The Pre-Shift
Great teams make great restaurants. On The Pre-Shift, restaurant operators and industry experts dive into what it takes to build great restaurant teams. We explore their stories, the strategies they use, and valuable lessons on running restaurant teams. Hosted by D. J. Costantino. Presented by 7shifts.
The Pre-Shift
How restaurants exist beyond four walls | Irene Shiang Li, Cofounder of Prepshift & Mei Mei Dumplings | 042
The Pre-Shift Podcast presented by 7shifts is a deep dive into what it takes to run great restaurant teams.
Host DJ Costantino covers the restaurant industry with conversations featuring industry leaders and innovators sharing their business growth insights, backgrounds, and valuable lessons on running restaurant teams.
On this episode, we’re joined by Irene Shiang Li, Cofounder of Prepshift & Mei Mei Dumplings in Boston, Mass.
Irene Shiang Li co-founded Mei Mei in Boston in 2013 and built the brand around ethical, sustainable sourcing and fair and transparent employment practices, including open book management. Mei Mei is now a dumpling company and Irene is now building Prepshift, a tech-enabled coaching and workforce training firm. Prepshift focuses on aligning food business teams around their common goals and empowering them with education and transparency. Irene believes that in restaurants, everyone can win. She is a Zagat and Forbes 30 Under 30 honoree, six-time James Beard Foundation Rising Star Chef nominee, and 2022 James Beard Foundation Leadership Award winner. In 2023, Irene and her sister co-authored Perfectly Good Food: a totally achievable zero-waste approach to home cooking with W.W. Norton.
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Credits
Host & Producer: D. J. Costantino
Producer: Samantha Fung
Editor: Fina Charleston
About 7shifts
7shifts is a scheduling, payroll, and employee retention app designed to help restaurants thrive. With an easy-to-use app and industry-specific solutions, 7shifts saves time, reduces errors, and helps keep costs in check for more than 50,000 restaurants.
Listen, we know what it's like to be underwater on a hundred different things, and then you have a pipe burst and you're literally underwater.
Speaker 2:Hello and welcome back to another episode of the Pre-Shift podcast, where we dive deep into what it takes to run great restaurant teams. I'm your host, dj, and today I'm sitting down with Irene Lee. Irene co-founded Meimei, a food truck turned restaurant, turned dumpling company in Boston, and now PrepShift, a restaurant consultancy that helps small businesses thrive while remaining loyal to their values.
Speaker 1:My name is Irene Lee and I am the co-founder of Meimei Dumplings, and I'm also the co-founder of PrepShift, a consulting, coaching and workforce training company.
Speaker 2:Meimei opened in 2012 and has become a perennial favorite in Boston, racking up more local and national awards than I have time to list, but I do want to highlight Irene's recent James Beard leadership award win in 2022. But after enjoying a long running success, the pandemic forced Lee and her sibling business partners, andrew and Margaret, to rethink whether or not they wanted to be a restaurant at all. Irene and I get to dive into what that meant, how it spurred PrepShift and how she keeps her staff retained. As always, the Pre-Shift podcast is brought to you by Seven Shifts workforce management for restaurants. Now, in September of 2020, irene posted an article on the Meimei website blog titled this Is Not a Restaurant. That blog detailed how Meimei would adapt in the pandemic, and it morphed into a meditation on what independent restaurants and their owners need to survive.
Speaker 1:And that's kind of what led me to thinking about PrepShift. Prepshift started out as an idea that was basically just like what, of all the things we can do, how are we going to support independent restaurants? And so PrepShift has been through a couple iterations, but right now what we do is essentially coaching and consulting, and a lot of that is funded by municipalities, by the state of Massachusetts and by other third parties. So we're kind of like we're not your dad's consulting firm and we a lot of our clients, you know are people who would never even think about hiring consultants in a traditional sense, and so we try to bring our lived experience mine and my co-founders, dylan and Carla's, our experience working in restaurants, working for restaurants, as service providers and to really bring like having been there to the table.
Speaker 2:The way Meimei evolved was to transition out of being just a restaurant. While you can still go down and sit there to eat their famous dumplings, the restaurant has extended into multiple revenue streams, engaging its staff and customers in different ways.
Speaker 1:Today, meimei operates a what we call a factory slash cafe, slash classroom, and we are open for service only two days per week, and the other days we manufacture dumplings and we hold dumpling classes. We also take our products to tons of farmers markets around the state, and so that's where a lot of our revenue is generated. And we came to this conclusion in part because of the real estate opportunity we had and also because, in thinking about what we were really hearing from our customers, about what they wanted, it's more about experience across the board and less about I want to come into your restaurant and sit down and eat there. And so we started selling dumplings partway through the pandemic at farmers markets and they took off selling like hotcakes.
