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So what exactly is a mastermind and how does group coaching actually work? Those are questions I get all the time. Today I'm going to share with you two different case studies of P3 members just over the last 12 months. One very recent happened in the last two months. One that happened about a year ago. And I think they illustrate the work we do and most importantly, the impact that a really good coach can have on your business. All of that on today's episode of Restaurant Strategy. There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.

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Hey everyone, thanks for tuning in. My name is Chip Close. This is the Restaurant Strategy Podcast. Two episodes every single week, helping independent restaurant owners increase the profitability of their businesses. I wrote a book, it's called the Restaurant Marketing Mindset. You will find that link in the show Notes. If you want to buy my book. I give talks all over the world. I have a membership site, it's called Restaurant Foundations. You will find that link in the show Notes as well. If you are interested in joining that. I also run a group coaching program. It's called the P3 mastermind. We're about four and a half years old. We've grown from one group all the way up to four groups. Currently there are about 150 members in the group. We've put over 350 people through the program. The program has grown because the program works. If you have a busy restaurant, meaning you're doing at least a million dollars in annual revenue, you've been open for at least a year, but you're struggling to drop a consistent, meaningful number to the bottom line. And I define that as 20%. If you struggle to make 20% to the bottom line of your business, then we should chat. There's no pressure, but you start with a conversation. The link is in the show notes, but it's RestaurantStrategyPodc.

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You'll grab time on the calendar. You'll chat with me or someone from my team. We'll get to ask you questions so we can learn more about what's going on. And you'll get to ask questions so you understand how we work with restaurant owners and how we might be able to help you. If it's good fit, we'll talk about the next steps. If it's not a good fit, at least what we have, we will have met and hopefully you come away with some action items. But you'd be amazed at how common the problems are across all different concepts in all different markets. Again, restaurantstrategypodcast.com schedule as always, you'll find that link in the show notes. Okay, so today's episode actually goes hand in hand with that because it's a question I get all the time. What exactly is a Mastermind? What is group coaching? How does it work and most importantly, how does the work happen and what sort of impact, what sort of return on my investment can I expect? And they're all great questions because I run a program that's really behind closed doors. It's tough to know what's in the room until you get in the room. But that's the nature of it. That's why it's a closed room. There has to be a room that you go to where you can ask students stupid questions, where you can show warts and all what's going on in your business so that we can begin the hard work of actually fixing the problems. That's what the P3 mastermind is. I launched it with 10 people in a single group in the summer of 2021. And over the last four and a half years, it's grown now to again. We've put over 350 people through the program. We've expanded it to four unique groups. We have three other coaches who work alongside with me. It is an incredible, incredible community of owners, operators spread all over the world. Eight different countries, 48 states in this country, including Washington D.C. all different concepts at all different levels in all different markets. Now, it's no pixie dust, it's no silver bullet. What we do is teach you the systems that all the big restaurant groups and chains have dialed in. We teach them in such a way that you can teach it to your people and implement them very easily, easily into your business. They are the most important systems for targeting and automating profit every single month. So on today's episode, I want to share two case studies. I'm going to hide the names because there's a certain amount of anonymity that is expected when you come into the P3 mastermind. But I hope that you see the common threads. So I picked two multi unit operators. Both of them have three units. One's in Wisconsin, one's down south in Louisiana. They've got very different businesses, very different problems, but we solved them. We solved them over the course of their time in the P3 mastermind. First one, I'm Going to work with is a big operation. Again, three locations down south in Louisiana. Collectively, they were doing about $8 million across the three locations. When they came to us, the owner said, man, we're doing pretty good. They're dropping 12% of the bottom line. And you do the math. 12% on $8 million in top line is almost a million dollars in bottom line profit. That is the kind of business I want, but I want one that's more efficient, that can more effectively drop profit to the bottom line. Because 12% is good, but it's not great, especially for their concept. It was a family restaurant. It was a casual restaurant. So they didn't have fancy stuff. They weren't serving lobster and caviar and foie gras and truffles. They weren't. They were serving chicken and pork and steak and meatloaf and turkey. And we should have been able to do more from there. They want it more. I want it more for them, which is why they came to the program. When they came to the program, top line was doing pretty good. Labor was dialed in. They signed brilliant leases. Their overhead was very low. Their problem was cost of goods sold. Their COGS percentage was over 38% percent at each of the locations. They were remarkably consistent. It wasn't like one was killing it and the other two were dragging it down. It's not. They were all at a 38.5% cost of goods sold consistently over many, many months, which meant that they had a pretty good operation. But they didn't. They didn't do the. They weren't doing the. The important work of driving that number down. I got to tell you, we got them down below 30%. That was another 8 to 10% across the board. That dropped to the bottom line. Again, you do the math. It was somewhere between 750 and $800,000 over the course of. Over the course of this year. That was on top of the nearly million dollars they were already dropping to. The bottom line. So went from about $970,000 in bottom line profit to about 8, $1.8 million in bottom line profit. It's been an incredible, incredible year for them. This. This in a year, especially when we talk