Question of the Day - Restaurant Survivability?

[Marcelyn]

I've noticed some of my favorite eateries in Boquete (e.g., Mango and the Donut Shop, etc., and there are others) are now closed. Makes me wonder "what went wrong" or "what was the reason these places are no longer in business".

Does anyone have a suggestion of an answer or reason why many business don't remain?

[JohnF13]

There are so many restaurants to choose from in Boquete.  Some charge high prices and live or die at the whim of the monied crowd.  Others start off well but staff turnover or unexpected costs drive down the quality of the food.  My favorite complaint on this subject is restaurants not changing their cooking oil often enough.  The between change periods get longer and longer and that imparts bad flavors into the food.  Others fight with you over the jubilado discount, a sure way to drive off customers.  But, I think the big thing is the number of eateries, not even the high number of us in Boquete can support them all.

[Penny]

I'm worried about the survivability of one of my new favorite restaurants, Casa Vieja. This restaurant has good food, reasonable prices, a large parking lot, a main road location, a good attitude towards the pensionado discount . . . . and yet they have very few customers.

What is it about Latinos that think all they need to do is open their doors and customers will flock to them in droves??? Is it a cultural thing? The owner of this restaurant is a Panamanian who attended college in the U.S. and speaks flawless English. Yet, she has not attempted to take advantage of any advertising to the gringo community. There are at least 4 or 5 free ways to advertise to the gringo community here. This forum is one of them. She and her co-owner also apparently don't realize that their sign on the main street has only one side to it and that side is basically un-readable. I'd be willing to bet that 90% of the people who drive along the main street in Boquete don't know there is a restaurant there.

This is what happened to Moon Valley donut shop. Lots of people told them how to take advantage of news.boquete and chiriqui.life but they never got around to doing it. As a consequence, not many folks knew that they not only served donuts but breakfast and lunch as well.

They sunk their life savings into opening this restaurant and the result was devastating to them. Again, both husband and wife had college degrees from the U.S. so language was not a barrier.

There's probably more restaurants per capita in Boquete than anywhere in Latin America. Getting your name out there by advertising and promotion are essential.

[JudyS]

Yes, that is a mystery.  I suggested to the guy who runs the store that sells coffee products (liquors, etc.) to advertise on the gringo sites.  So far nothing.  His stock is limited, and mainly of appeal to gringos I suspect, but I wonder how many people have noticed his shop.

[Marcelyn]

I have never heard of this store. Where is it located?  Name?

[Bonnie]

I fully agree with Penny's point. Additionally, Casa Vieja is closed on Tuesday, the day when the most gringos are in town for the Tuesday morning market/meeting and often stay for lunch. I wrote the owner about this but heard nothing back.

I'm far from being a marketing expert, but I'm beginning to believe that Panamanians know as little about marketing as they do about customer service. All of this ties in with my other post about restaurants being open at the whims of the owners. I'm sorry to say that it becomes more frustrating over time rather than less.

[Roger B]

2 minutes ago, Bonnie said:

I'm far from being a marketing expert, but I'm beginning to believe that Panamanians know as little about marketing as they do about customer service. ...

 

Bonnie.

Most of the people who wanted to become an entrepeneur and invest their life savings in business lack of the following experience and knowledge:  Business administration, personnel administration, finance, salesmanship and marketing.  Customer Service is part of Marketing.  

They could be highly educated people but they lack of the knowledge on those areas that are very important for a business.   I have seen people working on opening a new business but they dont know how to do a business plan, an investment plan, cash flow plan, a marketing plan, a contingency plan.... and so on.  So the rate of business failures is high.  

But listen this is not only happening in Panama.  It happens around the world.  Not all people are prepared to become a businessman/busineswoman.  It require some knowledge and skills that will be the only way to a succesful business.   It is not only enthusiasm.  Look at the TV Show in cable, dont remember if it is in Discovery Channel or History Channel, it is called  THE PROFIT with Marcus Lemonis.  It will give you and idea of the amount of family business that started with a good idea but the owners lack of the skills and knowledge to manage their business succesfully and profitable.   You could be a good car mechanic but probably you will do a bad business owner of a mechanic shop.  You could be a good Chef but a terrible restaurant manager.   So it is not a panamanian issue, it is a worldwide personal issue that has to do with skills and knowledge.  Managing people and resources is not so easy as some people think.

