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Kris Karafotas      
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10 Ways to Cut Costs at Your Restaurant

Published on 3/20/2017
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10 Ways to Cut Costs at Your Restaurant.

A PENNY SAVED IS A PENNY EARNED. AND ALL THE MEANS TO SPEND MONEY IN YOUR BUSINESS, YOU CAN FIND A WAY TO SAVE MONEY FOR YOUR RESTAURANT. THE 2009 RECESSION CONTINUED IN THE MINDS OF THE OPPRESSED RESTAURANT INDUSTRY IN 2010. AFTER DIRECTING DECADES RESULTED IN POSITIVE SALES GROWTH, RETURN THE RESTAURANT INDUSTRY TWO YEARS IN THE GENERAL DECLINE HAD SALES.

It is clear that in order to survive, restaurateurs have two programs implement cost and Restaurants strengthen reduce revenue. Here are ten things that you have to do, (followed by ten things you should not do in a subsequent article) to reduce costs in its restaurant.
Technically this is not a point of “cost reduction”, but bear with me. You can not operate at a profit is.

The first line of cure whatever ails you – a 2% increase in sales is owned on a 10% reduction in the cost of food equivalent. The surest way to quickly increase profits is at the forefront of building sales. Although the industry has been reduced, it is only a few percentage points in total in the meantime reduced some catering company with.

Although the industry has been reduced, it is only a few percentage points in total – in the meantime reduced some catering company with a double-digit percentage. What this says is that even in a bad recession, some companies are well above restaurants. There still had to be sales, but in this market will not happen by itself. As the saying goes, “eat what you kill”, then time to go on the offensive, it is.

Can you refresh your selling skills to occupy the home? Can you get your server to sell more drinks? You can develop creative special or fixed price options that people will bring in the door? Before costs start lowering, make sure that you do everything restaurant offers creative and energetic for sale.

RE-ENGINEER

The tectonic plates of gastronomy have irrevocably changed – “. Back to normal” and even after the end of the recession, things do not work There are still millions of restaurant chains bills sitting on the fault lines think that their problems are only temporary and because of the recession.

The fact is that the restaurant industry has changed – because of the economic, cultural and demographic factors – and accelerated the pace of change. The fast-casual category is growing much faster than the speed of the industry in general, which means that it is otherwise cannibalize existing sales. Home meal replacement, which is $ 70000000000 a year the new battleground between restaurants and grocery stores.

Grocery stores lose market share to the restaurant industry every year for decades and have had enough. They fight and more like fine dining to work – you can see at every well-run supermarket; they offer to take packaged and bake pizza, a wide variety of menu options from different cultures and foods for all meals of the food requirements. The restaurant industry began to fragment and splinter and the winners are those who specialize.

Meanwhile, Restaurants groups like Chile and TGIFriday to continue working in systems and catering industry approaches of the 1980s and 1990s – try to be all things to all people. We saw how it worked for Bennigans (which went bankrupt). Many catering companies hold (for now) with sophisticated financial systems, but your focus should be on the industry’s future re-engineering, not trying to force approaches yesterday to continue working.

As an engineer, who, of course, to reduce costs and find more effective methods and approaches to business again. Reengineering means asking: “What is our unique niche, what the right things to do for our company?” You must be willing to take a look with clear eyes at the reality of the industry, and see again engineer: “There are no sacred cows.”

INVENT

There is nothing like a recession to get the dust off the old preferred tired industry. The Happy Hour and all sorts of other state-of-the-art in 1989 are under the re-introduced programs and to the chagrin of the push, the results are not there. The Times have changed. Consider the media who use restaurants to apply. When radio was first introduced as a new form of media, which took 38 years, a crowd of 50 million people in the market to achieve. Television took 13 years to reach 50 million. Facebook reached 50 million in just two years.

When radio was first introduced as a new form of media, which took 38 years, a crowd of 50 million people in the market to achieve. Television took 13 years to reach 50 million. Facebook reached 50 million in just two years. Meanwhile, tired restaurant chains grow Happy Hour actions through mass media advertising approach and adopt a “wait and see” with social media. News Flash: The media is not a fad, it is not something that will blow a little more;

This is a cultural phenomenon that shapes our lives in the coming years. Social media is not just for kids millennium. (But even if it were, there are now more than a millennium baby boomers in the US for Baby -. And Millennials eat more often and spend more money on Boomer restaurants) The fact is that the world and other companies / industries have speed rate of change, and to reduce the cycle time. The real winners – companies like Apple – earn invention.

We have just experienced the worst financial crisis since the Great Depression, but Apple’s iPhone the best-selling in history, and sales continue to grow in the recession of product. As without rebates? Invention. More innovation and you invent, the less discount must. The more you can do to create a unique customer experience of its kind, the more you can afford to charge – and the more customers you can expect to see in your dining room.

ALLOWED

Make sure to keep your best people. to make well before every, they considered a license or a reduction in working hours. The National Restaurant Association estimates that for each setting average hourly employee who spends $ 1,500 train. Many restaurants have a turnover of 100% or more employees now. If you have a staff of 100, which means $ 150,000 a year in the training of new staff! Since this “training” costs often just put on the payroll and not shown separately, many restaurant managers do not know the actual cost of their education. Retention is the key (and is a modern approach to education systems, but that is another article for another day).