Speaker 1:There were so many different experiments during COVID, and the one that really crushed it was dumplings, and so we basically said, okay, can we own and sell every aspect of the dumpling experience?
Speaker 1:So I think for us, the cafe classroom is like okay, you can come and watch us make dumplings, or you can come and we can teach you to make dumplings, or you can come and just order dumplings, or you can come and buy dumplings to take home. And so I think we're trying to capitalize on the enthusiasm around the product and to monetize that in a bunch of different ways. The other thing that I feel like is important to us is bringing a level of kind of transparency and like realism to what we're doing, and so when you come to the factory, you can see the production space, you can see the dumplings being made. We also show you how to make dumplings, so like it's not a secret, there are no secret recipes, there's no like confidential information. I think that really speaks to one of our core values, which is about generosity and sharing. And, on another level, like we also were, just like getting old and like don't wanna work at night.
Speaker 2:Fair enough, fair enough.
Speaker 1:And wanna work minimal weekends, and so I think that for me to say May, may is not a restaurant anymore was very bittersweet, but it also just felt like the smart next step in a bunch of ways, and I would say we're very happy with the niche that we've kind of carved out for ourselves.
Speaker 2:Leah's also found that these new business models have helped to tell more of the May May story.
Speaker 1:Diverse revenue streams all kind of tell a different part of the story and I think you build brand loyalty with the storytelling. And so when we sell someone a dumpling class and they come in and take the class, we are essentially marketing to them for 90 straight minutes.
Speaker 1:And that's so much more opportunity to build a relationship than sending a server to their table, and so I think that's one of the other things that we encourage clients to think about is, like, what are the things that build the relationship? And maybe it's doing like more takeout, but it's probably something that's higher touch or something that is more unusual or harder to find. So I think that's one of the things that it's all in service of is how to tell the story and build those relationships.
Speaker 2:Now my biggest question for Leah was about staffing a hybrid business like May May. Do you have separate staff for each arm of the company? Leah showed me that all of their team receives cross training and what exactly goes into it.
Speaker 1:So we cross train the majority of our staff. It kind of depends on, like, their availability. We're fortunate that the farmers market schedule makes it so that we can have a lot of employees who work once a week. It's great for us, it's great for them, but the majority of our full-time team members have to be cross trained to do everything and so for the most part they're kind of centered in one department. But we have the cafe department, the production department, the farmers market department and the classes department. So there are a lot of opportunities which again I think is nice for our team. They get to learn new things and kind of have new challenges as they move into other parts of the business.
Speaker 2:That's very cool. Do you think that that is something the cross training and different opportunities do you think that has an effect on employee retention at all, or is it? Am I making yes, so yes, 100%, I'm not just making it up.
Speaker 1:Yeah, I mean, I think we give people an opportunity to use different parts of their brain and I also think that I don't know. Essentially, we're telling people like we think we can teach you to do anything. You don't have to walk in with experience in anything If you are like attentive and like smart and, on top of it, like we'll bring you anywhere with us, and I think that's kind of like an overall attitude around employment and around like culture building. That I see as super effective, not just at NAMAY but at any organization where you know. It's like you weren't hired to be a cog, Like we're gonna bring you in and like skies the limit for both of us.
Speaker 2:That cross-training for staff also has another benefit in staff retention. In the study this year we found the training is one of the top places operators invest their dollars into keeping employees around, and cross-training likely does is a great way to do it.
Speaker 1:One of the things that I think is most important is having our team members feel like they're part of something, and I know that that's like how people lead really successful cults too. But I think that, like you know, we want them to feel like their work means something, even if it is just folding dumplings for an eight hour shift. And one of the ways that we do that is through our open book management system, which we now call Teamwide Financial Engagement, because it's a little bit more accurate. But basically, at May-May, the way we do TFE is we have a quarterly meeting and we look at the major expense categories and the major revenue categories. We get feedback from people about what they're seeing in their day-to-day work and if they're seeing it reflected in the numbers, what ideas they have for improvements or changes, and we set goals for the next quarter.
