Science of Service Episode 9: How to Thrive When the Market Tightens with Doug Cunningham

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It’s easy to feel like growth is a given when times are booming. But what happens when they’re not? When consumer spending tightens and the optimism that fueled your expansion suddenly feels out of reach, those already fine margins shrink, the fires in the kitchen get hotter, and the big ambition to grow can feel like a luxury you just can’t afford. Before anything else, you have to make sure the business stays a business.

When things get tight, it doesn't have to become a story of survival. Instead, it can be a moment to reset, make smarter choices, and build a steadier footing for whatever comes next. This is the opportunity to turn financial chaos into something far more manageable—what our guest, Doug Cunningham, calls "crafted calm."

Doug is the founder of Crafted Ledgers and a CFO-turned-operator-ally who has spent more than a decade helping hospitality businesses navigate the complexities of growth. After diving into Colorado’s vibrant craft-brewing scene, he helped build strategies for some of the region's most successful brands. In a recent episode of the Science of Service podcast, he shared how operators can not just survive but thrive, even when the market is unforgiving.

The Knee-Jerk Reaction: Slashing Costs

When revenue dips, what's the first lever most operators pull? "I think everybody's first reaction is to turn around and [ask], 'Where can I start cutting costs and saving money?'" Doug observes. It’s a logical instinct. Lowering expenses seems like the most direct path to protecting your bottom line.

However, this quick-fix approach can have a huge negative impact that you don't realize until much later. Hasty decisions made under pressure often lead to compromises that can damage the very things that make your business special. Cutting staff might seem like an easy win, but it can cripple your guest experience. Slashing the marketing budget to zero might save cash today, but it leaves you invisible to customers tomorrow. These "easy wins" often come with long-term consequences that hurt growth and erode the foundation you’ve worked so hard to build.

Protecting Your Most Valuable Asset: Brand Loyalty

The real danger of reactive cost-cutting lies in its potential to erode brand loyalty. Your regulars keep coming back for a reason—it could be the quality of your product, the exceptional service, or the unique atmosphere you've created. When you start making changes that compromise what your guests love, you risk breaking that bond.

Doug shares a powerful example from his time at Denver Beer Company. Faced with a 75% price hike on a key ingredient for one of their bestselling beers, the team decided to revamp the recipe to cut costs. They used less of the expensive fruit and incorporated substitutes and flavorings. The change saved money, but the customer reaction was immediate and negative. "We honestly had people that were coming up and like, 'This is a completely different product,'" Doug recalls. Friends, family, and loyal customers all noticed the difference. Sales dropped. "You, when you create brand loyalty, it is easy to erode that if you actually start cutting costs and not figuring out if there's some other way to absorb those costs."

Instead of immediately compromising quality, Doug suggests exploring other avenues. Can you market a different product more heavily? Can you make adjustments elsewhere in the business to absorb the cost? Sometimes, the wisest move is to take the temporary hit to protect the long-term health of your brand.

From Financial Chaos to Crafted Calm

Running a restaurant is a masterclass in controlled chaos. Between regulatory requirements, staffing challenges, and the daily grind of service, the back end of the business can quickly become a tangled mess. For new operators, especially, the feeling of being overwhelmed is all too common. They start with a brilliant idea—the best beer, the perfect pizza—but soon find themselves buried in the weeds of running a business.

This is where Doug’s philosophy of "crafted calm" comes into play. It’s about transforming the financial insanity into something that operators can actually use to make decisions. "How do you create something for them as a partner? To allow them to have a little bit more calm in their day, to be able to create what they actually got into this to create in the first place," he asks.

For Doug, this means going beyond simply delivering a profit and loss statement. It's about being an educator and a partner. He works with operators to understand why the numbers matter. Why is food cost important? What does revenue per labor hour tell you? By explaining the "why" behind the data, he empowers operators to make informed decisions that align with their overall mission. The goal is to give them the clarity and confidence to steer the ship, rather than just reacting to the waves.

The Power of Smart Systems and Guest Insight

In today's competitive landscape, thriving requires a deep understanding of guest behavior combined with strong internal systems. As consumer expectations evolve, operators need to adapt. "The typical taproom is now having to become what you would classify almost as a brewpub," Doug notes. Customers want more than just one thing; they want a complete experience.

This doesn't mean you have to abandon your core concept. Instead, it’s about finding smart ways to enhance it. Doug points to the strategy at Denver Beer Company, where they partnered with food operators to provide an on-site food option without having to become restaurant experts themselves. By leaning on a partner's strengths, they could focus on their core competency—brewing great beer—while still delivering the comprehensive experience guests were looking for.

This strategic approach extends to financial management. Doug implemented a system of KPIs and a weekly dashboard for general managers at each location. This gave them real-time insight into their performance and empowered them to make quick, data-driven decisions. For example, one GM noticed their food cost was running at 30%, well above the 27% target. By digging into the data, they discovered that the original chef had been using expensive Wagyu beef for their standard burgers without pricing them accordingly. By making a simple adjustment, they brought costs back in line within weeks—a huge win that didn't require raising prices or compromising the guest experience.

Building a Culture of Ownership

Having the right data is one thing; having a team that knows how to use it is another. Doug is a firm believer in empowering general managers (GMs) to think and act like owners. This starts by bringing them into the decision-making process.

Instead of handing down a budget from on high, Doug's team started involving GMs in the financial planning for their own locations. They provided historical data and asked the GMs, "What do you think is going to happen next year?" This simple shift created a profound sense of ownership. When a GM has a hand in setting the targets, they are far more invested in hitting them. They understand the "why" behind the numbers and are better equipped to identify and solve problems on the ground.

This culture of ownership also applies to technology. When it was time for a tech stack review, Doug brought all the GMs into the room to help choose the new point-of-sale system. He admits he had to check his ego at the door; the system the team ultimately chose was not his first choice. But because the GMs were involved in the decision, they were bought in. When implementation issues inevitably arose, the team worked together to find solutions instead of blaming the "piece of junk" that corporate had forced on them. They were invested in making it work because they had helped choose it.

Your Path to Thriving

In a tight market, the pressure to cut costs can be immense. But as Doug Cunningham’s experience shows, the operators who thrive are the ones who respond with intention, not panic. They prioritize brand loyalty, empower their teams, and build smart systems that provide clarity amidst the chaos. They understand that success isn't just about managing costs; it's about creating value for their guests and building a resilient business from the inside out.

Finding that "crafted calm" allows you to focus on what you do best: delivering exceptional hospitality. It’s about turning down the noise so you can hear what really matters—the needs of your guests, the insights from your data, and the passion that got you into this business in the first place.

Hear More from Doug

Want to dive deeper into Doug's strategies for turning financial chaos into crafted calm? Listen to the full conversation on the Science of Service podcast to get more actionable insights for your hospitality business.

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