Business advice case study – Bohdi restaurant in San Francisco
Posted by shannonclark on December 10, 2008
This post is my personal opinion and advice, unsolicited and uncompensated for by anyone, so take it accordingly.
A few nights ago I had dinner at Bohdi restaurant, a Vietnamese restaurant here in San Francisco which I have long walked past but haven’t previously had a chance to try. It is a huge restaurant occupying two storefronts in the Mission, in a part of the Mission which has long been borderline but is rapidly gentrifying with new restaurants, shops, galleries and cafes opening up all around Bohdi.
As I ate my dinner I looked around, counted the chairs and tables, counted how many other people were eating that evening (a Sunday night), I watched the one waitress managed the two large dining rooms, and I puzzled on what and where this restaurant had gone wrong.
Unfortunately based on my observations of hundreds of restaurants over the years, I would predict that Bohdi restaurant will close within the next year, probably sooner rather than later unless they make many changes.
I should pause here a bit and explain my views and my purpose in writing this post (especially if you are reading this without being a regular subscriber of my blog or a long time reader). I’m a fairly serious foodie and longtime “chowhound”. Back in Chicago I was an active poster and participant on Chowhound, and then later on LTHForum which friends of mine started as an alternative to Chowhound (this was before CNET purchased them). Since college (early 90’s) I’ve been an avid explore of restaurants, especially Asian restaurants, and eat out often.
I’m the amateur in my family, my father has had a 40+ year career in the food industry helping to design and build food processing processes and factories throughout the world. He’s written many textbooks on food processing and hundreds of academic papers on the food industry. I grew up learning to cook from both of my parents and talking serious food with my whole family. My sister’s long time boyfriend is a former food critic for the New York Times and has recently sold his 3rd and 4th cookbooks which will be published next year. He’s edited recipes for many cookbooks and has worked on multiple TV food series.
In short my immediate family takes food very seriously. I’m also a serious cook.
And professionally I’m a consultant and entrepreneur, so I look at restaurants not just with the eye of someone who loves food, but also with the eye of someone who is an entrepreneur and who advises businesses.
So with that said, here are some of my observations about Bodhi specifically and my suggestions for them to consider – and more broadly for anyone who has a food (or indeed other retail) business to think about.
The good news
- Bodhi serves flavorful and tasty food. The food is good, not without some serious issues (more on that below) but at least they are starting from a good basis of chefs who cook their cuisine well
- Bodhi has a large space with lots of potential. They literally have one of the largest restaurants I’ve seen in San Francisco, not the absolutely largest but a very big space, I counted a bit over 90 seats as they currently have their tables and chair arranged and they are legally licensed for 108 people.
- The location has a lot of potential. They are located on a stretch of Mission St which is almost at the beginning of SOMA. It is a still rough neighborhood but all around them are new galleries, restaurants, shops and cafes which have opened in the past year. The location does not get a large amount of foot traffic, but it is close enough to many parts of the city and parking is still manageable that they could draw a good crowd, and indeed within a few blocks of them are restaurants which are always busy and usually packed.
The bad news
- They are nowhere near busy enough. They should be serving 200-300 covers nightly for dinner in a space this large, if not more. Instead I’d guess that they rarely serve more than 40-50 covers a night, if that, with perhaps a few additional takeout or delivery orders.
- Their portions are far too large. Large portions may seem like a good deal, but for a restaurant they mean people do not order as many dishes or as many courses. In many cases they likely mean wasted food and certainly increase the costs to the restaurant of dishes they serve. In large part I think this is in part because they serve food on overly large plates.
- The decor, especially the cheap tables and chairs without any tablecloths is at odds with the menu. They are using uncovered, cheap four or two top rectangular tables and basic standard stackable chairs. In short tables and chairs right out of a discount restaurant supply house. The have a single flower in a small vase on each table but not tablecloths. Everything except the physical size of the space shouts discount, cheap location. The prices, however, are not exceptionally cheap though neither are they overly high, a few dollars higher for most dishes than the cheapest of Vietnamese restaurants, though the quality is higher.