Speaker 1:And I think that I don't know like it's really simple, but like if you can feel like you know if you're winning or losing. That's like a good feeling. And even during COVID, you know, we showed people like here's what we thought we were gonna bring in in revenue and here's what we actually did Sort of people having a sense of what's going on in the business and like if we're meeting our goals or not. I feel like that's just like that dignifies their contribution in a way that in many kind of like low wage jobs I think doesn't happen, and so can they take pride in our wins as a business and can they also help us in the moments when we're failing as a business. So asking them to really be part of what we're doing, I think is something that the folks who we bring in really respond well to.
Speaker 2:Another attention tactic is open book finance, which we've covered recently on the show, but Lee has an interesting approach on how to make it work for your team.
Speaker 1:Yeah, and that's actually part of why we're trying to like kind of rebrand to what we're calling team-wide financial engagement, because open book management kind of makes it sound like you're showing everyone everything all at once and you're really not. You shouldn't. And so we teach team-wide financial engagement as three pillars or like three legs of a stool. So the first thing you have to do is educate people so that they do know what they're going to be looking at. Then you give them the access to the information they actually look at it, and then you create an opportunity and an incentive for them to engage with the material and to try to make changes and meet goals. And those three things all have to happen or it is not going to be successful. We've had clients who are like wow, open book sounds so great, I'm going to show the staff the P&L tomorrow and we're like no.
Speaker 1:Don't do that, because it can be really disastrous to give people information without context, and so that's how we roll it out with our clients. We start by making sure everyone understands how to read a P&L. What are the benchmarks and what are kind of like the core tenets of running a super functional business that knows how to set goals and meet them. Then we actually show them numbers and typically we advocate for showing the five line P&L. So revenue and profit top and bottom. And then three major expense categories COGs, direct labor and overheads. And then I don't know if you're in a business where, like May-May, for example, where a lot of our dumplings are sold as retail, you might break revenue down into its component parts or like, wow, we want to see how classes did in the summer versus the winter. So often revenue breakdown is another layer that we might go to. But for the most part we're looking at the five line P&L and we again advocate that folks not go too much deeper than that.
Speaker 1:And part three is basically creating these team challenges, or like in Ann Arbor, gha, I think, calls them like mini games or initiatives, but basically like if we zoom in on a section of the P&L, can we create a measurable goal around this and engage everybody in it. And so that's the third leg of the stool. And yeah, I mean I love GHA and I love what Zingermans does, and I think that their brand of open book management requires you to like really have your shit together. Yeah, and so, like I think on some level, for us at PrepShift, tfe is like for like the C-plus students and not the A-plus students, like can we kind of get something underway that helps facilitate more alignment, even if the P&L is like still a little bit messy, and so I think that's like what we're really excited about so much respect for what they do, and also see a need to bring it even more to like a simplified level.
Speaker 2:Now I just want to take a quick break to share an exciting update from SevenShifts. Usually I don't do this, but our users have been waiting for it for a long time. I know I don't have to tell you that running payroll is a lengthy manual process Data entry, checking, multiple systems, cross-referencing, triple checking so I'm excited to announce that SevenShifts payroll is now available in the US. Now you can schedule your employees, manage the time clock, calculate tips and pay your team in one app, and when you make the switch to SevenShifts payroll, your first three months are on us To learn more. Head to SevenShiftscom. Make the switch. Now back to the show.
Speaker 2:As Leah's mentioned, what they've learned at May-May has inspired much of her work at PrepShift. At the core, Leah's dedicated to helping restaurants afford their values. She's helping them figure out how to afford to pay people more, eliminate tipping and build an equitable restaurant for their ownership as well as the staff. But Leah recognizes that in order to do so, you have to either make more or spend less. Ideally, it's a little bit of both and it also takes a pretty long time.
Speaker 1:The two options they have for improving the business are essentially bring in more revenue or reduce your expenses, and, depending on which kind of pathway makes more sense, depending on the particulars of their P&L, we help them create strategies to generate more profit and to generate more operating capital. And yeah, I think there are so many things that restaurant owners would love to do that we can't afford. Like, we would love to use all compostable, renewable, everything all the time, and that's hard. We would love to pay a living wage that's hard, too and we also would love to offer a really great value to our customers, a value that really knocks it out of the park. We can't do that either Many of us, I think. If we could give the food away for free, we would, because we love feeding people.
Speaker 1:We didn't get into this for the love of running a business, but I think, for me, one of the things that I realized in my journey as an entrepreneur, and one of the things that I see a lot of our clients coming to, is that if your goals outpace your profitability, that's a really dangerous place to be in.
