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Scaling Back Dining to Get A Bigger Slice Of The Pie

SCALING BACK DINING TO GET A BIGGER SLICE OF THE PIE
Chad Mackay
CEO
Fire & Vine Hospitality
Vistage member since 2004

On March 12, 2020, Chad Mackay did the last thing he ever thought he would. The CEO of Seattle-based Fire & Vine Hospitality laid off 90% of his staff and closed all of the high-end restaurants he managed in the Pacific Northwest. Mackay had little choice: The COVID-19 pandemic was in full swing. “We were burning money by staying open,” he recalls.

For the next two weeks, Mackay and the remaining members of his corporate team hunkered down in their home offices. “And then we decided ‘hibernating’ was no longer the operative phrase,” he says. “Here was a chance to do all the things we always wanted to do with the business and make it work better than ever.”

As part of the company’s strategic planning, Mackay adopted a third-party cash-management framework that became instrumental in the coming months. It helped him and his team determine how much to apply for in Paycheck Protection Program loans, where to spend money, when and where to relaunch, and how many employees to bring back. He also used the EOS Vision/Traction Organization to reimagine the company’s strategy and develop a succinct, one-page business plan. Vistage helped Mackay recognize who to engage in that process and what expectations to set for different levels of employees.

“Here was a chance to do all the things we always wanted to do with the business and make it work better than ever.”

What emerged was a much tighter business model. Mackay realized his restaurants didn’t need to offer lunch and dinner seven days a week; they could open for dinner only, five days a week, and still turn a healthy profit. He also identified new metrics — particularly sales-per-labor-hour — for monitoring and adapting to market fluctuations.

“Revenue is fantastic, but sales-per-labor-hour tells me if we’re profitable or not,” he says. “It’s a great key indicator.”

By the end of 2022, Fire & Vine Hospitality’s restaurants were up and running again. The company also opened a new hotel lounge and event space that Mackay expects to generate approximately $10 million in business annually.

Without question, Mackay says, the business is stronger now than it was before the pandemic.

“We’ve beat our pre-pandemic numbers, but with 40% less staff,” Mackay says. “I’ll tell you this: I’m fully a believer now that ‘less is more.’”

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