Twenty simple solutions to build your restaurant’s bottom line in the New Year

By Neil Lester

After the crazy pace of December with holiday parties and seasonal celebrations, the short days and long nights of January and February can be downright depressing! How you manage your cash and protect your P&L over the next few months can have a significant impact on whether or not you continue to build new and repeat guest visits.

Here are some tips for the months ahead that can help create flexibility and efficiency in your operation.

Better align your costs with sales:

Inventory optimization. With lower sales, there should be lower variable costs. Are you still carrying inventory levels that support higher sales and are increasing waste?

Track your sales by the hour to fine tune your labour schedule. The variable portion of labour should be reviewed to better reflect guest sales patterns. There is also a fixed element to labour cost that should not be cut, or service, quality and cleanliness standards will suffer and directly impact sales.

Review your menu mix. See what’s selling and what’s not at certain times of the day. Adjust your prep and production levels to reduce on-line waste.

Challenge the assumption of fixed costs:

Look into ways your back of house staff can better utilize down times with food prep, soups from scratch and items that reduce food costs and better utilize fixed labour.

Take advantage of slower sales to catch up on equipment maintenance and cleaning and sanitizing areas that often get missed during the daily maintenance schedule.

Reduce your waste pick-ups to align with sales. Are waste and recycling bins being picked up half full?

Work with your suppliers on finding alternatives to higher cost items. Look for menu items that better reflect seasonality and reduce higher cost items that are out of season or shipped long distances.

Look for opportunities to build sales:

Invest time in basic guest research. Find out where guests are coming from, going to, or what event triggered their visit. This can be very valuable in developing targeted marketing tactics.

Guests appreciate value when money is tight. Remember though, value is not necessarily cheap.

Look for opportunities to add value without price. Develop contra deals with other local businesses.

Bundle meals for a fixed price. This can help build check averages and offer better guest value. Remember at this time of year, it’s less about margin and more about penny profit.

Do the little extras for service that don’t cost anything but create an enhanced dining experience.

It’s always good business practice to give back to your community through cause marketing. What is your charity of choice? How do you support it? Can you do event evenings at the restaurant, and donate food or services that have more value than just cost?

During the winter months we all tend to stay in more. Look for opportunities for take-out sales, catering and curbside sales to build sales in the shoulder periods. Don’t forget how important packaging is to take-out. Nothing can degrade your quality quicker than cheap packaging and a cold winter night. Even though check averages are lower for off premise sales, they can still be profitable and help create kitchen efficiencies.

If you are open, be sure you look open. Are the lights on? With so many hours of darkness it is critical to check your signage and lights to be sure all are working properly and on at dusk off at close.

Many times, efforts to trim costs when sales are soft can backfire resulting in even more lost sales. If it impacts the guest, think twice!

Reducing your hours can be risky. Even if only one guest is turned away to a competitor, you run the risk they may never return. Think twice about constantly flipping open and close times.

Guest comfort is paramount, so don’t turn down thermostats or cut corners that may lead to guest dissatisfaction and discomfort.
Watch slips and falls. Keep the walkways and entrances clear!

Invest in staff training. Well trained staff will build profitable sales when you need it the most.

We know that corners can get cut when things are hectic, sometimes missing the important and critical cues to creating a great guest visit. Having the time to really showcase how great your restaurant can be with every guest visit is an opportunity that should not be missed.

Creating efficient and flexible solutions to adapt to the slower sales of January and February can help build sales and the bottom line.


About the author:
Neil Lester is founder of FirstOak Hospitality Consulting Inc. Lester is a seasoned restaurant executive with over 30 years experience in the Canadian hospitality industry. As Principal of FirstOak Hospitality Consulting Inc. he is focused on adding value for his clients in the areas of franchising, business planning and cost efficiency. Contact at neil.lester@firstoakconsulting.com or visit www.firstoakconsulting.com/index.html.

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