The government of Panama started, I guess in the Martinelli's government, a new government agency called AMPYME.  It was an agency created to help little entrepeneurs to make their dreams come true.  I knew that one of the requisites before granting an initial seed capital or investment the person was helped to make a business plan in writting and then they needed to attend some basic business courses covering areas as finances, marketing, accounting, etc.  They did it because the statistics of new business failures.

Thanks for reading this long reply.

 

Roger  

[Bonnie]

Thank you for your response, Roger. I agree with everything you wrote except for your suggestion that Panama is no worse than most. I have traveled pretty widely throughout the world and, with the exception of some countries in West Africa, I have never witnessed marketing/service as poor as I've experienced in Panama. Even "mom and pop" stores--that have no business plan, investment plan, no cash flow plan, etc.--elsewhere in the world seem to recognize that you have to advertise to get the customers into your establishment and have to provide good service to keep them coming back. As others have expressed here, it's a mystery why this is a foreign concept to most Panamanian business owners.

[Roger B]

1 minute ago, Bonnie said:

Thank you for your response, Roger. I agree with everything you wrote except for your suggestion that Panama is no worse than most. I have traveled pretty widely throughout the world and, with the exception of some countries in West Africa, I have never witnessed marketing/service as poor as I've experienced in Panama. Even "mom and pop" stores--that have no business plan, investment plan, no cash flow plan, etc.--elsewhere in the world seem to recognize that you have to advertise to get the customers into your establishment and have to provide good service to keep them coming back. As others have expressed here, it's a mystery why this is a foreign concept to most Panamanian business owners.

 

Watch the show I recommended.   You will enjoy it.   

[TwoSailors]

Roger's points are spot on!

I was in the restaurant business for many years in the States. Very successful white table cloth restaurants. I would not open a restaurant here in Boquete even if someone paid me to do it. 

Why?

1. there are too many restaurants and most are mediocre at best.
2. getting a good reliable staff is very difficult
3. my meals that I make at home are far superior to what I can get in most restaurants
4. I don't want to work my life away in a restaurant,... been there done that
5. to be really successful here you must be consistent with your food, Service, and the hours that you are open
6. dealing with the Jubliado discounts

On that note: the restaurants that are consistent with their service and their food with very fair prices in my opinion are (in no particular order):

• Sandwich shop
• Senior Gyros
• Colibri ( although new, this place has solid great food, great menu selection... and the service is improving) I think once they are on their game this will be Boquete's best restaurant giving the Panamonte a run for it's money. No I am not connected with them in anyway... 
• Boquete Tree Trek Restaurant
• Big Daddy's
• Panamonte
• Gelateria la Ghiotta
• Sugar and Spice
• Fish House ( just wish they posted their hours!!)
• Restaurante Las Orquideas
• Ill Pianista
• El Oasis
• Parmigiano Ristorante
• Mortons
• La Posada
• Los Molinos

In David:

• Terra
• Boca Chica Restaurant
• Cuatro
• El Fogon
• Verona
• Restaurant Mezcla
• Gran Hotel National

Granted there are others, but we have found these to be the best of the best. Most of these places have been around for a while.

We do agree, why are not marketing their business's better? There are a lot of free avenues here in Boquete to do that. CL for one!

[Brundageba]

2 hours ago, Roger B said:

 

Bonnie.

Most of the people who wanted to become an entrepeneur and invest their life savings in business lack of the following experience and knowledge:  Business administration, personnel administration, finance, salesmanship and marketing.  Customer Service is part of Marketing.  

They could be highly educated people but they lack of the knowledge on those areas that are very important for a business.   I have seen people working on opening a new business but they dont know how to do a business plan, an investment plan, cash flow plan, a marketing plan, a contingency plan.... and so on.  So the rate of business failures is high.  

