Pulling The Plug

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QUESTION FROM: Randy in South Dakota

“As a member of large corporate launch & integration teams, then over a decade as someone who started the day by asking "what can we do better" in my own business; I witnessed first hand the ups & downs of one step forward, two steps back. How do you know when to pull the plug on a process change or improvement you just knew would work, but it didn't. It's one of the hardest decisions we have to make. Actually, it's the second, since admitting we were wrong is sometimes harder. How much time will you give your process change or entire project before you pull it back, tweaking it or scrapping it all together?”




This ability, to read and react efficiently, must be built into the business early on by having an awareness of “Confirmation Bias” paired with a mutual respect for every team member, a genuine appreciation of their unique perspectives and a commitment to revisit / re-evaluate operations regularly.

Determining the length of time you give each failing process… or process that has yet to prove itself - depends upon a myriad of factors including: extended cost, margins, employee impact & perception, guest impact & perception, technology required to sustain, facility impact and ancillary impacts that touch other areas of the operation including but limited to: ancillary revenue centers, the brand as a whole, other outlets or future planned outlets, short and long term plans, vendors, neighboring businesses, the community of which you are a part, etc...

Grow your team methodically or take time to establish a collaborative culture statement to get you all on track. Although starting out with a long-view approach is best, it's never too late to back build integral pieces of framework and establish new policies and procedures like monthly or quarterly reviews with your teams.


Sometimes you have to look at a loss like a loss and whether you have a contingency plan in place or not.. just stop the bleeding.

In many situations (e.g., being upside down financially, loss of traffic due to significant changes in demographic, loss of available workforce to draw upon, changes in partnerships, public works impacts due to city or state projects, unsafe working conditions, etc..) it does make sense to just walk away but before doing so - be sure to carefully evaluate your total financial, legal and overall brand exposure:

Ask yourself the following:

How much equity vs. debt do you have?

What is the value of your current inventory, FF&E in place and/or contracts?

Do you own or Lease the building?

Have you consulted with a restaurant broker, business broker, restaurant / hospitality consultant and/or auction house?

What is the lowest market rental rate for a comparable facility in your market?

(There’s an old adage in brokerage: “Always check with the neighbor first.”…and for a VERY good reason: The party most likely to see value in your business and/or property/remaining term in your Lease will not only have an intimate knowledge of the area; they will like the area. Since people who live and/or do business in the area have already chosen that market, they are, demogrphically speaking, “pre-approved”. So…have you spoken with those physically closest to you (i.e., neighbors on either side or property owners within a mile) or those “emotionally close” to the business (i.e., management staff on your payroll)?

While realtors are certainly an avenue worth pursuing, I’ve found that a business broker, restaurant broker and/or restaurant consultant are far more productive relationships when pursuing an exit strategy or re-positioning.

Good Luck and let me know if I can assist any further,

Josh Sapienza