How to Make $1.7M/Year in the Restaurant Business
would you guys like to learn how to start a successful restaurant from someone who owns a restaurant that's generated 1.7 million dollars in remedy last year [Music] today we're here with carlo the owner of don luchos he's a regular on upflip channel what are you gonna teach us today yeah today we'll go over a few things that will help you run a successful restaurant like good operating systems how to be cost effective in your kitchen and marketing strategies that will help you get to your customers and a ton more so keep watching this is gonna be fun [Music] all right carlo for those that haven't seen our previous episodes with you give us a brief explanation on why and when you started don luchos yeah so now lucha started in 2013 started as a food cart uh reason i started is because i love food i love to be able to share my culture with people so i think through food is like the best way to do that and i'm really passionate about food and service industry so diving more into the specifics of operating a restaurant how do you refine your process as you grow as you continue to expand yeah i think it's very important that as you grow continue to span always have knowledge of you know how much each plate is costing you how much is your labor costing you so you can you know adapt prices adequately and you can continue to have that growth that you want every year so what do i need to do to do that is it hiring a person is it having the right software give us more specific combination of both some people like doing it i personally don't like doing it so i hire out and technology for sure you want to have the right software so who do you accountant yeah i have an account and then i have a financial strategist that works with me day to day [Music] so what's new for don lucho since last time we interview you and how is 2021 as a business owner the food truck started getting activated again we kind of lost our food truck program for a while due to everybody working from home you know not many people are leaving their house so we we kind of stopped that area and then and we're revamping it now like towards the end of 2021 we started getting active again and then 202 we have a nice schedule already set up so that's like one of our better marketing uh tools i would say because it's you know you're going to be able to try the food you're going to be able to and it's all over town all over town right we're moving around the city so the whole idea is to get you here the restaurant you know any different uh features experiences services that you've implemented since last time well we have our ceviche bar that we're making it more and more active each month as we go by probably in the spring we're going to have it full throttle so it's kind of like you know a new concept within our restaurant that we're going to start moving around and hey maybe one day we'll come to life and we'll have an actual business called ceviche bar you know be one of the other concepts that gets created within don muchos well last time i got to tell you you didn't have this awesome branding i don't remember you wearing it branding yourself so that's that's another thing that i see that's different two stars for two years of the restaurant nice so next year it'll be three it's your b3 what's your monthly revenue today as it compares to last year as well uh yeah average like anywhere 140 000 in sales about 170 a month this time the yeah was 21. was it different last year 2020. it was like right around 100 000 a month okay yeah so you're growing at what 23 at least that's the goal yes right around there yeah cool looking back at 2021 how does your revenue break down between food truck restaurant and then catering yeah so twice everyone is all restaurant like there's like barely any movement with our food truck we used to be focused on offices catering so we had some but not very much at all a lot of our catering was catering to office buildings as well so nobody's in the office anymore but this year we're anticipating uh more weddings to be taking place and then we're active with the food truck like three to five times a week so that all is starting to come back to life hopefully much better this year i hope so yeah and i believe so it's getting good [Music] when you grow how do you balance the quality of the food the quality of the service and everything else yeah i think it's very important to recognize uh you know the days or the seasons that you're the busiest so you can have the appropriate amount of staff that you can you can maybe shorten your menu on the on the busier days where you know that you know your kitchen's starting to get kind of clustered with uh having too much stuff on the menu so we do that we do that every friday saturday is like the peak of our sales uh every week so we make sure to put a menu on in place that's going to actually help us be effective and be able to serve our customers okay what else also i think as you grow you know it's very important to put the right pillars in place so you can start my mom told me never to interrupt but i think we should leave this as a hack so keep watching and you'll share that with us later how about that absolutely when you first opened don luchos what mistakes do you think you made that you wish you would have done differently with what you know now i feel like everything that happened you know you start learning from it and there weren't huge ones where i just like kicked myself in the head i think i would have kicked myself in the head if i didn't take the jump to become a restaurant so well i