October 31, 2023 • 24 mins
The Pre-Shift Podcast presented by 7shifts is a deep dive into what it takes to run great restaurant teams.
Host DJ Costantino covers the restaurant industry with conversations featuring industry leaders and innovators sharing their business growth insights, backgrounds, and valuable lessons on running restaurant teams.
On this episode, we’re joined by Irene Shiang Li, Cofounder of Prepshift & Mei Mei Dumplings in Boston, Mass.
Irene Shiang Li co-founded Mei Mei in Boston in 2013 and built the brand around ethical, sustainable sourcing and fair and transparent employment practices, including open book management. Mei Mei is now a dumpling company and Irene is now building Prepshift, a tech-enabled coaching and workforce training firm. Prepshift focuses on aligning food business teams around their common goals and empowering them with education and transparency. Irene believes that in restaurants, everyone can win. She is a Zagat and Forbes 30 Under 30 honoree, six-time James Beard Foundation Rising Star Chef nominee, and 2022 James Beard Foundation Leadership Award winner. In 2023, Irene and her sister co-authored Perfectly Good Food: a totally achievable zero-waste approach to home cooking with W.W. Norton.
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Credits
Host & Producer: D. J. Costantino
Producer: Samantha Fung
Editor: Fina Charleston
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7shifts is a scheduling, payroll, and employee retention app designed to help restaurants thrive. With an easy-to-use app and industry-specific solutions, 7shifts saves time, reduces errors, and helps keep costs in check for more than 50,000 restaurants.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Listen, we know what it's like to be underwater on a
hundred different things, andthen you have a pipe burst and
you're literally underwater.
Speaker 2 (00:12):
Hello and welcome back to another episode of the
Pre-Shift podcast, where we divedeep into what it takes to run
great restaurant teams.
I'm your host, dj, and todayI'm sitting down with Irene Lee.
Irene co-founded Meimei, a foodtruck turned restaurant, turned
dumpling company in Boston, andnow PrepShift, a restaurant
consultancy that helps smallbusinesses thrive while
remaining loyal to their values.
Speaker 1 (00:33):
My name is Irene Lee and I am the co-founder of
Meimei Dumplings, and I'm alsothe co-founder of PrepShift, a
consulting, coaching andworkforce training company.
Speaker 2 (00:46):
Meimei opened in 2012 and has become a perennial
favorite in Boston, racking upmore local and national awards
than I have time to list, but Ido want to highlight Irene's
recent James Beard leadershipaward win in 2022.
But after enjoying a longrunning success, the pandemic
forced Lee and her siblingbusiness partners, andrew and
Margaret, to rethink whether ornot they wanted to be a
restaurant at all.
Irene and I get to dive intowhat that meant, how it spurred
(01:08):
PrepShift and how she keeps herstaff retained.
As always, the Pre-Shiftpodcast is brought to you by
Seven Shifts workforcemanagement for restaurants.
Now, in September of 2020,irene posted an article on the
Meimei website blog titled thisIs Not a Restaurant.
That blog detailed how Meimeiwould adapt in the pandemic, and
it morphed into a meditation onwhat independent restaurants
(01:28):
and their owners need to survive.
Speaker 1 (01:31):
And that's kind of what led me to thinking about
PrepShift.
Prepshift started out as anidea that was basically just
like what, of all the things wecan do, how are we going to
support independent restaurants?
And so PrepShift has beenthrough a couple iterations, but
right now what we do isessentially coaching and
(01:52):
consulting, and a lot of that isfunded by municipalities, by
the state of Massachusetts andby other third parties.
So we're kind of like we're notyour dad's consulting firm and
we a lot of our clients, youknow are people who would never
even think about hiringconsultants in a traditional
sense, and so we try to bringour lived experience mine and my
(02:17):
co-founders, dylan and Carla's,our experience working in
restaurants, working forrestaurants, as service
providers and to really bringlike having been there to the
table.
Speaker 2 (02:31):
The way Meimei evolved was to transition out of
being just a restaurant.
While you can still go down andsit there to eat their famous
dumplings, the restaurant hasextended into multiple revenue
streams, engaging its staff andcustomers in different ways.
Speaker 1 (02:43):
Today, meimei operates a what we call a
factory slash cafe, slashclassroom, and we are open for
service only two days per week,and the other days we
manufacture dumplings and wehold dumpling classes.
We also take our products totons of farmers markets around
(03:04):
the state, and so that's where alot of our revenue is generated
.
And we came to this conclusionin part because of the real
estate opportunity we had andalso because, in thinking about
what we were really hearing fromour customers, about what they
wanted, it's more aboutexperience across the board and
(03:28):
less about I want to come intoyour restaurant and sit down and
eat there.
And so we started sellingdumplings partway through the
pandemic at farmers markets andthey took off selling like
hotcakes.