about cost of goods sold, it's a down year. The economy, right. There's lots of uncertainty. The economy is. The economy is dipping. And this was hurting them. A casual family restaurant. It was value. Big portions, you know, relatively inexpensive food. But still, it's. They had to keep. They had to maintain a certain price point. People went there for A reason. So when we got them from 38 to, it was about 29% that we got them. What exactly did we do to get them there? That's what you care about. That's what I want to share with you. So the very first thing we did is I said, we need to run the product mix because they had a ton of items on their menu. And I said, I'm guessing you probably need a whole lot less. Some of this is probably waste or spoilage or, you know, you don't have enough cross utilization. So I want to run a product mix report to really understand what's selling and what's really not selling. Also because I said it's not my call. But I think what we're going to do is we're going to end up cutting about 20 to 25% of the menu, which will give us some breathing room on the menu. It will give us some elbow room so that we can move things around. We can come up with different categories. We can do call outs like pictures and boxes and, you know, put my, you know, fan favorite or signatures and things like that. We didn't do that yet. I just knew that's where we were going. So we ran the product mix to see what was selling and what wasn't selling. That was very illuminating. When we got that report, we mapped out the recipe cards. So they had the recipe cards. We spent about two weeks to make sure they were all absolutely correct. We did that. What we found is that there were a bunch of items that they were getting killed on, happened to be a lot of the items that they were selling a lot of. So we knew that those were things to fix, what we had to figure out. Then we looked at the product mix and when we looked at what was profitable and what wasn't profitable, we figured out what dishes are getting cut from the menu, like which ones are off tomorrow, right? Then we played around with the portion size. Yes, we messed around with pricing, but we also renegotiated, went back to our vendors and said, hey man, we're doing $8 million in business. That's like two, three, you know, two and a half million dollars that we're pretty much giving you. So you gotta come to the table, you gotta play ball. And so we renegotiated prices. We looked at other SKUs. We, you know, swapped out this stake with this, you know, with a new stake, a new purveyor, all of that, right? So we went back to our vendors and they became partner in the process. We swapped out different Skus, we simplified some of the recipes for things. And yes, finally, like I said, we reworked the menu. So we cut about 25. We actually cut a little bit deeper. It was like 25 to 28% of the menu, something like that. And then we had lots of breathing room, lots of white space on the menu so we could move things around, we could do call outs, we can do that menu engineering thing. And that was it. That was the biggest thing. They just were afraid, honestly, they were afraid to mess with the menu because they've been around for so long. They were afraid to mess with the prices because they felt like their people were so value conscious. And what I told them and what we learned over the process is everywhere else in their life, prices are going up on gas, on clothes, their rent, everything across the board, prices are going up. Now you can say, maybe I'm the one refuge. This is where, you know, things are like they used to be and they can afford this. But I think that's crap. I think people know, because it's all we're hearing on the news, that the costs of things are going up. And I think you just have to join them. And what they learned over the course of very quickly, two weeks, nobody said anything. It wasn't like they had a handful of people every night that were like, oh, you know, this is much more expensive. This is pretty expensive. No one in the first two weeks, no one said anything. In fact, it's now been months since they've done this, and no one has said anything. So this is a lesson to all the listeners out there who say, well, my audience, my customers are very value conscious. Not as much as you think. Dining out is a luxury. People dine out not because they need to, but because they want to. Because they don't want to shop, they don't want to prep, they don't want to clean up. Afterwards, they come to the restaurant and say, hey, can you come up with a menu? Can you go shopping? Can you make it for me? Can you take care of me for the hour that I'm here? And can you do all the dishes later? Sometimes on the end of a busy day or a busy week, you're like, you know what? I just want to be taken care of. And that's okay. We have an entire business, our industry is propped up on this idea of serving people. So that's what they did. They came in with an $8 million business. Good business for three restaurants, right? 12% of the bottom line. It was almost a million dollars in bottom Line profit going into their pockets. But they wanted more. The cogs with a problem, it was about a 38. We got them down to 29. And by the way, we're still trying to go lower because. Because we can. Because they're a casual place and I think we can find more savings. So we go from 29 to like 26 is, I think, where they're going to land. That's another three points. The bottom line. You do the math. Three points on $8 million. It's a meaningful amount of money. So that's what we did. We went through the process of running the product mix, seeing what was selling, seeing what wasn't, looking at our recipe cards, laying them over, creating a matrix, seeing, man, what. What's really popular and really profitable. Let's sell more of that. What's not popular and not profitable? Let's get rid of those. Where do we put things on the menu so that they sell more? What do we take off the menu? And we just have the servers hand sell. What do we do? And the cogs dropped. I mean, literally, it was immediate. One month they were at 38. The next month they were at 29. And here is the crazy thing about the whole story. They were scared to death that sales were going to go down. And sales actually went up. Not just because we raised the prices on some items, though. That was it. But they also, the sales, like the. The how many items were on the check went up because they weren't buried in a, you know, menu that looked like a page out of the dictionary. They could actually take in all the stuff and they found other things they wanted. We offered snacks, we offered side dishes. We were offering some sauces. There were ways to upsell and spend more money, and it was awesome. That's the first case study. Next case study in a second, after a word from our sponsor.