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How to Turn the Tide in Your Restaurant

 

I often hear from restaurant owners who say they have tried everything to fix their costs, sales, and operations, and nothing has worked. Their ideas as a whole are great or well planned, but the execution is lacking.

If you are looking to grow sales in your restaurant, you need to ensure that you have your costs under control, your operations are pristine, and that you have the ability to invest money in the proper people and overall structure to grow sales.

For this piece we will discuss a quick service food franchise that also delivers, and how we were able to turn them around.

Take Control of Your Restaurant’s Menu

What are you known for, and what brings your customers in? You need to start with the basics of what you are known for and ensure you are giving that to your customers from the moment you open until the moment you close.

If you are known for having fresh produce, are you serving the same product seven days a week? We started teaching the staff what the expectations were. Through cost cutting, poor training, and overall poor leadership we found out that the staples of their menu were poor at best, service was slow, and there was nothing but excuses.

Start with accountability and the basics to ensure you are serving your customers the product they expect. Often times, people are looking at so many external factors they fail to look at their own operations to ensure they are giving their customers what they deserve.

Related: 5 Keys for Designing the Perfect Restaurant

Streamline and Improve Operations

From poor execution, lack of leadership, and lack of training we found that even managers on shifts and other leaders lacked the basic skills needed to work as an employee. They couldn’t even handle the basics, but they were expected to run shifts, grow sales, and coach others. When you are asking someone to make you a stir-fry recipe and they don’t even have an understanding of the menu or operations that go into making it properly, how can they lead and teach others?

We started off with an intense push to increase training, hold people accountable for what they need to know on the menu, and weren’t afraid to terminate people working against the direction we were pushing them in.

Leaders who don’t own or at least “share” blame are usually the biggest hurdle in a turnaround. The hardest part is when that person is an owner. Removing that person from leadership and the company shows the team that you are no longer accepting excuses and poor performance.

Related: Two Common Staffing Challenges, And How to Solve Them

Cut the Right Costs

Focusing on cost-cutting measures that make sense and allow you to spend money where it’s needed. If you can’t cover the operational costs necessary to grow, it might be time to work with a partner or a lender to obtain the funds needed to grow properly.

There are many costs that don’t change regardless of your sales — rent, taxes, even utilities change very little — but the costs you can control such as food cost as well as labor is where you can maximize your ability to grow.

If you don’t know your usage per $1,000 dollars of all your items already, start with the most expensive items to help control your costs. For example, if you are using 10lbs of cheese per $1,000 in sales and you are averaging $20,000 in sales a week you only need 220lbs of cheese at most. This is your usage plus a 20% buffer to ensure proper growth. This is a common issue we see in restaurants all over the country: The lack of understanding in what they use.

Me: Why do you have 15 gallons of Sprite Bag-in-Box syrup?

Manager: We don’t want to risk running out of it and we go through a lot of it around here.

Me: Your usage shows you only go through two gallons a week, and you have 15 gallons. Did you know it has an expiration date?

Manager: No. Are you sure we only go through two gallons?

Me: You haven’t used more than two gallons per week in the last two months.

We see these issues a lot that lead to high waste, increased order costs, and minimized profits.

In the terms of this example, in less than 90 days spent working on the basics, removing people working against proper coaching and growth, adding new hires and training them properly, the franchise saw increased revenue, decreased costs and started a trend of increased sales over the previous year. It should be noted the franchise had been consistently losing sales for four consecutive years; it has now beaten the previous year’s sales for 10 straight weeks in both locations.

The hardest part of turning a restaurant around is admitting you may not have put in the work needed to be successful. Looking for the edge needed to turn your restaurant around? Reach out to Blue Rock Consultants and our partners at Credibly to get the capital injection needed with solutions to guarantee your growth.