- They only have a wine & beer license and no bartender. Though they have a large bar with 9 barstools at it, they have no bartender and are licensed (based on what is for sale) only for wine and beer. And they do not stock a wide range of drinks at that, nor do they push them on customers. Alcohol makes up much of the profits of any successful restaurant, yet they are seriously forgoing this.
- The layout and single waitress does not draw people into the space. As I sat and observed people walking by and on first entering the restaurant they often looked around a bit puzzled. Here was a huge restaurant spanning two storefronts yet only a few patrons and you have to walk in, past a fountain, and look around to find someone, anyone to guide you to a table somewhere in the vast space.
So what does all the above mean in terms of suggestions I would offer?
For starters I would suggest that Bohdi make the following changes:
- update the decor at a minimum by adding tableclothes to hide the cheapness of the tables. Better would be to replace the tables and chairs with more natural and rich appearing materials. Tables of real wood, chairs with some design to them. This would be much more in keeping with the neighborhood which is edgy and arts oriented and would make the space feel higher end
- leave no part of the space unfinished, cluttered with storage or apparently unused. At present there is an entire seating area, between the bar and the bathrooms which looks like it is never used. The tables and chairs are just scattered around that space haphazardly. If the demand for that space as a dining area is not there, then perhaps it should be transformed into an extension of the bar and made more functional.
- Remove much of the visual clutter, such as the odd central fountain and the very old (and cheap) art hanging on the walls. Did I mention this is an arts district with countless galleries in the area? Make a deal with one or more of them to hang art on a rotating basis that is more in keeping with the neighborhood (and not coincidentally might suggest holding an opening party in the space each month)
- Simplify the menu still further to have fewer dishes which are even more seasonal and always using fresh ingredients. Write about the choices and suppliers used. Reduce portions (while keeping prices at current levels or even higher in some cases – use local, organic meats and charge a few dollars more for example) . Add weekly or daily specials to try new recipes and to make it special to dine in the restaurant.
- Upgrade the wine, beer and sake selection. Again look for local supplies, there is Sake brewed here in the Bay Area for example as well as many local breweries and lots of local wine. Include imported sake, beer, and wine but emphasize quality and pairings with the food. Add special beverages for non-alcohol drinkers and train the waitresses on selling pairings.
- Get demand higher so that the bar has a full time bartender and give very serious consideration since the space is so large to transforming one section to a lounge and to upgrading the license to a full liquor license (which is, I admit costly especially for a space this large). Consideration should also be given to getting a public performance license though that depends on if the space would be used frequently for non-dining events. At a minimum a license that permitted use of one of the two rooms for private events on a regular basis would be a good idea.
- Add the chef’s name to the menu. This is assuming that there is a chef behind the restaurant (if not, get one). But restaurants with the chef’s name attached enter a different category in the mind of patrons than those that are seen as ethnic, cheap dives. With a space that could seat nearly 100 people and should probably see 300+ people a day if not more (since they are open for lunch as well as for dinner) they should be targeting a higher end audience.
- At the moment I would guess the average cover is less then $20, making these changes would likley move that closer to $30 perhaps even $40 if most tables are getting a bottle of wine or a couple of beers or cocktails. At the moment few patrons would get appetizers, entrees and desserts for everyone at the table, and it did not appear that most were buying wine or many drinks. However throughout San Francisco there is clearly demand for restaurants where the average cover is far higher than $40 and indeed this could be a great date or group dining restaurant where a couple could have a great experience for less than $100.
- With new furniture make a wider range of table types to signal a wider range of customers. At present they have only a very few two tops and every other table is a four top. There should be a few tables set up for larger groups, perhaps arranged for semi-private dining experiences and there should be far more two-tops set up as with only one exception every single group I observed at the restaurant was a couple out on a date.
