On a Restaurantowner.com presentation in January 2021, Shawn Walchef discussed a number of topics relevant to his fellow restaurant owners and operators who want to thrive and adapt in the modern era.
Restaurant Owner Topics Included:
- The challenges of achieving profitability in a less than ideal location.
- How digital marketing has been key to success.
- Initial response to dining room closures.
- Drastic menu changes that have streamlined operations and improved profitability.
- How Mother’s Day 2020 was the restaurant’s most profitable day ever (with a closed dining room).
- Working with 3rd party delivery platforms.
- Plans for expansion into virtual ghost kitchens.
- Questions Answered from RestaurantOwner.com Members.
In true Digital Hospitality fashion, Shawn made sure to share details on the webinar of his Cali BBQ restaurant’s digital evolution over the years, including becoming a digital restaurant in 2020, expansion into “ghost kitchens”, and selling BBQ sauce online by becoming an ecommerce business.
You can check out a recording of the Restaurant Owner presentation from Shawn Walchef of Cali BBQ at: https://www.restaurantowner.com/public/COVID-Success-Story-A-New-Business-Model-for-Cali-Comfort-BBQ.cfm#recording
RESTAURANTOWNER.COM PRESENTATION TRANSCRIPT:
Jim: Good afternoon. My name is Jim Laube and I want to welcome you to our webinar this afternoon. We have a couple of special guests with us today. Joe Erickson, my colleague, and partner, welcome.
Joe: Thank you, Jim. Appreciate it. This is going to be a fun one today, especially that guy in the middle that’s getting ready to speak.
Jim: Absolutely. Our special guest is Shawn Walchef. I’m going to introduce Shawn in just a minute. First, let me just say a few opening words. As I’m sure all of you know, there are restaurants out there that are doing exceptionally well, even in this pandemic environment. The thing is, most of them were designed and built for some form of combination of delivery, drive-thru, and takeout.
Last year at this time, Shawn’s restaurant, Cali BBQ had a full-service dining room driven business model serving lunch and dinner Monday through Friday, in addition to having breakfast on weekends. Now, today, Cali Comfort is actually thriving at this time. In fact, right now, their indoor and outdoor dining is closed, but they have a fully functional digital sales channels, several of them, and they’ve been one of the biggest independent restaurant success stories that we’re aware of.
That’s why Shawn’s here today. Shawn’s going to tell us about their story and he’s going to tell us how he and his team have actually done this. Let me tell you a little bit about Shawn’s background. Shawn opened up the restaurant in 2008, during the Great Recession in a less than ideal, in fact, he’s going to tell you a very, very difficult location.
He struggled for years to generate more sales, getting more people to come to that location, but now he considers that location challenge to be a blessing or a gift that forced him to focus on digital and social media platforms just to stay in business. Besides operating a successful restaurant, Shawn is also the host of an award-winning podcast called Digital Hospitality.
He is a verifiable, digital, and hospitality marketing evangelist as you will soon see. Shawn, I’m going to go ahead and turn the program over to you, and you’re going to start by telling us a little bit about how you got started. Again, thank you for being here.
2008-2013: Low-and-Slow Start of Cali BBQ
Shawn Walchef: Well, Jim and Joe, thank you, and thank you for everybody that’s on the call. I’m going to take you back to 2008 when a couple of college buddies, me, and Cory, one of my closest friends from college, we opened up the restaurant. Like Jim alluded to it was in 2008, so not the best time to be opening any business. Certainly, a restaurant business in a difficult part of town, every real estate expert, every industry experts, they tell you location, location, location, and this was definitely a challenging location.
Before I get started, I do want to say one thing, and that’s it’s truly as humbling and an honor to be talking to other independent restaurant owners. Restaurantowner.com was the first subscription that I subscribed to. 2008 I was on Google looking for resources to help us not only open our business but scale our business, and what were other independent restaurant owners doing, and I found restaurantowner.com.
That led me to restaurant startup and growth magazine, which me, and Eric, and my business partner, Cory we read religiously. It’s all through the stories, the stories of other independent restaurant owners that are doing it that have done it before. To be here on the panel, I’m truly grateful. This is our story. Our story is a story of, it was very difficult to open. Because it was difficult to open, we had a lot of people that really didn’t care about what we were doing and we didn’t have a good business.
I kept reading articles on restaurant owner about how do you become profitable running a restaurant, I kept reading about a weekly profit and loss statement. For us, that seemed like such a far-fetched idea, such a far-fetched possibility, but that led us to implement steps in our restaurant to make us better by contacting a company called Restaurant Solutions, which is now called Restaurant Accounting Services.
They helped us do this weekly inventory, the thing that we hated to do, and we didn’t want to do so that we could actually build our business. More content that Restaurant Owner gave to us was about having a primary food vendor. We were using Cisco and US Foods and a couple of other vendors to order food. We decided that we were going to build a relationship and save time. We reached out and US Foods has been our partner since we made that decision in 2012.
Part of what we want to talk about today is going all-in on digital, how did we in a very difficult location sell over $25 million in sales, and how did we become a media company. We’re a barbecue media company and how did that happen? Well, it happened because of what’s on the screen right now, and it’s that smartphone. The first iPhone came out in 2007, June 29th, 2017– 2007 excuse me.
The reason I know that date is because my son was born on June 29th, 2017, 10 years later. I was in the hospital with my wife, I was looking on Google on my smartphone, what’s happened on this date, and I realized at that time for the first time, how far we’ve come technology-wise, how far the restaurant has come, and what we’re able to do now with that smartphone.
The biggest thing for me today, Jim said, I’m going to answer every question, we’re going to tell you a lot about what we’re doing in the coronavirus, why we’re three times more profitable, and the reason we know those things is because restaurant solutions allows us to get those weekly profit and loss statements, things that we’re doing with our food costs, our labor costs, repositioning the restaurant so that we can become a master smokehouse, a commissary kitchen, open up a ghost kitchen location.
