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The meez Podcast
Josh Sharkey (Entrepreneur, professional chef, and founder/CEO of meez, the culinaryOS for food professionals) interviews world class entrepreneurs in the food space that are shifting the paradigm of how we innovate and operate in our industry.
The meez Podcast
Brian Stubbs on Boosting Restaurant Profitability with Genuine Article Bookkeeping
#82. In this episode of The meez Podcast, host Josh Sharkey is joined by Brian Stubbs, owner of Genuine Article Bookkeeping.
Brian Stubbs is a proud native of Oklahoma and studied Accounting at the University of Oklahoma, where he witnessed some very lucky football being played. Brian later moved to Austin. Brian worked in restaurants in a diverse number of roles and soon realized he could use his degree to significantly help restaurants thrive. Thus, Genuine Article was born.
In this episode, Josh and Brian discuss Brian's restaurant experience and how it influenced his passion for helping restaurants, Accounting and finance in relation to restaurants, and how Genuine Article plays a part in boosting restaurant profitability.
Where to find Brian Stubbs:
Where to find host Josh Sharkey:
In this episode, we cover:
(01:47): Brian's restaurant experience
(15:51): Accounting, finance, CPA taxes-- are they separated?
(27:58): Austin and it's dining population
(36:01): All about Genuine Article Bookkeeping
(56:06): Why EBITDA is so important
(1:04:52): Leveraging AI in Genuine Article
(1:12:06): Parting advice for businesses who want to be profitable
[00:00:00] Brian Stubbs:
Somebody's walking into a restaurant today that I do the books for, and their server is happy because the direct deposit hit on time, and they didn't have to talk to anybody about their check being incorrect. The small farm is happy because they just got their statement balance paid. The owners are happy because they're going to walk in and everything's going to be ready to go.
[00:00:24]
And now someone's going to have a great meal tonight in Austin. And I just had a tiny little bit to play in it. But that means a lot.
[00:00:32] Josh Sharkey:
You're listening to season two of The meez Podcast. I'm your host, Josh Sharkey, the founder and CEO of meez, a culinary operating system for food professionals. On the show, we're going to talk to high performers in the food business.
[00:00:44]
Everything from Chefs to CEOs, technologists, writers, investors, and more about how they innovate and operate and how they consistently execute at a high level, day after day. And I would really love it if you could drop us a five star review anywhere that you listen to your podcast. That could be Apple, that could be Spotify, it could be Google.
[00:01:05]
I'm not picky, anywhere works, but I really appreciate the support. And as always, I hope you enjoy the show. I looked at your background. Um, more before this, obviously, I mean, we talked a little bit before I didn't realize like, you know, it's like 16 years as a manager in restaurants. So maybe more than that.
[00:01:23] Josh Sharkey:
It was a long time. So, you know, I'm from Oklahoma.
[00:01:28] Brian Stubbs:
Boomer Sooner.
[00:01:29] Josh Sharkey:
I don't meet many people from Oklahoma, so
[00:01:31] Brian Stubbs:
That's a small, it's a small state. Oklahoma city is a small, smaller, I mean, it's growing, but yeah, so I graduated college with my degree in accounting from OU and came down to Austin, had a good friend that I grew up with that needed a roommate and it was like, yeah, Austin seems like a good place to go.
[00:01:51]
It's, uh, You know, it's got some good swimming holes, and it's kind of, you know, some independent What is Willie Nelson says when a redneck needs a hit beat? They run out. That's what makes them an outlaw.
[00:02:07] Brian Stubbs:
And so I knew I had the redneck part and then I wanted to explore the hippie part. And so, yeah, kind of a little outlaw, Austin, then how old were you when you moved there?
[00:02:16]
23, 22, something. Yeah. Around there. Like six years ago. Yeah, exactly. Uh, yeah. 2003. And, you know, it's been interesting, right? So Austin has grown and changed tremendously in the last, uh, 25 years, 26 years. And, um, so. I came down here and this is, this is part of the story, so I have to tell it, but so my grandparents owned a restaurant and in Oklahoma, in Oklahoma City called Pick Spine Foods.
[00:02:50]
That's where my parents met. My dad was a police officer and a line cook, so he would work the line and then he'd go work the graveyard shift for the police, the village, the village police. My mom was the, owner’s her daughter, right? Would work in the restaurant. And so they knew what they knew each other. He's 10 years older.
[00:03:15]
So they, yeah, it was very kind of, they didn't, they didn't start dating until she was done with college, but really kind of knew, you know, knew of each other and, and, and, I mean, met in that restaurant. Right. So my grandparents owned a restaurant and I, for whatever reason, kind of always fought against going to work in a restaurant, right?
[00:03:36]
My mom and dad would always be like, you'd love it, the, you know, the connection with people, the fast pace, the critical thinking skills, all the things you need to be a good restaurant employee. I was like, no, no, that's yours. That's y'all's thing. I'm not, you know, I'm not a restaurant guy or whatever. So. I finally senior year of college, my brother had had a lot of success and really enjoyed his time at the Applebee's near our house.
[00:04:06]
And so to make extra money, I said, go ahead, I'll go apply. He, you know, my brother, the manager liked him and my brother had subsequently gone to college. So I was like, okay, I'll go introduce myself. Started working at Applebee's and really loved waiting tables, you know, really loved taking care of tables.
[00:04:27]
And so when I moved to Austin, I transferred, like I walked into the Applebee's at St. John's and I 35 and said, Hey, I'm trained. I'm ready to go. And, uh, worked lunch shifts and bartended it and, you know, had the cowboy burger and did the whole deal. And, um, through this group of friends, right, my, my good friend from growing up, and then he had made friends down here and.
[00:04:53]
We kind of had some friends from college that were around, you know, working on their law degrees or working on their, uh, MBAs at UT. One of my good friends, bartended at the restaurant. It was called Osti. Osti Trattoria. It's still here. It's at 43rd and Duvall. And, and he was good friends with the chef.
[00:05:14]
And so the chef would, we'd all hang out, we'd go to swimming holes and, you know, bluegrass concerts and all these things. What do you mean by swimming hole? Sorry. Maybe I'm just not familiar with it. So, so around Austin, there's a lot of, uh, limestone and, and there's also a lot of kind of reservoirs. And so like there's, so like Barton Springs is a spring that is, it's a spring fed, always 68 degrees.
[00:05:43]
And it's, and they've made it, you know, Barton's is a huge pool, but even out, out West, there's like Crousey Springs, there's Hamilton pool. So just all these natural pools of cold water. And, uh, so in Austin, right? Like today, it's 96, it's a high of 96. So it's like, you need water, you need to get in cold water.
[00:06:07]
And, uh, so it's just, it's just part of it. And I'll bring this up later. It does inform the restaurant world of Austin. Because when you think about it, so many people. Are out in their swimsuits and in their flip flops and have done a trail run and then they hop in the springs and then it's like, okay, well, I'm going to go grab a bite to eat.
[00:06:30]
Yeah, so you're walking into a restaurant, you know, maybe a little, a little dirty or a little, you know, kind of a little casual. And so, you know, I feel like that really does inform a lot of the way that people interact with the restaurant world here.
[00:06:47] Josh Sharkey:
Hey, I didn't realize there was so much, uh, uh, swimming. Do you, do you go swimming often?
[00:06:51] Brian Stubbs:
Uh, I tried to, yeah. So like, you know, Barton's race is great. So I'm a big golfer and there's a couple of courses and so it's, you know, it's like go play nine holes. I mean, if anybody comes, I mean, I'll regret saying this cause Barton's can be busy, but there's something about jumping into that 68 degree water and like, it really does like chill your soul.