There were so many differentexperiments during COVID, and
the one that really crushed itwas dumplings, and so we
(03:49):
basically said, okay, can we ownand sell every aspect of the
dumpling experience?
So I think for us, the cafeclassroom is like okay, you can
come and watch us make dumplings, or you can come and we can
teach you to make dumplings, oryou can come and just order
dumplings, or you can come andbuy dumplings to take home.
(04:10):
And so I think we're trying tocapitalize on the enthusiasm
around the product and tomonetize that in a bunch of
different ways.
The other thing that I feellike is important to us is
bringing a level of kind oftransparency and like realism to
(04:32):
what we're doing, and so whenyou come to the factory, you can
see the production space, youcan see the dumplings being made
.
We also show you how to makedumplings, so like it's not a
secret, there are no secretrecipes, there's no like
confidential information.
I think that really speaks toone of our core values, which is
(04:54):
about generosity and sharing.
And, on another level, like wealso were, just like getting old
and like don't wanna work atnight.
Speaker 2 (05:03):
Fair enough, fair enough.
Speaker 1 (05:04):
And wanna work minimal weekends, and so I think
that for me to say May, may isnot a restaurant anymore was
very bittersweet, but it alsojust felt like the smart next
step in a bunch of ways, and Iwould say we're very happy with
the niche that we've kind ofcarved out for ourselves.
Speaker 2 (05:26):
Leah's also found that these new business models
have helped to tell more of theMay May story.
Speaker 1 (05:31):
Diverse revenue streams all kind of tell a
different part of the story andI think you build brand loyalty
with the storytelling.
And so when we sell someone adumpling class and they come in
and take the class, we areessentially marketing to them
for 90 straight minutes.
(05:52):
And that's so much moreopportunity to build a
relationship than sending aserver to their table, and so I
think that's one of the otherthings that we encourage clients
to think about is, like, whatare the things that build the
relationship?
And maybe it's doing like moretakeout, but it's probably
something that's higher touch orsomething that is more unusual
(06:16):
or harder to find.
So I think that's one of thethings that it's all in service
of is how to tell the story andbuild those relationships.
Speaker 2 (06:25):
Now my biggest question for Leah was about
staffing a hybrid business likeMay May.
Do you have separate staff foreach arm of the company?
Leah showed me that all oftheir team receives cross
training and what exactly goesinto it.
Speaker 1 (06:37):
So we cross train the majority of our staff.
It kind of depends on, like,their availability.
We're fortunate that thefarmers market schedule makes it
so that we can have a lot ofemployees who work once a week.
It's great for us, it's greatfor them, but the majority of
our full-time team members haveto be cross trained to do
everything and so for the mostpart they're kind of centered in
(07:02):
one department.
But we have the cafe department, the production department, the
farmers market department andthe classes department.
So there are a lot ofopportunities which again I
think is nice for our team.
They get to learn new thingsand kind of have new challenges
as they move into other parts ofthe business.
Speaker 2 (07:21):
That's very cool.
Do you think that that issomething the cross training and
different opportunities do youthink that has an effect on
employee retention at all, or isit?
Am I making yes, so yes, 100%,I'm not just making it up.
Speaker 1 (07:36):
Yeah, I mean, I think we give people an opportunity
to use different parts of theirbrain and I also think that I
don't know.
Essentially, we're tellingpeople like we think we can
teach you to do anything.
You don't have to walk in withexperience in anything If you
are like attentive and likesmart and, on top of it, like
(07:58):
we'll bring you anywhere with us, and I think that's kind of
like an overall attitude aroundemployment and around like
culture building.
That I see as super effective,not just at NAMAY but at any
organization where you know.
It's like you weren't hired tobe a cog, Like we're gonna bring
(08:19):
you in and like skies the limitfor both of us.
Speaker 2 (08:23):
That cross-training for staff also has another
benefit in staff retention.
In the study this year we foundthe training is one of the top
places operators invest theirdollars into keeping employees
around, and cross-traininglikely does is a great way to do
it.
Speaker 1 (08:37):
One of the things that I think is most important
is having our team members feellike they're part of something,
and I know that that's like howpeople lead really successful
cults too.
But I think that, like you know, we want them to feel like
(08:58):
their work means something, evenif it is just folding dumplings
for an eight hour shift.
And one of the ways that we dothat is through our open book
management system, which we nowcall Teamwide Financial
Engagement, because it's alittle bit more accurate.
But basically, at May-May, theway we do TFE is we have a
(09:22):
quarterly meeting and we look atthe major expense categories
and the major revenue categories.
We get feedback from peopleabout what they're seeing in
their day-to-day work and ifthey're seeing it reflected in
the numbers, what ideas theyhave for improvements or changes
, and we set goals for the nextquarter.
(09:44):
And I think that I don't knowlike it's really simple, but
like if you can feel like youknow if you're winning or losing
.
That's like a good feeling.