We call it a friendly ghost kitchen because we’re going to use social media to share the experience. There’s so much opportunity. If you’re on this call, one of the hook lines that restaurant owner, when I went to the website was a good restaurant owner is always learning. My grandfather, he taught me, he raised me, he’s from Bulgaria, an immigrant that went through war, he had to study German in order to study medicine during World War II.
He just lived this incredible life, but he always taught me to stay curious, get involved, and ask for help.
You’re on this call, which means you’re already dialed into Restaurant Owner, you know what they do and what they’re all about, so you’re already past step one. Getting involved is hopefully, something that we say on this call will cause you to realize what kind of opportunity is out there. If you look at what’s being published on media, probably what’s going on in your city, what’s going on in your village, it is very difficult.
It’s very difficult, and it is very rare for any restaurant to be doing well. We wouldn’t be doing well if we didn’t have a great team and if we also didn’t ask for help, if we didn’t attend panels, getting involved and do things like this. We’re here to answer any questions.
2014-2019: Becoming An E-Commerce Business
All right. Becoming an e-commerce business.
At the beginning of our journey, really becoming a barbecue restaurant there’s multiple iterations of how California Comfort Restaurant which was opened as a breakfast concept, we didn’t do barbecue, we became a barbecue company once we tried to do some charity. We tried to do local charity, we realized that what was happening was, we’d love to give back. That’s why we’re in the hospitality business. We had a lot of youth sports teams reaching out to us asking us to do fundraisers.
Cory and I, we said, “Why don’t we focus on doing one fundraiser instead of doing multiple fundraisers every single week?” That one fundraiser, the idea came was let’s do an amateur barbecue contest. Great. Everyone was really excited about an amateur barbecue contest, but there’s a problem is we don’t know how to do barbecue and we don’t know how to put on an amateur contest.
I contacted Kansas City Barbecue Society, which is essentially the NFL of Professional BBQ contests, and found out if there was anybody locally in San Diego that could help us. That’s where I found Jean Grey Kucha, who’s our pit master and our barbecue mentor. He taught us basically how to put on that first amateur BBQ contest which there’s a photo in the screen, which is in front of our restaurant, we have about 20 amateur barbecue teams, about 5000 people come out.
We also have asked other barbecue restaurant owners to come out and sell barbecue in front of our barbecue restaurant. Why would we do that? We do that because we believe a rising tide lifts all ships. Really for us, it’s never been about focusing that we’re the best barbecue. It’s about having a movement and the movement is craft barbecue.
The fact that we’re doing craft barbecue in San Diego is laughable on anybody that’s on this call probably from Texas, or Kansas City, or Memphis, or the Carolinas, but we care about doing barbecue the right way, and we know that it’s a low and slow process. The low and slow process converting doing that first amateur barbecue contest, Jean said, “Hey, would you like to learn how to do barbecue for your restaurant?” We said, “Absolutely. We’d love to do barbecue.”
Once we started doing barbecue, we realized that was going to be a great point of differentiation for our business. We did that and we essentially got rid of our breakfast business Monday through Friday. We turned into Cali Comfort BBQ. I remember it was probably about five years in where we started building a good reputation for doing barbecue in Spring Valley and then East County, San Diego.
I started wondering why didn’t any of the legacy media why did any of the magazines, or newspapers, or really anybody care about what we were doing? That’s when we really became a media company when we started really focusing on Facebook, really focusing on Yelp, really focusing on Google. There wasn’t Instagram at the time, but then we got on Twitter. We started doing things that were free and available for us that we didn’t have to pay for, but that taught us how to be digital storytellers and to realize that the internet isn’t as difficult as we all make it out to be. We had a website when we first opened and I remember, it was very difficult for us to update the website. We host fight nights for boxing and for UFC and we do NFL Sunday.
We’re constantly every single day, 365 days, promoting sporting events or charity events or things that we are doing in our business. One of the things that was difficult was getting our website updated. I had to email someone, wait two days, get that information updated on the website. Once that information got updated, if it wasn’t the way that I wanted it, I was losing time. I needed the guest to be able to search. I’m looking to go see Manny Pacquiao fight in San Diego, what’s open. I need a Cali Comfort to come up.
I went to a friend, Adam Harris. He now runs Cloudbeds, very successful hospitality tech company, but he was running websites at the time, and I asked him, “Can you help me with a website?” He told me something that I’ll never forget and that was if anyone’s building a platform, if anyone’s building anything on the internet, if they don’t make it easy enough for anybody to do it, it won’t exist into the future and it won’t work. He taught me how to use WordPress and he taught me how to update the website by myself.
It really was an empowering moment for me because there were so many things that are coming out every single day. Just this morning, I was on a Clubhouse call, which is a new social media app. That’s an audio app that allows you to talk to other people that have similar interests, but every single day, the internet is changing, social media is changing, digital media is changing. When you think about how do you stay curious, how do you get involved and how do you ask for help, you got to ask for help. You got to ask for help from the people that are around you.
Asking for help from Adam helped us improve our website. Improving our website helped us realize that we can actually become an e-commerce business if we put our catering on the website and take it out of the control of the people that are running the restaurant. Before we’d have someone come into the restaurant and go, “Do you do catering?” We would have a host write down their information. Hopefully, they didn’t lose the information or they would go get a manager.
It’s just getting the catering process done at a full-service restaurant that’s busy was very difficult for us. Once we added everything online and said, “Here’s a catering request form, fill it out, we’ll respond back to it,” we realized that we can actually generate sales through our website, which was a big a-ha moment for us. We realized that the more that we focus on digital, the more that we focus on our website, the more business we can do and the more barbecue we can sell.
2020-Beyond: Responding to the Pandemic with Digital Hospitality
All right. Now, to the good stuff. Oh, you guys are all here, pandemic. There’s a lot of talk out there about pivots and we don’t like to say pivot because we say that we go all in. Really, it was the all-in moment on March 17th when California went into a full lockdown. We saw that it was coming, but still, it was the most difficult day that I’ve ever had running the restaurant. I had to layoff 29 employees. I had to call my wife to talk to her, talk to Eric, my general manager and business partner. I know that everyone on this call experienced the same thing.