[00:07:17]
Like it just brings. Anything just way down and I don't know, it's, I mean, it's, it's, it's, it's a spiritual place, right? I mean, you know, the, the green belt, uh, which kind of runs through town and has all the hiking trails. And, you know, when it has water in the summer, early summer in the fall, man, yeah, that's just, I mean, you just sit in the water and just let it run over you and you're just chill and it just makes.
[00:07:47]
I don't know. I mean, like, you know, you can just see and you understand where it's like, you know, this has been a kind of a spiritual place forever, you know, Native Americans, you know, I mean, Onion Creek. I mean, there are just so many places here. Green spaces. And I think that's always been part of the intrigue, right?
[00:08:07]
Is that you've got this city that's got a life, that's got this life. You've got a university that has all this vibrancy. It's the capital. So you've got all the kind of political maneuverings. And then you're five minutes, 10 minutes, 15 minutes away from, you know, we're right at the edge of the hill country.
[00:08:26]
So the hill country starts and the ranch, you know, just so you can kind of get a little bit of both. And I think that that's always been the part of the secret sauce.
[00:08:36] Josh Sharkey:
Yeah.
[00:08:36] Brian Stubbs:
Yeah. But yeah. So anyways, this chef, this chef was like, what are you doing at Applebees? Like you need to come over here and, uh, Work for this husband and wife and I did, and I didn't, you know, I mean, I wasn't a foodie or, you know, into wine or even coffee like I am now, like this place had a weekly wine tasting where both the wine director and or the, you know, the distributors would come in and we'd do wine education and so like.
[00:09:10]
I just learned and tasted and had good food and, you know, learned how to make the espresso the right way and love the coffee. And it just kind of, you know, it just grew and grew and grew. And, you know, I mean, I was bussing tables and then waiting on lunch. And then, you know, you always want to get the, the backroom section where all the, uh, the Sons of Bacchus was this name of this local, uh, wine drinking club.
[00:09:37]
And so the cool thing about Austin. Is if you have a wine and beer license in Texas, you can just do a cork fee. You can't bring in wine if you got liquor. I don't know if it's like that around other states, but in Texas, it's if you have liquor, you can't bring in your own wine or any of your own. But if you have wine and beer, you can bring in your own wine.
[00:09:59]
So these guys had cellars and all this Italian, you know, Sasakaya, you know, all these Barolos and, and. They'd come in and you would basically, they, we'd put a 12 top together and if you had that table, that was your tape, that was your night, right? Like, that's the only table you're going to have tonight.
[00:10:20]
So it's like breadsticks and white pizzas and fried calamari and the special and then the lamb Osso Buco with saffron risotto and they were just pairing and tasting and sharing and yeah, they always took good care of you. On the tip, but what they also would do once they really got to know you is they'd pour you a salmon, you'd have a sip, and you'd let it sit till after shift.
[00:10:45]
And so you're drinking, you know, Gaia. You're drinking, you know, you're drinking. And some of that stuff was just insane, you know, years and vintages that were, that you would, you'd never have, you'd never be exposed to. And so it just opens up the world, right? It's just like, Oh my. So it's like, I'm reading, uh, you know, I'm coming in early to shifts and like reading Vino Italiano and the Wine Bible and all of those things that just like, give me the content, give me the information.
[00:11:15]
And, but fortunately too, because it was an independent restaurant. You know, I had my degree in accounting. I wanted to use my degree. And so I noticed that, you know, we were closing the night. We were just kind of putting all the sales data, the top line sales data on. We write it in, add it up, balance the drawer.
[00:11:36]
It was on a clipboard. I was like, you know, can I take this and build a access database and just, so I made a little form and I was just keying in historical data, just looking at seasonality and looking at nights of the week and looking at special event data, right? And I was just, and of course, I was doing it on my own time, which was fine at the time, because it's like, well, I want to do it.
[00:12:00]
I want to learn and that, of course, got me a seat at the table to help manage that restaurant. Okay. And then they started talking about another restaurant and I was all in, I was drinking the Kool Aid. I was like, yeah, I want to do this. I want to help you guys. I want to help with the pro forma. I want to help write the business plan.
[00:12:18]
I want to, I want to do the research studies. I want to drive to Houston and eat tapas. And it's, it's, it was a Mediterranean restaurant called Fino. And I think just from my passion and then maybe also some of my skill, I would hope they were like, yeah, you'll, you'll be the GM. And I was like, okay, like I've never hired a, I've never interviewed anybody before for a job.
[00:12:41]
I've never fired anybody for a job. I've never put together training manuals. I've never done any of this, but because we were this family, this tight knit group and we all trusted each other, they shared a lot of confidence in me, uh, to give me that opportunity.
[00:12:56] Josh Sharkey:
What did you do to learn all of those things? And I guess maybe just generally speaking, what's your like process for learning new things?
[00:13:04] Brian Stubbs:
Yeah, so it's interesting. You know, I definitely read a few books, right? Definitely kind of went to, I mean, the one that came on maybe a year and a half in, I think, I can't remember when Setting the Table came out, but obviously Danny, Danny Meyer's book is huge.
[00:13:20]
I mean, that was the first one for my career that really, You know, and I, I, I kind of identified with M.T. Reyes from St. Louis. There was this kind of like Midwestern heartland kind of way of being, you know, kind of taking care of people, making them happy. But also, you know, at the peak, right, New York City, like top, you know, if you can make it there.
[00:13:45]
Right. And so that was kind of inspiring. But the Austin community was super, it's always been supportive. Like, that was the other thing too, is like, once you kind of open your eyes, we see it's like independent business, independent business, independent business. Yeah, so many of them. Entrepreneur, entrepreneur, entrepreneur.
[00:14:02]
And I also had this really, so another good friend from my high school who started freshman year, he was from Austin, but his dad was in Oklahoma City, uh, for work and, uh, his stepdad was a CPA and here in Austin. And did not know this at the time, but come to find out he was the CPA of Austy, the restaurant that I started working in.
[00:14:30]
Oh, that's so funny. And so I reached out to him and he kind of became a mentor in a lot of ways for me, because he had been doing restaurant tax returns for 45 years in Austin. So he knew all the players, he knew every owner, he knew he had seen the data and he had, you know, advised them for decades. I just started asking questions and.
[00:14:52]
You know, my buddy Clint would come to town and we'd go over to Gary's and Suzanne's and we'd cook out and talk and, you know, we'd usually talk about Texas football and OU football and Texas baseball. But every so often I, you know, I kind of bend his ear for, you know, you know, what are you seeing? This is what I'm seeing in my restaurant.
[00:15:14]
What do you think about this? What do we think about the economy? Right? That's macro and micro. Like, what are, what are some of the inputs that people are struggling with? Things like that. So. That helped a lot and then Emma and Lisa, the owners, helped me a lot. Like I said, they continued, we had our manager meetings.
[00:15:31]
They had come from kind of a family tree, right? Every restaurant's got a family tree. He had worked for Robert Del Grande in Houston. She had worked a couple places in Boston. They were chefs themselves, chef owners. And some numbers were always part of our meetings. And so we ran, We ran Prague Fells.
[00:15:51] Josh Sharkey:
I mean, Brian, I want to anchor a lot of today on like, I mean, selflessly asking some questions and also I think everybody will get value out of it. But you were just talking about something that like, I always, I still haven't wrapped my head around, which is like, There's accounting, there's finance, and then there's CPA taxes, and they're like discreetly different things. And I think almost always I'm asking a question to my accountant. That's a finance question or a tax question and vice versa.
[00:16:21]
And how separated are they? And, and also, I mean, we're going to talk about January article as well, but like, do they have to be separated?