But listen this is not only happening in Panama.  It happens around the world.  Not all people are prepared to become a businessman/busineswoman.  It require some knowledge and skills that will be the only way to a succesful business.   It is not only enthusiasm.  Look at the TV Show in cable, dont remember if it is in Discovery Channel or History Channel, it is called  THE PROFIT with Marcus Lemonis.  It will give you and idea of the amount of family business that started with a good idea but the owners lack of the skills and knowledge to manage their business succesfully and profitable.   You could be a good car mechanic but probably you will do a bad business owner of a mechanic shop.  You could be a good Chef but a terrible restaurant manager.   So it is not a panamanian issue, it is a worldwide personal issue that has to do with skills and knowledge.  Managing people and resources is not so easy as some people think.

The government of Panama started, I guess in the Martinelli's government, a new government agency called AMPYME.  It was an agency created to help little entrepeneurs to make their dreams come true.  I knew that one of the requisites before granting an initial seed capital or investment the person was helped to make a business plan in writting and then they needed to attend some basic business courses covering areas as finances, marketing, accounting, etc.  They did it because the statistics of new business failures.

Thanks for reading this long reply.

 

Roger  

Socio.. the History channel here on cable.  Great show.  What you learn is there are a lot of wonderful kind hearted people that start businesses that have zero business sense.  The program shows folks doing the same things over and over never understanding why they are going backwards in their business until they are over their heads..  The star of the show Marcus Lemonis is an entrepreneur/ businessman who for a % of the business , invests his $ and turns the business around, giving the business owners excellent instruction all they way.  The show is very instructive.  There's a whole lot more to business success than having a good product !

Roger...does AMPYME still exist?

[Roger B]

48 minutes ago, Brundageba said:

Socio.. the History channel here on cable.  Great show.  What you learn is there are a lot of wonderful kind hearted people that start businesses that have zero business sense.  The program shows folks doing the same things over and over never understanding why they are going backwards in their business until they are over their heads..  The star of the show Marcus Lemonis is an entrepreneur/ businessman who for a % of the business , invests his $ and turns the business around, giving the business owners excellent instruction all they way.  The show is very instructive.  There's a whole lot more to business success than having a good product !

Roger...does AMPYME still exist?

 

Sure.  El Socio is the Spanish name of that show!  Sorry I wrote it in english.  LOL.  It is a good show to me because it is very instructive.  He uses simple methodology Process, People and Product to teach the owners of those failed business what the should address and what they should change.  I do recommend the show to small family business owners and entrepeneurs.   

AMPYME still exist.  I am not sure how they are working now because the actual goverment put that agency on investigation because of the former administrator from the past Martinelli's government and you know that this new government from Varela has everything moving very slowly and more bureaucratic.

 

[Roger B]

2 hours ago, TwoSailors said:

Roger's points are spot on!

I was in the restaurant business for many years in the States. Very succesful white table cloth restaurants. I would not open a restaurant here in Boquete even if someone paid me to do it. 

Why?

1) there are too many restaurants and most are mediocre at best.

2) getting a good reliable staff is very difficult

3) my meals that I make it home are far superior to what I can get in most restaurants

4) I don't want to work my life away in a restaurant,... been there done that

5) to be really successful here you must be consistent with your food, Service, and the hours that you are open

6) dealing with the Jubliado discounts

 

 

Granted there are others, but we have found these to be the best of the best. Most of these places have been around for a while.

We do agree, why  are not marketing their business's better? There are a lot of free avenues here in Boquete to do that. CL for one!

 

Two Sailors:

 

I do respect you very well.   Why? Because the Restaurant business is the one I would never invest time and money.   To me it is a business that demand from owners/managers a lot of time, efforts, money and sacrifices.   I had a friend in Panama that used to have one of the most famous Seafood Restaurant of the 70's and 80's.  Nice food, nice location, prices accordingly to the service and food.   It was an exclusive restaurant.   But he had to work there from very early in the morning to pick all the fresh fish, shrimp, lobsters, etc.  The vegetables, etc.  and stayed at the restaurant late night.   He managed personally the restaurant taking care of every detail.   This restaurant was founded by his father and he passed the management to my friend.   He got a degree in Law and found that this business was so demanding that they decided to sell the property about 15 years ago to some investors that wanted to build a high rise condo building.  He sold the land for a lot of money and got also a couple of apartments in the condo and opened his legal office to practice as a lawyer.

