The only thing easy about the restaurant business is failure. For every five new restaurants that open in the U.S. this week, three will be gone within three years. That’s a sixty percent failure rate, and my guess is that it’s even higher with barbecue joints. In barbecue, the waste is high, the profit margins are slim, and the hours are long. Yet new barbecue joints seem to be cropping up faster than ant hills after a hard rain.
But as with any new business venture, if a place takes the right steps before and after it opens its doors, it can survive the flooded marketplace. Though it’s not without its challenges along the way. Consider this bit of advice from long-time barbecue restaurateur Cliff Payne, owner of the successful Cousin’s BBQ chain: “Anybody who talks to me about getting into this business, I’ll tell them to go spend their money on something else. They better divorce their wife and don’t have any kids.” Strong words coming from a man who has been in the industry for several decades.
I’ve seen a lot of Texas barbecue joints come and go over the years, and watching the successful ones thrive and the struggling ones fold has given me a good sense of which places will survive. Of course, I’m an armchair coach who has never run a restaurant, but given that I’ve studied the barbecue scene for years, people who want to make the leap from smoking for friends in the backyard to selling to customers on the town square ask me for advice all the time. Knowing enough to know I don’t know much about running a restaurant, I asked a few folks who run steady businesses for their advice (and I’ve added a few of my own tips, seeing how I’m an expert on being a customer).
Here are ten guidelines for creating your own successful barbecue restaurant.
Make Good Food – The line I always hear from prospective barbecue entrepreneurs is, “My friends and family tell me my barbecue is great.” I’m here to tell you that their opinions are worthless. Free food from your backyard or your tailgate will garner only praise. Find a party to cater or a bar that will let you sell a few plates around dinner time. If you want honest opinions about your barbecue, ask strangers who have paid for it.
Start Small – It’s hard to hide your shortcomings with a huge menu. As Aaron Franklin of Franklin Barbecue in Austin told me, “Learn one thing, learn it well, and move onto the next thing.” Nobody will mind if you only have just brisket, pork ribs, and sausage on the menu (it has worked for City Market in Luling for decades) so long as they’re all great, but they will remember how bad that one item was that you haven’t quite mastered. A small menu will also allow you to better control your food costs. Guessing what will be popular from one day to the next is nearly impossible, especially when starting out. Multiplying that guesswork by ten different meats will only result in lots of perfectly good meat in the trash.
Quality is the Priority – Keep your standards high, and be prepared to not serve barbecue that doesn’t meet your standards. It’s better to be sold out of ribs than to serve one that creates a bad impression. You need repeat customers, and you don’t want them questioning which version of your restaurant they’ll encounter on the next visit. Throwing away subpar food will be tough, but it will be easier to stomach when the menu is small.
Also, don’t forget the sides. Good sides are never going to make up for poor smoked meat, but customers still notice when you put in the effort. My wife doesn’t like barbecue, but she’ll join me for lunch at the Slow Bone in Dallas because of all the great side options. At the other end of the spectrum, beans from a can and slaw from a tub just looks like a plate full of give-up.
Provide Daily Specials – With your limited menu, use specials to help hone your skills on items not yet in your wheelhouse, or just to keep the walk-in cooler from filling up. Lockhart Smokehouse in Dallas might not be able to sell out of an expensive cut like beef short ribs on a daily basis, but when they put them on special every Wednesday they’re gone before the lunch hour is over.
Daily specials also help gauge interest from your customers. If your once-a-week smoked pork loin garners enough praise and popularity, maybe it’s time to shift it to the permanent menu.
Charge Enough – The aim is to be profitable, and food costs in barbecue are high. Charge enough to make it worth your while. When I walk into a barbecue joint charging ten dollars per pound for brisket, I don’t think “What a great deal.” Instead I’m left wondering what kind of corners they cut to get their costs so low.