[00:16:28] Brian Stubbs:
It's interesting. I observed this in college and I continue to observe it in business school. You know, kind of when I watch or talk to people that are going through business school, I think that there comes a time, it's usually around sophomore year, sophomore, junior year, where you've taken finance classes, you've taken accounting classes, and there's, there's this road where the accountants take the off ramp and say, I'm not interested in kind of the more creative
[00:17:02]
Modes of making money happen. I'm interested in making sure that what the finance guys and gals are doing is being organized to make sound decisions and giving the feedback. And so I think that sometimes it's a way of learning and it's a way of being that you kind of drift towards 1 or the other. And then obviously with CPAs, you know, you take, you just go further into the accounting world to make sure that you have the certifications and really the deep knowledge.
[00:17:39]
Down kind of like, the reason that I went into accounting was at the time, this will date me. One of the things that was said in like my one on one class was like, yeah, it's the last self regulated profession in the United States.
[00:17:54] Josh Sharkey:
What does that mean?
[00:17:54] Brian Stubbs:
Meaning, accountants took care of accountants, right? Oh yeah.
[00:17:58] Josh Sharkey:
Yeah.
[00:17:58] Brian Stubbs:
The AICPA and GAAP, there were organizations where. We made our, we made the rules for ourselves and we all agreed on them and those were the rules.
[00:18:09] Josh Sharkey:
How old is GAAP?
[00:18:10] Brian Stubbs:
Oh man, I don't know. Well, all you need to know is that was maybe freshman year and then sophomore year, my case study was NREL. Oh, okay.
[00:18:19]
Which really did, that was one of those areas where the finance and the accounting were working together to do certain things that were not to spec. You know, that were, that were more manipulative. In terms of the way that they were showing certain assets and liabilities and presenting to the market and using that, that there wasn't that firewall, right?
[00:18:47]
It's just like, and, and there needs to be, especially with the big organizations, there has to be that firewall for protections of both shareholder value and interests. But then also, you know, it's like the finance folks need to be told, like, no, we can't do it that way. Like, that's actually not legal, you know, or not, or not proper.
[00:19:12]
That's where I think, you know, I think it's at the bigger organizations. I know it's at the bigger organizations where maybe there's a little bit more friction. So along the way, I think I realized, because I know that I felt this way. I don't know if you felt this way when you're young. You're out of college.
[00:19:28]
You want to change the world, right? You want to make an impact. You want to make things better. You know, it's like my dad would always, you know, make it, leave it better than he found it. Right? I think along the way, you know, and my, my grandparents who owned the restaurant passed away. Young, sadly, see, when you do some math here, I was probably seven or eight when my grandfather died of leukemia that same year, uh, my grandmother had a stroke and was paralyzed on her left side.
[00:19:59]
She, she had been with us and lived with us. We built onto our house. My parents did and took care of her. I think she passed when I was 10 or 12. So, in a lot of ways, you know, I never got to share my passion for restaurants with them. Which would've been neat to, to be able to do, but it didn't work out that way.
[00:20:21]
Yeah. But I think along the way, you know, I remember the night I was hanging out with chef who ended up becoming my roommate. I, I kind of, it just dawned on me, I was like, you know, in a lot of ways I'm exactly where I was supposed to be. You know, I went to college. I got my degree in
business. I'm working for a husband and wife.
[00:20:43]
The husband is gregarious and kind of the mayor. And everybody has his name, which is a lot like my grandfather, Lisa was very meticulous. She was the pastry chef. She was a numbers hawk, every payroll, every overtime hour, every prime, you know, every, every food cost number, every cup of tea, the lighting. I think one of the reasons why Lisa started liking me so much is because I would adjust the lighting throughout the evening to make sure that it was matching the sunset and that there wasn't that disruptive, like.
[00:21:18]
Yeah, we'd always joke about it because she'd come and change my lighting. I was like, no, this is work. Yeah, like we would argue about where the lights were or the music, how loud the music was, right? Those, those kind of ambiance touches that are happening behind the scenes. So yeah, so it dawned on me, it's like, you know what, it's like, I'm kind of where I am, you know, like, I'm kind of where I'm supposed to be, like, I'm kind of getting some of what maybe, you know, I would have gotten if my grandparents were still around.
[00:21:46]
So it really became part of my identity and something that I could really kind of tap into their memory and say. Yeah, you've got your own journey, but you're in it and it's great. And it, and it's so, I say this to my clients a lot, and it kind of talks to the financing and the numbers thing. It's important to know what the extrinsic rewards are in the restaurant, right?
[00:22:11]
Are we making money? Are we sustainable? Can we give. Uh, long tenured employee arrays, can we introduce a 401k into our, uh, expense base? But the intrinsic rewards are there every night, every shift. There's somebody walking in that's had a bad day. There's somebody that's walking in to celebrate. There's somebody walking in to meet an old friend.
[00:22:40]
And you get the privilege. Of making sure that the coffee was made right and that the, and that the forks are clean, right? And that the position numbers are right, so you're not interrupting your conversation. So there's a just, to me, there's a, and I'm, I'm waxing philosophical, which any of my former employees would tell you I would do it line up quite often.
[00:23:06]
But I do believe that this table, the table in front of you, the table between 2 people, 4 people, 8 people is a spiritual place. And taking care of it properly is your job, but it's also your opportunity to let life happen. And so what I figured out was, if I take care of my section the right way every night, then maybe I can take care of the restaurant every night.
[00:23:32]
And if I can take care of the restaurant every night, maybe I can take care of two restaurants every night. And if I can take care of two restaurants every night, maybe I can take care of 5 restaurants, and eventually I had to change how I engaged with that taking care, but for me, the bookkeeping piece in the back end office piece was like, you know, I've got a role to play.
[00:23:54]
My role is to make sure that payroll is timely and accurate for my clients. My role is to give them. The previous four week P&L balance sheet statement of cash flows reporting every four weeks as close to the end of the period as we can close the books with accuracy. And present it to them so that they're making informed, confident decisions about their business on a regular basis.
[00:24:23]
And if I can do that for, you know, now over 100 entities, that's pretty amazing way because I know at the very, at the end of that life cycle, somebody is walking into a restaurant today that I do the books for. And their server is happy because the direct deposit hit on time and they didn't have to talk to anybody about their check being incorrect.
[00:24:48]
The, the small farm is happy because they just got their statement balance paid. The owners are happy because they're going to walk in and everything's going to be ready to go. And now someone's going to have a great meal tonight in Austin, and I just had a tiny little bit to play in it. But that means a lot.
[00:25:08] Josh Sharkey:
You know, I think probably the first thing that I noticed when, when I first met you that intrigued me was, was one, you don't meet a lot of accountant finance folks that even have like restaurant experience, let alone generally care and give a shit about it.
[00:25:20] Brian Stubbs:
And I've always said is that if I've ever write my restaurant memoir, it's going to be called cooking with gas and GAS is the acronym for give a shit.
Yeah. If you care in a restaurant, you can be successful. Cool. But you have to care about the people in the building.
[00:25:39] Josh Sharkey:
It has to translate, I'm sure, to the work that you do with Genuine Oracle, your, your business. Because if you just look at a P&L, absent of the context of the, of the business, uh, you tend to make very sort of short sighted or maybe myopic decisions because you're just looking at a bunch of rows of a spreadsheet.
[00:26:01]
But if you do generally understand the people and the business model. And, uh, you know, the, the meaning behind some of these things that you can really have a huge impact.
[00:26:11] Brian Stubbs:
And I, I think that's the other thing about accounting that I love, right? Is that at the end of the day, it has to be balanced and every penny has to be trapped.
[00:26:20]
And there is a lot of value in the cold calculus, right? I think that some of my clients, former clients, current clients would argue that maybe sometimes I'm too passionate about certain line items and it, and, and they want more. What was this? What's this trend line or whatever? And I'm working on that right to kind of it's a balance and I've I've learned to grow and and really make sure that, you know, it is their business.
[00:26:51]
At the end of the day, it is their decision. My core competency role is to give them accurate and timely information. Now, when they ask me for a little bit more, I love giving a little bit more and, you know, and it's, you know, sometimes it's at this point, it's almost humorous because some people be like, Oh, here goes Brian again to speak to that though.