USE INVENTORY

When I recorded the activities of a theme restaurant the Caribbean $ 4,000,000 again, I focused on the counter. We achieved almost 30% of the distribution costs Bar and Bar were in the top 20 is executed (as a percentage cost of sales). In the study of purchases and inventory, I saw that we had stacked cases and cases of a product that has not moved.

Canadian Club ran a promotion for its new Canadian Citrus Club and therefore gave away bottles with the purchase of another product faster movement. Our up and down the beach competitors had also accumulated mountains of this product. They began to try the $ 2 shots to download. $ 50 Cent 1. After then. No one bought it. They had never heard of Canadian Citrus Club and realized that when it was sold at 50 cents might not be good. So I took a different approach.

I have invented a drink called the “Cayman curse” and said he could not say what happened to him or curse Cayman is obtained. We sold them for $ 8 and build resources by dry ice (which makes the drink to “smoke” seems) support and a suggestive selling program. Results? This “mystery drink” from a non-mobile before liquor was our bestseller. We started at a time when a bottle of Crown Royal to negotiate with other restaurants for an event that the product did not move.

Our costs in the beverage mix were so weak – and the huge volume – which brought forth our total cost of the bar up to 16% of sales. This is half of what it was! As a new and innovative approach to the use of the idea of the inventory has a great influence on the final result. You do not have a good bar – similar approaches may with different varieties of fish, for example, and not only to reduce costs but also reduce the pressure on other species of fish are taken.

MARKETING

The average restaurant in the United States spends 3% of revenue from advertising and marketing. This is a variable restaurant and controllable costs their budgets significantly reduced when it is hard. To a certain degree, that’s true – after the crisis, this is a good time to stop spending on advertising media. Take no money on billboards, radio, television, banks or other outdated yellow pages to connect addressed your customers. However, there is never a good time to stop marketing. Especially in a recession. This may paradox, but it is time to invest in marketing. You will find that some of the biggest changes in the market share

You will find that some of the biggest changes in the market share found to occur in recession for some companies marketing and others to stop the heat. The goal is not only, but they do happen, it is invested. The time has come, advocated in new, innovative marketing programs such as social media, mobile marketing and a number of new approaches in several of my other posts and articles on the blog www.aaronallen.com found to invest.

Many of these new marketing techniques in the media, which provide a degree of flexibility and the ability to measure the results in a way that was not possible before. Use of the recession – if the competitors put their marketing efforts – to explore new ways to connect with your customers. It is an investment that will pay itself – now and in the future.

Ask suppliers HELP

Although times are tough, they can often turn their support providers. The owners give grace, distributors wide line will be an extension of credit, and generally sellers you want to be successful. Their fates are intertwined in this sense each other – the better you do, the better they will do. It is shortsighted to bounce into stores sellers price according to the contract to a supplier without loyalty. If you are faithful and to seek help, usually you get. Often sellers who lack steal away with a lower price on the service side and reduces the service sometimes lost win.

FOCUS ON HIGHER

The 80/20 rule should be applied to the cost reduction. Many traders try to improve 100 domains at once – and thus never occurs deep enough into any problems be able to make a real difference. The key is to find crucial influence. One of my clients has food costs, which have run as high as 47%. Each reduction of one percentage point in the cost of food equivalent to $ 100,000 in the improvement in net income. Our approach is not using any of the 350+ SKU shares, which have to do it. Our approach is to focus on the top 5 of the SKU. Focus on the big things first. Work your way up to your account or inventory gains and losses

Each reduction of one percentage point in the cost of food equivalent to $ 100,000 in the improvement in net income. Our approach is not using any of the 350+ SKU shares, which have to do it. Our approach is to focus on the top 5 of the SKU. Focus on the big things first. Work your way up to your account or inventory gains and losses not work more than 5 items at once.

Buying Groups

We have introduced many of our customers for buying cooperatives. A cooperative is a commercial center that in purchasing power as a mega-chains offers regional chains and independent operators. If you food, cooking utensils or the marketing of services to buy, when they buy in bulk, you will always get a better deal and better service. If you to muscles you do not need to buy, start or join a cooperative. We have even seen the operation for the payment of $ 42 $ 48 to pay for a bag of sodium box and under. This corresponds to a 13% savings for purchasing group. That adds up quickly when 100,000 gallons per year watering as they were.

If you to muscles you do not need to buy, start or join a cooperative. We have even seen the operation for the payment of $ 42 $ 48 to pay for a bag of sodium box and under. This corresponds to a 13% savings for purchasing group. That adds up quickly when 100,000 gallons per year watering as they were.

PON is a good example

You can not work in a new Mercedes and expect their employees believe that money is tight. You will notice these days many CEOs an example of tightening their belts as their own for other employees. The CEO of General Motors worked for $ 1 per year. The Director-General of Land O ‘Lakes (a $ 12 billion) trainers flies their employees. The CEO of Wal-Mart stays in 3-star hotels where they share a room with often another officer. If the head of the company shows a commitment to the company over their own comfort, it trickles to the rest of society down and encourages them to do the same.

The recession has forced companies to observe more accurately their spending. Even the largest governments around the world to meet face deficits and have to make difficult decisions. Use this time as an opportunity for new innovative approaches – not just stingy. As the saying goes: “The necessity is the mother of all inventions” Be grateful for the recession -. When used properly, it will help new and better ways of doing things to attract goodbye.

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