Entrepreneurial Insights from Years of Experience as a Server

Have you ever worked in a restaurant waiting tables before? With regard to entrepreneurship, your server can tell you a lot about business. A lot of people have done it. Many people take the job while working their ways through college or pursuing alternate careers. I got my first job as a waiter in 1992 when I was a married, unemployed salesman and “failed” entrepreneur with a brand new baby. I also had less than $15 in my checking account during Christmas season. I got a job at the Courtyard by Marriott in Hoover, Alabama. I was desperate. I had to make money so we could eat. I was also an entrepreneur in “learning mode” (which means my first venture did not work out).

My experience waiting tables for a living in Birmingham (AL), south Florida, and Atlanta for $2.13 per hour plus tips (and $3.35 per hour plus tips in Palm Beach Gardens, Florida) is the inspiration for this blog post. I have also worked in a few “pool houses,” or restaurants where the waitstaff pools their tips and divides them among themselves equally, regardless of contribution. Some of this information does not apply as equally to servers’ experiences in California and Nevada (and possibly other places) where unions play a large role in the hospitality industry.

Note: For all you hardcore restaurant folks out there who refer to your customers as “guests,” I have chosen the word “customer” because most business owners call their patrons by the name “customers.”

1) You are NOT ENTITLED to an income and your successes are NOT GUARANTEED

If you don’t come to work, you don’t get paid. Your income as a server is directly proportional to the value you bring to your guests in the best (or harshest) of terms. Even in a “pool house” situation (you are equally dividing tips with the entire waitstaff), your co-workers can easily turn against you if you’re not pulling your own weight. If you sit on your duff and wait for the money to roll in as a server, you will be out of your source of income quickly. The same thing is true as an entrepreneur. If you don’t create value for your customers, you don’t make sales. If you don’t make sales, you are out of business…or will be soon.

2) You can go out of business through no fault of your own

You can come to work one day and find a note on the door saying “Sorry, but we are out of business.” The owner could get over-extended financially. The restaurant lease could get negotiated right out of under the restaurant, or drug and alcohol abuse could take its toll (the owners are not exempt). In some places, the managers may decide that you’re too old, too good, too bad, not pretty enough, or any reason they choose (in “right-to-work” states). It it is living life on the edge constantly, just as an entrepreneur does.

3) Customer (or Guest) service is 95% of your success as a server, if not more

If you give great customer service, you get paid. If you give awesome customer service, you get paid well. If your customer service sucks, you get paid nothing. This is the idea behind waiting tables in the acronym “To Insure Prompt Service” (TIPS). If you own your own business and your customer service sucks, the chances are very good that your business will not last for very long. Competition is too fierce these days to stay in business, and not deliver outstanding customer service.

4) Your income is directly proportional to how hard and how well you work

If you work hard and get great results, your income goes up. If you work poorly or get bad results, your income goes down. This is pure entrepreneurship at it’s best (or worst). One of the aspects of successfully applied entrepreneurship is to delegate as many of the daily tasks to responsible employees, or to contract out the grunt work. If you are not actually getting your hands dirty, how well you delegate the important tasks of your business is also directly proportional to your income and your success.

5) The restaurant does not employ you; you employ you

As a server in a restaurant, you do not get a paycheck. Your meager hourly wage goes to pay your taxes (hopefully). The restaurant does not lay claim to your exclusive employment. They don’t employ you. Your customers do. As an entrepreneur, your customers are the people who employ you in the marketplace. Hopefully, I’m not being redundant here. Taking care of your customers is your first job as a server, and as an entrepreneur. Without customers, you’re done as a server, and as an entrepreneur.

6) There is no safety net

If you fail as a server, you get fired. If you fail as an entrepreneur, you can’t pay the rent, and your landlord fires you. In both cases, there is no safety net. Going to the labor department to draw your unemployment check is an adventure in futility. If you have no verifiable income, then your unemployment check will be pretty weak. In my experience, unemployment checks are very weak. The last unemployment check I got from a restaurant closing was $290 per week. Have you ever tried to live on less than $300 per week?

There are probably more ways that being a server is similar to being an entrepreneur, especially a start-up entrepreneur that I have overlooked. The point is to understand where the risk involved in your operations are and to mitigate those risks ion order to achieve success. Servers bear all the risk of a restaurant, unlike the managers that think they employ their servers. Entrepreneurs also deal with risks daily. A restaurant server can easily adapt to the world of entrepreneurship and business ownership due to a servers familiarity with risk.

So go get ’em, Tiger! Don’t be afraid (as much) to get started on your dream of owning your own business, and walk away from the apron! You are more prepared than you think!

 

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• Contagious Entrepreneurship: People Who Know Entrepreneurs Are More Likely to Become Entrepreneurs, Kauffman Foundation Survey Shows
• Can we nurture a new generation of entrepreneurs?
• New York Enterprise Report | 25Founders: Can Entrepreneurship Be Taught?

Who is Seth Godin?

Seth Godin is one of the entrepreneurs, authors, and speakers who helped the Internet become what it is today. He coined the phrase “Permission Marketing” with his now-classic book of the same title in 1999 as well as 16 other bestselling books on marketing and the Web 2.0 era. He has also become a hero of mine over the years.

