Eren Ali: The 10 golden rules that made Las Iguanas such a success
The co-founder of restaurant chain Las Iguanas shares his tips for business
Back in 1991 Eren Ali bought a failed Italian restaurant from his landlady in Bristol. He'd actually graduated in transport design and was working as a product designer when the offer came. He and his business partner Aj Jaya-Wickrema turned it into a Latin concept eaterie and renamed it Las Iguanas. More than 20 years later Las Iguanas is the UK's leading Latin American restaurant chain, with 25 restaurants spread throughout the UK and more in development.
A major catalyst for growth occurred in 2002, when investment house Piper Private Equity invested a minority stake in the growing chain, helping the business expand from four to 14 restaurants. Five years later, Piper exited the business with a very healthy six times multiple return on its investment – at the time of the acquisition led by Bowmark Capital the chain was valued at £27m.
Jaya-Wickrema remains a founding shareholder and has gone on to create Caribbean concept Turtle Bay Restaurants. Eren Ali himself, meanwhile, was awarded Group restaurateur of the Year in 2009 and Las Iguanas featured on 2011's Buyout Track 100 table in The Sunday Times. Here Ali shares his 10 golden rules of business:
1. Stand out and sparkle
The absolute key is your big idea – which has to be different, innovative and have that magnetic attraction. You just can't run with the pack. Las Iguanas opened on a quiet street in Bristol during the middle of a recession, on a site where seven restaurants had previously failed. The concept of a fun, vibrant restaurant serving simple Latin American food hadn't been seen in the city before.
2. But keep it simple
One of my strongest memories is of our very first guest walking through the door – a lawyer in a pinstripe suit. Today he remains our most important customer. In the early days, I'd ask the local barristers who came in for lunch what they liked best about Las Iguanas. They said they loved the fact that there were no airs and graces – it was the one place they could kick off their shoes for an hour and truly relax. This helped us cut across various demographics. We weren't pretentious in any way.
3. Be fanatical about talent
I'm fanatical about finding and nurturing the right talent. It's at the heart of everything we do. The more pivotal the role, the more fanatical I get. For example, it took us two years to find our operations director. It was probably the best hire I ever made. After all, he has 1000 people reporting to him – so if I don't get it right, it's curtains. Once you've found the right people, invest heavily in them.
4. Be Mr Motivator
I spend a chunk of every day thinking about motivations – throughout my career it's probably the one subject that has occupied my mind most of all. In business, you can turn almost everything into a science, but understanding the motivations of others will always remain an art form. And yet they can have the biggest bearing on the future of your business. I think we're the only restaurant chain in Britain that employs someone full-time to focus on staff motivation. It slices through everything we do – if people aren't motivated, they're not going to deliver.
5. Learn from the coal face
It's very easy to get distracted by various back-of-house issues, but everything you need to know about your business can be found at the coal face. It's here, up close and personal with your customers and staff, that you can gain some incredible insights into how to improve your business. I have spent countless hours observing guests in our restaurants. I've even stalked one or two of them when they've looked at our menu board and drifted away – to check out why. I've made some of the best decisions simply by loitering and talking to everyone, from staff to guests.
6. Don't dumb down
As you grow, resist the temptation to dumb down and process the hell out of everything. Any retail business is a bit like a factory line – its operators ultimately exist to provide a consistent experience so the default mode is to standardise, simplify everything so it pops off the end of the line in a neat little package. But if you follow that route, eventually you'll see a compound effect and get down to simple common denominators which you'll start to share with your competitors. The hospitality sector is there to do things for people rather than to them. By dumbing down, you'll end up doing the opposite.
7. Get better, then better again
Las Iguanas leads the sector on continual improvement – it's a culture we've built up over 20 years. From the very start, we've collected suggestions from our customers – we now get the equivalent of 150,000 responses every two months, distilled into a 20-page report, which is read by all of our branch managers. All the restaurants apply our ‘W3' process at the end of every single day. W3 asks: what did we do really well? What are we going to do better? And what are we going to do next time? If you've instilled a culture of continuous improvement in your business, when things are getting tough you'll be able to start firing on all cylinders just when you need to.
8. Take it steady
I think we opened 12 or 13 restaurants before we ever went to London. We felt very much like a provincial operator and took time to grow in confidence and look at what others were doing. London's quite a different market, as many restaurants in the capital that have tried branching out themselves have discovered. They think they can storm in to any given town, do exactly what they're doing in London and get away with it. But many crash and burn. In the end, our waiting paid off. We opened a restaurant at the Royal Festival Hall, one of the best locations in London. It was one of our big turning points and does phenomenal business.
9. Surround yourself with great creative minds
Everything we do at Las Iguanas has a creative edge. We seek out the best designers and creative types, whether it's for restaurant, website or branding design, food and drink development or a marketing campaign. It's all about creating something new and better while still being on brand.
10. Don't accept defeat
I was born in England but my parents came from Cyprus. As first-generation immigrants, they worked hard all their lives and the one thing I really learned from them is never to give up. Don't let emotions or your ego get in the way of doing the right thing. Keep at it. As a team here, all the best things we've ever done have come through dogged persistence.