Very difficult thing to do, to tell people that have family, 29 people is a lot of families and letting them know that, unfortunately, we can’t have you come to work because we don’t have the business, but then telling the remaining staff, which was probably another 27 employees that, this is our plan, we’re going all in on digital. We are going to focus on delivery. We’re going to focus on takeout, and this is how we’re going to do it. We’re going to add– We already had DoorDash but we added Uber Eats and GrubHub.
We’re in the process of adding Postmates, but how are we going to focus our menu? How are we going to focus our service? How are we going to focus our digital hospitality? We talk about Digital Hospitality, that’s the name of my podcast, it’s what’s on my hat. What is digital hospitality? Digital hospitality is every business needs to be digital and every business needs to be in the hospitality business. What I’d like to say is there’s something that every restaurant owner that’s on this call knows about and it’s a “please sit yourself” sign.
You can buy it at Restaurant Depot. You can buy it at Webrstaurant. We all know what that “please sit yourself” sign is. It’s a hospitality hack. It’s a labor cost hack. It’s a way that you put something up in your restaurant because you want to reduce the labor cost. You don’t want to have a host there and you go, “Oh, well, there’s a manager on duty, they can cover during the slow times, during the non-peak hours.” That please sit yourself sign, but what happens when a customer comes in and there’s a “please sit yourself” sign?
You walk in and you know, “Okay, now you’re empowered. I get to sit anywhere in the restaurant, this is great.” You go and you sit down and you always get the worst service. We all know that that’s true because we’ve all worked in restaurants. We all know that. Once Eric and I decided the restaurant that we have is laid out in a way that is very unwelcoming for somebody even with that “please sit yourself” sign. We were going to invest in hospitality and we’re going to always have somebody on the shift to hospitality host at the front of the restaurant, to welcome somebody when they walked in, to thank somebody when they leave, to help someone with a stroller, to help somebody that was in a wheelchair, to answer the phone politely with a smile.
We made that investment knowing that we could definitely put that sign up but that sign wasn’t going to differentiate us. Once we did that, that really became the philosophy for us for hospitality, is humans are at the heart of what we do in this business and that’s why the coronavirus has been so difficult on us, is because it’s attacked the heart of hospitality, it’s attacked our ability to be with one another. Being with one another is what we do best, but we also do something else that’s very incredible and that’s provide a product and provide a product and that service that we provide.
Providing the hospitality, how can we do that digitally? What we’ve done to get people to care about our business in our difficult location is care about every single platform that’s on your phone, every single app that’s on your phone, we treat it like a room in our restaurant. Nobody gets ignored. No one gets ignored on Yelp. If someone writes a Yelp review, we respond to the Yelp review. If someone sends us a message on Google, we respond to the Google message.
If someone says message on our website, we respond. If someone tweets at us, we respond to the tweet. By doing that, we realized how empowering it is to treat the digital customer the same way we treat a customer in real life and that’s really put us in the position to invest in technology. Once the pandemic hit, we realized we’re going to reduce our menu by 90%. We’re going all in on barbecue, what we do best. All in on barbecue, reduce our hours of operation. We had already considered getting rid of breakfast on Saturday and Sunday because they were slow periods for us, high labor.
This was the perfect opportunity to do all the things that we knew in our heart were going to do the right things to do moving forward. By doing that, we realized now we’re selling barbecue digitally in a way that, obviously, is safe for COVID and safer delivery drivers. Doing those things enabled us to start selling during the very difficult time where it’s just essential services that are open but it also helped us prove our thesis and prove what we knew in our hearts is that it’s a more profitable business model.
By using the tools that RSI gives us to have weekly financials, we could actually see the impact of our labor cost, of our food cost on the business that we were running. Granted, our sales weren’t what they used to be but because of what we were doing, we were able to really build a business that we can expand and we can expand into a ghost kitchen. The next step was figuring out that our first holiday was Mother’s Day during COVID. Mother’s Day was a very busy– It’s always the busiest day in the restaurant.
Another very busy day, but we also– When we opened, we started with Aloha. We compared Aloha and Micros. Aloha was the best of the best. We picked Aloha and it was incredible for us as we built and scaled our business. Once we started realizing we’re going to be a digital restaurant first, we realized that there’s so much technology that needs to happen that we didn’t have with Aloha that Toast could provide for us.
Once we looked into what Toast could provide, which was, really the entire customer experience, the customer experience on mobile when they order from mobile, how our staff can update our own mobile website to put the photos that we want, to put the text that we want, to update any specials, to keep the customer information, we realized that this was what we needed in order to truly build sales.
We went through Mother’s Day. We sold out of barbecue in five hours on Mother’s Day.
Jim: Yes, 2019, you had your full-service model, visits model essentially, and then in 2020, it was essentially all-digital at that point, correct?
Shawn: That is correct. We did not have Toast on Mother’s Day, just so everyone in the audience can know, but yes, in 2019 we were open for 14 hours. 2020, we sold out in three hours.
Shawn: We sold out in three hours on Mother’s Day. You can go to the next. You can just put all the slides up there. The difference in sales, obviously we had more sales in 2019, but that’s a full service. Our total hourly costs and labor was $2,800. We did $16,000 in sales in only three hours of business, and our week to date labor was 13%. We’re talking about a significant reduction in our labor cost and a significant reduction in our food cost because we were just focused on the barbecue.
The prep times, everything that we were doing has just changed dramatically because we’re focused on what we do best. Just because you can do it doesn’t mean you should do it, and now, especially. Every restaurant owner that’s on this call, you all know in your heart, there’s things that you wanted to take off your menu, but you don’t take it off because that regular, they come in or the family comes in and it’s a story. It pulls at your heartstrings and we’ve had to make all those difficult decisions.