And even during COVID, you know, we showed people like here's
what we thought we were gonnabring in in revenue and here's
(10:04):
what we actually did Sort ofpeople having a sense of what's
going on in the business andlike if we're meeting our goals
or not.
I feel like that's just likethat dignifies their
contribution in a way that inmany kind of like low wage jobs
I think doesn't happen, and socan they take pride in our wins
(10:29):
as a business and can they alsohelp us in the moments when
we're failing as a business.
So asking them to really bepart of what we're doing, I
think is something that thefolks who we bring in really
respond well to.
Speaker 2 (10:45):
Another attention tactic is open book finance,
which we've covered recently onthe show, but Lee has an
interesting approach on how tomake it work for your team.
Speaker 1 (10:53):
Yeah, and that's actually part of why we're
trying to like kind of rebrandto what we're calling team-wide
financial engagement, becauseopen book management kind of
makes it sound like you'reshowing everyone everything all
at once and you're really not.
You shouldn't.
And so we teach team-widefinancial engagement as three
pillars or like three legs of astool.
(11:15):
So the first thing you have todo is educate people so that
they do know what they're goingto be looking at.
Then you give them the accessto the information they actually
look at it, and then you createan opportunity and an incentive
for them to engage with thematerial and to try to make
changes and meet goals.
(11:36):
And those three things all haveto happen or it is not going to
be successful.
We've had clients who are likewow, open book sounds so great,
I'm going to show the staff theP&L tomorrow and we're like no.
Don't do that, because it can bereally disastrous to give
(11:56):
people information withoutcontext, and so that's how we
roll it out with our clients.
We start by making sureeveryone understands how to read
a P&L.
What are the benchmarks andwhat are kind of like the core
tenets of running a superfunctional business that knows
(12:18):
how to set goals and meet them.
Then we actually show themnumbers and typically we
advocate for showing the fiveline P&L.
So revenue and profit top andbottom.
And then three major expensecategories COGs, direct labor
and overheads.
And then I don't know if you'rein a business where, like
(12:42):
May-May, for example, where alot of our dumplings are sold as
retail, you might break revenuedown into its component parts
or like, wow, we want to see howclasses did in the summer
versus the winter.
So often revenue breakdown isanother layer that we might go
to.
But for the most part we'relooking at the five line P&L and
we again advocate that folksnot go too much deeper than that
(13:06):
.
And part three is basicallycreating these team challenges,
or like in Ann Arbor, gha, Ithink, calls them like mini
games or initiatives, butbasically like if we zoom in on
a section of the P&L, can wecreate a measurable goal around
this and engage everybody in it.
And so that's the third leg ofthe stool.
(13:28):
And yeah, I mean I love GHA andI love what Zingermans does,
and I think that their brand ofopen book management requires
you to like really have yourshit together.
Yeah, and so, like I think onsome level, for us at PrepShift,
tfe is like for like the C-plusstudents and not the A-plus
(13:52):
students, like can we kind ofget something underway that
helps facilitate more alignment,even if the P&L is like still a
little bit messy, and so Ithink that's like what we're
really excited about so muchrespect for what they do, and
also see a need to bring it evenmore to like a simplified level
(14:18):
.
Speaker 2 (14:20):
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exciting update from SevenShifts.
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it for a long time.
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to announce that SevenShiftspayroll is now available in the
US.
Now you can schedule youremployees, manage the time clock
(14:40):
, calculate tips and pay yourteam in one app, and when you
make the switch to SevenShiftspayroll, your first three months
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Head to SevenShiftscom.
Make the switch.
Now back to the show.
As Leah's mentioned, whatthey've learned at May-May has
inspired much of her work atPrepShift.
At the core, Leah's dedicatedto helping restaurants afford
their values.
She's helping them figure outhow to afford to pay people more
(15:01):
, eliminate tipping and build anequitable restaurant for their
ownership as well as the staff.
But Leah recognizes that inorder to do so, you have to
either make more or spend less.
Ideally, it's a little bit ofboth and it also takes a pretty
long time.
Speaker 1 (15:15):
The two options they have for improving the business
are essentially bring in morerevenue or reduce your expenses,
and, depending on which kind ofpathway makes more sense,
depending on the particulars oftheir P&L, we help them create
strategies to generate moreprofit and to generate more
(15:35):
operating capital.
And yeah, I think there are somany things that restaurant
owners would love to do that wecan't afford.
Like, we would love to use allcompostable, renewable,
everything all the time, andthat's hard.
We would love to pay a livingwage that's hard, too and we
also would love to offer areally great value to our
(15:58):
customers, a value that reallyknocks it out of the park.
We can't do that either Many ofus, I think.
If we could give the food awayfor free, we would, because we
love feeding people.
We didn't get into this for thelove of running a business, but
I think, for me, one of thethings that I realized in my
(16:20):
journey as an entrepreneur, andone of the things that I see a
lot of our clients coming to, isthat if your goals outpace your
profitability, that's a reallydangerous place to be in.
