts on making sure the main dining room ran properly. We quickly realized this was going to be more difficult than we had anticipated. We needed help. Our chef knew of someone who had been in the business for years, worked in the big city and was willing to come out a few nights a week to give us some pointers. Wow! After just one visit we learned that everything we thought was right -- was wrong. “Why are your servers carrying dirty glasses through the dining room with their fingers in them, gross? Do you know your servers are not supposed to take bottles of wine away from the table? Your server just introduce himself by saying you guys, does he know that the person with the make-up isn’t a guy? Do your customers always eat their dessert without utensils?” Let’s just say we really needed the help!

So with our big night ahead, a couple months of training, and a new kitchen staff, we were ready to take on Valentine’s Day-- the busiest restaurant night of the year. We had been a little slow the past few weeks and could really use this boost in business. I set the prices higher than normal (‘cause this is what we restaurants do on holidays), prepared a limited menu, added lots of tables for 2 in the dining room and booked twice the number of reservations we had ever had in one night before. My wife was dressed to the nines, a large beautiful flower arrangement was delivered for the dining room along with 12 dozen long stem roses to give away to the lady customers and everyone was excited about the prospect of an evening of really good revenue. Everything was perfect! What could go wrong?

The first customers started coming promptly at 5:30. They were greeted and seated, handed menus and roses, and everyone was very happy. Then 6:00 came and more people came and then 6:30 lots more and 7:00 so many more that the greeting and seating had stopped. The line of people waiting was growing out the door and down the block and people weren’t so happy anymore.

Servers were now becoming frazzled. The emphasis became getting customers out and tables reset, rather than taking care of the ones who were seated and still eating. It was a domino effect that just kept spiraling out of control. By 8:00 the line was down the street. My wife was hyper-ventilating in a brown paper bag (this is true, she couldn’t face another angry customer yelling at her). The beautiful flower arrangement was knocked to the floor and smashed by an angry mob by the front door trying to find out when they would be seated. Most customers who were waiting ended up leaving and the few that were seated were so angry that there was no pleasing them.

Later, as I sat having a few drinks and smoking what by now would have been my second pack of cigarettes of the day, I pondered the evening. I was angry at everyone’s mistakes and how poor the night went. I thought was a strong leader keeping everyone directed and the chaos to a minimum. As both my adrenalin and rage decreased I realized that this was far from the truth. In actuality, I was afraid, screaming at everyone else to do the things that I either didn’t know how to do or was scared to do. I didn’t want to deal with an angry mob waiting to be seated, so I said I was too busy & yelled at my wife and told her to do it. I should have taken a stand, humbled myself, made some quick platters of hors d’oeuvres, and gone to the front door. I should have listened, said I was sorry and that the wait was going to be a bit, that we had screwed up. I should have said, enjoy these hors d’oeuvres and we will be with you as soon as we can. Instead I was a coward who sent my wife in to do the dirty work, un-armed no less.

It wouldn’t be until years later that I would learn a valuable lesson from the night. A lesson that would help me to grow from a restaurant owner to a restaurateur. I realized that being a restaurateur is so much more than just owning a restaurant. It means taking personal responsibility for the quality of your staff, service and food. I can’t think of better demonstration of the golden rule (Do to others what you would like to be done to you). I learned that being a restaurateur is being a leader and your staff is a direct reflection of you and how you treat them.

Our First Menu

Take a ton of money, ask someone to give you two quick kicks to nuts, grab the money and throw it out the window. Take two aspirin, apply ice and repeat in the morning. This is the best analogy I can come up with to describe my experience creating the first menu from our newly crowned chef.

Running a small BYOB restaurant can present many challenges, one of the biggest being food cost. Not that designing the menu isn’t difficult for a restaurant serving alcohol, but for a BYOB, not having those extra points from alcohol profits means labor cost and food costs have to be dead-on at all times. This is a simple concept to grasp now -- eight years later -- however, back then, building a house with some nails, a hammer and some two-by-fours would have been an easier concept to understand. So once again, with my lack of knowledge, big ego and immense stupidity, I sat down with my new chef to create a menu.

Let me preface this with a clear understanding of what style menu we were already serving. Oh wait, it wasn’t a style, it was a cop out: American continental, aka the ubiquitous term used by every chef/restaurant owner who really hasn’t honed in on a concept or style of cooking. It includes wonderful sliced prime rib (king and queen cut, of course) or a chicken roulade with spinach and goat cheese, maybe something Italian, like a pescatore or scaloppini of some sort. We would round out this “beautiful” presentation with a superfluous garnish, such as an inedible orchid and a beautiful carrot and parsley confetti strewn all over the rim of the plate (They aren’t teaching this style of presentation at cooking schools anymore...right?). The menu was huge, but easy. Everything was served with mashed potatoes and a mixed veggie, and a special sauce that started with a roux or Minor’s chicken base. It was old, it was stuffy and it was all I knew. This was what a good restaurant meal was to me.

Before all you chefs from the ‘80s who are now teaching at cooking schools get your thongs in a bunch and fire nasty comments at me, let’s get a few things clear. I know this style of cooking had its place once, and that it even made a little comeback as comfort food. I am also aware that celebrity chefs like Jose Garces have opened restaurants using the term American Continental. But, I can assure you, they all have morphed into more modern concepts with an emphasis on home-style cooking that not only has foundation, but also their creative twists.

