A businessman thinks outside the box

I like it when business owners think outside the box.

From Eater.com:

How a Restaurant Tripled Its Profits by Eliminating Tips

The employees get paid vacation days, too.

Things are working out quite well for Bar Marco, the Pittsburgh restaurant that eliminated tips and put their staff members on salary. In January, co-owner Bobby Fry told Eater that he planned to give his full-time employees a base salary of $35,000 a year, plus healthcare, paid vacation, and 500 shares in the company. Plus, employees would only be asked to work a maximum of 40 to 44 hours per week. According to Entrepreneur, the unconventional model is working quite well for Fry and his team — profits are have nearly tripled in two months. Weekly profits have jumped from about $3,000 per week to $9,000 per week.

Fry tells Entrepreneur that revenues “exceeded expectations by 26 percent” and that overhead costs dropped by eight percent. Other costs went down too: “Our water bill was cut in half, our linen bill was cut in half, our liquor inventory was lean.” Fry mainly attributes this to “revived employee cognizance” thanks to the restaurant’s new business model. He also notes that the restaurant introduced a “retooled menu comprising of cheaper, local ingredients,” and more shareable plates, which has helped keep costs down.

The model has been so successful that the team has decided to implement it at Bar Marco’s sister restaurant, The Livermore, when it reopens this week. Thanks to bonuses, Bar Marco employees are likely to take home between $48,000 and $51,000 this year.

Many cities and states have increased or are in the process of increasing the hourly minimum wage to $15 per hour. This has upset many restaurateurs who argue that they will not be able to pay their staff such high wages. Fry believes, however, that they should considering switching up how they do business considering that many restaurant workers currently live in poverty: [NB]You cannot tell me that your business model relies on paying people below the poverty line.” He adds, “Google is the best company in the world for how much money they make per employee and that’s because they put all their time and energy into their employees. It pays off for them in fistfuls.”


Thinking out of the box.

Is there anything to be learned from this for churchy environments?

Off the top of my head… perhaps stop thinking about the Sunday collection as “tips”.  Rather, regular automatic account deduction….  I know this is being done in some places.

Otherwise, …?


About Fr. John Zuhlsdorf

Fr. Z is the guy who runs this blog. o{]:¬)
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  1. Not to mention it is almost, or entirely in accord with Catholic social teaching and Justice, applying the principles of subsidarity. And to boot, “Traddy” Fr Z has highlighted this on his “conservative” blog. Has this been featured on liberal or non-trad sites? This is proof the majority of Traditonalists (not the Radical Catholic Reactionaries, term intellectual property of Dave Armstrong, Catholic Apologist) are aren’t ignoring the other half of the faith and give fair share to social justice and works. Huzzah Fr Z!

  2. Rouxfus says:

    Not only does this model incorporate the Catholic teachings on the benefits of subsidiarity, and the duty to pay employees a living wage, but by granting the employees shares of stock in the company, he has created ownership, which gives the employees a direct incentive to increase the profitablity and success of the restaurant. Employee ownership of the means of production is a key aspect of Distributism.

    Too much capitalism does not mean too many capitalists, but too few capitalists. [G.K. Chesterton]

  3. drohan says:

    The churchy environment I would focus on are Catholic Campaign for Human Development and Catholic Relief Services. Recent reports say that we pay the head of both organizations north of $500,000 per year. That does not include staff. Imagine if we restructured them by putting members of Religious Orders in charge, then we could save money.

    In my diocese, they used to take a tithe for each Catholic High School (and grade school) within a certain mile radius of the parish. This kept tuition rates extremely low, and fostered a few areas where the local Catholic school system was bigger than the public. Recent bishops have done away with this to straight-up tuition with varying degrees of scholarships. I would think that is vocations is a real issue in much of the country, having good Catholic Schools would be part of that. And Catholic Schools that all faithful parents can afford to send their kids is necessary.

    I think one other thing that holds back giving to our church is the belief, among a lot of the parishioners (whether unfounded or not) that all our money goes to the diocese. The belief that we in the local parish are raising money that we will never get to use on our own parish, because the bishop will invariably use it for his own projects. I have a number of parishioners tell me that. I think a diocesan initiative that put a flat 10% Cathedraticum on all parishes, with rebates for things that are needed for the health of the Church. So a parish has a young man go into Seminary. The parish he was raised in gets a rebate of 3% from the diocese. A young woman wants to take religious vows, another 3%. As word got around that the more your parish does for the Church, the more money you keep, the emphasis on the real mission of the Church would increase. Local giving would also increase, and like a supply side tax cut, the percentage taken from 7% would be more than what is taken from 10%.

    I think a bishop who implemented this plan would see eyes roll at first. But I also envision that a diocese where all the people saw concrete benefits of their actions within the Church would strengthen her. You’d have parishes and pastors focused on vocations and saving souls. You’d probably have to release a lot of deadwood diocesan staff, but they could get jobs running the charity arms of the bigger parishes. Charity would be close to home, which is where it works best, and then we’d wouldn’t have to beg for money every time the insurance premium came due, or the diocesan appeal came through. We’d just be able to pay it.

  4. Grateful to be Catholic says:

    Consider implementing FaithDirect, a system that automatically deducts monthly from your checking account or credit card (watch those frequent flyer miles pile up). You set it up for weekly amounts and any special collections, as provided by the parish, entering the donation for each. If you think some special collections are more worthy than others, adjust the donations (or not) accordingly. You can go online and change it anytime.