We still to this day, get messages on Instagram about bringing our burgers back and bringing salads back, but we know that we need to focus on what we control and what we can control is really utilizing technology, utilizing digital to build out the business and open up our next ghost kitchen. We plan on opening up 7 to 10 ghost kitchens in three years. We plan on repurposing our current location using our existing restaurant floor plan by 60%. 60% is going to become a master smokehouse, where we’re going to do all of our prep for all of our ghost kitchen locations. I wanted to share these transparent figures with you guys because I think a lot of you– This is where the rubber meets the road.
Jim: Shawn, do you want to tell folks about how much you decrease the size of your menu in terms of menu items?
Shawn: Yes, like I said, 90% is the best estimate that I have, that we had decreased, and a lot of that was getting rid of the breakfast daypart on Saturday and Sunday, and then getting rid of a lot of the other menu items that really were cooked to order and not what we do best. We do a slow-smoked barbecue. It takes us 14 hours to cook brisket overnight, another 14 hours to do pork, but we do it overnight and we smoke it fresh every day, once we’re out, we’re out.
It’s been eye-opening to have the financials to understand this is something that’s different, and it’s something that, as we change and evolve into a digital restaurant, even when we do open back when times get normal, again, we’re going to utilize technology in a way. Servers and bartenders and managers, they’re all going to have different responsibilities. They’re going to have digital responsibilities that they didn’t have in the past, and for us, it’s very exciting. Do you want to put up New Year’s?
Jim: New Year’s, yes, absolutely. Same thing with digital versus full service.
Shawn: Yes. We were open eight hours in 2019, and then we sold out in two hours, that 30% of those sales. On New Year’s eve, we implemented Toast on our point of sales system on September 11th this year. By having Toast, there’s so many tools that Eric, my general manager, and my front of the house managers have that we didn’t have before with Aloha, and I know Aloha is amazing. Don’t get me wrong, but Toast understands the next generation of digital restaurant owners in ways that a lot of these other companies do not, and they’ve been an incredible partner with us because they listened.
We’ve only had this short relationship, but everything that we’re asking of them, they have people on the ground, salespeople on the ground, Allie is our sales rep. Willa is our regional rep, and they’re willing to go to fight for us to ask, “Hey, this is what they need.” We tell them, “We’re going to share the Toast story, the good and the bad and the ugly because we’re a barbecue media company. We’re going to create content.” I’m sure a lot of people say a lot of things, but literally, if the restaurant owner is great, we’re going to go tell everybody it’s great. We are going to go tell another restaurant owner because we don’t want them to fail. There’s so many amazing restaurants that I love in San Diego that are mom and pop restaurants.
On my birthday, on January 2nd, I went to a Japanese comfort restaurant called Ichiban in Pacific Beach where my grandmother used to take me three times a week. It’s a no magazine. It doesn’t get all the love, but it’s just this incredible mom and pop restaurant. I walked in, right at their cash register, actual cash register, there was a sign that says, “We’re very sorry, but we do not have a website. All of the menus that are on the world wide web are not accurate. Please call us.”
It breaks my heart to see that because they’re still very busy. The woman on there, she was answering the phone, trying to put out orders, but understanding that there’s tools out there, there’s technology out there, there’s people out there that could literally help them become a digital restaurant, not just for that location, but for multiple locations throughout San Diego, and that’s why I’m just excited to share what we’ve learned with everybody on the call.
Jim: Awesome. Do you want to finish New Year’s leave?
Shawn: Yes, sure. Doubled the sales, which is absolutely incredible to do $15,000 in sales in a few hours.
Jim: Yes, that’s amazing.
Shawn: Hourly labor costs, obviously much different when you don’t have servers and bartenders. We’ve also been selling alcohol to go. We’ve been using social media to ask our customers what they want to buy, and they wanted fishbowl cocktails. We call it an adult happy meal, Mai Tais, Margaritas, and then we come up with fun names that are happening. We had an award-winning cocktail 2020, the Tiger King. It was very popular.
We actually had people dressing up to come and get the Tiger King when that was popular on Netflix. Yes, it goes back to digital storytelling. There’s the food costs, it’s a significant reduction in food costs when you optimize your menu. There’s so much hope, and I hope from this call that you get that there’s hope and you get that you can do things right now without waiting for any city, any state, any federal government to change the outcome of your business. The outcome of your business is digital. You on this call, you understand hospitality in a way that small business doesn’t. You understand hospitality in a way that big-box retail doesn’t. We care about people. We just need to start caring about them online.
Jim: Great. Shawn, can I ask you, we’re getting some questions, in fact, we’re getting a lot of questions. Do you want to go into some questions now?
Shawn: Really, yes. No, absolutely. This is their call. Any questions I can answer.
Interviewer: Awesome. A few people are asking about delivery. You’re saying that you use delivery. What’s your experience with delivery? What are you paying for delivery? What do you think about the delivery companies, keeping your customer data, or keeping that data on people that are buying your barbecue? Could you just talk about your philosophy and your approach to delivery?
Shawn: Yes. Sure. We started with DoorDash two years ago. We added a Grubhub and Uber Eats, and we’re in the process of adding Postmates, but basically, our philosophy with delivery is, yes, the delivery charge is a lot, but everything is negotiable, whatever they tell you, that’s not true. It’s negotiable. They need you just as much as you need them. There are people on DoorDash, on Uber Eats, on Grubhub that are actively searching for a hamburger, actively searching for pasta, actively searching for Greek food, actively searching for Japanese food, actively searching for barbecue, and if you’re not on there, you’re going to lose that sale.
If you’re okay with that, then that’s fine, but the way we feel about delivery, the same way we feel about every digital platform. There are people. If you go into the app store on your iPhone or on your Android and the top downloaded apps, all those basically social apps, that’s where people are. People are spending time on Facebook. People are spending time on Instagram. People are spending time on Nextdoor.