[00:27:14]
And it's, that's why I think that the conversation is so important is because yes, you, your concept, right. And you want to do a certain thing. Okay. Well, that's it. It's nice to know that that's the, that's the new project, the new menu offering, the new happy hour, the new schedule format, and let's track it.
[00:27:35]
Right? So let's put some tracking in place so that we can measure it and judge its success financially. Not just, well, you know, so you have to have the context where it's like, well, we just started this happy hour and it's like, yeah, well, in Austin, it's like, you don't start a happy hour in the summer because nobody's in Austin in the summer.
[00:27:58]
It's too hot. Anybody that has disposable income that eats out a lot tends to leave. I was telling you this in a previous conversation, they don't leave for a 1 week vacation. Some of these folks that are really restaurant supporters. Are gone for a month because they have a second home or they have a, you know, and that's crazy to think about, but good for them.
[00:28:19]
But that is, that's a, that's a customer base that isn't here and I've seen it over the last, you know, 20 summers. In Austin, where it's a different animal and so our seasonality is. And you would, you would think that the fall would be great, right? It's like, oh, it's so nice. And everybody comes here for football games and.
[00:28:42]
Everything else. And you know what football is a big competitor because Texas high school football on Friday nights is a thing. And then, and then Saturday night, Texas football is a thing. And then Dallas Cowboys. Football on Sunday is a thing, and if they play on a Monday night, it's a thing. And so, you know, you're competing against some pretty big entertainment dollars.
[00:29:12]
And when you're at those events, you're eating hot dogs, you're eating tacos, you're eating, you know, you're eating the concessions. You're not, you're not saying, okay, well. After the game, we're going to meet up with the 12 top and have, you know, uh, 3 courses at Olame or, you know, we're not going to pop into Lenoir and, and eat in a garden, you know, it's just, it just doesn't happen.
[00:29:38]
And then, and so, so there's this big tranche between special occasion or kind of what, what, what we would consider fine dining. And I've told you this too, it's like, our fine dining restaurants are pretty casual, because they have to be. I mean, I think there's only, I mean, there's less than a handful of restaurants that would be casual.
[00:29:58]
I don't, I don't know that there is a dress code at any restaurant, to be honest, maybe Jeffrey's, you have to wear a coat, maybe, but I mean, you can go around, it'd be an interesting, now that Michelin is here and looking around Austin. I don't even know how many places have white tablecloths. It is just not a thing, and I think so much of that is because that's just not the way that the city lives.
[00:30:27]
I mean, and it used to be when I stepped moved here, it did seem like. Austin is informed a lot by Dallas and Houston and San Antonio and their cultures, and it used to be economically, Austin was kind of like Texas's playground where a bunch of people would come to Dallas from Dallas or from Houston on the weekends and hang out in Austin.
[00:30:53]
But how many more independent, creative, fantastic restaurants have popped up in Houston and Dallas and San Antonio? I mean, you got beard award winners all over Texas now, it has its own category. So it used to be that Austin was like the cultural little hub and everybody would come here to seek out the weird and the different.
[00:31:15]
Well, there's a lot more weird and different in these big cities than there used to be, which is great. And we've grown, you know, my company's grown with that, right? Like we, we service, we've got a couple of restaurants in Detroit, bars and restaurants in Detroit that we work with. Yeah. And those guys are great and it's a totally different seasonality, a totally different customer base.
[00:31:34]
And it's fun to have those conversations with them and learning, learning about Detroit bars. But, you know, they've got the Detroit Lions challenges and the University of Michigan challenges, but it's all that, you know, the, the evolution of the industry, I think since I've been at it is, you know, all the reality shows.
[00:31:55]
All the, uh, all the kind of, you know, chef as rockstar. Restaurants and bars are just part of our entertainment culture now. And they're seen as part entertainment, part nourishment and everything in between. And so it's really, really interesting now because there is kind of this, like, spectrum of client that, you know, have you seen Cosm, this big planetarium, like, 180 degree, There's one in L.A.
[00:32:30]
and there's one in Dallas right now. And it puts you in, like, on the field, or it puts you in the court side. And it's almost like being at the Sphere in Vegas, right? It's this totally immersive thing, but the seats are tables, and it's food and beverage. And it's like $200 a ticket to get in, plus all what you're consuming.
[00:32:52]
And it really puts you at the event. And it just, it's feeding this idea that, like, And it's happening in commercial real estate, right? With the death of retail or the challenges that retail has now with, you know, you can get everything online. The highest, best use of commercial real estate right now has to be entertainment and hospitality.
[00:33:13]
And every single new spot, even if it's a pickleball court, has a food truck and a bar and, you know, and it's like, are they managing the food costs? Are they managing their liquor costs? Is it a profit center? Is it, is it necessary to be a profit center? Is it a break even scenario? I mean, that's the thing.
[00:33:34]
It's like, think about it. If you're making so much money off of pickleball rentals. You can run coolest food truck in the world because you don't have to make money off of it. It could be a hundred percent prime cost.
[00:33:48] Josh Sharkey:
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[00:34:58]
The cost of food. There is this sort of parallel where if you, if you go to a spa, you know, you spend 150 and that's just to be in the spa. You just get to be in that place. And then anything, anything else that you're paying for, you're paying for the juices and food and things like that. In the restaurant, you're just not paying for that experience.
[00:35:18]
You're only paying for the food. Right. But oftentimes there is this really incredible experience. I think that is, You know, I think there is a lot of opportunity there if we can just sort of communicate the experience that you're getting in that, that'd be a, you know, that'd be a cost and the food is another element. I mean, that's, that's how talk was born, right?
[00:35:36] Brian Stubbs:
Was Kakanis and Next were selling the experience and they needed a ticketing platform that they could work. And so they built one. And now it's a reservation system and now it's being used for private events and it's got all these other things. Now it's owned by Amex, like every good tech solution in the space usually does is they eventually get acquired and they become just part of the ecosystem.
[00:36:01] Josh Sharkey:
Yeah. Yeah. I want to make sure we talk about GA, Genuine Article, and, and also just getting a bunch of like tactical advice from you because, I mean, obviously you've run restaurants for decades. And now you oversee over 100, you know, restaurants in terms of the finance and other things. So, so first of all, in terms of the other things, what does Genuine Article do? I know, I know obviously you guys are doing accounting. The core competency is bookkeeping.
[00:36:30] Brian Stubbs:
Everything at the end of your tax return for restaurants, bars, coffee shops, you know, so what we focus on is just, you know, the, the nitty gritty, the blocking and tackling as I call it, right? And actually, I did want to bring this up because it's like, you know, I was thinking about some of the clients that we inherited or some sometimes, you know, you're a lot of the CPAs have bookkeeping services within their firms.
[00:36:52]
And but CPAs have a broad, they cast a broad net of all businesses, you know. Auto repair, general contracting, you know, there is one way to do books and it's the cash basis accounting where whatever hits your bank account that day goes into your P&L or balance sheet that day. And it doesn't have a lot of granularity or specificity and they send you the report and you look at it and it has percentages and it has what it does.
[00:37:27]
And, you know, if you've got a healthy business and you're making money. You could probably run it that way, but that's not the way you'd need to be running. In my opinion, it's not the best way. I know it's not the best way to be running restaurants and bars and coffee shops because we have terms with all of our vendors.
[00:37:44]
We have, you know, we have inventory that we're trying to manage effectively. We have pay periods that don't line up. I mean, that first restaurant I managed was a semi monthly. Payroll, uh, which, you know, bridges different work weeks and, you know, I, I mean, I don't know how many conversations I had with, you know, line cooks and dishwashers, any hourly employees saying my OT is not on this check.