    Our pastor loves it: saves time and worry counting the collection every Sunday, picks up donations when people are on vacation, compiles the summary of donations at the end of the year. For me, it sure beats writing checks. This was the last regular use I had for checks.

    And it’s being used at stodgy, Latin Mass venue Old St. Mary’s in DC.

  5. PA mom says:

    More than in “churchy” environments, I think ideas like this are needed in the World, implemented by Catholic business owners.

    Like the Hobby Lobby model of demonstrating respect for employees through better wages and benefits and Sundays off, this would speak loudly about the dignity of the person being maintained within the atmosphere of earning their living.

    Would be interesting to know how it works out long term as well.

  6. moconnor says:

    Yup. If only Catholic Churches understood that music is a profession, not a hobby. Too many congregations have known only badly done music by admittedly faith-filled volunteers (as well as a smattering of applause hounds) that they don’t know what professionally realized music can do for the experience at Mass. No. 1, pay your organist enough that he or she can think about starting a family. If you are a cathedral, act like one and pay a professional choir too. In the parishes, I understand there exists a variety of circumstances, but if you are are parish in an upper middle class neighborhood, you CAN afford to pay professional musicians. Prioritize the liturgy over everything else.

  7. Elizabeth D says:

    The problem with professional musicians is sometimes churches hang on to a quality musician who has no commitment to the Faith or to the life of the parish. When the center of the church music program is heterodox people or even people antagonistic about the Faith or aspects of it, that is unfortunate. After experiencing and hearing of some egregious unpleasantness from paid church musicians I am at the point where I would rather stop paying musicians and just have amateur quality music by people who are first of all committed parishioners.

  8. RafqasRoad says:

    This is a fantastic business model, all the moreso for placing the employees at the heart of the business in the form of making them share-owners also. As several commenters have noted above, Subsidiarity in action. Go the Chesterton quote!! and CCC2424 is Catholic social teaching re this sort of thing in a nutshell.

    Concerning automatic deduction from a parishioner’s bank account or credit card for church collections etc., prior to becoming Catholic in 2011, I had witnessed this in action in several churches and allied church programmes (missionary support for those working abroad) since around 2003 and it proved very successful and easy for individual churches and church programmes to set up.

  9. yatzer says:

    I’ve been to organless, intrumentless Masses where things went along quite nicely. My theory is that the music chosen was something people actually could sing. I’d rather that than others I’ve been to where the bongos were overwhelming.

  10. gramma10 says:

    Bar Marco? Pittsburg? Wonder if they would hire me?
    But I would have to move to PA.

  11. comedyeye says:

    I like it when a priest thinks outside the box by taking an economic secular story and applying it to the Church.

  12. Mojoron says:

    The difference between Bar Marco and Bar McDonnald’s is that most people who work in a restaurant/bar nowadays are college educated usually with degrees due to the job market being so lousy. They understand, or should anyway, the economics of operating a business particularly one that has a slim profit margin as does the restaurant business. Mickey D employee’s rarely care about waste or even customer service or whether the toilets get enough paper. Google’s business model is entirely different from anyone’s. They rely strictly on advertisement while giving away stuff at their cost hopefully making money at some point down the line. I doubt there are very many businesses that can operate at those limited resourced options, especially when someone is trying to force a $15/hour minimum wage on your business that you know you cannot afford.

  13. HeatherPA says:

    I so wish we could do auto deduction for our parish tithe, as we do auto deduction for all our other charitable giving. It is so much easier. Alas, our parish is stuck in a kind of 1985 mentality with communications and such, the people in charge are very resistant to change and “new” technology. There isn’t even a parish email list for push notifications, despite many requests for one. Perhaps one day.

  14. jcapt says:

    While I understand the temporal usefulness and convenience of automatic deduction of the parish tithe, I have resisted it. Although this (and various Catholic school activities) are very nearly the only checks we write anymore, I have thought it spiritually beneficial for us to go through the weekly act of physically making an offering to the Church by tossing the envelope in the basket. We have also liked the idea of our children seeing us donate weekly.

    After reading so many comments in favor of automatic deduction from this blog’s undoubtedly orthodox readers though, I’m inclined to change my opinion.

  15. The Arlington Diocese uses FaithDirect, the automated deduction donation system, at the option of the pastor and parish staff. Works great.

    In the churchy model of pay, most parishes cannot afford salaries commensurate with the corporate world, and therefore the lack of sustainable salary gets you a lesser workforce. Yes there are exceptions of competent workers who can afford to commit to working for the Church out of love and sacrifice. A tip system might help in this case LOL.
    At the same time I am aghast at the salaries a diocese will pay to consultants and advisers who rarely have the best interest of the Faith at heart.

    When we lost 80 – 90 percent of our religious vocations, we also lost the free workforce. Unfortunately pastors still want laity to work for free or almost-free, with large unrealistic commitments of time. You can’t blame em – its Church work! How can you possibly pay for that? This subject is a big one – the laity really can’t substitute for the committed full-time religious, and parishes can’t possibly pay breadwinners enough. And yea, families need to have time for family responsibilities. At least I’m not aware of situations of adequate pay.

    In regard to musicians, no we don’t pay musical directors enough. In cases where there are paid members I have seen both good and bad. Where non-Catholics are paid, mmmm, maybe not such a good idea, but when good Catholic singers cannot be found, what do ya do?
    Again, although the Church has a history of paid composers and directors [where did all the patrons of the Nobility go?] the Church also suffers from the lack of full-time religious and Church musicologists today.

    Its kinda like trying to keep up appearances when in reality maybe the Church has been gutted of competent and ‘free’ workers. Does money solve it?

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