Any hospitality outlet is a complex business in a complex and diverse industry, but there’s one major lesson I learned in my 25 years at the helm that beats most others hands down.
I call it my tender business secret, and it’s so not what you would think.
I’m talking about tendering for business – whether it’s catering for an event off premises, or a party or wedding, most owners or managers/head chefs will have to either give a quote or put in a tender at some stage. For me, the following story is one that I retell often as part of my business secrets cache, and when you look at it, it’s so simple. But then, the best business secrets are.
This following is an extract from my memoirs, Theatre of War: The art of running a restaurant and I’ve introduced the main player in this section, Milton Stonnington who I met by chance and had come to Brisbane to build most of Expo 88. He and his boss, Robert Rathe Jr., had scoped out property in Brisbane, had snaffled the contracts to build the bulk of the International Pavilions at Expo, and these guys opened my eyes to big business culture in the USA.
There’s many more stories in the book with lessons aplenty, but this is one I regard as the best I’ve ever been taught in business. I was running my massively successful Australian restaurant in New Farm, Possums Australian Food, which enjoyed glowing reviews around Australia and in the USA – Detroit, San Francisco, L.A. In a small way, I was pretty well known, and life was busier than ever, and then these guys came to town:
“Milton’s boss, the original Robert Rathe Jnr., owner of Gotham City Restaurant, and blocks in Manhattan, forging an ever-greater (inherited) empire across the world, arrived in his Lear Jet, and we holidayed in Noosa, and played. Milton told me about himself, that he had enjoyed a Presidential appointment at the Whitehouse, and had invented the carousel in the microwave. Every time one is sold in the world, he earns 25c. The telephone numbers that makes for income is beyond me, and my small brain, whether either claim was true I have no idea, but it was obvious that money was the least of his worries.
Expo 88 sprang up like a desert garden after rain. It was a monstrous ants’ nest of activity, and the air in Brisbane throbbed with energy and anticipation. By March, Milton had flown back to the US twice, and the third time he arrived, in Brisbane, to stay and oversee the building of the pavilions they had tendered for and won. Russia was holding out. Milton asked me if I would like to be with him when he gave his final presentation to the Russians.
Would I? Boy, he didn’t have to ask me twice. Milton has taken me under his wing and regarded his mentorship of my business prowess seriously. He took Ray, his Canadian architect, and a brilliant one at that, a mock-up of the pavilion that Ray had envisaged, and me. I knew enough by this time that to open my mouth during that meeting would be unappreciated. In the main office building on site, the Russians were waiting for us in a plush boardroom.
Milton and Ray took their places. I tried to disappear into a wall. Ray carefully sat the model on the table and Milton, dressed like a preppy lecturer from Harvard, with short back and sides and glasses he used as a prop, threw his best pitch.
He was music to watch. Slow, deliberate, carefully ensuring they were focused on him, and the model, that they understood everything, the reasons for this particular design, and by the time he’d finished, they’d said ‘yes’ and ‘da’ about a hundred times, or so it seemed. He missed nothing, but still wound up by saying, “And the price is $3 million.”
I heard a collective intake of breath. Milton continued, cool as ice. “Any questions you’d like to ask?” They shrugged, not sure what to say. Milton, completely in control waved them off, “Go and have a chat – I’ll wait.”
The Russians, their eyes wide, hesitated, withdrew into a huddle at the back of the room, mumbled together for a few minutes, while Milton relaxed on a couch. Nonchalant.
Then the leader approached Milton, almost with a sheepish air. He scratched his head, “Ah, Mr. Stonnington, ve do like da design, but $3 million? I am sorry but zat is over our budget.”
“Mmmm,” Milton paused, then looked him straight in the eye, and threw this tar baby into his briar patch.
“That’s fine, no problem. Your country’s priorities are different… What would you like to cut?”
Sweeping his hand towards the model, he threw the ball back squarely into the Russian court. With his last two, short sentences he won game, set and match. He got his $3mill, and I took that lesson to heart, and never, ever, lost a tender again.”
The psychology behind this is irrefutable. The minute you start to discount a price you’ve quoted, your client instantly feels he’s been cheated/over quoted in some way. So to go in where you intend to finish just makes good sense. And engenders trust. The important word that I feel is the basis of a good business.
Like all the tales in my book, it’s a true story, and was one of the best business lessons I ever learnt. These guys were masters of their universe, and so good at what they did they managed to play by their own rules and win every time.
They were ruthless as well, and drove hard bargains everywhere, which I felt in the long term, was not a good way to be. Their lack of empathy astonished me, but in the end, I took the lessons I wanted, and left the others to harder players in a hard universe. But tenders? I followed this rigidly and never lost one after.