BACK TO BASICS IN THESE TOUGH TIMES
By Jeffrey D. Solomon, CPA
Levine, Katz, Nannis + Solomon, PC

No one needs to tell you that sales in your restaurant have been suffering recently. It’s been tough sailing for even the most profitable restaurants in this poor economy, and many restaurants are just barely staying alive. So, what can you do now to create a profitable bottom line and hang in there until things pickup? It’s easy……just get back to some basics.

Let’s explore five steps you can act on now to begin to have a better impact on your restaurant’s bottom line. It won’t happen overnight, but you will begin to see positive results begin to emerge.



1. Nothing Like the Owner’s Touch – Be Present and Be Aware

I hope you know by now that as the business owner, when you are away, the help will "truly play". No one, even your best managers, take as much pride in the unit as you do, both up front and out in the back, as well. But, you must not only be "present", but you must also be aware of the restaurant’s customer satisfaction and to food presentation and quality as well. I can count numerous restaurants we work with where the owners got tired of being onsite and have basically "checked out", and it didn’t take long for the place to begin to fall apart. Make sure that your staff knows you are serious and watching their service and the quality of the product that they are serving.



2. Know Your Numbers – They Are All Around You

The best restaurants are those that have a pulse not only on weekly and monthly figures, but also know their daily figures and what goal they must reach. Focus on meal counts, daily and weekly purchases, and labor and food and beverage costs. In slow times, reduce servers and kitchen personnel. Remember, your two largest expenses are most likely food costs and labor costs. Physically control your inventory and watch for the ability of food or beverages to be "walking out the door". Put periodic inventory counts in place to make sure the employees know you are watching.

3. The Customer is King (or Queen!)

In this economy, the customer, more than ever, is looking not only for a quality product and great service, but a real value as well. Keep in mind that once they have had just one bad experience, you may lose that customer for life! Make sure the employees know the standards you are trying to attain. Here’s something that seems to work: before every meal, as the wait staff is hearing the daily specials, make sure that the manager runs over some basic protocol tips, or ways to make the experience for your customer more enjoyable. Train them to "up sell" and make recommendations, if so asked. There’s nothing worse than a server who doesn’t know the food that he or she is serving.

4. Adequate Capital

Nine out of ten restaurants that we have helped to open in the last year or so have often run into snags because they underestimated the amount of capital they needed to open a restaurant. As a result, the snowball continues to manifest itself and it ultimately becomes almost impossible to catch up. Try to put away an extra amount of cash in the "good season" to help get you through the rough times. Some of my restaurants even go so far as setting up and funding a separate cash account in the summer, for instance, to get them through the long winter season. Consider closing in slower times, such as Mondays, if financially that time is usually a cash drain on your operation.

5. The "Buzz" Works – Create It!

There are many ways to get your name in the news. From special dinner events to getting a review in the local paper, getting free publicity works great. Think about wine tastings, specials on holiday meals, etc. Using a qualified and well-connected PR firm can do wonders for the top line. But, it takes time and may be tough to measure. Think about sponsoring Chamber or Town events in non-peak hours, as well.
While the above tips are some you have heard before and truly are basics, it is good to review these every six months or so, and then strive to follow through with some of them. In doing so, you just may find that your customers and your pocketbook are both much happier.