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*A Book Review*

Setting the Table

By Danny Meyer

by Michael C. Gray

January 31, 2008

Danny Meyer has had a remarkable track record. He has opened eleven successful restaurants in New York City, with no closures. His restaurants are all unique, highly rated "destinations", including restaurants in the Museum of Modern Art and the first "flagship" restaurant, the Union Square Café.

Since the restaurant business is reputed to be one of the most difficult and is a highly competitive business, it makes sense to pay attention to what Danny has to say. (The fact that my daughter and her husband have two California restaurants, Marché aux Fleurs in Ross and AVA in San Anselmo, might have also contributed to my interest in this book.)

Whenever reading about someone who is successful in a particular industry, it’s dangerous to think, "My business is different." Instead, think "How can I apply this to my business?" Many of Danny’s points might seem familiar. Sometimes we don’t need to be told what is required to run a successful business, but we might need to be reminded.

All businesses are in the hospitality business. If our customers and prospective customers don’t find the business and its employees to be welcoming and inviting, and if they don’t have a delightful experience in encountering the business, they probably won’t try an initial transaction, let alone return again and again.

Like most successful entrepreneurs, Danny had a solid career in sales before deciding to follow his passion for restaurants. He was the top salesman for Checkpoint, a company that manufactured and sold security tags for retailers, for three consecutive years. He also had some exposure to the hospitality industry by working in his father’s travel business. He particularly enjoyed taking tourists to out-of-the-way restaurants in Italy.

Danny also became cautious about growing too quickly because he saw some of his father’s ventures fail, partly because his father was overextending himself.

Instead of choosing locations that were already desirable, Danny chose locations that had good potential for improvement and low initial rents, usually close to a city park. Then the restaurant would participate in upgrading the neighborhood.

In order to keep things manageable and preserve his personal life, Danny initially chose locations that were a five-minute walk from his home.

Danny said that one of his wisest decisions was to not be a chef or restaurant manager, but to find good people to fill these roles. This freed him up to "work on the business" of planning, promoting and leading the overall operations.

When choosing people to work in his business, Danny is looking for "51 percenters". These are individuals with highly-developed emotional skills to project care for customers and what they are doing. This is based on an observation of restauranteur Rich Melman of Chicago that 51% of a restaurant’s success depends on emotional skills and 49% depends on technical excellence. The five desired core emotional skills are (1) optimistic warmth, (2) intelligence, (3) work ethic, (4) empathy, and (5) self-awareness and integrity.

Danny’s philosophy of handling customer complaints is based on Neiman Marcus’s observation that a business is a collection of problems and mistakes, but what makes the difference is handling those problems and mistakes well. "By viewing mistakes as opportunities to repair and strengthen relationships, rather than letting them destroy relationships, a business is paving its own road to success and good fortune." The customer service goal is to be sure every customer’s experience has a great last chapter. If a customer is unhappy for any reason, make an adjustment on the spot. Danny’s five A’s for effectively addressing mistakes are (1) awareness, (2) acknowledgement, (3) apology, (4) action, and (5) additional generosity.

In order to have a business that will thrive over the long term, five groups of stakeholders have to be acknowledged and satisfied in this priority: (1) our employees, (2) our guests (customers), (3) our community, (4) our suppliers, and (5) our investors. The reason is taking care of the first four will assure the long-term success of the business, which will maximize the long-term benefits to the investors.

All businesses have a hospitality element because we want our customer and their families and friends to return again and again, so Setting the Table should be included on the required reading list for all business owners.

Buy it on Amazon: Setting the Table: The Transforming Power of Hospitality in Business.

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How to succeed in the restaurant (or any) business by the successful owner of 11 restaurants.


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Michael Gray, CPA
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