[00:38:13]
And it's like, well, you didn't, you actually went into OT cause you get paid 10 days, you know, seven days later. He said, well, you didn't go into OT in this, in this week, you actually went into OT the next week. So it just comes back to, for me, I really just got, it's like the matching principle Is key matching the expense to the revenue that it created or didn't create matching the payroll to the Friday and Saturday that they were actually working matching the invoice matching that, you know, it's like we didn't spend 5,000 with, you know, this broad line vendor on Tuesday, we spent 2,000 last 2 weeks ago, and we spent 3,000 this week.
[00:38:55]
And the 5,000 hit in week three, because we're on that set. So it's like, no, it was the 2000 that ran 10,000 in sales two weeks ago. And so, you know, just the approval versus cash basis accounting is a huge one. Marking all the invoice, marking every expense on the day in which it was incurred and received.
[00:39:18]
So it matches the sales from the subsequent days. That right there is like linchpin number one. In making a decision that's accurate about your food costs, your alcohol costs, and your labor.
[00:39:34] Josh Sharkey:
Yeah, so it sounds like, you know, obviously in addition to the accounting, there's all this just finance and strategy that you guys are doing.
[00:39:43]
So maybe if it's okay, we'll just, Talk a little bit about some of those things that could be nebulous to others or just to get your your thoughts on you've taken on Restaurants that are already operating and you start new ones as well. Mm hmm two questions really like one is when you first start Like what are the most what are some like the obvious?
[00:40:02]
Opportunities or mistakes that you see that like most folks probably are doing that that have the biggest impact right away?
[00:40:10] Brian Stubbs:
Honestly, where I start both with like a pro forma and with an assessment of existing businesses in the space is understanding one of the ones that's become really kind of valuable is, is occupancy costs relative to revenue.
[00:40:30]
Understanding is the space creating the sales in a range, right? So I always like to see and I'll go back and then I'll go forward real quick. The USAR Uniformed system of accounting for restaurants is a chart of accounts that was put out by the National Restaurant Association and continues to be an election been updated in a while, nor that doesn't need to.
[00:40:59]
But it basically gives you every bucket that a restaurant, bar, coffee shop may end up having to put something in that are specific to the industry and they have specific codes. Right? So what I get to do is I know that, uh, 7,518 is credit card fees. So any restaurant P&L that I look at 1st thing we do is make sure that they have everything's organized in the chart.
[00:41:25]
And if they're not using that chart, we adopt that chart for them. Because what it does is it puts, you know, then I know that when I'm going through general and admin expenses, 7,518 is in there and credit card fees are part of the general and administrative percentage. And I've just kind of over time really started to see the restaurants that do well, this is this percentage area.
[00:41:48]
And then I go and look at the dollars and I say, okay, is it higher than last year? Is it higher than last period? You know, period accounting is another one, like we run 445, right? We run 13 periods a year. So that line up exactly with the end of the pay period, whether that be weekly, bi weekly, Wednesday to Tuesday, or Monday to Sunday.
[00:42:09]
I love period accounting for restaurants because I'd never liked to doing an inventory on the end of the month on a Friday night after working a double and I was beat down and tired and I didn't want to be counting, you know, back stock. So I love the fact that every 4 weeks I can tell chef or wine manager or bar manager that.
[00:42:34]
Hey, you guys are dark on Monday, the period just closed on Sunday, get up, go get your coffee, come in, clear head it, take your inventory accurately, calmly, do a little bit of admin work, send it off to us, it's valued, let's go.
[00:42:54]
The other thing about that is every of those periods has the same number of Fridays and the same number of Saturdays and the same number of Sundays, which, you know, we all know this, the weekends are busier than Tuesday night.
[00:43:08]
And so, you know, those are some of the adjustments that I will make right away. And what that does is it just brings all the matching in tight. And now we're now we know where we are. Now we know, now we're cooking with gas, right? Now we know, okay, is our menu priced right? You know, are we paying too much in management wages relative to hourly?
[00:43:37]
Are we over managed? Are we under managed? Are we, you know, so these are all these metrics that I kind of go down and check along the way. Occupancy is a big one. Is our rent in triple nets between 6 to 10 percent of our revenue? Okay. Because if it's an 18%, we're going to have a hard time, we better be real busy and that contribution margin may be real, but gross profit better, better be pretty high.
[00:44:06]
After we pay for the product and the people, if we're running that, you know, and so it's not that it can't be done. It's just, it's like, okay, so what are our challenges? Right, so 1 of the things that I'll see is like, if we're close, right, it's like, if we're at 11 percent occupancy costs for the previous year.
[00:44:23]
Right. A slight price increase is going to get us into a range where, you know, and it always goes back to the, the way it was taught to me, uh, and it hasn't changed. It's the, where the puzzle pieces fit have moved around a little bit, but, you know, the 30:30:30, and you make 10, right? 30 percent on product, 30 percent on labor and 30 percent on everything else.
[00:44:52]
And you make 10%. And that should always be a target relative, you know, and it's, sometimes it's, it's not much, right? Sometimes 10 percent can only be 1,500, but it's still 1,500 in the black and we're still moving forward. And, you know, and then some concepts, right? The types of concepts have different things, right?
[00:45:16]
So it's like, I know through over time that. I know what barbecue cog, you know, protein cogs are going to be higher for barbecue places than burger places. Um, labor cogs are maybe lower than the 30 percent because of the nature of making pizza, right? So, you know, the great thing about pizza, right? You've got these huge deck ovens or whatever.
[00:45:39]
It's all prepped. They all go in at the same time. They all go out at the same time. It's not broken up by station. You're not handing off, you know, It's just a in and out situation. You can sell a lot more pizza in an hour than, you know, um, a seared scallop dish. It's just the nature of prep time. The nature of accuracy of cook time that, you know, you've got good ovens that hit that whole temp.
[00:46:07]
I mean, you crank out the, and that's why, you know, the first question I usually ask anybody about their concepts that they want to either open or bring to a unicycle. Is it pizza or not? Because if it's pizza, we've got some and pizza's got all the things right. It's low barrier to entry. You can prep a lot of it and have a lot of, you know, available to sell.
[00:46:31]
And like I said, it's easy to make and the customer gets it right. You're not educating the customer on what pizza is. Maybe a style, right? But even that's evolved, where it's like, I mean, two year olds love pizza, 92 year olds love pizza, right? It's like, it's, it's just one of those things that you just don't have to do as much.
[00:46:52]
It's not as high touch. Uh, barbecues kind of become that more, as, you know, the Aaron Franklins of the world. Kind of educated and, and the barbecue nerds, Tex Mex, you know, there's all these concepts that kind of, you know, don't have as many hurdles for the customer to jump over to access and understand.
[00:47:15]
And I'll be honest, you know, that's sometimes that's, you know, you'll see it. It's like, sometimes it's just a menu, a menu change. Sometimes you need to introduce some more accessible. Relatable items that is, you know, that's the whole choice fatigue, right? It's like, you know, people make choices all the time, every day, all things.
[00:47:36]
Some nights you just want to go into a restaurant and it doesn't need to be a geography quiz and it doesn't need to be a culinary quiz and it doesn't need to be, you know, it just needs to be like, okay, they've got a pork chop, you know, they've got, you know, a bone in pork chops, it's grills with, you know.
[00:47:56]
A side and a sauce, I'll take it, but go back to the DL, right? And, and so that's the operational piece. Those metrics have always, it's kind of where we start. Getting them matched up, getting them what's accurate and kind of. Responsive to the sales and some can,
[00:48:13] Josh Sharkey:
I mean, you mentioned a few things there, like, so generally speaking, I know there's like a rule of thumb of like a 60% prime cost. Sure. But you know, when you have something like barbecue or, or pizza even, there's a really high prep labor cost of those things. Mm-Hmm. So, so maybe your cogs is your, your cogs is labor, your labor is higher. Are there instances when you're okay with higher than a 60% prime cost? And, and if so, like how do you help, like adjust in the opex if prime costs are just gonna be higher?
