Cash flow system

Technology Comes to Rescue of Seaside Cafe

SNAPSHOT

RESIDENCE: Dartmouth, Massachusetts

BUSINESS: founders and owners of Bridge Street Cafe, openend in 1982, a 60-seat restaurant specializing in grilled and smoked seafoods and meats.

ANNUAL REVENUE: $420,000

EMPLOYEES: 12 full-time, 6 part-time

EQUIPMENT: Macintosh SE and Packard Bell computers; Apple Image Writer and Panasonic dot-matrix printers; Canon PC-25 copier; Esper 7810 computerized cash register

SOFTWARE: One-Write Plus, Lotus 1-2-3, Page-Maker, MacWrite, FileMaker II

The Bridge Street Cafe, a 25-table restaurant in the harbor village of Padanaram, Massachusetts, has two particular business problems to overcome. When business is good, it's very, very good. When business is bad, it's horrid.

Summer traffic is so heavy that it's hard to keep track of inventory, accounts payable, payroll, and overall cash flow. Winter traffic is so light the owners have to mount major marketing efforts to lure customers away from their fireplaces and into the restaurant. This is characteristic of the seasonal nature of the restaurant business in a resort area like Buzzards Bay. A national economic recession is currently making a difficult situation worse.

Greg and Sally Morton, owners of Gregarious, Inc., the company that operates the restaurant, use a different computer system to address each of their two big problems. An MS-DOS system handles billing and accounting tasks. A Macintosh pumps out menus, flyers, and newsletters to address the marketing problem.

In 1982, when the Mortons were visiting friends in the area, they saw a For Sale sign on what had once been a gas station, then a bait-and-tackle shop, and most recently a coffee shop. They decided to buy it (along with the house next door), quit their jobs, and start their own business. At the time, Greg was a production manager with singer Jonathan Edwards; Sally worked at a gourmet food shop in a Boston suburd. They hadn't run a restaurant before, but created a business plan by brainstorming a menu and working backward from there. "We made a menu of food we loved--that's how we got started," says Greg. He's now the head chef, and Sally specializes in desserts.

GRABBING THE BOOKS BY THE HORNS

"This started as a family business. I paid the bills but I didn't know anything about bookkeeping. I was the chef, the good guy, the front man," says Greg. "But this is a very low-margin business. We were getting squeezed. And I can't go any higher on prices.

"We'd get to the end of the summer season, when our business quadruples, and I'd say to Sally, 'Hey, we've got $50,000 in the bank.' She'd say, 'Great, we're rich.' The next week I'd pay $40,000 or $50,000 in bills. I never had a clear picture of what I owed to whom. The phone would be ringing constantly. So I hired a consultant to help with the books."

Even though Greg had recently bought a Macintosh--"it was to be the all-office computer that would do everything"--consultant Carolyn Chabot was an advocate of One-Write Plus, and MS-DOS accounting program. So Gregarious Inc. bought a Packard Bell computer to run One-Write and Lotus 1-2-3.

Every one of the restaurant's suppliers is listed in One-Write's accounts-payable module. When a bill comes in, Chabot (who works about three hours a week) enters the invoice number and date, date due, discount date, amount, and payment amount. Once a week she goes through the list and indicates which bills are to be paid. She then prints out a report for Greg, who okays the list before the computerized checks are printed Chabot uses windowed envelopes with name and address showing through so no addressing is required. "There's a trade-off because you have to enter all the billing data," says Greg, "but it's worth it. The vendors know you've got yuour stuff together when they see a computerized check. The phone doesn't ring anymore."

In the summer months, Bridge Street Cafe issues around 60 checks a week. Paying bills by the One-Write method--selecting items for payment form an on-screen master list and then simply sending them to the printer--saves Greg 10 to 15 hours a week during the busy season. More important, once the billing information is entered, it can be viewed in a variety of useful ways. For instance, Chabot can call up an aging report, which shows bills that are one, two, or three months past due. To reconcile a bank statement, Greg can print a cash disbursements journal, which lists checks paid by date and creditor. He also prints monthly reports of income and expenses so he always has a good fix on current and future cash flow.

"The rule of thumb in the industry is that food costs should be no more than 32 percent of total costs," says Greg. "But, when I started computerized bookkeeping, I found that our costs were closer to 40 percent of total. In less thatn a year, I've cut back to 32 percent. On revenues of $420,000, that's a savings of $34,000. That more than pays for the computer system and the consultant."

MENUS BY MACINTOSH

Just about every morning, the chef, front man, and good guy can be found in his office in front of his Macintosh, printing up the menu for the day. "It's all in here," he says, patting the plastic casing as if it were a favorite pet. "Everything's in its own [electronic] folder--my catering, my menus, my liquor list, mailing list, flyers, business forms, correspondence, newsletter. You name it."

Greg started printing menus on the Mac because he was getting so many repeat customers--some stopped in two ot three times a week in the summer months--that he wanted to vary the bill of fare. He spends 10 minutes every morning making changes from the previous day's meny. He highlights the date at the top of the menu in large letters, which emphasizes the freshness of the food.

"If a fisherman friend calls and says "I just got a couple of striped bass,' I'll put them on the menu. I write the description of the dish just the way I'll cook it. Waiters and waitresses don't have to take the time to memorize and recite specials, and I don't get a lot of questions from customers." The Roast Rum Plum Duckling, for instance, is described as follows: "A specialty. Half a duck breast, boned; roasted and finished on the grill, served with a sauce of fresh plums and Myers's rum."

In addition, Greg can experiment with specialty menus. He recently tried a dessert menu with specialty coffees (Roman, Jamaican, Nutty Irishman) served with liqueurs and topped with whipped cream, and found that coffee sales tripled. "They were walking out of the kitchen." Now, he plans to concoct a separate appetizer menu, to spur sales.

NEWSLETTER TO GO

The cafe's newsletter, which made its debut last December, is a new departure for Bridge Street Cafe and a rarity in the restaurant business. Plans are to publish the four-page Cafe Communique twice a year--at the beginning of winter, to beef up business, and at the beginning of summer, to whet summer taste buds.

Greg started out with a list of about 330 names--regular customers and friends--which he supplemented with lists from the local yacht, golf, and business clubs, for a total of about 1,500. He wrote the copy in MacWrite, moved it into PageMaker for layout, and gave the disk to an Alphagraphics print shop for printing. He produced mailing labels from his FileMaker database. Printing 2,000 copies cost $600; he mailed 1,500 copies first class for $375.

Becase the cafe is located in a small village, and its prices are higher than those of most local eateries (entrees range from $13.95 to $18.95, with $10.95 specials and a $13.95 prix fixe), the Mortons needed to make this $1,000 investment in order to attract upscale diners from the surrounding cities and towns. In addition to publishing recipes and advertising the Morton's catering business, the Cafe Communique touts upcoming promotional events at the cafe. Wednesday evenings, for example, are Mexican, with much less expensive meals. On Cajun nights, entrees are served at a fixed price of $10.95; Sunday brunch is also $10.95. New members of the lunch club get a free lunch entree once they've bought five full lunches.

"I've got to do it," says Greg. "I have to create business. I can't afford to close in the winter because I've got employees; but if I'm going to stay open, I've got to serve more meals."

SMALL-BIZ SQUEEZE