The year was 2003…

I was the volunteer coordinator for the Entrepreneurship and Small Business Special Interest group for Fast Company magazine‘s Company of Friends readership network. Don’t look for it. It doesn’t exist anymore. This is also before I was formally introduced to the complete awesomeness of Seth Godin. Being a loyal Fast Company reader, I knew Seth was writing articles for Fast Company. Here’s what happened in a nutshell, when I asked Seth Godin to speak for one of our teleconferences I used to do. I sent an email, after all, everyone reads their email (right?). I didn’t get a response after a couple of days, so I sent another email. After all, I’m sure Seth is a busy man. Then one day I got the reply. I thought it would read how interested and excited he would be to speak for our prospective teleconference for our fledgling group associated with the magazine that he wrote articles for. I opened it, and to my horror I saw the reply: “What’s in it for me?”

“What’s In It For Me?”

When I first read Mr. Godin’s short reply to my carefully crafted invitation, I was insulted. I thought he was asking me for a fee. The magazine didn’t pay fees, my marketing budget for the group was zero, and my title began with the word “volunteer” (which meant I didn’t get paid either). I felt that I had nothing of value to offer Mr. Godin.

If you’ve ever been in professional sales, chances are that you’ve heard this phrase before. All of the big sales trainers like the late Zig Ziglar, Tom Hopkins, Brian Tracy, Jeffrey Gitomer have all used this phrase in their seminars. Why? Because it is a fundamental truth in persuading someone to buy what you are selling. In order to be successful in selling products, services, or even ideas, you have to explain what is in it for your prospect, audience, readers, etc. It is also something that I was not trained on until I learned some really bad habits early in my sales career.

The REAL Lesson

What I didn’t understand is that he was trying to teach me a lesson, to teach me about appealing to one’s primary motivations for doing anything. Fast forward about ten years and I’m still learning about marketing, about connecting with prospects and building a business that creates value for my customers and clients and for my bank account. I read about the Unique Selling Proposition (USP), about appealing to buying motivations, and then it hit me: Seth Godin was trying to help me! He wanted to help me connect with my prospects and customers better by being able to answer this question “What’s in it for me?”

The lesson is that if you are in the business of convincing someone to take an action, to enjoy a product or service, to click a link, or to do anything, you must know what ‘s in it for them. It doesn’t matter what you think is in it for them. It matters what they think is in it for them.

You hear about the word “risk” all the time. The mere mention of the word generates fear in most “normal” people.  If you are constantly wondering what your risks are in business, I guarantee you are either an attorney, an accountant or getting nothing done as an entrepreneur.  For attorneys and accountants, it is their job to discover risks and help protect their clients from risks (at least that’s my perception).  For entrepreneurs who create a business from nothing, there are many risks and some of them actually exist.

The Reality of Risk

Risk is all around us every day.  A major cause of accidental death in the United States is car accidents, yet millions of people get in their cars every day and drive to work.  There is a lot of it involved just in driving to work, yet people do it anyway.  Once, flying through the air was incredibly risky, but airplanes have made it much less risky.  Getting food used to mean the possibility of getting trampled by large animals, but the grocery store has made that activity less risky.  Risk is relative.  What seems like a huge risk to some is a new adventure for others.  There is no escape.

What is “Risk?”

Merriam-Webster defines “risk” as follows:

Risk-  1: possibility of loss or injury : peril  2: someone or something that creates or suggests a hazard  3a : the chance of loss or the perils to the subject matter of an insurance contract; also : the degree of probability of such loss b : a person or thing that is a specified hazard to an insurer  c : an insurance hazard from a specified cause or source <war risk> 4: the chance that an investment (as a stock or commodity) will lose value

Risk is Everywhere

Risks are something we live with every day, but they are sometimes blown out of proportion when it comes to business, and especially with starting your own business.  Entrepreneurship has long been associated with risk by non-entrepreneurs.  I have lost everything before in business.  That’s because I risked everything.  After I had learned not to risk it all, I stopped losing everything in business when I failed to reach my desired level of success.  I found one of the best assessments of career risks in the book The Start-Up of You by Reid Hoffman and Ben Casnocha.  It is riskier to stay in the same place where you know bad things will happen compared to starting your own business.  Again, risk is everywhere.

Risk vs. Comfort Zone

People become so accustomed to doing the same thing over and over again that they create a “comfort zone. ” When they get into these ruts, they see their comfort zone and see anything outside of their comfort zone as “risky behavior.”  The sad news is that sometimes it is more expensive to stay where you are than to step out of your comfort zone and do something really cool.  It’s kind of the “I-could-have-been-a-contender” syndrome.  When people miss their “lucky break,” they tend to justify their surroundings, blame others, and slip into a learned helplessness pattern I call “I-could-have-been-a-contender” syndrome.  Risk gets a bad wrap, for all the wrong reasons.

Risk Management Defined (as it relates to your small business)

How often can you fail and do it again?  Think of it in terms of trading the financial markets.  If you invest 100% of your capital in one trade, you have about a 50/50 chance of having any money left.  You may have huge gains or lose everything.  If you invest 1% of your capital and you lose your position, you still have 99% left.  You’re not going to experience massive gains, but over time they will accumulate into the habit of winning.  The same thing is true with your business.  You’ve only got one farm.  If you bet it and lose, you’ll have no farm.

“The number of times I succeed is in direct proportion to the number of times I can fail and keep on trying.”  –Tom Hopkins

The Other Side of Risk Is Reward

If you keep looking over the edge of the high dive, you’ll never jump.  If you think of the thrill and exhilaration of falling through the air into a nice warm swimming pool below, you won’t hesitate to jump.  The reason that we take risks in business is for a perceived reward.  Without reward, risk is just taking risks for the sake of taking risks.  If you take intelligent risks and manage your exposure to risks your chances of getting rewarded increase dramatically.