Back to my meeting with the chef. He brought me a menu with about six appetizers, two salads and maybe eight entrees. I looked at it and said to myself, I have no idea what any of this shit is. Where is the fowl section? (I actually spelled it “foul” on my first menus) The meat section? Where are all the choices? What the hell is a hanger steak and why isn’t there a filet mignon (served six different ways?) I know this guy was from the city and he did a more French menu but to me, this was just unacceptable. I needed more choices, more variety more…..American Continental! The stinger was when he told me that I shouldn’t be showcasing a dessert tray to tables. He said that this was a fine dining establishment with white tablecloths…not a diner. He said we needed to make a dessert menu. So I ordered some menu sleeves and printed DESERT MENUS (Yes, I spelled dessert with one “S” on my early menus too – which was pretty embarrassing when a customer asked if it meant that all the desserts were dry).

After a few go-rounds, we agree on a menu that was about 25 percent smaller than what I wanted but was about 50 percent bigger than the chef wanted. Now, it was time to unveil the menu and learn some very, very valuable lessons about food costs, labor costs, cross utilization and sheriff sales! I would say “good luck to me,” but looking back there isn’t a triple seven anywhere that would have helped me from going through the hell I was about to go through.

No Chef...No Clue...No Shit!

So there I was: no chef … no clue … no shit! I was handed a restaurant with no papers signed, had just fired my drunk chef (with no replacement) and really had no clue as to what I was supposed to do moving forward. Anyone with even a small amount of restaurant knowledge would have said I was doomed … period. Fortunately for me, my one really good attribute is my ability to make things work under pressure. The more pressure there is, the better I seem to perform. Just to be clear, I am not saying that living a stressed-out life, always being two steps behind and doing daily tasks that have to be done because they were yesterday’s priority is a smart way to live. But I will say as a small, independent restaurant owner who wears many, many hats and is very involved in his business … this is just the way it is.

So new restaurant owners, be wary, because you’re going to be weary. With that being said, and the pressure on, I set up a kitchen meeting. In my meeting I learned that one of the line cooks had worked at Le Bec Fin, a nationally acclaimed Philadelphia restaurant run by legendary Chef Georges Perrier. The line cook was made the sacrificial lamb and given the reins for that night’s service. I told him to continue to execute the same menu while I interviewed for a replacement chef.

My ignorance was already showing through loud and clear. Could I have been more insulting to this cook? I didn’t think to offer him the job or, at the very least, give him the opportunity to interview. Because of my lack of restaurant experience, I didn’t realize that someone working in a Georges Perrier kitchen for over two years would learn 10 times more than he would have learned at a culinary school. Ironically, now, eight years later as a self-taught chef, I prefer applicants who have not attended culinary school. Now, when I am interviewing chefs, I am more interested in where they worked and what chef they worked under. And, I am always impressed when I see that someone has stayed at one place for more than two years. I, quite possibly, had the perfect diamond-in-the-rough with this kid and because of my ignorance as a restaurant owner, I never offered him the opportunity to shine.

After several very disappointing interviews, I decided to ask a local chef/owner if he knew of anyone. He said his girlfriend had been running his catering business for a couple years and he thought she was ready. I liked these people. I frequented their restaurant and used the catering services and although I was a meat and potatoes guy with an extremely limited palate, I enjoyed their food. For the interview, I asked the girlfriend to come to the restaurant to cook three plates for four of us-- the former owner, his sister-in-law, my wife and me. I can’t remember what she made, but I do remember the meal was hit-or-miss. At the end of the meal she said she didn’t feel good about what she served. She claimed that the ingredients in the kitchen were not high quality and that she would like the opportunity to cook for us again at her boyfriend’s restaurant on a night he was closed.

As we have since learned watching cooking reality shows, a good chef could walk in a 7-Eleven and make a decent meal, but we agreed to the rematch and set a date for the following week. We invited six people. On the morning of the tasting, the former owner called me and said he would like to bring four more guests and told me I should ask if we could increase the tasting from six people to ten people. I finally was able to get in touch with her sometime mid-afternoon and she politely said she would not be able to accommodate the request because she was already preparing everything and didn’t have enough food. To me, this seemed very reasonable… but the former owner was outraged. “If she can’t bend for four more people, how could she possible run your kitchen?” he said. “I wouldn’t even bother going to the tasting - it would be a giant waste of time.” Once again, “Svengali” had spoken and his restaurant experience trumped my lack of. Feeling horrible, I made the call and told this poor girl that if she didn’t make the dinner for ten we were not coming. Now she was outraged and basically told me to go &%$# myself. Eight years later, we’re only just back on speaking terms.

With no hope of finding a good chef and no real contacts to reach out to, I was relieved when the kid running the kitchen came to me and said he had a friend I should talk to. The following week, I met with his friend and did a tasting. His food was very good. I particularly remember a dish of figs wrapped in prosciutto, grilled and served on a bed of greens drizzled with balsamic reduction. The plates looked stunning, and eight years later, I still remember that he came empty handed and utilized only the products in my kitchen. He was hired on the spot.

Interviewing staff is one of the hardest parts of owning a restaurant. Looking back, I think we handled the situation poorly but in the end in it worked out -- at least for that moment. You’ll have to wait for my next posting to see what happened next.