[00:48:40] Brian Stubbs:
So you know, we talk about it, right? So, you know, one of the things we do in addition to the actual bookkeeping is, you know, this is where kind of the fractional CFO or the consultant, you know, I meet with clients every 4 weeks and review these reports with them. And we have these conversations. And so if I see that, okay, we hit 65 percent perhaps, right?
[00:49:02]
We were 2 percent over on labor and we were 2 points high on food costs. Did we get to 4 points someplace else? And so you start to understand that between direct operating expenses, general and administrative expenses and occupancy, right, let's just say that those are the 3 day buckets of 10, 10, 10.
[00:49:26]
Oh, okay, well, you know, come to find out we can't and marketing's in there like, oh, our marketing is too high. That is the thing that if what, you know, or not to pick on Open Table. But this reservation system, this computer data process subscription is expensive relative to our metrics. Is there another, you know, solution out there that, you know, maybe can help us offer a similar and that's the argument, right?
[00:50:02]
They would say, you know, their competitors don't offer a similar product. They offer a lesser product, but. The point there is it's like, yeah, but your concept maybe needs to be on a different platform because the juice isn't worth the squeeze and we need those two points if we're going to keep running at 65, those controllables, right?
[00:50:22]
We have got to, we have got to be more efficient with our cleaning supplies and our linen costs are linen costs are, you know, half a point too high. Are we checking our pars? Are we? You know, are we paying, are we keeping them, are we looking at that invoice every time and saying, no, we need, we need different.
[00:50:43]
Or, you know, paper and packaging is huge, especially post COVID, right? It's like, well, how are we packaging these products to go? Are we wasting them? Are they branded? Are they not branded? You know, all those kind of decisions come in to where it's like, you know, Hey, we need a half point here and a half point here and a half point here because we just, we are comfortable with, and it is part of our mission for that one and a half percent prime cost to be able to be at 61 and a half.
[00:51:13]
Like, okay, fine. Let's go find it. Like, let's get to 10 and then when you're busy, you get to 15. And then when you're slow, maybe you do five, but again, you, you kind of ride that, you know, if we can do that and, you know, I've seen, gosh, I mean, I've got some bars, you know, that are great and busy and have great volume.
[00:51:33]
I mean, I've seen 33, 35 percent profits, like it's out there. But it's not common. That's the, that's the big, you know, I think that that's the big kind of like, it's the disconnect both with some employees, right? You'd feel like, man, I'm working at this busy restaurant. Why can't they give me a raise?
[00:51:50]
They've got to be making tons of money. But they don't know what rent is. They don't know that utilities are 3. 5 percent because the AC is inefficient. They don't know that the makeup here between the vent hood and the HVAC has been a problem from day one, because it was a second gen space that wasn't engineered properly.
[00:52:10]
All the decisions you make in opening a restaurant, raising money, they were underfunded. They're servicing debt. They had to go take out a line of credit and they're paying 9 percent on it. All those things hit below the line, and it does. It just doesn't free up ownership to just say, Oh, yeah, you know, yeah, you're right.
[00:52:32]
We'll pay you more. We'll pay. We'll raise our prices and pay you. Sometimes when prices are going up, they're going up because the below the line expenses are going out. And like you said about the environment, that's not on the menu. Nobody pays for the carpet. Nobody pays for the carpet cleaning. Nobody pays for the paint.
[00:52:53]
Nobody pays, like, the business pays for those things. And they have to manage that between taking care of their people, taking care of their purveyors, and then taking care of the guests. And like, that's the, that's the push and pull that happens every day. And sometimes it just gets written off on a Yelp review as, it was too expensive for yeast rolls.
[00:53:16]
And it's like, you don't know. And I, that's what I said, I posted that the other day. I, I saw some, uh, not even a client. I saw somebody that I respect a lot. Nathan and Sarah heard he'd run Foreign and Domestic.
[00:53:31] Josh Sharkey:
Oh, yeah.
[00:53:31] Brian Stubbs:
I used to work with Ned and Jodi when they had foreign and domestic and then Nathan was an employee who bought, bought the business from them.
[00:53:39]
And they've got another place out in Lockhart. My big chef posted that, you know, they had a four star review and the one negative was the cost of the rolls. And, and she, you know, they explained the butter and the flour and all the things that go into it. And I've always said this. Good food from good people costs good money.
[00:53:55] Josh Sharkey:
I just can't think of another business where you, you can go spend time somewhere and that itself doesn't cost money. You know what I mean?
[00:54:03] Brian Stubbs:
And so, and so that, and then on top, yeah, speaking of metrics, right, that's another metric Cornell, the Hospitality Management School of Cornell had these great newsletters when I was managing and they had some class, you know, they were, some content was getting out there and.
[00:54:18]
There was a period of time before I started the business where I thought about going, you know, going to school and, and, you know, going to maybe going to Cornell and trying to learn, you know, like, uh, like Andy from, uh, the office, uh, that, uh, revenue per seat hour. Right. How many seats do you have? How many hours are you open?
[00:54:41]
What's your revenue? That was an interesting metric that I'll always look at sometimes to say, like, are we getting the revenue out of these hours that these seats are open just like tickets, right? That seat costs X. Are we making X on that seat? And yeah, I mean, there's been some concepts that have tried it, right?
[00:55:02]
I mean, that's what a cover charge is. That's what a ticket is to a dinner. That's where pre fee and some of those things are really good for margin. And when you see just speaking to general restaurant fans, like when you see dinner series, when you see, you know, guest chefs, when you see pop ups, what they're trying to do is they're trying to keep you engaged in a different way because they know that you're a guest that.
[00:55:29]
Has been in on a regular basis and I want to share with you the kind of they want to take the They want to take the constrictions off for a night and have some fun And you know, it may be a little bit more than your normal dining experience there But it's like go support it. Those are the things that get you know, that keep the great restaurant daily going.
[00:55:50] Josh Sharkey:
Yeah back to your point about just going through the you know, the below the line things I think just that exercises I mean, I wish I had my early days in restaurants, I wish I had someone going through that exercise every week.
[00:56:00]
That alone of just looking at the, you know, at the, at the numbers often enough.
[00:56:06] Brian Stubbs:
One of the things you said was, you know, it's like you hear the word
EBITDA all the time, right? Or at least before income, income taxes. Appreciation and amortization, you know, P&L's oftentimes sometimes will be presented with non cash expenses, things that actually don't affect cash, but are recognizing previous business activity.
[00:56:26]
And you need to account for it because your asset values are going down and there's the tax side of that, which is important and you have to do right. So. All your expenses, all your big leasehold improvements and furniture and fixtures and equipment, right? You can't just wreck, I mean, for a while now, you've had bonus depreciation.
[00:56:47]
So a lot of new restaurants get to write off a much bigger amount on their tax return and treat it as, hey, this was part of this year's, uh, you know, profit and loss. But over time, you do have to recognize some, you know, the depreciation. Or the amortization of your, of your assets, those aren't controllable by the operations.
[00:57:14]
Those are just things that are part of the P&L. And so that's why EBITDA for restaurants is so important because there's net income and then there's net operating income, right? The NOI is also another term for EBITDA where it's like, that's the number that your business made in profit or loss or whatever period of time you're looking for.
[00:57:37]
And for me, the most important thing, and this is a, the P&L, that's where I spend a lot of time with clients because that is the day to day, week to week, month to month. Kind of report that gives them feedback, but taking that net income number onto the statement of cash flows and looking at the balance sheet and understanding that.
[00:58:00]
Yes, we made 25,000 dollars this period, but we had a bad summer and our accounts payable over the last 12 weeks has grown. From 10K and what we owed our vendors, we've, we've had to pay some invoices late, or we're having trouble keeping up or we overworked. We owe, you know, we owe our vendors 10K more than we did 3 months ago.