People are spending time on Yelp. There’s people on Yelp and there’s restaurant owners probably on this call that hate Yelp. I used to hate Yelp because we got bad reviews. No one likes to get a bad review. I don’t want to get a one-star review, but really a one-star review is only a one-star review until it becomes a pattern. What if three people write a one-star review about our brisket? Guess what? I better start looking into our brisket. There are great people on Yelp that want to spend money in your restaurant, and for free, you can claim the Yelp page, your Yelp page, on your mobile, Yelp for business and you can start creating content specifically for all those people searching for your stuff. It’s the same thing for DoorDash, it’s the same thing for Grubhub, it’s the same thing for Uber Eats.
You are in control of your story, your digital story, but if you’re not there, you’re not going to get the sale. Right now, it’s all about learning. Some of the stuff might not be for you, but if you don’t taste it, if you don’t test it, you’re not going to know.
Jim: Good point.
Shawn: Okay.
Jim: Thank you. Joe, do you have another question?
Joe: Yes, there is one question about the Toast integrations. Are there Toast integrations for food, costing, and labor, and things that you have used during this COVID crisis in particular?
Shawn: Yes, we use Restaurant Solutions, which is now Restaurant Accounting Services. I can put a link or send anybody, but that’s an incredible company out of Colorado. We’ve used them, since Jim and you put out so much content about the weekly financial statement that a profitable restaurant has to have, understanding your labor cost, your food cost.
Those are the unsexy things that I didn’t want to have to do but there is this incredible company that allow– literally built for independent restaurant owners to have the financial accounting tools that they need that integrates with Toast. Are the integrations seamless? No, but guess who is going to go and fight on behalf of Restaurant Solutions?
I’m going to go tell Toast, “Hey, we need this to integrate,” because Restaurant Solutions they take care of 1,500 independent restaurant owners. A lot of them are switching to Toast if they’re not on Toast already. That’s the thing that’s happening right now is, it’s not just a vendor relationship. It’s a partnership. We all need each other. They need us. Tech companies need us just as much as we need them.
Joe: Great.
Jim: Did adding your catering menu to your online format, to your website, produce a noticeable increase in revenue in your catering down the line?
Shawn: Yes.
Jim: It did?
Shawn: The pillar of catering was the easier we make it on our guests and the easier we make it on ourselves, the more catering we’ll do, but nobody wants to go through– The most valuable thing we all have right now is time. If you make it easy, if you make it mobile first, if you order on a desktop or you call– However the customer finds you, we can’t discriminate how they find us and how they pay for stuff. We’ve got to make it as easy as possible. We have to be where everybody is.
Joe: Shawn, there’s a couple of questions regarding, since you’re doing a private– like with ghost kitchens and you’re using a lot of delivery services I would assume more than one. There’s some questions about, do you have any input on those percentages that range anywhere from 10% to 30% that you pay these people? Do you have any valuable insights to offer?
Shawn: The insight is everything is negotiable, so whatever they told you is definitely negotiable. You own something that they do not own. We own a product and a service and what we do is hospitality. You just can’t go and create what an independent restaurant owner has created. We’ve created a community. No matter what they say about how many people are coming to their platform, yes, there are people on their platform, but, ultimately, you have to control the customer journey on your website first.
You have to care about your website in ways that you’ve never thought about before. That is your primary tool, the thing that you own. There’s going to be no algorithm change with Instagram or with Facebook. Nothing is going to happen if you own your own content and you drive the customer to your website. You come to your website, you place the order, order for pickup, our link, it goes to our Toast hub.
Order for delivery, that goes to Uber Eats, which is our best rate and our best partner for delivery. Order catering, that goes internally and we process that by ourselves, but literally don’t make anything difficult when someone visits your website, and it has to be mobile first. There’s no question about it. I’m sure you guys have the statistics of how many people are searching your site and the internet in general what has changed in the last 10 years from desktop to mobile.
Joe: Yes and especially what’s changed in the last 10 months.
Shawn: There you go.
Jim: Shawn, could you tell us about some of the other– You’ve talked a lot about technology and apps that you’re using. You talked about one the other day that you’re really happy with, and I think you just started using it and that’s Ovation. In fact, you were really, really thrilled with what you’re geting in Ovation. You want to tell people about any other technology components that you’re really happy with that you’re using?
Shawn: Well, I’m going to give Ovation an ovation.
Jim: Okay.
Shawn: It’s absolutely incredible what they’ve been able to do with customer feedback. As great as we think we are with doing digital and providing digital hospitality, we literally just integrated Ovation in the last two weeks. Ovation essentially is a QR code that links or you can send a text message. We staple a flyer onto every single to-go order.
Whether they ordered through our website, or whether they ordered through DoorDash, or any of third-party partners, they’re getting something from us to answer two guest satisfaction questions, just two, five different emojis either the great emoji, a very bad emoji, or three other ones. If it’s not a five, if it’s not a perfect score, then it’s going to go internally.
They’ll text internally to our manager on duty and our manager on duty will be able to resolve that complaint, will be able to answer any questions that that person has. It’s literally given us a power to talk with our customer and understand, well, this customer also ordered a tailgater, which is our most popular meal. It’s all of our slow-smked meat, it’s all of our sides. It’s the number one item that we sell, what we were missing aside.
I’ve learnt in the last two weeks, Eric, my general manager, has learned, we’re having a problem with sides. Most of those people would never have written a Yelp review, would never have written a Google review, would never have written anything. We would have just lost the ability because we can’t make it hard for people to communicate with us.
Ovation, this QR code, is allowing us to really have an interaction with the customer that we’ve always wanted to have. Another piece of technology that we’ve been using is Yelp Connect. Business social media, is what we like to call it. Yelp Connect is a paid service that Yelp has, but I believe it’s only $125. I’m not sure. You can’t quote me on that exactly, but it allows you to push content.
