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Up to 60 percent of restaurants do not survive past the first year. Running a successful restaurant and surviving in the food and beverage industry may be challenging because of intense competition, shifting demographics, rising food costs, high turnover rates, changing labor laws or constant health hazards. However, talented managers and decision makers can use their business skills and experience to make better decisions that lead to success and profitability.
Use Financial Tools
All business decisions will require accurate financial data, food costs operational information. You may not need a comprehensive accounting performance audit, but you must continually review and revise the costs of sales, labor and major expenses. If necessary, consider employing a financial consultant to analyze the books to uncover minor issues that may lead to major future problems. Continually review every menu item to understand the meal costs compared to the supplier prices. If the cost of producing a dish is too high, adjust the ingredients or choose another supplier. A very small restaurant may get away with using a spreadsheet to track supplier prices and menu costs, but the standard solution is to use food service management software.
Quantify Customer Feedback
Restaurants often receive a steady stream of both positive and negative feedback. They are both important sources of information that should be quantified and analyzed. Consider performing a regular review of online complaints and social media comments about your restaurant. Social media platforms are the best way to elicit feedback and engage customers. Always respond to negative social media comments within 24 hours. Take advantage of this opportunity to apologize and invite them back. Categorize and rank complaints, identify reoccurring problems and take appropriate action to resolve them. Use positive feedback for advertising content and marketing purposes. Re-branding decisions for existing organizations should be intuitive to changing customer demographics. There are many inexpensive, online survey services available, such as SurveyMonkey, which allow organizations to quickly understand consumers.
How to Cook Up New Insights
New tools, such as sentiment analysis and predictive analytics, are being used by restaurants to understand trends and drive performance. For example, Big Data and advanced analytics will optimize menus by streamlining selection and profitability. Menu engineering refers to using analytics to enhance profits, operations and customer satisfaction. Understanding demographic segments will help to personalize promotions. Analytics will help with demand forecasting, staff optimization, and HR management by breaking down customer numbers by the hour and measuring individual performances. Advanced analytics may improve operations, service speed, and customer experience by predicting product usage, adjusting inventory and reducing food waste. Comprehensive evaluations of different time segments, such as lunch, dinner and post-dinner periods, will provide deeper insights and accurate metrics.
Create a Recognizable Food Identity
Food products make up a restaurant’s identity. Anyone who wants to survive in the food and beverage industry must present themselves in a definable and memorable way for customers. Failure to properly establish a food identify means you will be indistinguishable from the competition. If the local area is already inundated with similar bistros or Italian restaurants, the food must be uniquely differentiated from the competition. First, attract potential customer’s attention with original dishes that will inspire experimentation and stimulate appetites. Second, use local farm produce to broadcast the fact that you support the local economy and use the freshest ingredients. Third, if you purchase the best ingredients available, but go with a mediocre chef to save money, you will not be successful. The best investment you can make is to hire the best chef and staff.
Choose people who are passionate about the industry and customer service. They should possess a sense of urgency, a pleasant attitude and a willingness to be part of the team. After the food quality, the service experience is the next important factor that will guarantee an excellent dining experience.
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