[00:58:28]
We're going to pay that down now because we just made the money. So you start to understand the cash flow and how, you know. The biggest problem that I see for a lot of restaurateurs is that they manage their business from their bank account. The amount of money in your bank account, especially when you factor in, you know, liabilities and credit cards, potentially health insurance, accrued tips.
[00:58:53]
Right? I mean, thinking about this, like, if you pay out your employees on tips on their paycheck tips on paychecks, right? You're holding on to those tip dollars. They're part of your credit card batch. So, you know, you could, that's not your money, right? So it's like, really, if you just look at a number on a screen on your phone and say, What's my bank account up today?
[00:59:15]
Oh, man, it's worth 75,000 today in the bank account. Let's go, let's, let's go buy a new, new knives for the kitchen. It's like, well, no, I mean, 20 of that is state taxes and you've got a payroll that's accruing that you're going to have to clear. Like, so. And it goes the other way too.
[00:59:32] Josh Sharkey:
If you amortize something that you paid annually and, you know, yeah, you had 30,000 expense this month, but it's actually, you know, hovering the next 12 months.
[00:59:40] Brian Stubbs:
That’s right. That's right. You just, you did. Yeah. Yeah. It's like, no, actually we did have the cash and we did buy, uh, we did improve the patio, right? We put in a misting system. We brought out, bought all new patio tables and that 15,000 is gone. But the useful life of it is going to live. Hopefully for, you know, 18, 24 months, and we're not going to have to be buying 1 chair at a time.
[01:00:03]
And we're not going to have to be buying or we're not going to have to be renting heaters because we bought a new heating system for the patio. So making those choices at the right time when. You know, and let's be honest, the most important decision that you got to be making usually on the cash flow statement is who do we owe money to our investors, the bank, you know, are we, do we want to pay down the principal balance of a line of credit?
[01:00:29]
Do we want to make a distribution because we haven't made 1 in a year? And our investors are, you know, kind of, kind of not meeting our targets and we kind of, you know, it's like, yeah, and, and that's the other piece that we do try to do is we try to help with some of the investor relations stuff as well, right?
[01:00:48]
Where it's like the most important thing for restaurant investors, and I, you know, it's a challenge, but it's communication, regular communication, good, bad, or ugly. If somebody is invested in your restaurant, at least quarterly. You need to let them know how it's going. It'll lower the temperature so much.
[01:01:09]
Even if it's not working, you have to say that. Like, we had a really bad quarter. You know, people were down. We're working on it. Maybe come and invite them into dinner to get some feedback, right? I mean, these are the people that believed in you. These are the people that wanted you to succeed. And, and sometimes people get so anxious and nervous about saying, of sending a bad report.
[01:01:31]
And it's like, no, that's exactly when you need to lean in and send the bad report. These are your former co-workers, or these are your grandparents, or whatever, like, these are the people that know you. And so they're, you know, If you haven't seen them in a while, and you're nervous to tell them that you, you know, that the business lost, you know, 10 percent over the last quarter, I would say that, you know, kind of get over it.
[01:01:58] Josh Sharkey:
Yeah, no, I couldn't agree more. I tend to be overly communicative and super communicative with my investors, mostly because even if most of it is good, they're, yeah, they're vested. When they hear the bad, they're going to want to help a lot more than someone else, because.
[01:02:13] Brian Stubbs:
Well, and then that's the other thing too, is like, you know, the, the, the challenge there is like, if you go bad, bad, bad, now all of a sudden you're presenting a real turd that, you know, jars them and causes all sorts of more friction.
[01:02:28]
So it's, you know, it's, but all of those reports matter, right. And, and, and understanding of matters and that's where, you know, I really think that I've been fortunate enough because a lot of people have trusted me and shared their information with me that I get to see a pretty broad spectrum, definitely in Austin, but even around the country of flows and ways of tackling things and ways.
[01:02:53]
And it's like, there's no proprietary thing that I, of course, would never share anything like, yeah, I don't have recipes or anything like that. Like, but I do have, yeah, You know, I've got my own recipe, I suppose, uh, where things like this work, have you thought about this, you know, within your context, right.
[01:03:11]
Have you thought about. I don't know. The one I always go to is, you know, the, you know, reverse happy hour or, I mean, Lin Manuel has a really cool thing, right? The community supported restaurant, uh, yeah, the CSRs. I mean, I always feel like, you know, it's like, if you have a really. If you've got a really good email database and a good social media following, it's like nothing is preventing you from a small business from being your own tiny little rip on.
[01:03:38]
Like, you've got to be careful about what that percentage discount is. You've got to be careful about, you know, the real cost of that. But that's the other thing about discounting anything in the restaurant business. Is the, you know, managing your discounts matters, right? It's like that 3 to 5 percent range matters on both sides, right?
[01:03:58]
If you're giving away 10 percent a night, that's, that's too much, you know? But if you're only giving away 2%, well, let's maybe figure out a way, because the true cost of that, right? It's a retail, it's a, it's a dollar value sales wise, because it's going through the POS. But the true cost of that product, if it's a, you know, there is some margin there to play with.
[01:04:20]
So the cash isn't as expensive to give, but you've got to make sure that that value is, is felt and perceived. So that's always a fun way to kind of, you know, engage with customers and see if you can't kind of hook them in a new way and get them excited about a new, a new product. So promotions are always huge.
[01:04:43]
And I think that, you know, the cool thing about social media is, is that you get to be yourself, right? You get to tell your story. You get to make it, you know, authentic and real.
[01:04:52] Josh Sharkey:
That's cool. Well, you know, just forward looking, do you, I don't know if you think about this at all, but I know this is somewhat cliche, but do you have thoughts on how things are changing?
[01:05:03]
Maybe specifically if you're leveraging any AI right now or any sort of like, you know, machine learning or predictive analytics to amplify what you're doing?
[01:05:13] Brian Stubbs:
Yes. And yes, right. It's like, I mean, we're, we're working with meez, I think one of the things that I always liked and has been helpful to my growth was.
[01:05:21]
Any tech in the space, I've always tried to research and understand myself as a user. Uh, because again, one of the biggest kind of like, you know, ceilings are one of the hardest things for restaurant owners, especially independent restaurant owners is they don't have a deep bench and they don't, we don't have, they don't have time.
[01:05:41]
They're too busy just trying to get ready for service. And so I've always felt like one of the things that I can do is take a demo. See if it's a better solution than another solution, and then try and harness it. Right? Like for me, one of my kind of my mission statements is giving the independent restaurant the power of the group, right?
[01:06:00]
Because groups have enough top line revenue to have a full-time, CFO, and full-time, CTO and a full-time, the whole c-suite can be hired. Mm-Hmm. . But when you don't, when you're all the C-suite, when there's the, when you're a c-suite of one. Anywhere that I can help take away some pain and have some information
[01:06:20] Josh Sharkey:
context, it's valuable. The semblance of like outsourced whatever it is, you know, services, CFO. I mean, I remember running a very large restaurant group before this, really large. And we had, you know, we moved to outsourced services. Accounting actually, and I think it's a huge benefit because you can get this economy of scale of knowledge, information, uh, you know, and, and to your point, like bandwidth of being able to look at
other opportunities.
[01:06:45] Brian Stubbs:
I'll tell you the biggest advantage, in my opinion, uh, this is kind of, I guess, part of my sales pitch. So forgive me listeners for selling myself a little bit, but you know, I'd like to think that me and my team aren't going anywhere. And we're not asking. You know, for health insurance or 401k, like we're, we're a little bit more contained and the biggest thing is, is the institutional knowledge loss sometimes in a small organization.