I’m guessing most restaurant owners on this panel, either they do it or they have someone on their social media team post to Facebook, post to Instagram, specials, menu items, anything that’s going on, events. Yelp Connect allows you to push content directly to an existing group of people that you don’t even have. On Facebook, you own your fans.
You have however many fans are following your restaurant, same on Instagram, same on Twitter, but Yelp Connect is something different where if anyone’s interacting with your business, if they’ve bookmarked your business, but they haven’t visited it, they become a fan of the business. We have 13,000 fans that I did nothing but run our restaurant.
Someone that’s written a review, or they’ve interacted with our business, or they’ve asked for directions, but they get pushed to the content. If we put a special that we’re open on New Year’s Eve, they’re not only getting a push notification to the app, but they’re also going to get an email. That’s a powerful– I call it business social media because it’s actually within your trade area. It’s somebody that actually can buy barbecue from a restaurant whereas Instagram fans and Facebook fans that’s– We have a global audience.
Joe: Eric, I mean Shawn, sorry. You talked about your general manager, Eric. Anyway Shawn the–
Shawn: [laughs] He’s the yin to my yang. [crosstalk]
Joe: Okay. All right. We’re getting several questions about just– we have some of the audience who doesn’t quite understand ghost kitchen concepts. Could you just explain that just a little bit more to help clear that up for them?
Shawn: Sure. The ghost kitchen that we’re opening, we’re opening in a location in San Diego. That’s not in Downtown San Diego but right next to it. It’s an industrial location and it’s going to be with 20 other concepts. It’s going to be a 200-square foot kitchen. We’re building out that entire space, equipment, everything that we need for under $75,000.
For us to go open another full-service restaurant– we own a 5,700-square foot restaurant, we sit about 250 people. To go open another Cali the way that we want for sports entertainment, for barbecues that provide the hospitality, we’re talking about one million, 1.5 million build out. Now, with the ghost kitchen, I can take what I’m selling at Cali and bring it to my ghost kitchen location which is going to service one million people in Downtown San Diego that would have to drive– right now, those people would have to drive out to Spring Valley in order to get our food, unless they can get delivery that far, and Uber Eats is the one that goes the far.
It doesn’t go the farthest. Ghost kitchens allow you to essentially operate a food truck in a permanent location. Food trucks were very popular. We all know about them. We all read about them. This is a great thing that allows people to get into the food business at a low cost. The problem with food trucks is the problem with vending. It’s that you don’t know what your business is and you can’t build in a repeat guest because you’re never at a fixed location, you’re dependent on an event. The thing that makes independent restaurant owners unique is that we do not survive unless we create community, unless we create repeat guests.
Once we create repeat guests, then we have a true business and we call it a friendly ghost kitchen. The friendly ghost for us are great race and there’s going to be content and I’m sure you’ve already read it about all these different concepts that are opening or people opening multiple concepts under one ghost kitchen. Essentially, the ghost kitchen, there’s nowhere to eat inside the restaurant.
This is literally for pickup and delivery only. Some of them are no pickup, it’s just delivery. It depends on the concept, but repurposing real estate in a way that has never been done before is why it’s exciting and it’s also exciting because it’s not based off of traditional location, location metrics. We’re talking about search metrics. We’re talking about where are people searching for barbecue in San Diego which zip codes, which are the most popular zip codes, which are the most popular zip codes for–
When you are there and you do operate it, then you find out that, well, there’s a lot of people that are searching for breakfast. What can we do breakfast? Guess what we opened as a breakfast restaurant. It’s really not going to be that hard for us to roll out a breakfast menu in a very low-cost location.
Joe: Great, great. Jimmy?
Jim: Shawn, Gina has a question. Can the five emojis on Ovation, the feedback emoji, really allow valuable feedback? Can you provide another example? Go ahead.
Shawn: The first question is the five emojis. The first question is the five emojis. If you answer a five out of five, there’s still an open-ended question to give us how did you do and they can text literally exactly what went wrong. On New Year’s Eve, I came in and somebody that’s on local sports radio has become a great friend of the restaurant.
He bought an A.J. Preller cocktail that we made. We made a pineapple cocktail just to celebrate our general manager of the Padres signing all these big-name pitchers to our pitching staff. He was very big on Twitter, but literally this sports media friend came down bought this drink and we forgot the Topo Chico, which is the mineral water that you add to the cocktail.
He used the app, he used the QR code, he text and I was on it and I saw, “Oh, hey, we really enjoyed the food but you guys forgot the Topo Chico.” I look and it says Craig Alston and Craig Alston his name, I go, “Hey, this is Shawn, very sorry that we forgot it but I’m going to come and bring you the Topo Chico.” You can literally have this conversation of me. Now, I’ve brought him the Topo Chico but now he has what he needs to create content to help us sell more cocktails.
It’s the ability to resolve a customer complaint and it’s an empowering moment when the customer hears directly from the restaurant because when it happens through a third party, they complain to DoorDash, they complain to Uber Eats. You get a credit. Uber Eats takes my money away, the customer gets the credit, and nobody’s happy. Uber Eats isn’t happy, customers not happy, I’m not happy but Ovation allows us to directly talk to the heart of hospitality, which is the location of the restaurant.
Jim: Fabulous. Joe?
Joe: I’m going to paraphrase a couple of different questions into one big one if I could. That way, we can satisfy a bunch of them at the same time. There’s some questions about the operational concerns, such as preserving the integrity of the food and product, probably, the packaging, and so on. Also, I’m going to combine that with one we’re asking about like lead times.
If you take a catering orders, is there enough time to prep that much food and I guess that would probably go into certain to-go order? Any insights that can help people on the operational about timing, how far ahead of time, and preserving the integrity of the product?
Shawn: Number one, we wouldn’t do what we do if we didn’t have integrity in the quality of our product. Maintaining the quality of what we’re doing, we don’t serve fries to-go and we don’t do that because the fries that we have are soggy and it’s just a problem. We get complaints about why aren’t we serving fries, but we choose not to do it. We’d rather not serve it than come get what we know is going to happen.