A few general underlying premises behind my suggestions (here’s where things may be a bit more broadly applicable):
- Curation adds value. It is hard to create a streamlined space and in the case of a restaurant menu. But a tightly focused menu (or selection of goods) signals quality – the assumption being that there is nowhere for a chef to hide on a short menu. Also that every decision has been made with care and attention (as it should have been). A short menu also allows for frequent changes to reflect the best possible ingredients and suppliers. In a non-restaurant context think about the visual difference between higher end retail shops and dollar stores – very few (if any) high end shops are cluttered – instead they sell a relatively small but in theory highly curated selection of goods. Likewise a restaurant with a short, tightly focused menu signals that the chef is very confident – and is only offering the best possible dishes and is not catering to the broad public but to discerning patrons (and everyone wants to be respected)
- Design suggests audience and price. In an artistic neighborhood show respect for art and design. Lazy choices about art to hang on the walls (i.e. stuff that was very cheap) or the use of bulk, cheap furniture, signals a lack of design. Just a few blocks away the new Four Barrell Coffee shows one great approach to furniture – they have all custommade from recycled materials tables and chairs, the effect is striking and well in keeping with their desired audience of “hipsters”. Their other choices, such as playing vinyl for their music and not having wifi are other signals. And they are almost always packed with customers paying premium prices for high quality coffee.
- If you don’t ask people won’t buy. Years ago I met a professional waiter who shared with me his secret to having average covers which were nearly double his fellow waiters, if they averaged $20 he averaged closer to $40 (which meant his tips were also double or more than double his fellow waiters’ takings). His secret – he asked people if they wanted things. He asked if they wanted to start with a cocktail, he asked if they wanted appetizers, if they wanted wine with their meal, if they wanted dessert, if they wanted an after dinner drink. Especially with couples on a date his technique worked extremely well.
Sure this last point is simple – but the simple things are often the most important. I’m always surprised by how few restaurants train their waitstaff to always ask if I want something to drink, to check if I want dessert before giving my the bill for my meal. To see if I want some appetizers to start the meal. The better restaurants train staff to do this as a matter of course – and as a result sell much more.
I do not know all of the numbers for Bohdi restaurant, but my very rough estimate would be that between lunch, dinner and delivery they gross far less than $500k a year, probably less than $400k. In s apce that large, however they should be grossing over $3M or more a year (potentially a lot more). And yes, to gross that much they would need to have far more staff, buy more supplies, do more active promotion, spend more on printing, cleaning of tablecloths and the like, but I suspect they would net vastly more than they do today – and with some further changes could net far more than $3M a year (which is based on an average cover of $25, shift to $40 or higher and to high alcohol sales on a regular basis and profits could be much more.
If I were wokring with a client such as Bohdi restaurant I would start with the following questions (see above for some of the probable results):
- What strengths does the business start with?
- What is working already?
- What resources does the business have?
- What is the initial impressions of the business (if retail on walking past, on first entering, if online on first visiting the site)
- What does that impression signal about the target audience and especially about the price expectations of that audience?
- Does the actual experience then reinforce (or call into question) those initial impressions?
- What could be done immediately to start to change?
- And then what further changes should happen, ideally looking to make changes that reinforce other desired outcomes and build on it (i.e. start with tableclothes, move to partnering to improve the art, then throw opening parties to build awareness and get people in, then change the menu to help grow revenues, then reinvest in getting better/higher quailty furniture, then in expanding/enhancing the bar options etc)
As I noted this is based on my experiences of walking past Bohdi and of eating there once as well as my long time observation of the restaurant industry. It is certainly possible that I’ve missed some key aspects to Bohdi’s particular situation (they might do a booming lunch business for example though I doubt it). And as in every case, if I were working with the business it is likely that there would be other issues that would be discovered and would need to be addressed – every situation has surprises and unique aspects.
But hopefully this (admittedly long) post helps them (if they see it) and inspires others to rethink their particular business.
And yes, I’m available to do extended versions of this type of consulting work (the first meeting is free but after that I charge).