If restaurants had water coolers to hang around and talk all day about the gossip of the moment, it would be about food cost. This topic is the thorn in the side of many a restaurant owner, operator and chef, each trying to walk that fine line between creativity and profitability.
In the classic 1972 book, "Cooking for Profit" by Robert Petrie, the author outlined the original "40 Thieves of Food Costs." This concept of food cost thieves has been circulating around ever since. There are many variables as to why your food cost may have gone astray. The number one concern most restaurants struggle with today is controlling those costs. Let’s take a look at the four big ones and help you dial in the food cost monster.
Not costing out your menu
You would think this is a no-brainer but you would be totally shocked and appalled at how many operators do not know what it costs to put out each plate in the restaurant. Do you think for one second that Apple does not know how much it...
Guest Blog Post by Mark Chase, Restaurant Real Estate Expert
“In all my years as a restaurant coach, consultant and operator I can tell you first hand that restaurant location and lease negotiation is more important than most people think. Getting an expert to help answer questions is important. Mark Chase is such an expert.” -Donald Burns, The Restaurant Coach™
1. Net Charges and Common Area Maintenance (NNN/ CAM)
Commercial properties including, shopping centers and free standing restaurants typically require the Tenant to pay a portion or all of the properties expenses as "Additional Rent". The charges may include maintenance and repairs of the common walkways and parking lots, security, property management and utilities for common areas. The Tenant will also pay their share of property taxes and property insurance. NNN charges for each year are estimated and paid monthly with your rent payment. These charges are usually defined on a monthly or yearly price per...
When you opened your restaurant you had big dreams and a plan. Then there was a change in the market and perhaps your plan went astray. It happens. Actually, it happens all the time. Many restaurant owners get stuck during those challenges. They lose their faith and become prey to self-doubt.
Then comes the friendly advice from a “friend” (even though they have never owned a business themselves). Out of desperation, you listen. You add this and that, hoping to revive your brand. It might get a few new customers in the door, however the more you stray away from your original brand identity, the more customers you lose. It becomes a very turbulent ride. Welcome to the slow death of your restaurant brand.
So, what’s an owner to do? Here are 5 powerful tips to get you back on track.
1. Be Honest
First you need to be honest with yourself. You also need to take personal accountability for where you brand is now. It’s easy to point the finger and place blame.
How many restaurants have you been to where the server comes over and automatically starts into the canned sales script they are told to recite with the energy of a sloth? Enough already. Upselling is dead. That's right, today's customer is far too overstimulated with about a 1,000 other sales pitches every day from their mobile phones, email, Facebook, Twitter, Google+… they are everywhere!
So, how does a restaurant increase sales if upselling is a dead end? Simple. We need to change our mindset and focus to build better rapport. Here are 4 ways to get you down a better path to profits.
4 Alternative Ways to Increase Profits
1. Be Guest-Centric
Very few things are as frustrating as someone trying to get you to buy something you have no interest in. The canned “welcome” scripts at most restaurants are truly stale and delivered in a way that would not inspire most customers to buy the item being pitched. The reason they have lost their effectiveness is...
There is a strange duality of restaurants. The restaurant industry can be extremely fulfilling and rewarding. There are times when you will be over-the-top and never question why you choose this path.
On the other hand, the restaurant industry can also be relentless and merciless. There are times when you will feel like the weight of it all is crushing down upon you and you might even want to quit. Don’t. When the weight of it seems heavy, examine these five keys areas that could be causing this pressure and here’s how to break free from it.
1. Your Social Media Marketing
Social media is here to stay. Embrace it and use it to keep your brand top-of-mind. The problem with most restaurants’ social media tactics is that they use it to sell. They post the same boring stuff, usually their specials. The problem is that every other restaurant in your market is posting the same thing: their specials. If you don't dare to stand out in your market, you will blend in with the...
I've received quite a few emails from managers asking about the Pareto Principle, and the ways that it can be applied to their restaurant. I’ve touched on it before with regards to where profits come from on your menu, but I’ll give a quick refresher. Here we go….
THE PARETO PRINCIPLE
The Pareto principle is named after an Italian economist named Vilfredo Pareto. Way back in 1906, he discovered that 80% of Italy’s land was only owned by 20% of the population. Soon after, he observed that 20% of the pea pods in his garden were producing 80% of his peas. After conducting surveys of several other countries, he found that his 80/20 observation actually held up.
This concept has since gone on to show itself applicable to all manner of situations (and was named after Pareto after the fact).
Wikipedia defines it like this: for many events, roughly 80% of the effects come from 20% of the causes.
Which works well enough for me. Another name for this idea is...
Great restaurants are rare. That’s not meant to be mean, just the truth. Many live alongside a road named Average. The thing to remember is the road of Average leads to a town called Mediocrity. Nothing ever happens there, because the residents are too complacent to change.
To get out of where you are, you need to shake things up! Whether your restaurant is struggling and you want to get out of survival mode into thriving, or your restaurant is doing well and you fell like it would probably be better, it’s the classic mode for motivation: you need to be either in desperation or inspiration.
So, what separates the great from the average? Here are three key items to put on the front burner and think about:
Restaurants are 80 percent psychological and 20 percent systems (and strategy). That being said, you would be shocked to know that most restaurants don't have a really good grasp on systems and how to use them — and here is the key — effectively....
These are words thrown around our industry as if they are one and the same. Let's be clear that they are not. Actually not even close. One works on push and the other pull.
Don't misunderstand, there are times you need to push people to get things done, and for that being in the role of manager would be appropriate. However, if you want to break free from the cult of average and really take your restaurant to the highest level, then the real leader must stand up. Leaders pull people forward by being the example. By being a positive example. You can't sit on the sidelines and bark orders; leadership requires being out front. At its basic level, leaders lead the vision, while managers manage the shift.
How do you step up to be the leader? Here are five steps you can take to get you going in the right direction.
1. Your Emotions Induce Emotions in Others.
You must understand that your restaurant is a reflection of you as the leader. You know...
Whether you know it or not, your restaurant has a culture. Culture is one of those business elements that are created either by design or default. Culture can be like a subtle song playing in the background or it can be a booming cinematic soundtrack that blasts throughout your brand. It’s there. Have you noticed it?
Culture and your brand are in a symbiotic relationship, they cooperate and succeed (or fail) due to each other. Your culture is your brand and your brand is your culture. When you started your restaurant, you brought an idea to life. Along with that idea came the dynamic every business and society need to survive…culture.
Think of it like that song mentioned before. If your brand message is the lyrics, then your culture is the beat. You can have incredible soulful words to a song, however, if the music or beat doesn’t provide the right background your tune will not find an audience. Can you see how they need each other to be a hit? Can you see...
We have all had times when we question ourselves. Especially if you work in the restaurant industry. Some call it burnout. Some call it a sign to get out. Actually, it’s more like you have been disconnected from the driving force that sustains you. That force is still there, it’s just taking a nap.
This post is not to talk you out of being in the restaurant business. What we’re going to talk about is why you love this business so much and how to awaken that fire deep down inside. Quitting is easy. It’s easy to say, “I’m just not right for the industry.” That’s the cowards way out. Chances are if you are reading this, you truly love the chaos and intensity of this roller coaster business and now you just have to realize again why.
You Are Fueled By People
We are drawn to the restaurant industry because we get energy around other people. You probably have felt this magnetic quality that you can’t quite put your finger on....
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