I recently offered Free Consulting for a week to help struggling restaurant owners. I had such a great turn out and got to meet lots of new restaurant people. One thing that came out of the experience was that I was one of the few restaurant consultants that had ever offered Free Consulting. Many of the restaurant owners that I worked with said they have wanted to get some help in the past but being independent restaurant owners, extra free cash is not always available. That got me thinking! How can I continue to help those that need it and still be able to pay my own bills?
So, staying true to the idea of not being a traditional restaurant consultant, today I have decided to offer a payment plan where you Pay After™ my services have been given. Not all projects and programs qualify for this plan but most do. Under this plan, you will pay $300.00 at the beginning of the project. At the end of the first month you will pay the contracted monthly price minus the $300.00. Your next full payment will not be due until the end of the following month and so on. By allowing my clients to pay this way, it relieves the initial monetary burden usually associated with using traditional consultants.
I hope that I can help even more people with this offer and maybe even pay some of my bills too!
As always, your comments and suggestions are welcomed!
It hurts me to see a new or established restaurant close. I get even more upset when I see a good restaurant close. So I came up with a way to help by creating a program called u.R.I.S.E.™ to Save your Restaurant. u.R.I.S.E.™ stands for Ultra-focused Revenue Improvement & System Efficiencies to Save your Restaurant.
To kick off this program, I have decided to offer my services for FREE, via phone and e-mail, beginning Aug. 26th and ending Sept. 2nd. All restaurant owners, operators, or managers will have open access to me, my knowledge, and my experience. I am not saying that I can save your restaurant during this time, but I do believe I can help you see where you can improve and if you have the ability to hold on for at least three months, then I can most likely get you into a better place.
In fact, I am so sure I can help, that all new clients who sign a contract with me before Sept. 2nd will get 50% off the cost for the first three months.
This FREE consulting is a “NO STRINGS ATTACHED” offer. You do not have to buy anything from me to receive this offer, I just want to see you and your restaurant be successful. There is one catch, because I want to make sure that I can really be of help, I am going to limit the FREE consulting offer to the first 50 people that sign up. The offer for 50% off the first three months will be open to everyone as long as you enter into a contract before Sept. 2, 2009.
It is simple, click here and visit our special sign up page. Fill in your information at the bottom of that page and I will send you my personal cell phone number and e-mail where you can ask questions, bounce ideas off me, or whatever you need for FREE, between August 24th and September 2nd.
Please note, that the advice I give during this Free Offer may be general in nature due to the limited personal knowledge and understanding I will have of your restaurant. Clients that are under contract receive much more specific and detailed direction in acheiving their goals and their results are GUARANTEED, as I spend several days learning and understanding their restaurant before the contract begins
People Development, Restaurant Consulting, Restaurant Marketing, Restaurant Operations, Restaurant Profitability
This is a great story that exemplifies both a creative and innovative twist to opening a new restaurant!
The Tasting Kitchen, the restaurant formerly known as AK Ak The Tasting Kitchen is open in the space that housed the very-recently-defunct AK. Instead of closing to retool, the restaurant is embracing the transition. The restaurateurs are calling it "a transparent culinary case study" (what others might call quick-change artistry). Over the next eight weeks, as new chef Casey Lane (a veteran of Clarklewis restaurant in Portland, Ore.) trains staff and tweaks the menu and the restaurant undergoes design "modifications," the kitchen and dining room will remain open. An interim menu of eight to 10 choices will change daily. The restaurant will emerge with a new menu, new look and new name in the fall. 1633 Abbott Kinney Blvd., Venice, (310) 392-6644, www.thetastingkitchen.com — Betty Hallock Photo of AK by Ken Hively / Los Angeles Times
How can you bring a fresh approach to things you do everyday?
By the way, Kudos to The Tasting Kitchen!
