May 26, 2020
Listen to the related podcast.
I grew up in the restaurant business with my father. In the 60’s he owned The Cattleman restaurant in midtown Manhattan. At the time, it was the most successful restaurant in the city. From about age ten on, I used to hang out in the restaurant after school and on weekends. You might wonder how did ten-year-old travel from the upper west side to midtown Manhattan. Believe it or not, I was allowed to take the subway by myself. Occasionally I would hitch a ride on our stagecoach. What??!! Yes, this was a western-themed high-end steak house. We had a stagecoach that would take customers from the restaurant to the theater. If I had been a good boy, my father would send the stagecoach to pick me up and bring me to work after school.
My father would stand near the front door and greet guests as they arrived. I would stand right next to him and copy everything that he did. Of course, I was dressed in a three-piece suit. I used a tie tack on my tie and wore shirts with cufflinks. I combed my hair just like his, and my shoes were polished to a brilliant shine. Most days, a shoeshine guy would come to the restaurant and give shines to the staff. I always loved getting my shoes shined. It made me feel that I could tackle anything.
I learned how to shake hands, look someone right in the eye, and introduce myself. After I greeted guests for a while, I would help out as a coatroom boy. The big trick was helping a tall man with his overcoat. I had a step stool so I could reach up. Other times I was the cigar and mint boy. I would walk around the dining room, offering cigars and after-dinner mints. Naturally, I would cut the tip of the cigar and offer to light it. As you can imagine, I got great tips. “Oh honey, he is so cute, give him a twenty!”
On other nights I would be the cashier. On a busy night, we might take in $20,000. If anyone questioned the wisdom of letting a 10-year-old handle that kind of money, my father would respond, “Don’t worry; he is smarter than anyone else here.”
One thing about my father he believed in me no matter what. Every night before I went to sleep, he would remind me, “Don’t ever forget that you are smart, talented, and handsome. You can do and be anything that you want. Aim high, there is plenty of room at the top.”
At the end of a long night, greeting guests, coat checking, handing out cigars, and taking cash, I would hang out at the bar with my father and his friends and play Liars Poker while sipping a Shirley Temple. I would often win. The men tended to underestimate me. They did not believe a ten-year-old could bluff with a straight face. I would take a sip on my Shirley Temple, the call and raise.
I saved all of my earnings, and after a few years, I had enough money to buy my first drum set. But that is a story for another day.
I think I learned more about how to handle myself in the real world, hanging out with my father than I ever learned in school.
Over the years, my father expanded and built up 70 Beefsteak Charlie’s Restaurants. I ran that business with him for 15 years until we sold it. I shudder to think what we would have done in this crisis if we had to close 70 restaurants and lay everybody off. We most likely would have had to declare bankruptcy.
Unfortunately, I think that this will be the fate of many restaurants today. Frankly, the likelihood of restaurant success is very small. Something like 80% of new restaurants fail within the first two years. It is a very tough business. My father used to say, “The sales come in through the front door, and the profits go out the back door.” The essence of successful restaurant operations is CONTROLS. Very few new owners understand this. They think that they are going to hang out like my father and me and succeed by virtue of their personality. They don’t understand what goes on behind the scenes. While Dad was schmoozing customers out front, he had two trusted lieutenants in the back of the house watching every penny. His rule was, “If you watch the pennies, the dollars take care of themselves!” If you don’t have rigid financial controls, you cannot succeed in this business.
Anyway, I do think that the restaurant business will recover. The names and menus will change, but people love to go out to dinner, especially if they are spending more time at home. One of the first things I will do once we get they all clear is go out to dinner and get a real drink made by a professional!
Maybe I’ll get a haircut first!
CEO, CFP® Wealth Preservation Solutions
Personal Family Office / 360 Wealth Management
The opinions expressed in this podcast are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC.
This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.
Securities offered through Kestra Investment Services, LLC (Kestra IS), FINRA / SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Wealth Preservation Solutions, LLC is not affiliated with Kestra IS or Kestra AS. Neither Kestra IS nor Kestra AS provide legal or tax advice and are not Certified Public Accounting firms.