So it might be that you can'tpay a living wage until you are
X% profitable.
That's just the reality for alot of businesses, and so one of
(16:43):
the things I think we try tohelp clients with is to figure
out what goals are appropriatefor where they are in building
the business and then to helpthem see what is the pathway to,
for example, paying a livingwage.
You can't just start doing ittomorrow.
That is going to put you out ofbusiness.
So how do you set a reasonablegoal and keep yourself on track
(17:07):
towards it?
And then, on the flip side,there are also operators who say
things like oh, we could neverpay a living wage, and we don't
love that mentality either.
So we want to tell them thereis a way to get there, there is
a pathway, and whether it's thatyou don't think you'll ever get
there or you're mad that you'renot there already, we want to
(17:30):
kind of close that gap.
Speaker 2 (17:33):
Now we wouldn't be having these tough conversations
that were easy, just to makemore money.
There are many ways to go aboutit, but Lee contends that
raising menu prices isinevitable.
Many operators are reluctant todo it and drive customers away.
But a slower, more tactfulapproach can get you where you
need to be.
Speaker 1 (17:48):
I do think that menu prices are ultimately going to
be the driver of profitabilityfor restaurants, but I think
there are tons of differentlevers to be pulled and menu
prices are just one of them.
So, for example, like I thinkin a lot of independent
restaurants you know you couldprobably shave a percentage
(18:10):
point off cost of goods if youwere to monitor food waste.
Negotiate with your vendorslike reformulate some recipes
there's opportunity in so manydifferent places and raising
prices is one opportunity.
The other thing that, like Ithink I often see is operators
(18:32):
are so scared of raising pricesbecause they just know that one
guest who's going to complainand that vocal minority is going
to haunt them.
And I've been there and I thinkwhat I've seen is that there
are a ton of ways to likemitigate that kind of negative
reaction.
The first thing is, like youwant to raise prices very
(18:53):
intentionally and you probablywant to do it gradually.
You also can communicate aboutwhy you're raising the prices
and hope that people rememberthat.
Like grocery stores don't lockin their prices for you and so
like neither should restaurants.
But I think a lot of it is inthe messaging and the
(19:14):
relationship.
And, yeah, like if you're justgoing to raise everything by
four dollars, like, yeah, peoplearen't going to be happy about
that, but I do think that in theUS, like we do undervalue
restaurant dining and that'sgoing to have to change for the
industry to continue to survive.
So I think all these thingshave to happen and it's the
(19:37):
matter of, like pulling thelevers that are available to a
given restaurant and you knowthere's no single solution.
It's like you can't just hit ahome run, like you have to grind
it out with, I don't know,singles or whatever baseball,
(19:58):
but it's a grind, and so there'sjust not one kind of magic
solution, unfortunately, Anotheraspect of the puzzle is the all
important question on tipping.
All of this around wages ispretty complicated and, as you
know, like tipping, has a prettyugly history with, like, its
(20:21):
roots in slavery and thereconstruction era, and I would
love for us to be in a worldwith no tipping.
It's going to take a lot to getus there and I know that that
can't happen overnight.
In Massachusetts, there areparticularly restrictive laws
around tip pooling, and sopooling with the back of the
(20:46):
house, even if everyone is paida full minimum wage, is still
not permitted in Massachusetts.
There is going to be, I think,a ballot initiative coming up
about instating one fair wage inMassachusetts, and I think the
more we see data coming out of,you know, oregon, washington,
(21:07):
california, the states that haveimplemented one fair wage, the
less scary it's going to be totake that leap.
Speaker 2 (21:15):
Now Irene understands that it can be scary to raise
your prices and the concern ofalienating customers is real,
but she also calls out thatrestaurants are in a tough spot
because of the laws regardingtip service charges and how they
vary from state to state.
Speaker 1 (21:28):
I get that it's scary .
I get that operators don't wantto upset their customers, and
so we're seeing a lot ofproliferation of service fees,
admin charges, back of housefees and lately that's really
pissing off customers.
So it's like these are likemachinations that we're taking
(21:49):
on because the laws don't fitour needs.
So the systemic change, whichyou know would be ideal, would
be to change the way the lawsare written, and everything that
restaurants are doing that'spissing people off is just a
response to the laws not makingsense.
So that's something I think weneed a lot of consumer
(22:10):
engagement and education on, andso it'll be interesting to see
what happens in Massachusetts asthe ballot initiative kind of
moves forward towards nextNovember.
Speaker 2 (22:23):
Lastly, one of the more important things that Lee
is doing at PrepShift is helpingrestaurants understand data and
what it says about theirpriorities.
Speaker 1 (22:30):
I think it comes down to two very different things.
One is the storytelling how dowe tell ourselves the story of
our business, how do we tell ourteam, and then how do we tell
our guests on the outside?