I know we are all trying to figure out ways to increase profits and cut costs. Some restaurants have come up with very creative and ingenious ways to do these two things. But there are some restaurants out there that are choosing to do this by either passing the cost on to the guest or cutting labor in ways that affect service. Even worse, some restaurants are sacrificing quality for lower costs. I am not a fan of the band-aid approach and that is what this is. For those that do not know what I mean by the band-aid approach, it means you are using short term solutions and hoping that it will solve your long term issues. In other words, it is like getting a limb cut off and trying to use duct tape to put it back on. Sure that might seem like a great idea at the time, but I am pretty sure that solution is not going to work. The band-aid approach rarely ever works and only causes more issues. The short term may help your bottom line, but I assure you that the long term effects are hurting your brand.
Here are some of the ‘not so good” ways restaurant operators are trying to increase profits and cut costs with better solutions:
Charging extra for take-out or catering, even if it is only 25 cents.
I know that the Styrofoam box costs money. But have you ever thought about the money you are saving because the guest is not eating in your restaurant? There are no dishes to be washed, no tables to be cleaned, and there is less of a chance that the guest will get bad service (unless of course you mess up the order). This is and will never be a practice that I condone.
Cutting labor at the wrong times
This is understandably one of the first areas operators look at to cut when sales are not strong. After all, next to food cost it is the most expensive area. Instead of blindly cutting labor, why not look at your Hourly Sales report and compare it to your schedule. Are there times when you have a lot of staff and not a lot of sales? That is where you want to cut labor, not at a peak time. The peak times are when you want to make sure you are exceeding the guest’s expectations. What time do you schedule your cooks in the morning? My guess is sometime between 8am and 9am, so they can get all the prep done before you open. Next question, how many times during a shift do you see cooks just standing around because it is not busy yet? What if they were doing some of that prep that the AM crew does? Do you think you could bring the AM crew in a little later? Of course you could. I am not going to lie to you; this is a system that takes some getting used to. It requires a true buy in from everyone, re-arranging of some responsibilities, and a heightened awareness by the management team. When done correctly, it can drop your labor by 2 to 3 percent, and sometimes more. I know, I have seen it work, and have done it myself. Want to know more about how this system works? Send me an e-mail and we can discuss.
Focusing on the cost of food instead of the quality
There are a huge amount of examples I could use for this topic, but to keep this from being a book I am only going to talk about a few. Food cost is obviously one of the biggest costs to any operator and it always amazes me that for some operators so little thought goes into the guest’s perception of quality. I am sure that you are scratching your head right now so let me explain. Most everyone would use the best, top of the line ingredients if price were not a factor. And most people will agree that to yield high quality food, you must use high quality ingredients. This is partially right and partially wrong. There is a definite difference between stew meat and top sirloin, but is there that much of a difference between a Name Brand bulk sugar versus an off brand bulk sugar? The only real difference between those two sugars is the price. This is where operators should be looking to cut food costs at and not on the main ingredients of their dishes. If you go from a top sirloin to stew meat, the guest is going to notice. Not so much on a switch of sugar. I am sure that the stew meat is several dollars cheaper a pound but is that savings worth it?
What about the products in the dining room? Do they say quality? For example, do you use the generic brand of Sweet n’ Low or the actual brand? Guests are aware of things like this and it has a psychological effect on how they perceive the overall value and quality of your restaurant. Some other examples of this would be generic ketchup or generic steak sauce. These products are cheaper than their Name Brand counterparts, but the intrinsic value to the guest far outweighs the small price difference.
Taking approaches like those mentioned above will help with the short term goal of getting more to the bottom line and the long term goal of being able to sustain it.
To sum everything up:
Charging extra for take-out or catering, even if it is only 25 cents.
Just don’t do it
Cutting labor at the wrong times
Be creative and think outside the box WITHOUT sacrificing service to the guest
Focusing on the cost of food instead of the quality
Name Brand products effect the overall perception of the guest and should always be used in areas with direct contact with the guest. In areas with less direct contact from the guest, off brands may be a more suitable and cost effective solution. The exception to this rule is the main ingredients on your dishes.