In Panama City I have seen people opening restaurants just to only to be closing them in a few months later.   I could list other business I have seen born and die in less than two years.  I used them as an example when doing some marketing and sales coaching. 

One thing about the Jubilado discount.  Dont fear it.  Remember that you can deduct it as a cost or expense when you do your tax return.

 

[JudyS]

14 hours ago, Marcelyn said:

I have never heard of this store. Where is it located?  Name?

It's on the main street.  I think it's roughly across from MBE, but I'm not sure.  The next time I see it, I will get the name and the exact location.

[Penny]

I don't think it takes a college degree in marketing and/or restaurant management to know that you need customers to keep your business going. To that end you have to make it easy for customers to find you and, once they find you, you have to make them want to come back. Duhhhhh !!!!

Here's another thing I don't understand about Panamanian businesses. Take, for example, The Fish House (one of my most favorite restaurants). The owner gets there about 12:15 and then parks his large pickup diagonal across three of the parking spaces in front of the restaurant. I think Mike's has gained a lot of lunch customers from folks tired of waiting for the Fish House to open. And Sugar and Spice has probably gained a lot of non-customer cars parked in front of their place because the Fish House owner took up all the parking spaces in front of his restaurant. And then there are the places that put up those orange cones in front of their establishment to prevent customers from parking there.

I too, wrote the owner of La Casa Vieja a long email offering to help her advertise her business on the free English language sites. No answer.

By The Way, the English name of "El Socio" is "The Prophet" (obviously a pun)

[Deborah]

1 hour ago, JudyS said:

It's on the main street.  I think it's roughly across from MBE, but I'm not sure.  The next time I see it, I will get the name and the exact location.

La Viuda del Café (the Coffee Widow)?  It's on the same block as Deli Baru, same side, a few doors south.

[Marcelyn]

Thanks Deborah and Judy.  I'll visit La Viuda del Cafe.

[Doug Tyler]

Some very sage advice and comments here. My 2 centavos. I feel Casa Vieja will make it through service, word of mouth and maybe Michelle is capable of accepting advice. Mar del Grau deserves a chance. Try it out. Two Sailors is right on with their list except for Mango's new iteration. Craig and Maureen were shafted there by the building's owner. So will the new operators be. We won't go there because they illegally manipulate jubilados. Same goes for Retrogusto.

 

Edited April 23, 2016 by Doug Tyler
more comments and grammar

[Keith Woolford]

Operating a good restaurant requires significantly more than the ability to cook and a good location to do it in.

A good restaurateur also needs to be able handle customer service, purchasing, cash flow, stock control, employees and their benefits, perhaps entertainment, and of course, marketing and publicity.

That's a lot of hats and forgetting to wear any one of them for long can result in a rapid demise of the establishment.

[TwoSailors]

Another major problem is the turn over of staff. Hiring and training is very time consuming.

[Roger B]

9 hours ago, Penny said:

I don't think it takes a college degree in marketing and/or restaurant management to know that you need customers to keep your business going. To that end you have to make it easy for customers to find you and, once they find you, you have to make them want to come back. Duhhhhh !!!!

Here's another thing I don't understand about Panamanian businesses. Take, for example, The Fish House (one of my most favorite restaurants). The owner gets there about 12:15 and then parks his large pickup diagonal across three of the parking spaces in front of the restaurant. I think Mike's has gained a lot of lunch customers from folks tired of waiting for the Fish House to open. And Sugar and Spice has probably gained a lot of non-customer cars parked in front of their place because the Fish House owner took up all the parking spaces in front of his restaurant. And then there are the places that put up those orange cones in front of their establishment to prevent customers from parking there.