feel like it happened at the right time and then you know it's just a learning experience we didn't have this patio uh before we created during the pandemic i thought about doing a smaller patio before that would have been a mistake that i avoided luckily you know i decided to make it bigger because of the shutdown i knew everybody was going to want to be eating outside but i mean there's so many that i could mention anything that tops the mind just out of curiosity for us probably doing the the due diligence and learning a pos system that would be adequate for the amount of transactions we're going to be doing and swiping cards so it'll save me quite a bit of money important to invest in that research before committing to absolutely okay absolutely that's important you guys check out our podcast as well upflip.com forward slash podcast we dive into more specific questions such as these check it out right now carla i want to talk more about opening a restaurant specifically so tell us a little bit about what a soft opening is and what benefit it has for a restaurant owner yeah i think soft opening is probably one of the the more important phases because it allows you to interact with your customers and also dial in everything from your service to your kitchen and what many you want to present i did a soft opening for about a month so it's a time for trial and error it's a time for for you to figure things out you know but you're not serving people for free right you're not officially open but you're open to yeah i mean you're officially open for business okay i mean at least that's the way we used it so we were officially open for business for a month and and we had different hours we were operating and then when we finally opened our hours were from 12 to 9 instead of just five to nine every day you know so we have like limited time frames of service while we figure stuff out while we're hiring while we're training you don't do that in just a matter of two three days you know so you're figuring out how the flow of the kitchen's gonna work you know how your your outside service team is going to work so it's time for trial and error and down everything in so without it it could be chaos if you just go ahead and hard open it yeah and then if you don't say you know grand opening and you don't use that cover that you have for soft opening your you know people might come in and they don't know you know and they'll be like oh this place sucks you know but you just you're two days open you know they go leave you a terrible review on yelp but little do they know that like three days ago you opened and you're still trying to figure everything out so i think restaurants should definitely use that soft opening phase to figure stuff out and let your customers know it's a soft opening because you're still trying to figure everything out okay awesome guys we'd love to hear from you on your experience with soft opening any tips tricks suggestions please comment below love hearing from you [Music] let's switch to social media you're huge on social media you've got more than 10 000 followers on instagram which is awesome what posts do restaurant owners need to focus on posting what what posts do the best i like teaming up with local influencers that are going to restaurants you know that are in the foodie community i will invite them over we will do collaborations quite often and when we do those like type of giveaways it really helps to create traction and people commenting and you know a lot of the rules are usually going to be like tag a friend you know or like sharing your stories so you're tapping into all these different you know groups of people that you may not have access to when you're doing that so those work really great collabs i think uh instagram you know has come out probably gonna say like the reels it's like a type of video that you do and uh they're they're trying to compete with tick-tock because six stocks like the big one right now so those organically get a lot of movement more than a regular post would so do you run social media i do it myself i actually enjoy it you do okay but i do have i do have during the busy time of the year i have people that help me create content but in the end i'm the one you know nobody's gonna be able to say like me so i'm the one behind you know the post of how you know we're gonna structure it what we're saying out to our followers and the community but as far as like posting daily posting five times a day any tricks there any suggestions uh yeah i mean i found i found uh to be fruitful more like late late at night or i don't know if you do have a lunch special like do it right for lunch maybe like two three hours early because you might have already set your mind at 10 p.m or 10 a.m what you want to have for lunch so