Sorry for the long post, there was just so much to talk about and yet there are still many more examples to talk about.
What are your ideas and thoughts on effective long term approaches to controlling costs and increasing profits?
I would love to keep this discussion going and look forward to your thoughts!
People are still eating out, albeit maybe not as much as before, but they are still doing it. Make sure that you are not giving them a reason to NOT visit you again. Guests are basing their decisions on where to eat out at on three general areas.
Value – are they getting more than they expect for the money they are spending. Some guests are looking for small prices and big portions; others are looking for adequate portions but great service.
Service – Some people are ok with paying a little more for something if the what they are getting is of superior quality and comes with great service. Your service level cannot be just adequate; it needs to exceed the guest’s every expectation. It needs to be REMARKABLE! It needs to be so good that they tell other people about their experience in the restaurant.
Convenience – Is it easy for your guests to get what they want, when they want it? The lives of people are pretty stressful right now; you need to make it easy for them to do business with you. People are looking for fast, efficient, and easy to use.
There is a lot of overlap in these three areas and it is like that for a reason. If you can hit on all three areas every time a guest visits you, then they will visit with you again. More importantly, they will tell others about their experience with you.
What are you doing specifically that increase the Value, Service, and Convenience of your restaurant?
This is a GREAT article about a restaurant in Houston called The Coffee Groundz that is capitalizing on the power of Social Media. Are you using Social Media? If so, how?
Twitter To Go: How one local coffee shop used Twitter to double their clientele. What’s YOUR story?
Posted using ShareThis
I recently read an article by Jim Sullivan of Sullivision.com, where he talked about what all restaurant owners are talking about, how to control costs. In his article he gives an overview of a visit to one of his restaurants and all that he saw. Things like people burning 24 chicken breasts, throwing away silverware, and breaking dishes. Most importantly, he talks about the attitude of those people toward making those mistakes.
Most people, including your staff, think restaurants are gold mines making so much money that the owner must be swimming in mounds of cash. Don’t we all wish that was true! The important question is, does your staff know it is not true?
The question posed by Jim to his staff was, What do you think is the average profit on the dollar? The responses Jim received were crazy. Some said fifty cents, others thirty-five cents, one person even told him it was seventy-five cents. What would your staff say if you asked them this same question?
In case you don’t know, the reality is most restaurants make on average 5% for full service restaurants to about 15% for QSR, with Fast Casual making around 10%. Remember these are just AVERAGES. Some restaurants make much more than this, while others make much less.
I am sure that most restaurants and restaurant companies have initiated some hardcore cost cutting measures. But here is the million dollar question, is it working? If it is, kudos to you. If it is not, do you know why?
I do.
It is because your staff doesn’t know the truth. They do not know that only a nickel of every dollar is all that an average restaurant makes in profit. And that when things like burning food, throwing away silverware, or breaking dishes happen it lowers that nickel to pennies or even less.
As I mentioned in my last post, the people that work for you control more of your restaurant than you do. I am sure we have all educated our managers on what to do, but have they (or you) educated your staff?
Here is what Jim Sullivan did to educate his staff. This is a direct exert from his newsletter, which can be found by clicking here.
The hourly team must first understand how cost-control and menu merchandising are flip sides of the same coin (after all, your best strategy to reduce costs is to raise sales). I displayed a simple bar graph reflecting the National Restaurant Association’s research that the average profit on the dollar in the foodservice industry is under a nickel. I marked five glasses with labels that said food & beverage, labor, marketing, rent, equipment & supplies. I took a hundred pennies—representing one dollar that a guest gave us—and put the appropriate pennies in each respective glass that reflected the appropriate expense. When I was done, I had four pennies left, which I asked each team member to put in the palm of their hand and pass on. Then I said: “The average profit is about five cents on the dollar and we sell a burger and fries for $5. After you subtract the cost of sourcing, storing, prepping, garnishing and serving that food on that plate, on that table, with that napkin and ketchup, etc–you don’t “make” $5, you make 25 cents (a nickel on each dollar times five dollars).