[01:07:15]
So you've got a close partner who access CFO, but then they have another opportunity. And now you've got this vacuum where you used to rely on this one person, and they're not there anymore, and you're trying to teach somebody new. Think about the time, like, right, the biggest thing you always hear is, like, training time and retention, right?
[01:07:39]
It's the thing that restaurants and bars just churn through. Because you have a lot of people in the building, when you have more people, they're going to have life happen. They're going to have injuries. They're going to have weddings. They're going to have babies. Like life is going to happen to everybody in the building.
[01:07:57]
We try and just again have a very clean deliverable that it's not just me. I'm not doing this alone, but my team that knows you continues to do it. And then if I just had an employee move on to a new opportunity, But she spent two weeks with her client set, with the new managers, talking about processes, talking about the uniqueness.
[01:08:25]
And so for me, I think where we're at is, yeah, I think that I see AI as a huge support tool for my employees to free up their time so that they can become even more kind of intimate and connected with their clients.
[01:08:42] Josh Sharkey:
Do you find yourself using it at all, like the GPT or anything like that, like
throughout your day?
[01:08:46] Brian Stubbs:
I haven't been doing, I probably should, because I'm not a good emailer. Like I'm much better like this. So, so not on, not on the AI piece. I mean, there is some AI stuff in the space. As we know, we've talked, we have a mutual acquaintance slash, you know, new friend. He's been on the show. Okay. Yeah. So Jordan Silverman from Starfish.
[01:09:04]
Yeah, shout out to Starfish. In a very weird, kind of, you know, collective consciousness, synchronicity. I think I met you and then I met him the next day.
[01:09:14] Josh Sharkey:
Yeah, by the way, what he's doing, Jordan Silverman, he used to be at this company called Market Man. And now and now he started this called Starfish. First time I saw it, I was like, Oh shit, I wonder if like.
[01:09:25]
You know, uh, accounting, uh, software might become obsolete at some point if you can like automate P&L's well dynamically based on your, you know, again,
[01:09:35] Brian Stubbs:
I mean, yes, the answer to that is yes, at some point, like I said, the blocking and tackling will happen what you hear on it, you know, whether it's like the slow productivity from like how camera was last night, you know, you hear this a lot though, it's like, that's not doom and gloom.
[01:09:55]
Yeah, what it means is, is it's kind of free up people. Like Genuine Article, like my employees to either aggregate more client information under a philosophical umbrella. And or connect more and educate and teach what we're doing and what, how we're doing it. And so it's like, it's, it's the freeing up of the time and that resource is the one that is finite.
[01:10:26]
And so all that data is always gonna have to be looked at and scrubbed, right? Trash in equals trash out. And if you don't have good processes and if you don't have good training, You're always going to be struggling to get a clear picture.
[01:10:40] Josh Sharkey:
Yeah. And I think, I think with all of these things with AI and specifically with, with these things in the, in sort of the accounting space, it just moves, shifts everything from being
[01:10:50]
task driven and tactical to being more results driven and strategic, you know, you can just spend way more time on like, you know, strategically, what, what, what are the right decisions as opposed to spending time on like building these.
[01:11:05] Brian Stubbs:
Right. But you know, I've got two kids, right. And so I mean, part of my fear is, is that sometimes, and I think that maybe my story says this a little bit, is that the tactical pragmatic is the foundation that builds good strategic.
[01:11:20]
And so it's like, you know, it's like, you don't want, you don't want to skip the line, like sometimes you kind of have to go through to get to the destination. You know? And I think that that's what I'm sensitive to. That's the only fear I have. Is people jumping ahead and then not really understanding what goes into it and why that matters, right?
[01:11:43]
And so it's a balance. Like anything, we just got to keep talking to each other and meeting good people like yourself and and working together and trying to make it better. Because ultimately, you know, like I said, going back to what I fell in love with about the industry is taking care of people. That's how you change the world.
[01:12:06] Josh Sharkey:
Yeah, man. Well, this was awesome. I hate to ask this, but just because we spent a lot of time on a lot of things, any parting advice for people that might be struggling with their, uh, with profitability of their business that, what's like the right next step?
[01:12:25] Brian Stubbs:
Don't be afraid to ask for help. Don't be scared. Uh, money, money is, you know, just like food transfers emotions, right? I always believe that, you know, you could, you know, taste the love and, and you're. And your favorite dish that your mom makes money has a lot of emotions that you don't know where the, the emotions come from. And, and fear is a big 1, there's a lot of people that, that are scared to, to look at, I mean, they'll, they'll like when do I open the bank account, right?
[01:12:55]
And it's like, don't be, don't be like, face it, face it with friends, face it with. People that you trust, I mean, just ask for help and start to start to engage with it in any way. Yeah. And because if you can face it, then you can fight it. If you know it, if it's accurate, now you can make a decision. And today, and yeah, it's like the next table is the opportunity.
[01:13:24]
Yeah. You know, the next ticket is the, is the next opportunity. So I do, I mean, I know I'm, I'm sounding very kind of coachy and very, you know, grandiose maybe. And if you know me, you're probably, you've turned this off a long time ago because you're like, Oh, Stubbs is on one, but, but no, I mean, I do truly feel that and it makes me emotional and it makes me, it makes me happy and excited because it's like, you know, It can be done.
[01:13:50]
It can be done. And it may be that the decision is it's time to move on and try something else. That's up to you. Like, you know, restaurants can fail. It's not the end of the world. It's, it's, you know, it doesn't define you as a person. You know, um, but you just want to make that decision, open, close, pivot concepts, not just with, just with some support and trustworthy information. Just face it, ask for help. You know, it's like what Mr. Rogers said, like find the helpers.
[01:14:18] Josh Sharkey:
Yeah. I mean, it really is. I know it sounds surface level, but it, but it isn't like, yeah, you, you know, before it's too late, you know, just go in eyes open about what's, what's going on. Cause it is, it is a tough business.
[01:14:31]
And I think that's what, you know, I think what we'll, we'll leave with here is, again, that's another thing that I, that I really appreciated when we first met was, you know, with me, our whole, our mission is to help people be creative and profitable. And those are two, Typically opposing things, and that sucks.
[01:14:49]
And I think that far more people can, can be both. And it's a great first step is go, you know, have an honest look at your, you know, at your business and, and just start making whatever change and get whatever help you can. Well, you can, you'll be, you'll be shocked and surprised, right?
[01:15:05] Brian Stubbs:
It's like, you know, understanding who you spend most, who do you send most of your money to from a purveyor standpoint?
[01:15:14]
Right. And going to the sales rep and saying, you know what, it's been a bad, it's been a bad year. Like, we're struggling, you know, what can we do? Can we look at our purchase history? Can we, you know, are there rebates or is there a, is there a product that we don't know about that would replace this product?
[01:15:31]
And it's half the cost? I mean. And they could be like, Oh yeah, as a matter of fact, we just brought on a new supplier and we love this product and we're running a promo and you know, the first 2,500 is, you know, comped and you're like, Oh, okay, great. And so now it was 76, 2,500 and then you get to go sell that for 7,500 and it's like, and now, now we're cooking.
[01:15:59]
You know, and it's just like it's just a snowball. Just find the pebbles and start it rolling and it will gain momentum
[01:16:06] Josh Sharkey:
All right, ask for help. We'll leave it at that. I appreciate it, man. Thanks for tuning into The meez Podcast The music from the show is a remix of the song Art Mirror by an old friend, hip hop artist Fresh Daily.
[01:16:19]
For show notes and more, visit getmeez.com/podcast. That's G E T M E Z dot com forward slash podcast. If you enjoyed the show, I'd love it if you could share it with fellow entrepreneurs and culinary pros, and give us a five star rating wherever you listen to your podcasts. Keep innovating, don't settle, make today a little bit better than yesterday, and remember, it's impossible for us to learn what we think we already know. See you next time.