Whether your business is up or down from past years, everyone always wants to find ways to increase restaurant profit. Great way to lower operating cost is to increase sales…wait what? I know it sounds redundant, but according to Aaron Allen & Associates a 2% increase in sales is a 10% decrease in food costs. What can you do to improve your product sales?
Marketing, marketing, and marketing! You have to spend money to make money right! Only if you do it accurately and with a well thought out plan. How many different ways can you advertise? I currently can think of radio, TV, yellow pages, billboards, benches, fliers, and social media, but how many of these are effective? Social media has developed a new measureable and flexible technique for advertising of the day.
Do not dwell with past success methods. We are meant to learn from history, but we do not always want to repeat history. Just because something worked in the past does not mean that you keep beating the same dead horse. Do you want to be a sheep following the flock or the shepherd that is leading the flock? Try to find a new success method of increasing customer flow. You always want to try to find that unique niche that allows you to go from the “average Joe” restaurant that no one can remember to the restaurant that stands out and cannot be forgotten. When trying to find that new success method do not be afraid to leave your comfort zone.
“Smooth is fast and fast is slow” is a saying that can apply to the movement of products. At some point every restaurant has that one product that they bought too much of or is not moving off the shelf. So in my experience the most common response is to discount this item. However, this can actually be a downfall. The following story from an Aaron Allen and Associates article proves that quite clearly.
“ When I took over operations for a $4 million Caribbean-themed restaurant, I focused in on the bar. We generated nearly 30% of revenues from the bar and were running bar costs in the high 20’s (cost as a percentage of sales). When I studied our purchasing and inventory, I saw that we had stacked up cases and cases of a product that wasn’t moving. Canadian Club had been running a promotion for their new Canadian Club Citrus and so they were giving bottles of it away with purchases of other faster-moving product. Our competitors up and down the beach had amassed mountains of this product too. They started trying to unload it with $2 shots. Then $1. Then 50 cents. No one bought it. People had never heard of Canadian Club Citrus and they figured that if it was selling for 50 cents it couldn’t be good. So, I took a different approach. I invented a drink called the “Cayman Curse” and said we couldn’t tell you what goes in it or you will get the curse of the Cayman’s. We sold them for $8 and built appeal by putting dry ice in (which makes the drink appear to “smoke”) and supporting it with a suggestive selling program. Results? This “mystery drink” made from a previously un-moveable liquor became our top seller. We started trading a bottle of Crown Royal with other restaurants for a case at a time of the product they weren’t moving. Our cost in mixing the drink was so low that – coupled with the huge volume – it brought our overall bar costs down to 16% of revenue.”
“Don’t expect what you don’t inspect” Another very important factor is to consider where your products are going. A possible new idea is to remove all of the trash cans from the kitchen area. Instead replace it with a clear bucket with that chief’s name on it, therefore at the end of their shift, or when the bucket fills, someone can review to see how much food was wasted. If it exceeds an acceptable amount then maybe someone can help that chief with his or her technique to waste less. This is also a good idea for dishwashers to help see if silverware, plates, or etc. is accidentally being thrown away.
Time management with all scheduling decisions is a huge factor. Make sure to plan employee shifts around customer flow trends. There is no use is having several people standing around doing nothing. On the flip side try to avoid having deliveries during rush hour times. The reason behind this is because everyone is busy and will not have adequate time to verify the correct order or amounts are there. Also, do not be afraid to have a scale to weigh the products that you ordered. Everyone is human and mistakes can be made.
If your business has a bar there are a couple different areas that you can proactively monitor. For instance have your draft beer lines cleaned regularly. This will help to prevent beer foaming and being dumped down the drain. Another idea to work into is surprise random cashier audits.
Employee moral is an area that should not be overlooked with your business. If you are complaining that the business is not doing well set an example to your employees. You might ask what I mean by this. Well, for instance do not complain about lack of business on Monday and drive your brand new Ferrari in on Wednesday that you bought on Tuesday. Show that you are attempting to put the business first.
Last but far from least is do not overlook your equipment and utilities. Utilities are usually one of the last areas that anyone seems to want to look at for savings. Spending money on the front end might actually save you money in the long run. Ideas to consider would be turn off unused equipment, I.E. unused burners, fryers, ovens, or hood vents, during nonpeak times. Possibly invest in automated equipment for the customer to use, I.E. automated towel dispenser, water faucets, or light switches. In my opinion though one of the most overlooked areas with utilities and equipment is that it is functioning properly. By this I mean insure that all gas heating and cooling equipment has proper gaskets to seal off any leaks.