Eatery Savors Rewards of Tough Changes
After Beadle’s Cafeteria boosted prices by 15 to 20 cents this fall for its Swiss steak, New England boiled dinners and the rest of the 100-item menu, Vice President Jane Waas held her breath.
It was a bold move for the family-owned eatery in Pasadena, where Waas said making changes has always been “like pulling teeth.” Although the average tab is still just $6.81, Waas was afraid the September price hike would scare off customers just as the restaurant was getting back on its feet after several years of decline.
“We went through a lot of quiet days that month, and it scared us to death,” said Waas, daughter of semi-retired owner Gordon Hammond. Fears that the bad old days had returned gradually eased as October sales hit record levels and November numbers came in even higher.
The strong sales have been a welcome sign that improvements Waas struggled to implement during the last 18 months have taken hold. Now that the business is out of survival mode, Waas and her general manager, Virgil Bearman, are eager to get to work boosting outside sales, including wholesale bakery revenue and catering, as well as making additional improvements to the restaurant.
Consultant Phyllis Ann Marshall of FoodPower in Costa Mesa, herself a former restaurant owner, said Waas has grasped the idea that the optimum food service company is kind of like a manufacturing plant--the kitchen should be busy 24 hours a day.
“If you maximize the productivity of [bakers and chefs] and the sales of what they produce, you have a very strong company,” Marshall said.
Marshall first worked with Waas in early 1997, when slipping sales, heavy debt and a management tradition that shunned change threatened operations. As an objective outsider, she helped speed alterations, including the family’s decision to close its ailing Pasadena Cafeteria, Beadle’s sister restaurant. Once Beadle’s didn’t have to compete with its older sibling and Waas, 51, took more of a leadership role in the absence of her strong-willed but physically frail father, sales jumped by about $1,000 a day to $7,200.
When Marshall revisited the restaurant one morning last month to meet with Waas and Bearman, who ran Pasadena Cafeteria, for the Business Make-Over, she was delighted to find three local business groups having breakfast meetings in the closed restaurant. (Beadle’s is open for lunch and dinner from 11 a.m. to 7:45 p.m. daily.)
“This is fantastic,” Marshall said. “First, it’s income-producing, but second of all, it’s beginning to maximize the use of their space.”
Marshall said she also was impressed with the teamwork between Bearman and Waas, who owns 48% of the restaurant, and the new willingness to listen to ideas and implement them quickly.
Those attributes will give the pair a head start on making further improvements in the three areas that Marshall suggested they focus on: employee training, outside sales and in-store merchandising.
Building the employee team is an important piece of Waas’ plan to increase catering and wholesale bakery sales and to get involved in contract feeding--running the food service operations at private and government employers, Marshall said.
“They should continue building their team both in the back [the kitchen] and front of the house,” said Marshall. That includes hiring experienced staff as well as creating and implementing the policies and procedures, including an employee-appreciation program, needed to attract and maintain a high-quality work force.
The restaurant will need to have enough trained employees to be able to send out professional teams for catering jobs, to manage contract feeding programs and to assist with sales, she said.
Marshall encouraged Waas to develop the restaurant’s relationship with a local culinary school. Beadle’s could benefit by attracting students and graduates who can increase the variety of the restaurant’s offerings, bring more contemporary choices to the menu and a more modern look to, for example, the bakery’s cake decorating, Marshall said.
Beadle’s already has added pastas, shrimp dishes, turkey burgers, vegetarian burgers and a larger variety of fresh vegetables to the more retro choices on its menu, such as its popular meatloaf and macaroni and cheese dishes. Marshall is also encouraging Waas to “bundle” foods into dinners, a la McDonald’s Big Meals. Her suggestion: a steak and potato platter that costs $8.50, a bit more expensive than the typical Beadle’s dinner.
As Waas strengthens her employee team, Marshall recommended she begin to market the restaurant’s services more aggressively. The consultant suggested creating a catering brochure as part of a catering marketing package. Signs inside the restaurant, notices in Beadle’s new monthly newsletter and mailings to local businesses would also help to spread the word, she said.