And then the other thing is thefinancials.
I guess the finances tell astory in a way, so maybe it's
(22:54):
the same thing, but thefinancials tell the story if the
operator cares to read it.
There is a lot to be found, andso for us it really does go
back to finances, back to basics.
I hate saying that because Idon't like financials, I'm not a
numbers person, but, as I said,I learned that you can only do
(23:15):
cool shit if you can afford it,and so that's why the numbers
matter.
So I would say, if I had tokind of center it around
something, it would be knowingthe story and making changes
according.
Speaker 2 (23:29):
And Lee is excited to continue with PrepShift and
help more operators live theirvalues and celebrate their
success.
Listen, we know what it's like to be underwater on a
hundred different things, andthen you have a pipe burst and
you're literally underwater.
Speaker 2 (00:12):
Hello and welcome back to another episode of the
Pre-Shift podcast, where we divedeep into what it takes to run
great restaurant teams.
I'm your host, dj, and todayI'm sitting down with Irene Lee.
Irene co-founded Meimei, a foodtruck turned restaurant, turned
dumpling company in Boston, andnow PrepShift, a restaurant
consultancy that helps smallbusinesses thrive while
remaining loyal to their values.
Speaker 1 (00:33):
My name is Irene Lee and I am the co-founder of
Meimei Dumplings, and I'm alsothe co-founder of PrepShift, a
consulting, coaching andworkforce training company.
Speaker 2 (00:46):
Meimei opened in 2012 and has become a perennial
favorite in Boston, racking upmore local and national awards
than I have time to list, but Ido want to highlight Irene's
recent James Beard leadershipaward win in 2022.
But after enjoying a longrunning success, the pandemic
forced Lee and her siblingbusiness partners, andrew and
Margaret, to rethink whether ornot they wanted to be a
restaurant at all.
Irene and I get to dive intowhat that meant, how it spurred
(01:08):
PrepShift and how she keeps herstaff retained.
As always, the Pre-Shiftpodcast is brought to you by
Seven Shifts workforcemanagement for restaurants.
Now, in September of 2020,irene posted an article on the
Meimei website blog titled thisIs Not a Restaurant.
That blog detailed how Meimeiwould adapt in the pandemic, and
it morphed into a meditation onwhat independent restaurants
(01:28):
and their owners need to survive.
Speaker 1 (01:31):
And that's kind of what led me to thinking about
PrepShift.
Prepshift started out as anidea that was basically just
like what, of all the things wecan do, how are we going to
support independent restaurants?
And so PrepShift has beenthrough a couple iterations, but
right now what we do isessentially coaching and
(01:52):
consulting, and a lot of that isfunded by municipalities, by
the state of Massachusetts andby other third parties.
So we're kind of like we're notyour dad's consulting firm and
we a lot of our clients, youknow are people who would never
even think about hiringconsultants in a traditional
sense, and so we try to bringour lived experience mine and my
(02:17):
co-founders, dylan and Carla's,our experience working in
restaurants, working forrestaurants, as service
providers and to really bringlike having been there to the
table.
Speaker 2 (02:31):
The way Meimei evolved was to transition out of
being just a restaurant.
While you can still go down andsit there to eat their famous
dumplings, the restaurant hasextended into multiple revenue
streams, engaging its staff andcustomers in different ways.
Speaker 1 (02:43):
Today, meimei operates a what we call a
factory slash cafe, slashclassroom, and we are open for
service only two days per week,and the other days we
manufacture dumplings and wehold dumpling classes.
We also take our products totons of farmers markets around
(03:04):
the state, and so that's where alot of our revenue is generated
.
And we came to this conclusionin part because of the real
estate opportunity we had andalso because, in thinking about
what we were really hearing fromour customers, about what they
wanted, it's more aboutexperience across the board and
(03:28):
less about I want to come intoyour restaurant and sit down and
eat there.
And so we started sellingdumplings partway through the
pandemic at farmers markets andthey took off selling like
hotcakes.
There were so many differentexperiments during COVID, and
the one that really crushed itwas dumplings, and so we
(03:49):
basically said, okay, can we ownand sell every aspect of the
dumpling experience?
So I think for us, the cafeclassroom is like okay, you can
come and watch us make dumplings, or you can come and we can
teach you to make dumplings, oryou can come and just order
dumplings, or you can come andbuy dumplings to take home.
(04:10):
And so I think we're trying tocapitalize on the enthusiasm
around the product and tomonetize that in a bunch of
different ways.
The other thing that I feellike is important to us is
bringing a level of kind oftransparency and like realism to
(04:32):
what we're doing, and so whenyou come to the factory, you can
see the production space, youcan see the dumplings being made
.
We also show you how to makedumplings, so like it's not a
secret, there are no secretrecipes, there's no like
confidential information.
I think that really speaks toone of our core values, which is
(04:54):
about generosity and sharing.
