It has been said, argued about, and proven time and again: a great restaurant is not about just great food. Of course, with the scary statistic that 60% of all restaurant businesses fail in the first year of opening, restaurants need everything to go their way to stay in business and stay profitable.
If you have crossed that mark and are still going strong, kudos to you.
By now, we know that, more than just great food, delivering an unforgettable dining experience should be a restaurant’s top priority. However, somewhere along the way, every great restaurant will be faced with obstacles.
What is more important is to acknowledge the problems and find a timely solution to make sure it does not hurt your bottom line and start eating into your profits. While these problems may show up in different ways, its results are almost always the same: they hurt your customer experience and decrease your profits.
Here’s a list of 6 of the most common and sneaky problems that restaurants begin to face after operating for a period of time and how you could rectify them as soon as they are identified.
- Absence of a restaurant USP
Every restaurant owner’s mission is to provide great food for their customers. That is the natural goal and ambition of every restaurant. However, serving just great food would not qualify as a unique selling point that would help set your restaurant apart from the competition.
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Anytime someone mentions your restaurant’s name, a unique experience should pop up in the minds of your customers. Something as simple as, for example, “the restaurant with the best apple pie in town” or “the restaurant where Monday lunch is 15% off”. Every great restaurant offers something to their customers that other restaurants simply cannot, or cannot provide on the same scale as you do.
Ask yourself, “how am I unique?”. If you can answer this question, then great! Your marketing efforts should revolve around advertising your USP. If you cannot, however, then it might be time to revamp your restaurant to stand out from the crowd.
Do you offer the best toppings in your burgers at an affordable price? Are you the only Vietnamese-American fusion cuisine restaurant in your locality? Do you stay open throughout the night?
You have a very high chance of starting and running a successful business if you can focus on a strong concept, the right kind of restaurant, and a killer USP. Look deep enough and you will find the answers that you are seeking right within your own kitchen.
- Ignoring menu engineering
Menu engineering can maximize profits by pushing your most lucrative menu items and encouraging people to purchase them. It could be as simple as highlighting some items on the menu, removing some high-cost dishes, and even replacing food ingredients to increase your profit margins for every plate sold.
Menu engineering lets you assess if menu items are expensive or underpriced, whether you need to change the amounts of certain ingredients or recipe quantities, and gives you insight on how well your menu is performing overall. It enables you to weigh profitability vs. popularity while making important business judgments.
When your entire restaurant runs on a full-scale, fully functional POS system, deriving the data for menu engineering is simple. Automating operations at your restaurant gives you a precise view of the margin contribution and sales performance of each menu item and makes it simple to assess popularity vs. profitability.
- Hiring and retaining talent
One of the biggest challenges and costs to restaurants is hiring talent. It takes a lot of time, resources, money, and labor to hire the right talent for your restaurant as they are your greatest assets. If you are ignoring or not investing enough to hire and retain your precious talent, your restaurant will suffer greatly in the long run.
Unfortunately, in the hospitality industry, employee retention is a problem that many restaurant owners and managers fail to consider. Employee turnover has become a sort of a norm that everyone begrudgingly accepts as a characteristic of their area of work in the restaurant business.
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The good news is that it does not have to be this way. There are many ways in which you can reduce your turnover rates. One good way is providing your staff with the right training. Proper training instills faith and confidence in their role at the restaurant and equips them with all the skills they need to execute their jobs well. Provide both positive reinforcement and constructive criticism.
Apart from training, you should also always make sure that the performance of your staff is always being monitored. Reward those who perform well, and encourage those who are falling behind to do better next time by providing them with additional training or resources as required.
- Handling online presence
The world has gone digital and restaurants these days are sitting on a goldmine of resources that they can tap into to discover various avenues of marketing.
Any question anyone has these days, the suitable answer seems to be to ‘just google it’. When this is the norm, restaurants should not miss out on developing and maintaining their online presence on various search engines and social media platforms to ensure that customers are able to reach them at any given time of the day.
A thriving restaurant would have three things – a website, a platform for online ordering, and social media accounts.
Every restaurant should maintain an eye-catching, optimized, and accessible website. A well-optimized website displays your proficiency in the kitchen and the tantalizing pictures of your food will pique interest, even tempting them to try the food at your restaurant. A majority of internet users spend a bulk of their time online in social media networks.. Restaurants ought to consider this an opportunity rather than a burden. People love to take photographs of everything they eat and share them with friends and it acts as marketing for you. E-commerce has become a part of our everyday lives thanks to technology, and more and more people are placing online orders and choosing to dine in the comforts of their homes.
The possibilities are endless for restaurants in the online business space. Restaurants risk losing out on a huge share in the market if they pass up the opportunity to push their brand online.
- Not investing in automation
Automation is the future of the hospitality industry. Not investing in automation is a huge risk as restaurants would be operating below their maximum efficiency. This hurts the bottom line in the longer run.
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Globally, the adoption of restaurant automation is heavily influenced by growing labor costs and, consequently, by the rising cost of operating a restaurant. While the cost of automation may be high at first, it goes down or is compensated by saved costs from operating on a much more efficient scale.
Full-scale restaurant management systems are the epitome of restaurant automation as these software systems can help you run your entire business on a single platform without having to excessively intervene in their activities. For your restaurant, this results in improved task management and cost savings.
Software like automated inventory systems make it easier for your team to keep stock of raw ingredients and food items in your kitchen, saving time, cutting down on waste, and lowering costs. Restaurant tables could also be managed with a use of a Table Management application that increases your waiters’ efficiency, turn tables quicker and provide the best customer service.
- Neglecting actionable data
Based on data available from your POS, you may make small changes in how you run your restaurant everyday.
For example, you could upsell menu items that have high margins but low sales. By incorporating these indicators into dashboards, you may gain insights regarding menu opportunities that can help you decide what to include and exclude from your menu, what pricing hikes and decreases are required, and where to position products on your menus. You could even use the data to train your servers to suggestively promote profitable menu items. These dashboards offer an easy method to view extensive sales information and even analyze individual staff performance and metrics.
Your restaurant’s day-to-day operations may be hampered by these problems that affect both business, staff, customers and restaurant owners. It may also risk your restaurant’s survival amidst the cut-throat competition of the restaurant industry. These problems are common for established restaurants anywhere and the key lies in foreseeing problems and resolving them before they can worsen.