Now, what if a server or guest drops and breaks a glass that costs us $1 to buy? Or what if a team member eats $1 worth of French Fries they don’t pay for? Or if we over-portion $1 worth of dressing or napkins in our to-go containers? You now have to sell FOUR burgers at $5 each to make enough profit to pay for either the broken glass, gobbled fries, or extra dressing. Now think even bigger: if somebody else drops and breaks a plate that costs $10 each, you now have to sell FORTY burgers to pay for one piece of china. Sell eighty $5 burgers during a shift and also break one $10 plate and five $1 glasses and eat $5 dollars of fries you don’t pay for and guess what else you’ve broken? Yep: Even.”
It struck home for the team, and if you find that lesson helpful to share with your staff, use it. And here are five more cost-awareness basics to make certain that you don’t run out of month at the end of your money:
The top line is not the goal line. Gross margin is the most important number on your Profit and Loss statement. You don’t take “top line sales” to the bank.
Make the invisible visible. Post and highlight your restaurant’s “hidden” monthly expenses for the staff to see, like garbage removal, utility bills, advertising.
Use cleanliness and safety as a barometer. If the basic disciplines of cleanliness and safety
are not in place in your operation, chances are the other basics, like cost-control, are also being overlooked.Give unbelievers a job at the competition. One of the most important things you can do to
reinforce a cost-conscious culture is to fire those whose actions fail to support your efforts.Set appropriate expectations. If you were to elevate the importance of cost-control to the level of importance of food safety in your restaurant, how much more effective would your efforts be?
This exert was reprinted by permission from Jim Sullivan. Please visit www.sullivision.com for his online catalog of training tools to help reduce costs and increase sales.
With all the talk about the economy and how to battle it by lowering costs and the next big marketing campaign, I think we have been losing sight at what we all can do that will put long term sales on the top line and increased profits on the bottom line. And best of all it cost nothing, but a little time and awareness on your part.
The smart operators are focused on the people. I am not talking about the people that eat in your restaurant, although they are important too. I am talking about the people who take care of those diners, your staff. What you do, or do not do for your staff makes a bigger impact to your bottom line than any cost saving measure or even the best marketing program. Why is this? It is simple, if the people that are truly responsible for taking care of your guests are not taken care of themselves, it will not matter how many guests you bring in with that cutting edge, creative marketing idea. The face of your restaurant, your reputation, everything that you stand for is in the hands of the people that have the most direct and constant contact with your guests. I am not just talking about your servers, hosts, and cashiers but your cooks, bussers, and dishwashers as well. Everyone that works in your restaurant has some kind of contact point with your guest, whether it is directly or indirectly. How you treat them, or mistreat them, will ALWAYS be passed on to the guest. Your staff needs to feel important if you want them to treat the guest that way. And in times like these, that is all that matters.
What are you doing to make your staff feel important?
Have you instilled such a rigid procedure for interacting with guests that your staff doesn’t think for themselves?
I went to a new hair cut place that opened today by my home. There was a small wait since they just opened and when the person asked for my name, she asked, “Have you ever been here before?” How could have I been here before if today was their opening day? Why do we push our staff to follow such a rigid outline when interacting with our guests? Why not give them the parameters you want accomplished and allow your staff to think and be themselves? I can already hear the critics, but for hospitality to be real it needs to be genuine and sincere. In other words, your staff actually has to care about what they are doing. Do you think someone who is required to follow a rigid set of steps each and every time they talk to a guest will be engaged in their job and actually care?
It is time to Think Different!
Here is a great story about true, sincere service and how it can spread.
Other Places You Can Find Me