What I can say is that there’s never been a time where so many smart people, so much smarter than I am are coming into the restaurant space with incredible solutions for technology that is allowing us to do predictive orders, to do ordering ahead of time, to start to understand the data. The data that we are getting now with Toast that we didn’t have with Aloha when every time somebody orders, we’re getting their email address and their phone number, we have the opportunity to collect that information to find out the next time that they ordered, hey, they ordered.
Look, this person’s ordered in the last week 16 racks of ribs. This person really likes ribs, maybe a manager should go out and talk to them and thank them for buying all those ribs. Before, we wouldn’t have that information.
Joe: Shawn, I just got to tell you. There’s now a thing that takes the moisture out of the containers with fries in them. The quality of the fries is almost like they’re there in your restaurants called Sabre pack.
Shawn: Really?
Joe: It’s just coming out, yes. TJ discussed that in our last webinar, but I’ll send you some information on Sabre pack.
Shawn: See, that’s why I love what we’re doing. Just by fairing it, by just by asking the questions, we learn about just these incredible things that we can implement into our own restaurants that people are requesting, people want to buy fries but we don’t have the technology but if I say, “Hey, this is the problem with fries, “you’ve just offered a solution, which is beautiful.
Joe: I got to thank Steve. Steve reminded me of that. He said, “What about Sabre pack?” He was on the last webinar too.
Jim: TJ on that webinar shared a lot of different technologies that had to do with packaging and things to overcome those, the food integrity so it’s a good time to bring it out there. Of course, you’re right. With a Toast POS Net, getting the predictive orders, getting them ahead of time, thinking about operationally how long it takes to prepare a party of 20, or whatever that case is going to be is very important as well.
Joe: By the way, TJ was also real big on Ovation as well.
Shawn: Yes.
Joe: He’s smart.
Jim: TJ, we’ve got some questions with people who maybe aren’t that digitally savvy and they haven’t done maybe more than a Facebook or some social media platforms? Could you just paint a picture of maybe a progression of where they might start to utilize more digital tools to become more of a digital type of company?
Shawn: To be honest with you, the number one place to start is your website and your point of sale system?
Jim: Okay.
Shawn: If you don’t address your website and your point of sale system– that is your e-commerce company, that is your platform. That is where you’re going to produce your content first for your website. There’s so many people out there and I understand, because even for me, it starts to get overwhelming with how many different new social media apps there are.
There’s TikTok and now there’s Clubhouse, and there’s Twitter, and I’ve got the post, there’s LinkedIn. How is a restaurant owner supposed to operate all these things? Well, you don’t have to but people are there and the answer is in your pocket. It’s much easier than you think it is. When you say you’re not technological savvy, I’m not either. I was a sociologist. I’m the last person that should be talking about technology but it’s how do you get there. You get there by asking questions and by using it.
By downloading the Yelp app onto your phone, as a restaurant owner, when you download the app on your phone and you log into your business page, you see all the things that Yelp has already done to set up. This is your story, these are your hours of operation, what are you doing during COVID? What are your feature photos?
Once you fill out all that content or if it’s incomplete, then it’s going to make you say, “It needs to be complete.” Somebody needs to make this right because if a customer’s coming here, hundreds if not thousands of people are visiting our page and it’s incomplete information, it’s the same as they were when they walk into your restaurant.
You wouldn’t have your main dining room of your restaurant have paint chipped on the walls or have a broken table leg like you just wouldn’t have it. Once you have it on your phone whether you do it or not, it allows you to go in and see and then you get to see the analytical side which is this is the powerful side of this person actually clicked on the link to get directions for our business.
If they asked for directions, most likely they came in ordered, and now if they order through Yelp, it’s going to go through GrubHub, this person spent $56 at your restaurant. That’s very powerful information.
Jim: Excellent. What is the number one way you drive traffic to your website, would you say?
Shawn: Storytelling.
Jim: Storytelling. Okay, now that storytelling on social media.
Shawn: Digital media.
Jim: Digital media.
Shawn: Yes. Everything that we do is digital storytelling. We break down the internet into four easy parts. It’s video, audio, written word, and images. That’s literally that takes care of everything. You can do all of that with your iPhone, or with your Google phone or with your Android. It’s very easy. We make it way more complicated than it needs to be. Once you own your mobile first site, and you start to understand, you get the report, you get the Google Analytics to see, where is the traffic coming from? You set up the integration with your point of sale company like Toast.
Literally, we have a redirect from our website to Toast tab, but Toast tab allows us to go in and update it and put the photos that we want to have. The photos that we want to have, have got to be great photos. We’re selling more on Toast. We sell retail barbecue sauce, or jalapeno sauce or regular sauce. We’ve never sold this much barbecue when we’ve had it in our restaurant, because we never had a server say, “Would you like to take home a bottle of barbecue sauce?”
Now, that it’s an option, as a digital option with a photo, people go, “I’d like to have that. That’s great.” There’s more upselling going on the internet than anywhere else.
Jim: Are you saying that a lot of your traffic is driven directly to your site, not necessarily through social media campaigns in it?
Shawn: We do social media campaigns. The answer for us is yes and more to all that. That’s more, but that’s a lot to bite off in the beginning. We always tell people to focus first on your website and focus first on your point of sale. If you don’t have the technology piece, the Toast integrations that we’ve been able to use to our advantage, then you really have nothing. If you don’t have a mobile first site with up-to-date content that tells your hours of operation, that tells your story, so many websites you go to, so many landing pages and nobody cares about. You won awards, that’s great.
If you go to cali.bbq.media on your mobile phone, you’ll see exactly what is taught in– one of my favorite books, which is StoryBrand by Donald Miller. StoryBrand by Donald Miller talks about having a clear and concise website and a call to action. Don’t make it difficult for the customer to buy. They want to buy something from you. Where’s your online menu? Order now.