I too, wrote the owner of La Casa Vieja a long email offering to help her advertise her business on the free English language sites. No answer.

By The Way, the English name of "El Socio" is "The Prophet" (obviously a pun)

Penny:

Yes.  There is no need for a college degree in marketing and business management to know that if you sell a service or a product you need customers.   But you will be surprised that there are so many stubborn and arrogant people in small business and also in big corporations.  

I used to be a distributor for a big European corporation about 20 years ago and the management of that company has a very arrogant attitude I couldnt believe.   They told us in one distributor sales meeting:  We are a very big and important company in our trade around the world and we are well known that people would ask for our products easily and constantly.   So you should be grateful to be our distributors.   In that meeting I told the speaker that I couldnt believe what he was talking about.  It clearly showed the arrogance that was introduced in the company's culture.  Most of the old distributors left that company and are now doing a strong competence to that company today.  It also happens in small business.  I have seen a lot of cases where people believe that what they are offering is so good that people will wait for them to get the products or service.  Of course there are people that act and work different and that is why you see that there are a lot of business that stay long in the market.  

Management of a business is a combination of knowledge, skills and luck.

 

[Roger B]

6 hours ago, TwoSailors said:

Another major problem is the turn over of staff. Hiring and training is very time consuming.

That is a major problem.   It is costly and time consuming as you said.

I was hired about 5 years ago to do a research in company because they were having a high turnover on the salesforce.  A salesman stayed in the company only an average of 6 months and quit and the one that stayed were under performing.

I did talk with all the people involved in the operation of the company to see their interaction and also talked intensively and extensively with the sales force.  What I have found in this company and that replicates in other companies are the following.

1.  People are underpaid.

2.  Working environment is not good and people leave even if they are well paid.

3.  Management is not good on human relations and cant communicate very well with the working force.

4.  Human resources or manager are not good choosing the right personnel for the position.

 

There is a restaurant in Panama City of Italian food.  I am customer of that restaurant since I was 17 years old.  The new administrators are the children of the old ownr.  One of the manager studied with me in the same college in Panama City.   I was surprised that 3 of the old waiters recently went into retirement.   They worked in that restaurant for more than 25 years.  All of them know me by my name and knew what was my favorite food - Spaguetti A La Carbonara - when I visit the restaurant that when I wanted to order something different I have to warn them in advance that I wanted to try something different.   They have other waiters that have 10 - 15 years old working there.  

 

The attached picture explains why some new business fail.   It is a compilation of what most of us here has explained.

 

 

[Roger B]

6 hours ago, Keith Woolford said:

Operating a good restaurant requires significantly more than the ability to cook and a good location to do it in.

A good restaurateur also needs to be able handle customer service, purchasing, cash flow, stock control, employees and their benefits, perhaps entertainment, and of course, marketing and publicity.

That's a lot of hats and forgetting to wear any one of them for long can result in a rapid demise of the establishment.

Keith

Some people dont want to ask for help when needed.  The pride and the arrogance of some people dont let them to ask for help.  I cant know everything and I cant master all the things needed in a job.... so I hired people who really know what to do a thousand times better than I could think and learn from them.

 

 

[JohnF13]

There is always someone around who can do task "A" better than you can.  The trick is to find them and encourage them to stay with your organization.  Easy to say, hard to accomplish.  A lot of times, the ego of the owner/manager gets in the way and the promising person gets canned.  In my working life I always encouraged my staff to do better than me and darned it, most of the time they did that.  There are two types of manager, those that think all of their employees are idiots and those that encourage challenge.  Challenge equals improvement, IF you as a manager can handle that.

[Bonnie]

Interesting and valid perspective, John, and one I can relate to. I spent 30 years as head of a state department that was known for good performance and low turnover. I always hired carefully, paid as well as I could within the state budgetary framework, and let the employees shine. I had to let very few employees go in those thirty years. Several were with me from the beginning, and others have passed or are approaching their own thirty year mark. When anyone complimented me on what a good job I was doing, I always said, "It's easy to look good when you have a staff like mine."