“F*ck this - I’m done!”

My chef announced this standing in the main dining area, during peak dinner rush, holding his apron which he then hurled back into the kitchen before storming out to the snowy parking lot.

I had three chefs at this bar. The first was out very sick. The second had broken his collar bone snowboarding. My third just walked out the door.

I felt all the eyes of my staff, then as they noticed the staff’s focus, those of the patrons’, all turn towards me.

I put down my towel and walked out from behind the bar calmly following the chef outside.

Ten minutes later we both came back inside. I picked up his apron, shook it out and held it up to him. He took it, looped it back over his head, and stepped back into the kitchen.

I walked to the rowdy table of 12 Australians on holiday and gave them a choice. They could stay, I’d buy them a round for their patience; or they could leave and I’d cancel the orders and comp the beer they’d already had.

They chose to leave, the backlog of orders lightened up, and we pushed on through the night.

Nothing particularly clever, just a basic assessment of the situation and casual problem solving.

And that’s fairly representative of the whole experience.

I was living in the northern most part of Japan in Hokkaido running a private cat ski mountain and a restaurant and bar. It was peak season and everything was going wrong.

This was a turnaround to begin with. Both businesses had been struggling and I was sent out to get things under control. To make things worse, every individual week seemed to be its own turnaround.

The snow cats broke down, the staff got injured, the construction crews abandoned the remodel, the reservation system broke, staff quit, cars broke down, snowblowers broke down, and of course… it stopped snowing a full month early.

If it could go wrong, it did.

But we just kept pushing.

In the end a lot worked and a lot didn’t but it was a great learning experience. The miserable, get-me-out-of-here situations often are.

I took three things with me and added to our operator’s playbook.

Here are the gems without the 18 hour days, 7 days a week, pouring beers, flipping burgers, and shoveling snow.

First move was to stop the bleed by any means necessary.

We looked at where we could cut costs with as little disruption to revenue as possible to slow the losses.

With a small sacrifice to revenue we were able to cut a lot of cost out of our operations and get us within striking distance to positive cash flow. But it’s rare to be able to cut your way to success. So we needed to do something for revenue also…

Everyone assumes when Private Equity buys something they show up with bags of money and everything gets easier.

Nope.

They spent the bags of money to buy it and there are no sharper pencils then that of a PE group. Every dollar in hurts their return and they are in it for the immediate return of money - not the hope of someday this being a winner.

When you’re a PE turnaround specialist the assignment is to get things profitable with as little money in as possible.

There is no big ad spend budget or investment in agencies to build a sales channel. You have to create your own cash flow and funnel it to high (and fast) ROI initiatives.

And I was trying to drive growth to a brick and mortar business… in the middle of nowhere. It wasn’t walkable from anywhere. It wasn’t on the way to almost anything.

But where there is an obstacle, there is often an opportunity.

In a ski town, not much is walkable and everyone is looking for something to do in the evenings. We just had to find the points of decision making. And there were two:

We paid drivers to run shuttles from the larger hotels, restaurants, even the ski hills. If I remember correctly we added something like 30-40% growth despite fewer days/hours open.

But it wasn’t enough to get profitable. Fortunately. That wasn’t the biggest objective.

A group of PE investors didn’t wake up one day and say, “hey, you know what would be a great idea - buying BARS!”

They woke up one day in the most epic powder they had ever skied and asked, “is this the next Aspen?”

The bar made the area cooler. The area being cool brought people. More people led to more investments. More investments added capacity (and made it cooler) which brought more people. And so on.

This was a 10 year play at least and all we really had to do was keep the doors open. The gains from real estate and other investments would dwarf the meager cash flow of a profitable bar.

Know where the value really lives. If you’re building an eCommerce brand you help to sell someday - invest in building an audience and social presence. Build “cool” and don’t stress investing into manufacturing or infrastructure. Someone is going to buy you for the brand, not your manufacturing capabilities or distribution. They’ll have that. They need “cool”. Build that.

Most businesses have an underlying asset where the highest ceiling potential lives. Winning at that game is exponentially more valuable than winning at the others. Know what that is and build to optimize that.

In the end, it wasn’t anything fancy that worked. We just locked in on the basics. And when things really go sideways, that’s the move. When things get really dark, don’t try to outsmart it. Go basic. Go back to fundamentals. Go simple.

Best,

Chase “Arigatou gozaimasu” Spenst

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