An interview with Karl Romboy on the day of Micro-, small and medium-sized enterprises

Today is Micro, Small and Medium Enterprises Day, proclaimed by the United Nations in 2017 to highlight the achievements of entrepreneurs. Do you feel that the role of small businesses for society and the economy is sufficiently recognised?

No, I don’t think so at all! In the public perception, the government is immediately prepared to pay out subsidies when large companies make mistakes. Small business owners often have the feeling of bleeding out and they suffer from the huge amount of red tape. However, if you take a closer look, medium-sized companies, micro and small enterprises are the job creators in Germany. They offer jobs where they are located and thus guarantee tax revenues. Unfortunately, this is often not really taken into account, because these micro and small business owners cannot afford to do much lobbying work and therefore are paid little attention – at least that is my perception.

As an independent restaurateur, you know the hardships and joys of small businesses very well. Let’s start with the joys – what brought you to the restaurant business?

The restaurant trade has always fascinated me since it is a very individual profession. You can express your own personality, have a lot of contact with guests. Of course, you have to like interacting with people. But the exchange with different people and cultures has greatly enriched my views. I have come to know and appreciate cultural differences. The restaurant trade in particular is a gathering place of cultures and therefore very diverse.

And now to the hardships: What are the challenges facing restaurateurs?

The main problem is financial viability. Doing business legally and properly has always been a trigger point for me. Unfortunately, the restaurant trade is always under suspicion of undeclared money. And yet there are so many restaurateurs who make enormous efforts to work entirely legally. They are under immense financial pressure, even just looking at staff costs. They also compete with competitors who do not work completely legally and who gain a competitive advantage from this. These black sheep in turn reinforce the stigma of the entire sector. One of the consequences is that regulation is increasing more and more. The restaurateurs who operate properly have to do a lot to overcome these bureaucratic hurdles. The recording of working hours and hygiene controls alone now take up so much time that the restaurateur has little time for his actual job. I miss a balancing regulation that makes it easy for restaurateurs to work sustainably and legally. Something has to change there.

One of the big problems of the restaurant trade is the lack of good staff. How does that affect your business?

Good staff is hard to find! In my restaurant it has always been the case that the winter business was much stronger than the summer business. We didn’t lay off people in summer because we were afraid that we wouldn’t see them again in winter. If you don’t have enough staff, you can’t generate a certain amount of business. If you can’t generate a certain amount of business, in the long run you won’t be able to generate turnover and thus achieve profitability. The shortage of skilled workers is generally known. It doesn’t only affect the restaurant business, but it’s there that it really hits hard, because in the past, for example, many students worked in a restaurant. If one didn’t fit anymore, you hired the next one. Meanwhile, there are many student jobs beyond restaurants. People no longer want to work these kinds of hours and prefer jobs with regular working hours and a more secure income. Food businesses are suffering as a result. This issue goes hand in hand with the quality of the workforce. Because you can always find someone – but is he suitable too, does he fit into the team, will he not steal from you? It has become really difficult to encourage young people to train in the restaurant trade. They see their friends partying during the weekends while they have to work. The job involves a certain amount of sacrifice and that makes it very difficult.

You just raised the issue of staff costs. The introduction of the minimum wage has always been considered to be difficult for the many small businesses in the sector. How do you see these regulations?

I had absolutely nothing against the introduction of the minimum wage. I also think the recording of this is okay. The minimum wage has already been raised several times. The problem: The restaurant business is characterised by temporary workers who work a mini-job. Increases of the minimum wage reduce the possible hours that temporary workers are allowed to work. Meaning that they earn the same money, but cannot work the same number of hours any more. Of course, that’s a naïve fallacy for me as a restaurateur. An adjustment would be needed: If the minimum wage is raised, it must also be possible to earn more. Otherwise the effect will be completely lost.

What would be necessary to achieve an improvement in the recruiting of employees? Can the Skilled Workers Immigration Act, which was passed at the beginning of June, have a positive effect?

I believe that we need a general immigration law – not necessarily an immigration law aimed at skilled workers. People who want to come to Germany to work are either qualified as skilled workers or disqualified by such a law – which then means that they cannot come. And that’s despite the shortage of labour we’re experiencing. Why don’t we let people who want to come to Germany with the intention of doing something also work here? The restaurant and catering industry is one of the most important employers in Germany and in addition it is tied to its location. It’s not like in the automotive industry, where a new plant is built abroad with the help of subsidies and then jobs are lost in Germany. The restaurant market is growing – and we urgently need workers there.

You were just talking about the bureaucratic hurdles that have to be overcome. What role does red tape play in your everyday life?

A very big one! You have to meet the requirements of every authority in Germany that is responsible for you. This includes the certified cash register, working time documentation, customs, hygiene lists, tips etc. If you go to the bakery quickly to buy five loaves of bread and take cash out of the waiter’s wallet to pay for them, this always involves documentation. If everything is meticulously documented, a lot of working time is lost. And if you don’t do it properly, you have a problem really fast. The red tape in everyday business is immense. If this time could be used for good offers, customer service and new business ideas – that would help restaurateurs. I hope that various digital tools will soon be ready for the market. I believe that they will make work easier and create cost efficiency in the future. This opportunity of digitisation must be recognised and harnessed.

Do you think the restaurant business is ready for digitisation?

I believe we have a great generational shift ahead of us. A long-established Italian restaurant owner, who has been running his business for 30 years and has always done everything with pen and paper, he won’t be digitised. But at some point, he will retire and his successor, who grew up with a smartphone, has a completely different affinity for digitisation. He really doesn’t want to pick up a pen and a piece of paper. The chances of digitisation are hard to slip into old, rigid structures, but this process of renewal will take place automatically.

Sustainable restaurants – this topic is increasingly moving into the focus of society. How far has the restaurant trade come in this regard?

The topic of sustainability is always a nice marketing gag for many people. Of course, sustainable approaches should continue to find their way into the restaurant trade, this is essential for our future. Not letting the oven run continuously, not keeping the stove in operation without breaks, water-saving measures – all of these measures have already been introduced in the kitchens. We often pack up leftovers – but at home they are ultimately thrown away anyway after three days in the fridge. However, sustainability is not only about the environment, but also about cost efficiency. For example, a restaurateur who does not work sustainably has higher costs for waste disposal. The more sustainably I work, the less costs are incurred, the more sustainably I also work in economic terms. Not all restaurateurs have grasped this concept yet.

In addition to the topic of sustainability, new food trends are constantly stirring up the restaurant scene. Which development do you consider to be particularly important?

Things are moving too fast to be able to say: That’s the trend for the next decade. I still believe, even though it’s no longer a new idea, that “back to the roots” is on the rise – what you ate at Grandma’s, these down-to-earth dishes. Feeling at home and being familiar with things is an incredible need for people. Another topic is barbecue, we see this worldwide. There are only a few food trends that work all over the world. The barbecue trend will continue.

What development do you wish for with regard to the restaurant landscape in Germany?

I would like to see a great deal of diversity in the restaurant landscape. On the one hand, to give restaurateurs the opportunity to present their roots. But also, to create a large variety of offers for the guests. (Laughs) And above all I would like to see a reduced VAT rate, because this could solve many financial problems. Therefore: A bit more togetherness with policymakers – that’s what I hope for for the restaurant trade. On the other hand, this sense of togetherness requires that restaurateurs comply with the policy and administrative rules. This is the foundation of working hand in hand, which is how we create future-oriented solutions for the industry.