If you go to your website, is that a PDF menu that doesn’t do anybody any good? Can I put it into the cart? Can I check out easily? If you can do that, now you’ve empowered the customer to give you more money.
Jim: Excellent.
Joe: Would you say that, get your website, get your order processed, all that you’ve talked about on your site, and then use any social media to drive them to your site, was [crosstalk]?
Shawn: Correct. Social media is, you have to produce content for your site first, and for your revenue centers. Your revenue centers are from our DoorDash, Grubhub, Uber Eats, Toast. People ordering from you, those are people that are actually– Then you go to the business social media that’s updating Google, it’s updating Yelp, it’s updating Nextdoor, and then Facebook, Instagram. By that time, you’ve already have all the content for Facebook and Instagram, you’re just repurposing that content.
Joe: Great.
Jim: Awesome. Here’s a question. We’re getting close to run out of time here. Shawn, this is just really fabulous. By the way, I put Shawn’s contact information out here. He told me to say this, “Reach out anytime.” That’s what kind of guy Shawn is.
Shawn: 24/7, 365. If I don’t respond right away, I definitely will very soon whenever I’m available.
Jim: Somebody is telling me that they have somebody that manages their digital social media, a full-time person. How would you evaluate whether that person is doing a good job and doing all that they can do for the restaurant on social media platforms, and digitally?
Shawn: Our social media policy is that every staff that we have needs to be social and needs to be on. We don’t require staff to follow our Facebook page or follow our Instagram page, but we know that if we create compelling content, they will be compelled to share that content. How do you know if somebody’s doing social media good, is you ask other people that you admire in your local trade area, reach out to us, let us know, and we’ll take a look at anybody at anybody’s site.
This is the crazy thing, is, no matter what social media agency you have, nobody’s perfect, and nobody’s an expert. Anyone that tells you they’re an expert, I would be very weary of them, because by no means I’m a student. Every single day, I’ve got to learn how to produce content, how to share content, how to distribute content, how to be a better storyteller, and that’s the world that we’re living in.
Once you accept that, once you accept that I need to do these things, then you can make micro habits every single day to work on them and prioritize them for your business. In the long run, you’re going to realize that not only are you doing it great in your product category, but you’re doing a great in your village. You’re doing a great in your city. You’re doing a great in your county, and now you can start sharing other people’s stories and then people start to reach out to you.
Jim: Okay, awesome. Joe, do you have a final question?
Joe: Well, I’ll tell you what, I’m going to leave kind of a fun note on this one. They’re not really worried about the social media but he says, what kind of smoker are you using for your barbecue?
[laughter]
Shawn: We use all hickory pits. Out of Cape Girardeau, all hickory is what we use and that we’re going to be giving them a lot of businesses, we build out our master smokehouse.
Joe: Okay, great. I’ve used it too. They’re great. They really are.
Shawn: Phenomenal.
Joe: All right. Jim?
Jim: Okay. Just put in a question. It’s, I don’t think it’ll take what– you plan on continuing with shorter hours of operation going forward. Do you run the same or will you run the same hours throughout your ghost kitchens?
Shawn: The plan is to run the same hours, we are 12 to eight now, Monday through Sunday, at the restaurant. We were open on Thanksgiving and Christmas, which we never– for the last five years, we haven’t been as a full service restaurant. To say what are we going to do in the future, would be pompous of me to do. We know that we are going to focus every single day on building the best business that we can. We’re going to focus on digital hospitality, really understanding that we’re doing slow food fast.
How do we do that? We use technology, we use social media, and we use digital media to share. How do people get great barbecues? It’s hard to do great barbecue, it takes time. It takes expertise. We messed up a lot of barbecue, we still mess up barbecue, I’m finding out through Ovation. We’re constantly working on it to be better. Once we’re better, we can’t discriminate where people get our food. We want to serve as many people as possible in San Diego County.
In order to do that, we’re going to roll out the plan that we have now. Does that mean the plan is going to change once we actually start operating the ghost kitchen? It might. If people want breakfast, and they’re kicking down the doors, and no one’s offering breakfast, and we know we can do pulled pork chili fila’s and eggs benedict with brisket, we’re going to do it.
Joe: That’s great, Shawn.
Jim: Shawn, thank you so much for being here. Judging from the response we’ve gotten, will you come back and do this again, sometime?
Shawn: I’d be honored to. It truly is an honor. I can’t thank you gentlemen enough and the team at Restaurant Owner and Restaurant Startup & Growth. Being an independent restaurant owner, you feel like you’re on an island. You feel like you’re on an island and having content like you have other successful people that are single unit that are growing the multi-unit, you share the stories and you’ve literally introduced us to so many people that you didn’t even know you introduced us until I told you.
It was through your content and through your stories that makes us as excited as we are to move into the future. Anybody on this call, we’re all in this together. There’s never been a time, that doesn’t matter where you’re at. It’s not a United States thing. This is a global thing. You’re running an independent restaurant, you understand hospitality better than so many people, and you have a gift?
Jim: That’s great. I’ve always said that the best people on earth are independent restaurant operators. You exemplify that to a tee, Shawn. Thank you very much for all you do, and all you’re doing and all the lives that you’re impacting as well. That’s what really turns us on.
Joe: Thank you for giving back to the community, which you got from other people that are sharing. That’s our proudest moment in restaurantowner.com is the fact that we get to meet so many great restauranteurs, and people actually that are proud. They want to share what they do. It does help others because you’re right. There’s something to that. Thank you.
Shawn: My pleasure. Thank you, gentlemen.
Joe: Well, folks, thank you so much for joining us this afternoon. In fact, Joseph just applauded, he sent applaud emoji.
[laughter]
Shawn: I’m big on emoji, so great.
Joe: Operators have good senses of humor too.
Shawn: It’s true.
Joe: Thank you all again, and wish all of you the best. We recognize that these are tough times, but hopefully you got some ideas today that we can make a difference for you in the coming year. Shawn, thank you.