like maybe like 9 00 a.m you know i catch you early when you're like huh i'm kind of i'm going to get lunch today where should i go and you're on your phone and boom it pops up right so it's like right before what you want to advertise so if you're advertising for lunch say three hours early if you're advertising for dinner same deal like three hour rule the algorithms can show you those people when they get home they're usually on their phone so anywhere from like eight to ten if you're you know trying to talk about some sort of promotion throughout the week that you're gonna have you know you can probably catch a lot of your fan base around that time it's cool yeah you've got great branding curious how important is it for you as a restaurant owner and anything else that you'd like to add yeah i think it's very important for you know for your load to show up somewhere and and people you know be able to relate to what you stand for and for us you know we're bringing peru to you we have a flag there looks really good we have a food cart in the back that we started with and you know so we want people to know that we're serving food we're doing some sort of service that has to do with peru and uh it's very important you know people to know what you stand for and what you're doing awesome okay oh by the way you guys today's sponsor is trademark factory a one-stop shop for trademark registration services for a fixed fee licensed attorneys will handle your trademark filing to registration and if it doesn't get approved guess what you get all of your money back so click the link in the description below to learn more about trademark factory and how they can protect your brand and i will probably be using that service because that's something i need to do there you go [Music] tell us how you set up your online ordering portal and what system do you use to manage and host it yeah we had a couple different services i did the study of which one is best and i ended up going with clover so clover online ordering it's compatible with the website structure that we're using so people can actually like do their online ordering and we'll we will get the tickets here in the kitchen so did you do it all yourself or no yeah it was you know a lot of studying that had to be made so i i had my manager dedicate himself for a whole week oh wow um roughly a whole week to learn the system start migrating all our menu items from our old pos system to our new one so it takes time you know so it's definitely uh something that you want to think about maybe dedicating one of your employees to learning the system and that way you can learn from them and i also did a lot of a little bit of research as well so is it worth it it's definitely worth it if you're going to save 20 000 and then okay so we the reason why we switched was uh we were using square before and there their average percentage rate was was higher and when we ran our same numbers straight across the board from one po os system to the other so square to clover we ended up saying like 20 grand [Music] one thing you mentioned about free advertising free forms advertising is this food bloggers right these influencers on instagram so how do you tips tricks suggestions on connecting with them you have to start browsing like instagram or facebook or whatever tick tock whatever you plan on using and kind of do your due diligence and see how many of these people actually have like an organic following that is what you need to be after you know but if you're not big i mean they may not want to waste your time on you can that be a possibility or yeah that's true i mean it doesn't hurt to ask you know so the more you ask the more you know you can start scheduling and you got to reach out yeah you got to get out there most people aren't going to say no to free food true but it does help your bottom line right your business your yeah yeah absolutely brand and everything yeah because they have a crowd you know you want their their crowd to be aware of what you're doing so yeah it's a cool collaboration you've had some amazing people collaborate with you yeah yeah we've had quite a few it always helps out with the latest one we did we did a three 100 giveaways with a seattle foodie adventure he has a 123 000 followers on instagram the video he did has over 80 000 views for real yeah and we did it twice actually we did one like about three months ago and then he reached out he's like hey how about we do another one i'm like yeah sure you know so that that video had like 90k views and we were super busy during the whole weekend so it definitely definitely brings a lot of traction your way [Music] so what would be your one piece of advice to small business owners struggling to build reliable staff especially in this season of life right yeah it's definitely one of the toughest times i think but i think you know like what we do here is we treat everybody like family you know we make sure that we keep a place that people can get along and a happy place to work happy workplace and you know you try to take it day by day and make sure that you know you're keeping your staff happy with what you're offering okay competitive wages too we do tip pooling here so okay you know certain people wanted certain shifts because they knew there was more tip money involved you know tips no no and i think uh that really helps out like once i did the tip bullying i think you know it just keeps all areas pretty happy so if i ask somebody hey do you want to work the the morning shift and i'd be like oh no because i'm not making any tips here you know it's like everybody's getting at the end of the day at the end of payroll whatever came in as tips is going to get distributed either to everybody well not evenly but there's a different percentages but you know okay at least in terms of like if you talk about the servers you know like just because you did a morning shift twice in a week it doesn't mean that you're gonna get a significantly less than somebody that's working a busy you know night shift so i think that that really helped a lot to keep people from wanting to pick and choose what they want to work yeah that's a good tip for you guys what are some crucial systems and processes that need to be in place before you open the doors to your restaurant internally in terms of you know managing staff uh i have you know on a busy day i'll have about 6 12 about 13 14 people you know on