If a restaurant wants to grow and stay profitable, cost controls are crucial.
Table-service restaurant operators know from hard-won experience how vital cost controls are to profitability and growth. Factors as diverse as portion control, inventory management, waste minimization, and labor costs all need to be kept in line in order for a restaurant to maintain acceptable profit margins. If one or more of these factors veers too far off, no amount of volume will make up for the imbalance. In fact, restaurants can face a nightmare scenario of losing money on a large percentage of covers, at which point being busy just means bleeding profits that much faster.
Successful restaurateurs leverage their own experience, along with advanced technology solutions, to establish and maintain these vital cost controls—meal by meal, shift by shift, day after day. But what happens when a restaurant must manage its other key business imperative—that of consistent growth? How can operators maintain the same level of laser-focused oversight when they add new menu items, expand into new day parts, and multiply their number of locations by factors of 10, 100, or 1,000?
As restaurants grow, technology becomes ever more important in the twin quests for consistency and profitability. For example, using advanced analytics solutions to discover the actual profitability of individual menu items allows restaurants to focus their efforts on these dollar-driving dishes. They can be featured as the daily special, moved to a more prominent spot on the menu, and recommended by servers. Boosting sales of the most profitable items stimulates growth without major cost increases.
Another key cost center—food waste—can be addressed with forecasting and inventory management solutions, balancing a sufficient supply of ingredients with the requirement to not overstock, particularly with perishable items. Over-purchased and poorly planned, overstocked items on shelves are a capital expense that remains a poor investment.
Restaurateurs also need to ensure training is used to manage costs. Take the example of plating consistency. If a recipe calls for four ounces of French fries to fill a plate, offering six ounces of fries would overflow it. Cooks have a tendency to over-serve, highlighting a restaurant's inconsistency that may appear to be “downsizing” from six to four ounces when properly portioned, and risking the guest perception that they are no longer getting good value for their food dollar. Monitoring food cost by inventoried item (comparing theoretical cost versus actual use) is key to remaining constant and consistently profitable. Restaurants relying on repeat business need to pay close attention to these and dozens of other details that go into the overall guest experience.
Cloud Solutions Create Consistency
Technology is obviously vital to solving the paradox of growing a table service business while controlling costs. Yet as independent restaurateurs grow a restaurant chain, some IT infrastructures have become a part of the problem. Haphazard, location-by-location growth paths have created highly varied IT architectures in different restaurants.
This can be a recipe for confusion, with on-site managers establishing their own methods and work-arounds for common applications. Investing in solutions that are connected by design, and grow consistently only when your business does, are early “start-up” decisions that will pay operational and financial dividends that makes growth smarter and more easily obtained.
Heterogeneous technology architectures in dozens (or hundreds) of locations also mean that corporate IT departments spend the majority of their time translating, integrating, and interfacing, rather than innovating. It also lengthens and complicates upgrade efforts, or even the provision of security patches to meet compliance requirements. IT does not stand alone in servicing these challenges. As a test, how many “systems experts” are working in your restaurants that should be “guest experience experts?”
Enterprise-level hospitality solutions built specifically for the cloud can address these types of “growing pains.” Take payment systems, a top-of-mind concern for any corporate IT department. With traditional on-premise systems controlling the POS and financial management systems, upgrades and security patches have to be undertaken almost literally at each payment terminal. In contrast, cloud-based delivery vehicles ensure that PCI compliance measures and other security upgrades are applied quicker and more consistently, enterprise-wide from a central location.
The centralized control and reporting made simple with a cloud-based system allows restaurant operators to manage operational consistency no matter how large the chain grows. They can even fine-tune it, allowing chefs in some locations to add seasonal specials or use locally sourced ingredients while still maintaining cost and portion controls over the majority of the menu.
At the individual restaurant level, cloud solutions provide easy access to centralized configurations, helping managers correctly price these unique items. The two-way street of a cloud-based architecture allows corporate to analyze the performance of these items and accurately compare it to others, with the possibility of replicating the best items at other locations if they prove popular with guests.
Every table-service restaurant, from a single location to the largest chain, must solve the riddle of simultaneously controlling costs, maintaining quality, and continuing to grow. The right technology solutions, delivered via consistent, easy-to-access platforms like the cloud, provide the tools restaurant operators need to achieve this often elusive balance.
The opinions of contributors are their own. Publication of their writing does not imply endorsement by FSR magazine or Journalistic Inc.