And, on another level, like wealso were, just like getting old
and like don't wanna work atnight.
Speaker 2 (05:03):
Fair enough, fair enough.
Speaker 1 (05:04):
And wanna work minimal weekends, and so I think
that for me to say May, may isnot a restaurant anymore was
very bittersweet, but it alsojust felt like the smart next
step in a bunch of ways, and Iwould say we're very happy with
the niche that we've kind ofcarved out for ourselves.
Speaker 2 (05:26):
Leah's also found that these new business models
have helped to tell more of theMay May story.
Speaker 1 (05:31):
Diverse revenue streams all kind of tell a
different part of the story andI think you build brand loyalty
with the storytelling.
And so when we sell someone adumpling class and they come in
and take the class, we areessentially marketing to them
for 90 straight minutes.
(05:52):
And that's so much moreopportunity to build a
relationship than sending aserver to their table, and so I
think that's one of the otherthings that we encourage clients
to think about is, like, whatare the things that build the
relationship?
And maybe it's doing like moretakeout, but it's probably
something that's higher touch orsomething that is more unusual
(06:16):
or harder to find.
So I think that's one of thethings that it's all in service
of is how to tell the story andbuild those relationships.
Speaker 2 (06:25):
Now my biggest question for Leah was about
staffing a hybrid business likeMay May.
Do you have separate staff foreach arm of the company?
Leah showed me that all oftheir team receives cross
training and what exactly goesinto it.
Speaker 1 (06:37):
So we cross train the majority of our staff.
It kind of depends on, like,their availability.
We're fortunate that thefarmers market schedule makes it
so that we can have a lot ofemployees who work once a week.
It's great for us, it's greatfor them, but the majority of
our full-time team members haveto be cross trained to do
everything and so for the mostpart they're kind of centered in
(07:02):
one department.
But we have the cafe department, the production department, the
farmers market department andthe classes department.
So there are a lot ofopportunities which again I
think is nice for our team.
They get to learn new thingsand kind of have new challenges
as they move into other parts ofthe business.
Speaker 2 (07:21):
That's very cool.
Do you think that that issomething the cross training and
different opportunities do youthink that has an effect on
employee retention at all, or isit?
Am I making yes, so yes, 100%,I'm not just making it up.
Speaker 1 (07:36):
Yeah, I mean, I think we give people an opportunity
to use different parts of theirbrain and I also think that I
don't know.
Essentially, we're tellingpeople like we think we can
teach you to do anything.
You don't have to walk in withexperience in anything If you
are like attentive and likesmart and, on top of it, like
(07:58):
we'll bring you anywhere with us, and I think that's kind of
like an overall attitude aroundemployment and around like
culture building.
That I see as super effective,not just at NAMAY but at any
organization where you know.
It's like you weren't hired tobe a cog, Like we're gonna bring
(08:19):
you in and like skies the limitfor both of us.
Speaker 2 (08:23):
That cross-training for staff also has another
benefit in staff retention.
In the study this year we foundthe training is one of the top
places operators invest theirdollars into keeping employees
around, and cross-traininglikely does is a great way to do
it.
Speaker 1 (08:37):
One of the things that I think is most important
is having our team members feellike they're part of something,
and I know that that's like howpeople lead really successful
cults too.
But I think that, like you know, we want them to feel like
(08:58):
their work means something, evenif it is just folding dumplings
for an eight hour shift.
And one of the ways that we dothat is through our open book
management system, which we nowcall Teamwide Financial
Engagement, because it's alittle bit more accurate.
But basically, at May-May, theway we do TFE is we have a
(09:22):
quarterly meeting and we look atthe major expense categories
and the major revenue categories.
We get feedback from peopleabout what they're seeing in
their day-to-day work and ifthey're seeing it reflected in
the numbers, what ideas theyhave for improvements or changes
, and we set goals for the nextquarter.
(09:44):
And I think that I don't knowlike it's really simple, but
like if you can feel like youknow if you're winning or losing
.
That's like a good feeling.
And even during COVID, you know, we showed people like here's
what we thought we were gonnabring in in revenue and here's
(10:04):
what we actually did Sort ofpeople having a sense of what's
going on in the business andlike if we're meeting our goals
or not.
I feel like that's just likethat dignifies their
contribution in a way that inmany kind of like low wage jobs
I think doesn't happen, and socan they take pride in our wins
(10:29):
as a business and can they alsohelp us in the moments when
we're failing as a business.
So asking them to really bepart of what we're doing, I
think is something that thefolks who we bring in really
respond well to.
Speaker 2 (10:45):
Another attention tactic is open book finance,
which we've covered recently onthe show, but Lee has an
interesting approach on how tomake it work for your team.
Speaker 1 (10:53):
Yeah, and that's actually part of why we're
trying to like kind of rebrandto what we're calling team-wide
financial engagement, becauseopen book management kind of
makes it sound like you'reshowing everyone everything all
at once and you're really not.