a busy friday saturday evening i need to schedule these guys you know and make sure they come in at the right time and know if they came in late if that's an issue i need to start addressing it but have software for your clocking in talking out and software i use sling it's called sling yeah okay and that helps you know schedule people out so you know you know like if you start doing this verbally with 24 people it's just a headache it's like oh wait a minute did i ask so-and-so to come in today or you know so but if you have some sort of software or even if it's like you know manually done it it helps a lot to know what what your staffing looks like each day how much you're spending for each day right what else well so in terms of systems processes obviously you know like for for charging and and and clover is way more restaurant friendly because i get to see my tables i get to see i see the other one was kind of more just like you create a ticket and then but you know i just like more restaurant-focused this area that we found in clover so it's a worthy investment at the beginning yeah yeah absolutely um but yeah the more the more uh software you can implement to help you you know in terms of uh managing your inventory managing your your staff and and all that's gonna be a lot better in the future when you start growing [Music] so i just want to follow up in terms of systemizing everything within a restaurant setting give us an example of finding an issue and and resolving it or fixing it yeah i think it's very important to keep track of your numbers you know very simple like hey if your your payroll and your cost of goods that you're getting is higher than what your revenue is coming in that's a huge red flag but if you want to even bring it down to the t you definitely want to keep track of everything your cost per plate you know how many are you selling of each plate which ones are your best sellers do you have those dialed in at the right price so definitely want to keep track that's gonna be your first red flag i think first one okay so it's easy in a restaurant to think you're making money but in fact you're losing is that possible yeah it's very easy with so much going on you have cost of labor you have cost of goods sold those things start getting out of whack a little bit and you won't even really know because the cash flow might still be coming in but in reality you're actually not making money or maybe even losing money man okay so know your numbers right yeah very important we'd love to hear from you guys comment below in terms of how you how you operate and how you know your numbers what system you use please comment below we appreciate that [Music] i want to follow up on the employee uh morale situation like what do you do specifically to keep everybody super happy and not have them go somewhere else well it's tough you know so some people are going to go somewhere else regardless if they have new plans going on but with the team that you have here i think it's important to you know maybe do some activity we had a company party at the end of the year where we you know brought some games in and have some food we have like an employee menu where you know the food's on you gotta go for a shift on the house you know start doing like maybe more specials we do do that you know have like hamburger days and stuff like that but and i think it's very important also like i have team meetings so like life isn't difficult for like the switching shifts you know i think when you keep a nice workflow between different shifts coming in it's also like hey you know like i like the organization here in terms of like how organized you are and how things just kind of flow it's very different to show up at a shift maybe at a restaurant where things aren't organized and you got to do the work for the prior shift so you're saying the team meeting at the shift change is crucial and very important we don't quite do team meeting in during the shift change we have like probably like whatsapp with the group or we share stuff but i think it's very important to you know leave everything set up for the next team coming in okay for 2021 compared to 2020 how many employees did you hire last year uh well i know we had a total of 24 at one point in our payroll 24 employees yeah where are you at now for this year right now it's the slow part of the season so part of the year winter time i have uh 19 people on payroll and is the pay about the same over the last couple years yes and no i mean every year you know the city has price increases so every year it's gone up okay so yeah that's something that's already kind of like tailored into you know the workforce and you remember your payroll uh number per month yes right before uh like when we're in the in the top like part of the year it's like 30 000 every two weeks right around there so 60 grand a month just like payroll yes well okay payroll takes about um 34 of our revenue blitz time with carlo carlo let's fly through these what's your favorite business book i haven't read in a while but i'm listening a lot of podcasts uh restaurant unstoppable okay and an up flip of course right off of course yeah what would your ultimate business superpower be uh multiply myself okay can you tell us about your most bizarre business encounter i need to come back to that one okay what's the craziest risk you've ever taken jump into the restaurant full-scale restaurant business and why do you think only a handful of startups succeed don't have a clear business plan okay this is from corey wright corey thanks for your question how has the pandemic impacted