The Future of Reopening
As the vaccine rollout picks up steam and we see positive signs of economic recovery, we remain hopeful for the future of restaurants. Regardless of the hottest Twitter takes and the catchiest news headlines, it’s integral for business owners to reconsider how their business will operate in the long-term, and not simply based on short term trends.
In this guide we’re going to cover some of the ultimate cost-savings strategies you can utilize to maximize your restaurant’s growth in a post-covid world.
How to Find Your Biggest Losers
There’s no way to track every penny that goes in and out of your restaurant. However, you can track how much revenue a menu time is supposed to bring in versus how much profit you’re actually generating.
You can start off by calculating your actual food costs and comparing it against your theoretical food costs.
Your theoretical food cost is what you spend on every dish you sell if it were cooked to perfection with no waste or shrinkage.
Your actual food cost is what you actually spent on each dish including waste, wrong invoices, theft, spills, waste, and inconsistent portions. Comparing these two costs within the same time period reveals the gaps in your plan against your execution. The difference between your actual vs theoretical costs is called your variance.
What to do with your dishes with the highest variance
Every successful business does the basics well. For restaurants, it’s understanding your food costs. It boils down to having access to accurate and trustworthy data that tells you which levers to pull, what menu items to optimize, and how you can be a more profitable restaurant. Here’s how:
Use cookbooks and printed charts to train your staff to weigh and measure their ingredients to ensure consistent portion sizes. This will keep your customers happy, minimize waste, and provide a more accurate food cost calculation. Use a tool like MarketMan to create a digital cookbook that can be updated regularly and be displayed on a tablet in the kitchen.
Track Inventory Meticulously
Compare the correct weight, volume, and quantity against the invoices of all incoming orders in case there is any discrepancy. Make a note of discrepancies so that you can be credited by your vendor.
Keep Your Ingredients Fresh
Vacuum seal proteins to increase their shelf life. Alternatively, use an inventory solution like MarketMan to automate inventory counting and get real-time alerts when items are running low.
To see an in-depth breakdown of actual vs. theoretical costs for a particular menu item, and more ways that data will help you make informed decisions and minimize waste, download The Future of Reopening ebook.
Revolutionize Your Menu
You’ve probably fully fleshed out your business plan when you first opened for business. Now with the challenges of COVID-19 still ongoing, it’s time to reevaluate that plan to see how you can thrive in what is now a loss-avoidance business. Here are a few ways you can save some money.
Optimize your menu items
In a study conducted by Rewards Network, 28% of restaurant owners reduced their menus to meet the demand of delivery-only orders in 2020. By adjusting your menu, you will:
- Order fewer ingredients from suppliers
- Improve meal preparation and cooking time
- Minimize indoor dining turnaround times
List out all your menu items and rank them by sales volume. Then, break down the cost of each dish by calculating every ingredient that goes into it. Once complete, categorize your menu items into one of these four quadrants.
Cows are popular items but with low-profit margins.
Stars are menu items that are the most popular and the most profitable.
Question marks are the opposite of cows. They are highly profitable menu items, but not very popular.
Dogs are menu items that are neither popular nor profitable.
Manage your delivery channels from one tablet
Having all of your orders in one place will reduce your need for multiple staff members to be monitoring your POS and many tablets. There really is no need to have a tablet for every delivery platform — all of your online orders are sent directly to your POS whether they are from mobile, web or third-party.
By using a single tablet, you can maximize efficiency and scheduling by automatically throttling orders during rushes.
Make Income Upfront with Physical and Digital Gift Cards
Gift cards are a great way for your loyal customers to support you and a fantastic gift for anyone who loves your business. It’s a great way to make some cash up front
1) Give customers the ability to buy, redeem and refill digital cards from your website and mobile app. They can buy for themselves or send to others.
Wondering what to do with your menu items after categorizing them into Cows, Stars, Question Marks, and Dogs? Get full access to these next steps as well as other ways to make income upfront by downloading The Future of Reopening ebook.
