Hospitality is a challenging industry at the best of times, and with the unprecedented weather and pandemic events of the past few years it has been particularly tough. We talked to Sid Sahrawat, owner and executive chef at Cassia, Sid at The French Café and KOL about the financial ups and downs of the restaurant business.
What are the key financial lessons you’ve learned from your years in the restaurant industry?
You don’t invest into owning restaurants to get rich quickly. To be successful you need to be more than a chef; you must be able to manage a business and understand your break-even and cost of goods, especially with the slim margins we have in this industry. It is a lot of hard work, and you need both passion and business acumen to achieve longevity and profitability.
Owning and running multiple restaurants in Auckland must be challenging, especially recently with Covid, the cost of living crisis and the extreme weather the city has faced. What are some of the economic pivots you’ve had to make?
You can only change what you can control. For us, when we have been impacted by external forces, we work on adapting rather than fighting those factors. During the pandemic we adapted with takeaways and we even delivered to our local neighbourhood in Northcote and Birkenhead as we realised we were driving home after work anyway.
We then pivoted to FCMG with our Cassia at Home range of curry sauces and spices that are now available at many supermarkets.
Then Auckland’s weather issues caused us to close Cassia twice in ten months due to flooding.
So we set up pop-up in the private dining room of our second restaurant, Sid at The French Café while we considered our options. This kept our staff engaged and our brand alive in the market. Earlier this year, we moved Cassia to SkyCity instead of relying entirely on our business interruption insurance for an extended period. This enabled us to retain all our staff and reopen relatively quickly.
With the cost of living crisis and recession we have modified our offering at Sid at The French Café to make it more accessible. We’ve now got an à la carte menu and we are doing a Street Eats night once a month so more people can come in for a casual night out.
How has the restaurant industry influenced your personal relationship with money?
It has made me more confident and comfortable with money. I don’t let money drive me but I let opportunities come to me that will ensure financial freedom and comfort. I believe the more you chase money the further it will get from you. But conversely, the more you follow your passion, and do it well, the more money will come to you because you are experiencing flow and joy.
What or who do you attribute your work ethic to?
My dad was ex-Indian army and he instilled a great work ethic in me. I could not never not show up or show up without being willing to put 100% into my day.
How do you juggle running multiple restaurant businesses with family life?
My wife Chand and I tag team, so I spend time in the morning with the kids getting them ready for school and drop offs, while Chand is on duty after school when I am at work. Our Sundays are sacrosanct, so unless it is a very important commitment I do not work on Sundays and we go out as a family for Sunday lunch.
Professionally, owning more than one restaurant has allowed me to have more time for my family, as strange as that sounds. It means we have great teams and team leaders that we can depend on to ensure our businesses are running well. So if it’s quiet on a Wednesday night I can take an impromptu night off to spend with the family.
Do you spend much on specialty or luxury ingredients for cooking at home?
On Sunday and Monday nights I am home with the family, so I like to eat more than a simple home-cooked meal, after cooking all week for others. On these nights we will often go to the butcher and grab a good piece of steak or indulge with some premium ingredients like truffle and French cheese and a good bottle of wine.
Would you describe yourself as a spender or a saver? Why?
Spender for sure. I feel like when you work hard, if you can, you should enjoy the results of your work so that it pushes you to achieve more the next day and the day after that. In saying that, it doesn’t mean we don’t save or invest, but we don’t squirrel away every dollar for a rainy day and forget to spend on ourselves and our loved ones.
We work hard and I believe a portion of your income is meant to be spent and enjoyed. I know there are many who are not able to do this, so I feel grateful that we can spend on what many would view as luxuries.
How has your relationship with money evolved over the years?
When I was younger, I would probably spend my entire pay packet over the week and be skint by the next payday. After buying our first home and pooling our incomes together as a couple, we started to have a bit more in the bank and took more responsibility with our money. It can quickly impact your lifestyle if you are irresponsible. I still look at the bank account once a week to make sure things are the way they should be but I don’t feel the dread of living pay check to pay check.
Finish this sentence: If money weren’t an issue I’d… be travelling around the world for a year at least. I want to travel to so many countries to experience their food and culture. Money would give me the luxury of taking the time to do so.
Any financial regrets?
Not really. Although we did make a poor investment in our first home and bought a leaky townhouse. That set us back by five years and we had to re-enter the market with no capital gains or deposit and had to start all over again. But it only taught us to be more cautious when investing in property and properly do our homework on a house.
What are you saving for?
A family holiday to Bali. Pre-pandemic you didn’t need to save as long for a holiday as flights were more affordable but now you do have to consciously save as mortgage rates are up and flights are more expensive.
If you have to tighten your belt financially, where do you look to save costs first?
On luxuries like everyone else does. At home we cut out on expensive ingredients or eating out more than once a week. With the restaurants, business capex (capital expenditure) hiring stops unless it is to replace a team member.
What is the best financial advice you’ve ever received?
When we first opened our restaurant Sidart in 2009 we had an amazing angel investor who loaned us the capital. On our first financial review meeting he grilled me on basic principles of business COGS, what our wage cost was, what our food cost was; were we breaking even? “EBITDA”. I had to admit that I did not understand these terms, and he educated me.
There is no excuse as a businessperson to not know how to manage your business. There are multiple resources and people in your industry who will help you understand. If your business employs people you have a responsibility to those staff to run your business well so they remain employed.
What are the key financial lessons you want to teach your children?
I want my children to be self-sufficient without the bank of mum and dad. For that they need to be financially literate. I want them to understand the importance of saving and investing and when and how to get into debt for the right reasons.
We often discuss financial principles in the car so that they understand terms like fixed assets, depreciating assets and assets that appreciate. Both kids have their own bank accounts and birthday money or money from chores goes into those so that they have control over their own spending.
What does financial freedom look like to you?
Financial freedom means not worrying about where the next rent or mortgage payment comes from. It’s when you don’t have to take a list to the grocery store and stick to it, but can simply pop a treat in the trolley without thinking about it; when you can plan and pay for an overseas holiday for your family without worrying how you will afford it.
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