5 Major Opportunities for Restaurant Owners to Cut Costs and Boost Efficiency

biggest concerns of restaurant owners

Running a restaurant is the ultimate full-time job that requires sheer dedication and an eye for detail. Even though it may seem a glamorous affair to many, learning the art of running a restaurant is something that cannot be mastered in a single day. As the restaurant industry is rapidly evolving, the list of things that give sheer nightmares to restaurant operators seems endless. From supply chain management, and staff, to marketing and customer satisfaction, the innumerable moving parts of the day-to-day restaurant operations raise some ineluctable concerns that give major opportunities to the restaurant owners to improve their restaurant’s efficiency. 

Major Opportunities for Restaurant Owners to Cut Costs and Boost Efficiency

Here are some recurring opportunities and resources that you can employ to tackle your restaurant’s issues. 

1. Staff Turnover

The restaurant industry is notorious for high attrition rates. It isn’t very easy to hire and retain skilled restaurant staff in today’s competitive restaurant market. The desire for better career growth, a competitive salary, and easy job switches have significantly contributed to the high restaurant staff attrition rate.

The never-ending cycle of hiring, training, and retaining restaurant staff also affects the customer experience. Therefore, one of the biggest concerns of restaurant owners is to overcome staff turnover and retain existing employees. 

1.1. Proven Ways To Solve The Problem Of High Restaurant Staff Attrition

  • Offer competitive wages, conduct regular performance reviews and provide annual raises to boost staff productivity
  • Create an attractive reward and recognition strategy to acknowledge employee achievements. Offer salary hikes, bonuses, and other financial awards to motivate the restaurant employees and foster loyalty.
  • Consider technological upgrades and prepared food supplies that would optimize labor costs, especially in places where there is a shortage of skilled staff. Re-examine the scheduling and set targets for your team around measurable objectives
  • Develop growth opportunities for your restaurant staff. Highlight their remarkable qualities and acknowledge them for their achievements. Consider rewarding the employees who have stayed with you for longer with a higher position and/or salary hike raise. Conduct additional management training sessions to foster their career growth. This will make them feel appreciated and evoke a sense of loyalty in them
  • Encourage open communication and consider your staff’s opinions and suggestions while implementing changes in the restaurant. Their feedback will be of great help in bringing changes to the menu, introducing better technology, and improving services. If your staff feels that their opinions are considered, they will feel valued and involved. 

2. Stay Ahead of the Competition And Boost Sales

In the highly saturated restaurant space with increasing competition, it is hard to reach the top and even harder to maintain the top spot. All it takes is a strong competitor to enter the market, and suddenly a steep fall in the restaurant sales may occur. Moreover, with seasonality, inflation, economic factors, changing customer preferences, and countless other factors, restaurant sales hardly remain constant.

2.1. Strategies To Beat The Restaurant Competition and Increase Revenues

  • Stay ahead of trends and adapt your restaurant to offer exceptional quality in food and service. Take constructive feedback from customers and provide an experience that they want. 
  • Define your goals and analyze the market accurately. Initially, this step involves recognizing a broad base of competitors and constantly developing competitive strategies to differentiate your brand from its rivals.
  • Consumer tastes are evolving in response to the changing trends and greater awareness of alternative lifestyles. For example, organic food is rising in demand, consumers are seeking more variety in food, and the healthy food trend is at its peak. Anticipate the evolving preferences, and if they fit your brand image, accommodate them.
  • A well-constructed menu can increase a restaurant’s profits by 10-15%. Consider re-engineering your restaurant menu by strategically picking the right price points and consolidating menu offerings that will increase restaurant sales. 
  • Develop new concepts and products that provide a better personal experience to the customers while still offering excellent value for money

3. Customer Footfall

Diners today are mindful when it comes to deciding on a restaurant. The quality of food, service, or simply the restaurant’s atmosphere; there are many moving parts in a restaurant business that have a direct impact on customer experience.