Ensure Your Staff Are Trained Properly
1) Ensure your staff are properly trained for safe service for COVID and beyond.
The quicker a customer can get in and out and the staff member can do their job, the better. Having staff that can understand the importance of quick and safe service will save you money and time. There are many great courses out there, even some free ones at servesafe.
2) Have an employee script outlining your loyalty and rewards program.
A loyalty program captures customers information and data and allows you to send targeted offers and campaigns or simply to reward them for their loyalty and continuous support of your business and brand. Ensure you staff have the proper training to let all customers know about loyalty and rewards customer programs that you have. This will ensure they feel appreciated and are coming back.
3) Run daily specials and promotions for high-margin menu items.
Having these specials will ensure you can move through your inventory as well as keep customers coming back! (such as Buy 1, Get 1 Free or 50% 3pm-5pm). Ensure your staff know to upsell and cross sell.
Give Your Staff The Tools to Succeed
Utilize reports. When management or staff can see detailed reports, they can know what is selling and what isn’t to ensure items can be marked down or on special to move products that may otherwise be wasted. Having real time access to this information allows you to see trends, patterns and know where and when to sell these items.
- Sales Reports: Use these to see the busiest time of the day and when to schedule staff. When you can analyze this, managers and owners can see when they can get someone home during the less busy periods and cover the shift themselves, cutting costs.
- Cost of goods sold (COGS) is the cost of acquiring or manufacturing the products that a company sells during a period, so the only costs included in the measure are those that are directly tied to the production of the products. Use these to consider removing some low-margin items and make way for some high-margin items.
- Waste or loss reports: Keeping on top of the spoilage will ensure you are not over ordering and losing.
- Inventory reports: See if you are overordering anywhere, as well as what to put on promotion and get moving.
Even after the world reopens and restaurants return to pre-pandemic capacities, digital ordering delivery, and takeout are here to stay. In fact, 67% of millennials said that the option for delivery can make them pick one restaurant over another.
With that in mind, let’s dive into what a ghost kitchen is and if it makes financial sense for your business.
How to Deploy a Lean Ghost Kitchen
Ghost kitchens are all the buzz right now. Also known as a cloud kitchen, dark kitchen, virtual kitchen, or ghost restaurant, they are a cooking facility solely for food delivery orders. Unlike a traditional restaurant, the customer touchpoints exist entirely online without a brick and mortar location.
Unlike a traditional restaurant, customer touchpoints are digital. A customer places an order through the company’s website or a third party delivery app, the food prep and cooking is done in the kitchen, the meal is delivered to the customer’s location, and funds are released after receipt.
Ghost Kitchen Business Plan and Models
What are the different kinds of ghost kitchens that you can start? Here are 6 of the most common business models:
- Independent Model: This is a standard ghost kitchen model. You receive your orders from third party apps or your own platform, create the food in your kitchen, and your driver or third party app delivers it. You operate only one brand. This model is easy to operate and inexpensive.
- Multi-brand Model: This option runs the same workflow as an independent model; however, you are running multiple brands within the same kitchen. With this option, you can experiment with various offering types and capture more market share.
- Mid-ground Model: In addition to delivery, customers can also come into your store to order and pick up food. With this option, you will have to find a location with a fair amount of foot traffic.
How to Start a Successful Ghost Kitchen: Step-by-Step Process
What are the “ingredients” for a successful ghost kitchen? Here is a step by step process for starting your own ghost kitchen:
- Choose a location or commercial kitchen.
- Choose a concept that resonates with customers
- Choose menu items that are optimized for delivery
- Create your brand
- Choose your suppliers and delivery service
- Launch your business and iterate
- Control your Inventory
Download The Future of Reopening ebook today and get full access to the pros and cons of starting a ghost kitchen, all of the business plans and models, and an in-depth look into how to start your own today.