By: Nick Gardner
They built new muscles; chefs now reviewed weekly budgets vs spending, GMs managed labor as a percentage of sales, and management pulled it all together in a data dashboard to support decision making and accountability. Hard times cause a shift in mindset from driving revenue to managing spending.
Just like that period, this pandemic has created motivation for restaurants to focus on cost controls at least as much as revenue; the ones who make it will have done this well. And that means daily monitoring of inputs and outputs: revenues are dependent on responding effectively to customer demands while keeping costs under tight control so they don’t turn into losses.
Additionally, all the usual industry challenges have been exacerbated by some unique aspects of the pandemic. It shuttered entire cities for months on end while upending production and distribution chains. With indoor dining banned, restaurants battled to survive on take-out and deliveries, despite cripplingly high fees.
Although feasible during the summer months, eating outdoors offers few attractions from October through March in a large swath of the country, with a long, cold winter looming ahead. As lockdowns lift in many cities and patrons start eating out again, labor shortages are hampering restaurant operations across the board, as staff fails to return to work, while inflation continues to rise steadily.
Restaurant managers and owners are looking for innovative ways of dealing with this crisis. Front-of-the-house options include streamlined menus and shorter opening hours; on the operating side, higher pay and better working conditions are attempting to attract servers and kitchen staff, although not always successful.
Already operating on razor-thin margins that hover around 5% (dropping to under 2% for full-service operations) restaurants need daily vigilance in order to stay healthy. This is where Hone’s restaurant bookkeeping service and reporting platform can help save the day, by empowering you to monitor and manage costs without cutting corners.
Boosting the Bottom Line
There are two ways of fattening up the bottom line: pruning outlays (without compromising on quality, of course), and increasing total revenues. With lockdowns shackling possibilities for attracting more customers, turning more tables, or simply raising prices, the smart option is to focus on spending less. Here are a few hints on how to do so, without compromising quality.
At roughly 30% each, food & bev combined and then labor, absorb a whopping 60% of cash-drawer inflows, with marketing, premises, and utilities accounting for a healthy slice of what’s left. That’s why reducing costs is the first step in keeping a restaurant healthy. The kitchen is a great place to start:
Creating New Revenue Streams
With traditional slack-time promos – like happy hour and early-bird specials – currently suspended by pandemic constraints, creative restaurateurs are seeking innovative ways of reaching out to their communities. Everyone loves a freebie (think wi-fi) – and with a little forethought, returning restaurant customers can feel pampered without cutting into profit margins. Here are some suggestions for filling those tables during quieter times:
Investing in Technology
One of the best ways of ensuring post-pandemic profits for a restaurant is to invest in smart new technology designed specifically for this industry. A few key pieces of technology, tied in with your bookkeeping and reporting can provide insights into every detail of its operations:
3rd party sales aggregators:
Staff Scheduling & Payroll:
Metrics That Matter
These technology systems can seem daunting to acquire and deploy but a restaurant-focused bookkeeper can help you pick the right solutions and integrate them into your operational reports. This enables you to use hard data, to know if you are doing well, and where tighter controls would boost incomes. Although this modern management approach might seem complicated, it’s actually quite simple, thanks to cutting-edge technology.
A specialized restaurant bookkeeping service and reporting platform such as Hone knows the restaurant technology space and is equipped to turn the data soup into actionable reports. Whether you are a regional franchisee of a major chain, a fine-dining restaurant group, or a family-run eatery the core systems and processes are the same. By lifting the paperwork burden, Hone helps restaurateurs focus on their main job: keeping the overhead down and while their customers savor delicious meals.
By: Nick Gardner
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