5 Ways to Grow Your Foodservice Business in a Tough Market
Since the beginning of the pandemic, food service operators have been struggling to survive. Food sales decreased by 50% during the shutdowns. this forced operators to rethink their business models, and to adjust how they did business. Layoffs, a focus on food delivery, an influx of ghost kitchens and bang! The food service world has been changed forever.
Owners and operators are still working to find those extra dollars they lost in the shutdowns yet cannot seem to make traction. The supply chain challenges, labour shortages and customers losing their disposable income have all contributed to an even bigger challenge to gain market share; never mind just staying afloat.
The companies that have survived and even thrived, have all done some common things. Here are 5 things that operators can focus on to bring greater success to their business:
1. Technology integration
2. Food delivery – duh
3. Hire the right talent and create a culture that they want to stay in
4. Know your numbers
5. Take action
1. Technology integration
It’s easy to assume that in a world where talent has become scarce, technology may be able to make up for some of those bodies. However, the danger is to solve problems as they arise (as with most things in business). If you are constantly putting out fires, or solving challenges with another app, you will soon find yourself in a time crunch, needing a person to manage all those apps, some of which do not talk to some of the others. Take the time to plan out where you want to be in 5 years and make decisions that will allow you to grow to that level. All your tech should be adaptable to your expected growth and handle all your needs along the way. A key ERP system, or POS system is the cornerstone of your tech stack. It has offer reporting on key data such as, customer details, labour and scheduling, reservations, table turnover, service times, expecting revenue, expected profit, etc. Then your marketing apps, and any other apps that you may require need to integrate with your POS system. Keep the number of apps down to a minimum.
2. Food Delivery
By now, most people have caught onto this strategy. The question is, how many food apps are you aligned with? They all do the same things, and the fees can be crippling. Not to mention the time it takes to manage all the different menus you have require to be a member of the app, and soon you have another time management nightmare.
Decide who is your most trusted delivery app partner and stick to it. Again, more is not necessarily better. This can also be a piece of your marketing strategy, as the apps help find online customers.
3. Hire the Right Talent
This has become a buzz-phrase. Yet, it is true. Hire slow and fire fast. If you decide that someone is not a fit, then move on. Find someone else who is. Sometimes you are better off not having that person and taking on a bit more load, than have someone hurt your brand and turn away customers.
The key to keeping your great people is to build and maintain a great culture. In hospitality this may seem obvious, but many operations still often have toxic cultures. Get to know your people on a personal level, have empathy and make it fun to work in your establishment(s). This will go a long way and will help with finding more great people. If the staff think it’s a great place to work, they’ll recruit their friends!
4. Know Your Numbers
It is true that 70% - 80% of independent business owners do not know their true food cost. It is part laziness, part ignorance and part a lack of resources. Many owners just do not know how to manage the finances.
It is imperative that any business owner knows their actual margins, their target margins, their daily break-even revenue requirements, and how to manage costs. This includes regular inventory counts, recipe costing, beverage costing, tracking waste and watching your invoices. Hire a professional if you struggle with this, but the information is all in the P & L statement (income statement). This should be coming to you monthly if it isn’t contact your bookkeeper or accountant.
5. Take Action
All the best laid plans are moot if you are not doing anything with them! It is easy to talk about what you are going to do, but talk is cheap. Acting and measuring your results could be the most important tip in this document. Being a business owner can be a lonely game and it’s hard to stay motivated and focused. Hiring a coach or mentor can help you stay accountable to yourself and keep you on track to achieve your own goals.
Food service operators are a special breed of people. They are passionate about what they do, and contribute to the fabric of our communities. Restaurants, pubs and hospitality businesses are a big contributor to the economy, and we are worse off when these businesses close. Use these 5 tips to keep a strong business and grow your profits.
If you want to talk to someone who can help you build your net profit from 5% to 15% reach out for a free chat.