your business in the seattle washington area it pushed me to create a big patio which actually served for a lot okay this is from hyperion kennels what was your biggest worry getting started that turned out not to be a big issue not having enough cash to build my patio okay this is the same person do you ever do commissary agreements with mobile food vendors as a side income not at this point okay and then this is from tanner ray thank you tanner how do you find a good location how do you tell what a good location is for a restaurant maybe look into the prior places that have been there this place for 20 years had failed but i believe that a corner i can make work but it's been a food business or 20 years yeah for doing a failure cool places i've gone out of business all right you want to come back to that question on the uh craziest bizarre business encounter are we done with that they wanted us to serve a hundred people in 30 minutes okay and that's pretty i said okay we can do it and we did it wow earlier in the video we told you about a hack that you started talking and i kindly interrupted so why don't we take this time and share with us i think you said the word pillars yes what do you mean by that and how did that change your business so pillar you know it's like a strength that's something that you know solidifies an area or you know helps it keep it up so um it's about having like good pillars in each area there's so many rest so many areas in a restaurant you know i have my kitchen i have my bar i have my service team so finding the right people to be the lead in those areas and be in charge of the training because you can't be everywhere so it's very important to start delegating is like one of the most important things that i'm starting to be better at is that hard to do for some people it's harder especially for me because i i love doing everything i've i created everything it is hard to let go when you're so involved when you're so hands-on you know i'm not somebody that was mainly an investor and said hey you guys figure it out like i've been creating these stations and areas throughout the process of growth it's interesting that there's like the secret downfall in not delegating for the long-term growth yes because you can't be everywhere like i said my business superpower i'd like to multiply myself so i could be you know in charge of all these areas maybe that i'm delegating you know so okay but uh yeah awesome it's not possible we gotta learn to delegate [Music] color in terms of the food truck specifically what systems do you use to keep track of inventory scheduling etc anything different well now it's separate because i'm actually still using square for the food truck while we figure out a better way to integrate it maybe to our clover system so we've been using two pos systems one dedicated only to the restaurant for our online ordering and our processing system inside for tables and all that and then our food truck is actually still running off a square while we figure out a few things and through that same place that's nice because it keeps it completely separate okay and through that platform you're tracking inventory as well food supplies or uh yes and no so no not quite we haven't really quite dialed in the the inventory but we have like a separate excel sheet that we're still doing it through that so a little old-school stuff low school still so i'm trying to get it all dialed in okay yeah [Music] how much do you spend currently on advertising and if it's different uh streams what has the best roi and on advertising right now we're spending right around probably like 600 to 700 a month okay talking to my financial strategist she says we can spend a lot more where's the 600 going break it down uh right now we're doing like about 250 for google ads we're doing about 250 for um yelp we're doing uh other instagram posts that are sponsored facebook posts are sponsored so that's where our 600 700 which ones do you find to bring you the most exposure and new customers looking at the google analytics probably google i think google's like the most just people use one yeah like you've got peruvian food boom we pop up yeah probably that one and then do you do that yourself as well like handle that yeah yeah well i had people that are helping me out but that right now it's pretty standardized where i can just kind of like you know i got my focus groups my focus areas of the city already dialed in so i kind of just play around with the amount of money i want to spend each month and just make sure that that focus didn't change from the area in seattle to bellingham you know somehow just like moved like why am i advertising with people in bellingham you know i don't need to be focused in seattle yeah so you pick the uh demographic area demographic area right and that's that's just where the money's going just that yeah it's going to be thrown out downloads interface google makes it pretty easy [Music] have you seen an increase in in your operating expenses by how much if you can share and then interesting enough which foo which food is more expensive harder to get just interested to find out yes it's definitely a real factor especially for the restaurant industry it was on the news just yesterday and like the week before so i am trying to keep as much as i can of it down but it's you know like i said uh 25 pound a bag of onions used to go for eight dollars now it's 20. so it's like how do you how do you battle that crazy like we use a lot of i mean this is the base of like almost all our dishes so do you pass that along to the consumer i mean well