The restaurant industry continues to be a difficult place for entrepreneurs to explore business opportunities, but by understanding common challenges, future owners may be able to develop unique strategies to increase their chances of success.
Effective inventory management
Restaurant owners should keep a keen focus on managing expenses. One crucial component of keeping costs low is effectively managing inventory. Failing to do so may result in unforeseen expenditures and supply overages or shortages throughout peak business periods.
Those responsible for managing the inventory and menu pricing should fine tune the ordering process to limit waste and to continuously monitor fluctuating costs which impact gross profit on menu items.
Pro-tip: Ingredient costs fluctuate frequently, so check prices regularly.
Keeping up with market trends
Before a potential business owner decides to open a restaurant, he or she must become familiar with the market. In addition, conducting periodic research into current and projected future trends is critical to staying a step ahead of competitors. A comprehensive analysis of existing trends and the viability of similar restaurant ventures in the community is a good way to forecast potential revenue in each quarter.
Hiring staff
Successful restaurant owners know the importance of having the right employees; an organization must be sure to have a good team in place to make it in the hospitality industry. Placing greater emphasis on hiring and training staff can help meet this requisite and also reduce costs over time.
This starts with sourcing high-quality candidates by not just advertising open jobs but also having detailed job descriptions that include specific responsibilities and requirements. And, it ends by thoroughly reviewing each and every applicant so that when it comes time to hire, it can be done with confidence.
Pro-tip: Take advantage of the interview; by asking candidates questions that allow for assessment of their knowledge and skills, it can provide powerful insight into whether or not he or she will make a good addition to the team.
Minimizing turnover
It is important to keep in mind that once the proper employees are both hired and trained, keeping turnover to a minimum should be a top priority. Why? Because turnover is expensive; the cost to replace an employee is about 16-20% of their annual salary.
One key concern is maintaining a positive corporate culture that will keep employees engaged and wanting to come back. For workers to remain enthusiastic and motivated, they should be given a clear set of processes, manuals and procedures as well as specific goals and rewards for meeting those goals.
Staying on top of technology trends
Technology is constantly evolving in the restaurant industry and smart restaurant owners will jump on the bandwagon. From hiring to inventory to customer service, technology can help to maximize business outcomes.
Pro-tip: Utilize a software program that is compatible with your existing POS system to track customer trends and demographics. These can provide great insight about customer likes and dislikes!
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