A major concern that gives sleepless nights to restaurant owners is low customer footfall even during busy days. Moreover, establishing customer loyalty is extremely challenging in the current business scenario. All it takes is a single bad experience or negative online review to negate the customer experience and repel them from your brand.  

3.1. How To Build A Great Customer Experience And Increase The Rate Of Customers

  • Incorporate Loyalty Programs to build strong customer loyalty. Make the process easier for your customers to understand and customize the loyalty rewards according to occasions or customer preferences. 
  • Set high food quality and service standards and ensure to abide by them throughout. 
  • Build an influential online and social media presence to understand your target market’s likings and expectations of your brand. Monitor the review sites, engage with reviewers, and take necessary actions to fix customer issues.
  • Make effective use of the restaurant POS integrated with CRM to build better relationships with your customers. Not only is it possible for a restaurant to keep an extensive database of all the customers but utilizing this data also helps in improving sales 
  • Encourage feedback from your customers to bring improvisations to your business. Create a constructive Feedback system that serves as a guide for growing your business. 

    how to exceptional customer experience at restaurant

4. Inventory Management

Inventory management is an enormous area of concern for restaurant owners. A significant aspect of restaurant management,  when inventory is not handled properly, it adds to the total food costs and ultimately hits revenue. Moreover, internal thefts, spillage, and pilferages are practices that lead to unaccounted loss of inventory, negatively impacting the restaurant’s bottom line.

4.1. Measures For An Effective Inventory Management

  • Invest in a robust technology platform to automate the entire inventory management. POS systems can save you hours of effort. Without any manual intervention, tracking the inventory consumption, calculating variance, generating detailed reports, and forecasting the inventory requirements would become a streamlined process. This will help in increasing operational efficiency, reducing labor costs, and bolstering your profits exponentially.
  • Regulate all the core restaurant operations by setting restaurant SOPs or Standard Operating Procedures, which will help streamline all the operational and managerial processes at your restaurant. 

5. Revenue Management

The costs associated with operating a restaurant add up quickly. Labor costs, food costs, kitchen supplies, rent and utilities, and marketing spend; are some of the leading expenses in operating a restaurant.  Sometimes, newbie restaurateurs forget to consider the working capital needs until the restaurant reaches the break-even point, which further adds up their concerns. Because of the high competition, many restaurants operate on thin margins and hardly make any profit. 

5.1. Tips To Keep Up With Restaurant Operating Expenses And Still Make A Profit

  • Increase the table turns, train your staff to upsell orders, provide additional food services, and optimize the floor space available. This will attract more customers and generate more revenues.
  • Upgrade to a modern,cloud-based point of sale system. A cloud-based restaurant management software will be able to optimize the delivery time of orders, track daily sales, analyze menu items, control food costs, generate detailed labor reports, etc. This will help you find the strongest and weakest areas of your business and make data-driven decisions to improve your business. 
  • Incorporate technology to streamline the order taking mechanism. Replace the manual order taking practices with handheld devices, server apps, KDS, and self-service terminals to serve your customers faster and improve your restaurant’s revenue. 
  • Extend your operational hours, or widen the delivery window by collaborating with multiple food delivery aggregators to increase your revenue.
  • Create special weekday discounts and offers to encourage your customers to dine in at your restaurants on slow days. 
  • Introduce new staff tips and consider incentivizing your restaurant staff with monetary rewards or recognition. Such measures will help in retaining them and reduce your hiring costs.

There are some proven measures and strategies you can adopt to alleviate the major concerns in running a restaurant business. Utilize these tips and bid goodbye to the nightmares and sleepless nights!

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Daniel McCarthy is a seasoned restaurant consultant and serves as the Communication Manager at Restroworks, a prominent F&B SaaS company. Drawing from his vast knowledge of leveraging innovative technological solutions, Daniel excels at enhancing restaurant operations and revenue, thereby contributing to the ongoing transformation of the industry.


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