Speaker 1:So it might be that you can't pay a living wage until you are X% profitable. That's just the reality for a lot of businesses, and so one of the things I think we try to help clients with is to figure out what goals are appropriate for where they are in building the business and then to help them see what is the pathway to, for example, paying a living wage. You can't just start doing it tomorrow. That is going to put you out of business. So how do you set a reasonable goal and keep yourself on track towards it? And then, on the flip side, there are also operators who say things like oh, we could never pay a living wage, and we don't love that mentality either. So we want to tell them there is a way to get there, there is a pathway, and whether it's that you don't think you'll ever get there or you're mad that you're not there already, we want to kind of close that gap.
Speaker 2:Now we wouldn't be having these tough conversations that were easy, just to make more money. There are many ways to go about it, but Lee contends that raising menu prices is inevitable. Many operators are reluctant to do it and drive customers away. But a slower, more tactful approach can get you where you need to be.
Speaker 1:I do think that menu prices are ultimately going to be the driver of profitability for restaurants, but I think there are tons of different levers to be pulled and menu prices are just one of them. So, for example, like I think in a lot of independent restaurants you know you could probably shave a percentage point off cost of goods if you were to monitor food waste. Negotiate with your vendors like reformulate some recipes there's opportunity in so many different places and raising prices is one opportunity. The other thing that, like I think I often see is operators are so scared of raising prices because they just know that one guest who's going to complain and that vocal minority is going to haunt them. And I've been there and I think what I've seen is that there are a ton of ways to like mitigate that kind of negative reaction.
Speaker 1:The first thing is, like you want to raise prices very intentionally and you probably want to do it gradually.
Speaker 1:You also can communicate about why you're raising the prices and hope that people remember that. Like grocery stores don't lock in their prices for you and so like neither should restaurants. But I think a lot of it is in the messaging and the relationship. And, yeah, like if you're just going to raise everything by four dollars, like, yeah, people aren't going to be happy about that, but I do think that in the US, like we do undervalue restaurant dining and that's going to have to change for the industry to continue to survive. So I think all these things have to happen and it's the matter of, like pulling the levers that are available to a given restaurant and you know there's no single solution. It's like you can't just hit a home run, like you have to grind it out with, I don't know, singles or whatever baseball, but it's a grind, and so there's just not one kind of magic solution, unfortunately, Another aspect of the puzzle is the all important question on tipping.
Speaker 1:All of this around wages is pretty complicated and, as you know, like tipping, has a pretty ugly history with, like, its roots in slavery and the reconstruction era, and I would love for us to be in a world with no tipping. It's going to take a lot to get us there and I know that that can't happen overnight. In Massachusetts, there are particularly restrictive laws around tip pooling, and so pooling with the back of the house, even if everyone is paid a full minimum wage, is still not permitted in Massachusetts. There is going to be, I think, a ballot initiative coming up about instating one fair wage in Massachusetts, and I think the more we see data coming out of, you know, oregon, washington, california, the states that have implemented one fair wage, the less scary it's going to be to take that leap.
Speaker 2:Now Irene understands that it can be scary to raise your prices and the concern of alienating customers is real, but she also calls out that restaurants are in a tough spot because of the laws regarding tip service charges and how they vary from state to state.
Speaker 1:I get that it's scary. I get that operators don't want to upset their customers, and so we're seeing a lot of proliferation of service fees, admin charges, back of house fees and lately that's really pissing off customers. So it's like these are like machinations that we're taking on because the laws don't fit our needs. So the systemic change, which you know would be ideal, would be to change the way the laws are written, and everything that restaurants are doing that's pissing people off is just a response to the laws not making sense. So that's something I think we need a lot of consumer engagement and education on, and so it'll be interesting to see what happens in Massachusetts as the ballot initiative kind of moves forward towards next November.
Speaker 2:Lastly, one of the more important things that Lee is doing at PrepShift is helping restaurants understand data and what it says about their priorities.
Speaker 1:I think it comes down to two very different things. One is the storytelling how do we tell ourselves the story of our business, how do we tell our team, and then how do we tell our guests on the outside? And then the other thing is the financials. I guess the finances tell a story in a way, so maybe it's the same thing, but the financials tell the story if the operator cares to read it. There is a lot to be found, and so for us it really does go back to finances, back to basics. I hate saying that because I don't like financials, I'm not a numbers person, but, as I said, I learned that you can only do cool shit if you can afford it, and so that's why the numbers matter. So I would say, if I had to kind of center it around something, it would be knowing the story and making changes according.
Speaker 2:And Lee is excited to continue with PrepShift and help more operators live their values and celebrate their success.