You shouldn't.
And so we teach team-widefinancial engagement as three
pillars or like three legs of astool.
(11:15):
So the first thing you have todo is educate people so that
they do know what they're goingto be looking at.
Then you give them the accessto the information they actually
look at it, and then you createan opportunity and an incentive
for them to engage with thematerial and to try to make
changes and meet goals.
(11:36):
And those three things all haveto happen or it is not going to
be successful.
We've had clients who are likewow, open book sounds so great,
I'm going to show the staff theP&L tomorrow and we're like no.
Don't do that, because it can bereally disastrous to give
(11:56):
people information withoutcontext, and so that's how we
roll it out with our clients.
We start by making sureeveryone understands how to read
a P&L.
What are the benchmarks andwhat are kind of like the core
tenets of running a superfunctional business that knows
(12:18):
how to set goals and meet them.
Then we actually show themnumbers and typically we
advocate for showing the fiveline P&L.
So revenue and profit top andbottom.
And then three major expensecategories COGs, direct labor
and overheads.
And then I don't know if you'rein a business where, like
(12:42):
May-May, for example, where alot of our dumplings are sold as
retail, you might break revenuedown into its component parts
or like, wow, we want to see howclasses did in the summer
versus the winter.
So often revenue breakdown isanother layer that we might go
to.
But for the most part we'relooking at the five line P&L and
we again advocate that folksnot go too much deeper than that
(13:06):
.
And part three is basicallycreating these team challenges,
or like in Ann Arbor, gha, Ithink, calls them like mini
games or initiatives, butbasically like if we zoom in on
a section of the P&L, can wecreate a measurable goal around
this and engage everybody in it.
And so that's the third leg ofthe stool.
(13:28):
And yeah, I mean I love GHA andI love what Zingermans does,
and I think that their brand ofopen book management requires
you to like really have yourshit together.
Yeah, and so, like I think onsome level, for us at PrepShift,
tfe is like for like the C-plusstudents and not the A-plus
(13:52):
students, like can we kind ofget something underway that
helps facilitate more alignment,even if the P&L is like still a
little bit messy, and so Ithink that's like what we're
really excited about so muchrespect for what they do, and
also see a need to bring it evenmore to like a simplified level
(14:18):
.
Speaker 2 (14:20):
Now I just want to take a quick break to share an
exciting update from SevenShifts.
Usually I don't do this, butour users have been waiting for
it for a long time.
I know I don't have to tell youthat running payroll is a
lengthy manual process Dataentry, checking, multiple
systems, cross-referencing,triple checking so I'm excited
to announce that SevenShiftspayroll is now available in the
US.
Now you can schedule youremployees, manage the time clock
(14:40):
, calculate tips and pay yourteam in one app, and when you
make the switch to SevenShiftspayroll, your first three months
are on us To learn more.
Head to SevenShiftscom.
Make the switch.
Now back to the show.
As Leah's mentioned, whatthey've learned at May-May has
inspired much of her work atPrepShift.
At the core, Leah's dedicatedto helping restaurants afford
their values.
She's helping them figure outhow to afford to pay people more
(15:01):
, eliminate tipping and build anequitable restaurant for their
ownership as well as the staff.
But Leah recognizes that inorder to do so, you have to
either make more or spend less.
Ideally, it's a little bit ofboth and it also takes a pretty
long time.
Speaker 1 (15:15):
The two options they have for improving the business
are essentially bring in morerevenue or reduce your expenses,
and, depending on which kind ofpathway makes more sense,
depending on the particulars oftheir P&L, we help them create
strategies to generate moreprofit and to generate more
(15:35):
operating capital.
And yeah, I think there are somany things that restaurant
owners would love to do that wecan't afford.
Like, we would love to use allcompostable, renewable,
everything all the time, andthat's hard.
We would love to pay a livingwage that's hard, too and we
also would love to offer areally great value to our
(15:58):
customers, a value that reallyknocks it out of the park.
We can't do that either Many ofus, I think.
If we could give the food awayfor free, we would, because we
love feeding people.
We didn't get into this for thelove of running a business, but
I think, for me, one of thethings that I realized in my
(16:20):
journey as an entrepreneur, andone of the things that I see a
lot of our clients coming to, isthat if your goals outpace your
profitability, that's a reallydangerous place to be in.
So it might be that you can'tpay a living wage until you are
X% profitable.
That's just the reality for alot of businesses, and so one of
(16:43):
the things I think we try tohelp clients with is to figure
out what goals are appropriatefor where they are in building
the business and then to helpthem see what is the pathway to,
for example, paying a livingwage.
You can't just start doing ittomorrow.
That is going to put you out ofbusiness.
So how do you set a reasonablegoal and keep yourself on track
(17:07):
towards it?
And then, on the flip side,there are also operators who say
things like oh, we could neverpay a living wage, and we don't
love that mentality either.
