‘Critical Condition’ Soul Food Restaurants at the Crossroads! The Series Part 2

 
 
 

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Economic impact:

We are living in very challenging economic times, and I am sure most of the World would agree. To be successful in business today, smart companies employ cost-efficient strategies that reduce waste and maintain high levels of quality and service to their customers. Companies have to either step up their game or become business casualties. This is true at all levels of business. No immunity! This is markedly true for Soul Food restaurants. 

Since the start of the economic downtown in 2007, restaurants have been struggling to survive. The economic impact has caused devastation at every level and sector of the restaurant industry–fine dining to casual; fast casual to quick serve, all have been affected.  No segment is exempt from this circumstance. However, some have experienced more distress than others.

The market segment most shaken by economic volatility has been small, independent restaurants.  “Mom and Pop” restaurants have been this economy’s #1 casualty. The overwhelming majority of all restaurants that closed as a result of the current economic downturn were independently owned.  I have outlined several factors below that have contributed to their demise.

  • Lack of rainy day funds:  Many independent restaurants are under capitalized; as such, most don’t have adequate reserve capital to stay afloat during tough economic periods.
  • Escalating food cost: Food cost are at the highest level in 36 years. Food prices soared 3.9 percent in February. This was the largest gain since November 1974. Much of the increases were do to the sharp rise in vegetable costs, which increased by almost 50 percent. Soul Food restaurants cook with a lot of vegetables. Rising energy prices have also made a contribution.  
  • Access to finance: Restaurants have high operating expenses. This makes access to capital critical. When the credit markets were frozen in late 2008, banks tightened their boot straps on businesses in general and small businesses in particular. Even before this occurred small, independent businesses had difficulty getting access to capital through traditional financing. The banking industry often takes a conservative position when it comes to investing in some small businesses, and especially in certain communities. Lack of financing options, forces these businesses to support themselves financially. To that end, independent restaurants means exactly that; Independent. Soul Food restaurants must be savvy enough to think outside of the box. There are many non-traditional business financing options available.
  • Deep Pockets: To the contrary, chain restaurants were better equipped financially to withstand the economic storm.  These businesses are often well-capitalized enterprises. While many Soul Food restaurants are robbing Peter to pay Paul; major restaurant corporations have unlimited capital access. This enables them to buy goods and services at lower costs and are therefore able to operate more efficiently.  Chain restaurants are walking around with a pocket full of money and playing golf with the bankers. 

Today major restaurant corporations dominate the restaurant landscape in America.  The restaurant industry is very spirited. You have to be clever in order to operate in such an immensely competitive business environment. Sometimes the truth can’t wait. This does not apply to all Soul Food restaurants. Most are vibrant businesses. But, if Soul Food restaurants as a whole are to survive in the 21st century, they must bring their A Game. This will require collaboration and perfect scores in Business Savvy 401. Soul Food restaurant business models must be equal to or greater than that of the competition. The days of opening or operating Soul Food restaurants with a few of Grannies recipes, and a shoestring budget are a distant memory. Today we must collaborate, pool resources and tap top talent.

Now, let’s put Soul Food Restaurants in the mixer. The majority of Soul Food restaurants are located in African American communities. The number one customer at traditional Soul Food restaurants are African Americans. These restaurants are directly and immediately impacted by the economic stability or instability of the communities where they are located. This places the success of these restaurants at the mercy of the community pocketbook.

Let’s keep it real–some things just stare you in the face like a hungry pitbull at midnight.  Here’s the math. The unemployment rate in African American communities all across America is 3 times that of the National average. African Americans are acutely aware of this statistic. Some groups have been disproportionately impacted by the week economy–no rocket science here.  I don’t care who you are, if you’re unemployed you don’t eat out as much–hello!

Then, that brings me to another ‘Critical Condition’ question and I need your wisdom on this one!  Why is it that restaurants from all other cultures are located inside and outside of their communities and Soul Food restaurants remain located in predominately African American communities?

My philosophy may be in stark contrast to conventional wisdom, but I think it is a ‘Big Mistake’. I understand the reasoning and the cultural implications.  That is why I do what I do. I get it! There was a time in history when this was appropriate, but it’s not now. Times have changed, life has changed, people have changed and the way we do business has changed. “Business isolation limits business potential”. Antiquated business practices equals extinction particularly in the restaurant industry.  Restaurants should be accessible to everyone. 

Not every restaurant can achieve name recognition or notoriety. If you happen to be one of the famous Soul Food restaurants you have a leg up. If you are not then you have work to do. You can have the best food in the city, but if no one knows about it and cannot find you, what’s the point? Everyone loves Soul Food, but not everyone can get it when they want to eat it.  That needs to change.

These are just some of the reasons why many Soul Food restaurants are at a greater risk of being in ‘Critical Condition’. Business has changed and Soul Food restaurants need to change along with it. It is time to take Soul Food to the next level.

‘Critical Condition Part 3 will focus on the operational aspects of Soul Food restaurants. Free advice! Get your Ticket…..

Everything anyone wants to know about Soul Food is in my New Cookbook; Soul Food 10.0 ‘The Next Generation of Soul Food’

It is available@ http://chefemanuel.com or http://Amazon.com and Amazon partners.

Please post your comment below!

  

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5 Responses to ‘Critical Condition’ Soul Food Restaurants at the Crossroads! The Series Part 2

  1. Pingback: My Homepage

  2. Hurrah! At last I got a weblog from where I’ll be able to actually get useful information concerning my study and knowledge.

  3. Richard Kramer says:

    Dear Chef Emanuel,

    I have conceived and registered a Live/Visuall/Musical Presentation, called “The 3 Soul/R&B Icon’s Tribute.” Presently it includes 2 Endorsed “Tributes” The 1st one to “The Godfather of Soul” Mr. James Brown and the 2nd one to “Mr. Excitement” Mr. Jackie Wilson, with a “Special Tribute” to Mr. Barry White and others.

    My goal is to Keep Alive, the Musical & Cultural Legacies, of these Great “Old Skool” Classic Soul/R&B Icon’s/Pioneers. To me nothing goes better with Great “Soul Music” then Great Soul Food. Concept details were forwarded.

    Let me know your thoughts on my concept.

    Soulfully yours,

    Richard Kramer
    Remark Entertainment & Productions

    • Chef Emanuel says:

      Mr. Kramer, thank you for your comment and for your efforts to help maintain a critical component of American History and culture. We obviously see eye to eye on these issues. Your concept and mine are quite similar. I will contact you to discuss.

  4. Pingback: 'Critical Condition' Soul Food Restaurants at the Crossroads! The … | TOPCOOKINGREVIEW.COM

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