yeah you have to like right now we're actually working on on seeing where we're going to rise raise our prices a little bit and uh yeah it's something that's inevitable also like cost of labor goes up every year at the start of the year you know like it went from 15 to 15 75 i believe if they're not making over 150 tips per hour i could be wrong on that but it's right around that ballpark and then you have of course your inflation that'll affect your your prices [Music] so you bring in chefs guest chefs to the restaurant and yeah they cook for you can you tell us a little bit about that idea how it helps you then what's the benefit to the restaurant yeah so currently uh last year we had two guest chefs that were coming in one on tuesday one on wednesday how it benefits is that they're offering something new and it also brings something new for our regulars that are coming in and exciting so like for instance uh tuesday we had a peruvian chef so he was doing different peruvian dishes his specialty is japanese peruvian fusion called vk cuisine and uh he did that about for almost like two years and now he has his own restaurant that's cool pioneer square go visit them really good too and then wednesdays we actually we're doing something completely different we're teamed up with a venezuelan couple and we're doing kind of a fusion with them so we're doing like a peruvian venezuelan fusion and then they're also putting out their venezuelan menu so on wednesdays people can come you know five to nine you can find a completely different menu uh that's presented from over there that's awesome because as a regular maybe to this restaurant to be able to come on a wednesday or tuesday and experience a different you know taste that's pretty cool i don't think you get that at every restaurant absolutely [Music] what's your major source of headaches right now as a business owner inflation mm-hmm very tough right now and how does that relate to you like do you feel bad about having to raise prices or what else yeah exactly i mean you know you want to i'm happy where the prices are but you're forced to you know bump them up just because of what's going on with inflation and stuff so nothing you control though right no not at all so it's kind of just got to keep tabs on it and make sure that as prices increase or maybe it's only for certain dishes you know so you need to know where you're gonna have to onions let's say i don't use onions for something and you know the prices haven't gone out up on sausages whatever so i know i don't have to raise anything there but you got to do your due diligence to know where you're actually spending your money with or that inflation is hurting you so got it how do you dedicate your time today what are you doing mostly as a business owner restaurant operator yes i'm still very much involved in all areas um so you know in the morning time i'll take some time to kind of look into the specials of the week that we can do coordinate with my chef and you know what what what dishes are going to give us the most return when to put them out you know when is it going to be adequate for our kitchen to take on specials of the week you know what time frame so think about that marketing strategies you know like what do i want to post on social media and start creating kind of like a chronogram of during the week like what i'm going to post when for for marketing purposes so you're pretty involved still still very involved still very hands-on still spend at least like 12 hours a day working 2012 hours a day whether it's me on my computer you know responding emails or here on on site man that's a lot of time for a restaurant operator i mean what at which point can you kind of step away and have a little bit more life just curious yeah i have my days where i say hey today you know i leave everything in place and and then i know i have my my day free but still you know something goes wrong it's kind of like having a child right like you know you're never really a child you're never really off the clock so if something happens something goes wrong like you're gonna hear about it if your manager can't right take care of it a child with 24 kids and 100 clients yes yes [Music] how long after you opened did you wait to hire someone to manage your social media well i still manage it i still still do the majority of the work i did hire somebody uh to create content during the busy well i was probably halfway in through the the the restaurant so like probably seven months after i opened okay i was too busy so i had somebody that helped me create content videos share more experience on that was it worth it you do you do that definitely definitely i think it's definitely worth it because you know i'm all over the place i'm doing a bunch of stuff and if you want to create the right content it takes time you know so it's important to do that i think if you don't have the time and you want to focus on what you're good at yeah exactly delegate the rest okay well carlo this has been a great crazy fun and interesting it's been our third time so we appreciate that i know our fans and audience really appreciate you you guys comment below we read them you will read them we'll respond thank you so much thank you thank you for having me my pleasure to see you guys i hope you guys enjoyed this incredible episode with carlo the owner of don lucho so i hope you execute on everything we talked about thank you so much for watching and supporting our channel by liking subscribing and hitting that bell so that you don't miss any of our amazing content we generate for you guys
2022-01-27 14:41
