Business recovery
Case study
Successful, Michelin-starred chef Dermot O'Callaghan opened a small 50-seat restaurant, La Belle Epoque, in the Lake District two years ago.
Although in partnership with a London-based merchant banker, La Belle Epoque's management falls squarely on O'Callaghan's shoulders. Along with running the kitchen, buying the food and recruiting staff, O'Callaghan also has responsibility for local marketing and business networking activity.
After the first six months of trading the business was profitable, well in advance of projections. His partner was delighted and decided to fund the opening of a sister restaurant on the other side of town. But O'Callaghan's towering ego would not allow him to admit that his heavy workload was too much for him.
The second restaurant, Le Fin de Siècle, was bigger than the first with 100 seats, and problematic from the beginning. Never filled to capacity, its limited success was drawn solely from the first restaurant's reputation. After two years, things went badly wrong as both restaurants fought for the same customers within a relatively small catchment area.
Important business decisions gave way to O'Callaghan's insatiable appetite for the good life, which the business was not able to support. Unpredictable cover numbers meant cash-flow was drying up, over-ordering was creating impatient suppliers and there were serious problems with wastage.
O'Callaghan's absentee partner desperately sought management accounts to track cash-flow, but this initiative was viewed by O'Callaghan as a sign of loss of faith in his own abilities and he continued to run both establishments into the ground.
O'Callaghan knew that the businesses needed to be dramatically re-engineered in order to survive, otherwise he would lose both outlets and his hard-won reputation.
This case study is a work of fiction and consequently the names, characters and incidents portrayed in the article are fictitious. Any resemblance to actual persons, living or dead, events or localities is entirely coincidental.