Charging too little also leaves you open to phoning it in on one or more items. When it feels like you’re giving it away, there’s a risk that your mentality starts to affect your effort. Putting the love into your barbecue becomes increasingly difficult when you don’t feel like you’re getting anything in return.
Limit Your Hours – When Jack Perkins opened the Slow Bone in Dallas last year, he promised to stay open for lunch and dinner, never run out of meat, and never serve yesterday’s meat. That lasted only a couple months. “We probably lost $20,000 in food,” Perkins said. He looked pained just thinking back on it, but his saving grace was that he already had another successful restaurant and the cash flow to handle those initial losses. If you’re just starting out, you won’t.
Perkins advises others to make it easier on themselves early. “The day we opened we should have done five briskets and run out at 1:00.” Start out with just lunch service, and close when you sell out. That will keep you from wasting food, and it keeps you from having to pay your staff to stand around between lunch and dinner. Once the demand is there, start to lengthen your hours.
Know Your Target – Find an area underserved for barbecue and open there. Rather than opening in the 78702 (the zip code in Austin that already houses Franklin Barbecue, la Barbecue, Micklethwait Craft Meats, John Mueller Meat Co., and others) find a neighborhood or a city without another great barbecue option. Some great examples of this are Stiles Switch along North Lamar in Austin, Lockhart Smokehouse in Plano, and Hays County BBQ in San Marcos. If anybody plans to open a great barbecue joint in Waco, let me know. They need one.
Don’t Make Yourself a Target – Although Aaron Franklin is now successful beyond any of his expectations he reminds us that “You can’t just build something overnight.” So don’t create the expectation that you’ll be at your best on day one. Franklin continues: “If you’re out there with a lot of hot air saying how great you are, you better deliver. You’re not leaving yourself much room to make mistakes.” Larry Lavine of Ten 50 BBQ in Richardson learned this when he was quoted on his first day of business as saying “Franklin’s in Austin is the gold standard, and we think we’ve matched that.” There’s a chance he believed that, but all that statement did was create unrealistic expectations of every visitor who read it.
Consider Your Expenses – There’s nothing that will drag your business down more than a huge lease payment and lots of debt. It’s like trying to pay back Ivy League student loans with a minimum wage salary. Once the calculations have been made, the best option might be to walk away before you even start. Look at the business like the purchase of a Ferrari. If that Ferrari has a price tag of $200,000 dollars and you just have $200,000 in the bank, then you can’t afford it. There won’t be anything left for gas, oil changes, new tires, new brakes … you get the picture.
Franklin also suggests doing more with less to keep start-up costs low. “People might be surprised what they can do with their own two hands.” That do-it-yourself attitude can save you plenty of money. “We built everything we had,” Franklin said. “If I needed a picnic table, I wasn’t going to buy one, I was going to build it in the backyard.” Also, keep in mind that many barbecue joints have failed before you. Look for used smokers.
Have a Gambler’s Mentality – “Don’t put more into than you’re willing to lose” was the advice of Jay Yates. He closed Curly’s Carolina, Texas Barbecue in Round Rock a couple months ago, but he doesn’t have any hard feelings because he didn’t overextend himself. Remember that there’s a sixty percent chance that your business will be closed within three years, and you don’t want to ruin your life just because your business failed.
Most of the owners I spoke with are still in the business, but Jay Yates had to close his restaurant in Round Rock after ten months. He’s an example of someone who followed most of these rules, and still had to pull up stakes. He ran two successful food trucks in underserved Round Rock, and had a faithful following. “I felt it was time to take it to the next level with the customer base that I had,” he said about his decision to open a brick-and-mortar restaurant. But his lease became his undoing. He needed lunch and dinner revenue to cover his costs. “No matter what I tried, I couldn’t get people to come into downtown Round Rock for dinner.” Despite the setback, Yates isn’t giving up on barbecue. “I’m not saying there’s not a good chance that I’ll reopen soon.”
* Based on research by H.G. Parsa recounted in Bloomberg Business Week