The cafeteria itself is the third area of the business Waas should concentrate on, Marshall said. Although the in-store merchandising has improved tenfold during the last year and a half thanks to modifications by Waas, it’s time to take it to a higher level of sophistication, Marshall said. In the cafeteria, she’d like to see a “warmer, more approachable, marketplace type of thing, as opposed to the first view now of stainless steel and a long line.”
The old-fashioned cafeteria could be transformed into a more contemporary, appealing space without spending a lot of money, Marshall said. The secret is to set up “enticing situations that make you want to approach, to get up closer to see what’s there,” she said. Colorful awnings, contemporary lighting, seasonal displays and color photographs of the food would create a more inviting environment, she said.
“A picture of this wonderful turkey being carved, which is just up the line, the beautiful cakes and pies, homemade breads and rolls--the food photos are everything,” Marshall said. Younger customers, in particular, are used to the food photography common to fast-food menu boards, she said.
Beadle’s could use new menu boards too, she said. Waas agreed but said that the roughly $5,000 price tag has pushed the boards onto next year’s budget.
Waas acknowledges the need to continue to improve the look of the cafeteria. “We’ve gotten better about trying to keep the Scotch tape off the walls and the sticky signs . . . you forget they are there, but the customers don’t,” she said. Beadle’s also has spent money to catch up on the painting and maintenance it put off when times were bad. That’s eaten into the increased cash flow, she said.
Waas is keeping a closer eye on expenses these days.
“One of the things we have really learned is we can’t take anything for granted,” Waas said. “We have to stay on top of things. One day kind of looks like the next day, so everybody gets lulled into a false sense of security. So it’s ‘Sure, let’s go buy this’ or ‘Let’s go buy that.’ ”
Marshall expects the new outside sales to help cut labor and food costs to 65% of revenue, from the current 67%, which will help free up cash for marketing and facility improvements. Growing cafeteria sales will also help, she said.
Down the road, the consultant would like to see Beadle’s begin to develop its own name-brand products. Beadle’s muffins or cookies, for example, could be part of the wholesale bakery business. Improving the kitchen staff will help make the name-brand idea a reality, she said.
For now, Waas is well-positioned to make the company grow, Marshall said. The restaurant executive is active in several restaurant associations and involved in the Pasadena community, both of which keep her in touch with other restaurant owners and new business opportunities, the consultant said.
“Beadle’s needed new leadership, and that’s just what Jane brought,” Marshall said.
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DOES YOUR BUSINESS NEED A MAKE-OVER?
* Does your marketing plan need revamping? Your office equipment need upgrading? We are looking for business owners willing to let a consultant review their operations from top to bottom and make recommendations. Those recommendations will be published in the Business Make-Over feature. Send us a letter describing your business in detail and problem areas that a consultant could help tackle. Send to: Business Make-Overs, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053
This Week’s Company Make-Over
* Name: HGH Inc., doing business as Beadle’s Cafeteria
* Headquarters: Pasadena
* Type of business: Cafeteria
* Status: Family-owned corporation
* Owners: Gordon Hammond and Jane Waas
* Founded: 1956
* Start-up financing: Hammond bought the business in 1967 with $15,300 in personal savings.
* Sales: $2.5 million for fiscal year ended June 30
* Employees: 68
* Customers/clients: Local residents and businesses
Main Business Problem
How to improve marketing and cash flow.
Goal
To cut overhead and boost customer count
Recommendations
* Continue to build and train employee team.
* Market outside sales more aggressively.
* Update in-store merchandising.
* Develop name-brand products.
Meet the Consultant
Phyllis Ann Marshall, principal of FoodPower of Costa Mesa, has spent 17 years as a food industry consultant specializing in restaurant concepts and operations. She was a co-owner and operator of Mr. Stox restaurant in Orange County.