So we want to tell them thereis a way to get there, there is
a pathway, and whether it's thatyou don't think you'll ever get
there or you're mad that you'renot there already, we want to
(17:30):
kind of close that gap.
Speaker 2 (17:33):
Now we wouldn't be having these tough conversations
that were easy, just to makemore money.
There are many ways to go aboutit, but Lee contends that
raising menu prices isinevitable.
Many operators are reluctant todo it and drive customers away.
But a slower, more tactfulapproach can get you where you
need to be.
Speaker 1 (17:48):
I do think that menu prices are ultimately going to
be the driver of profitabilityfor restaurants, but I think
there are tons of differentlevers to be pulled and menu
prices are just one of them.
So, for example, like I thinkin a lot of independent
restaurants you know you couldprobably shave a percentage
(18:10):
point off cost of goods if youwere to monitor food waste.
Negotiate with your vendorslike reformulate some recipes
there's opportunity in so manydifferent places and raising
prices is one opportunity.
The other thing that, like Ithink I often see is operators
(18:32):
are so scared of raising pricesbecause they just know that one
guest who's going to complainand that vocal minority is going
to haunt them.
And I've been there and I thinkwhat I've seen is that there
are a ton of ways to likemitigate that kind of negative
reaction.
The first thing is, like youwant to raise prices very
(18:53):
intentionally and you probablywant to do it gradually.
You also can communicate aboutwhy you're raising the prices
and hope that people rememberthat.
Like grocery stores don't lockin their prices for you and so
like neither should restaurants.
But I think a lot of it is inthe messaging and the
(19:14):
relationship.
And, yeah, like if you're justgoing to raise everything by
four dollars, like, yeah, peoplearen't going to be happy about
that, but I do think that in theUS, like we do undervalue
restaurant dining and that'sgoing to have to change for the
industry to continue to survive.
So I think all these thingshave to happen and it's the
(19:37):
matter of, like pulling thelevers that are available to a
given restaurant and you knowthere's no single solution.
It's like you can't just hit ahome run, like you have to grind
it out with, I don't know,singles or whatever baseball,
(19:58):
but it's a grind, and so there'sjust not one kind of magic
solution, unfortunately, Anotheraspect of the puzzle is the all
important question on tipping.
All of this around wages ispretty complicated and, as you
know, like tipping, has a prettyugly history with, like, its
(20:21):
roots in slavery and thereconstruction era, and I would
love for us to be in a worldwith no tipping.
It's going to take a lot to getus there and I know that that
can't happen overnight.
In Massachusetts, there areparticularly restrictive laws
around tip pooling, and sopooling with the back of the
(20:46):
house, even if everyone is paida full minimum wage, is still
not permitted in Massachusetts.
There is going to be, I think,a ballot initiative coming up
about instating one fair wage inMassachusetts, and I think the
more we see data coming out of,you know, oregon, washington,
(21:07):
california, the states that haveimplemented one fair wage, the
less scary it's going to be totake that leap.
Speaker 2 (21:15):
Now Irene understands that it can be scary to raise
your prices and the concern ofalienating customers is real,
but she also calls out thatrestaurants are in a tough spot
because of the laws regardingtip service charges and how they
vary from state to state.
Speaker 1 (21:28):
I get that it's scary .
I get that operators don't wantto upset their customers, and
so we're seeing a lot ofproliferation of service fees,
admin charges, back of housefees and lately that's really
pissing off customers.
So it's like these are likemachinations that we're taking
(21:49):
on because the laws don't fitour needs.
So the systemic change, whichyou know would be ideal, would
be to change the way the lawsare written, and everything that
restaurants are doing that'spissing people off is just a
response to the laws not makingsense.
So that's something I think weneed a lot of consumer
(22:10):
engagement and education on, andso it'll be interesting to see
what happens in Massachusetts asthe ballot initiative kind of
moves forward towards nextNovember.
Speaker 2 (22:23):
Lastly, one of the more important things that Lee
is doing at PrepShift is helpingrestaurants understand data and
what it says about theirpriorities.
Speaker 1 (22:30):
I think it comes down to two very different things.
One is the storytelling how dowe tell ourselves the story of
our business, how do we tell ourteam, and then how do we tell
our guests on the outside?
And then the other thing is thefinancials.
I guess the finances tell astory in a way, so maybe it's
(22:54):
the same thing, but thefinancials tell the story if the
operator cares to read it.
There is a lot to be found, andso for us it really does go
back to finances, back to basics.
I hate saying that because Idon't like financials, I'm not a
numbers person, but, as I said,I learned that you can only do
(23:15):
cool shit if you can afford it,and so that's why the numbers
matter.
So I would say, if I had tokind of center it around
something, it would be knowingthe story and making changes
according.
Speaker 2 (23:29):
And Lee is excited to continue with PrepShift and
help more operators live theirvalues and celebrate their
success.
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