There are several restaurant owners reading things that may be saying how they cut costs, refined operations, and raised their margins, but nothing seems to have worked. In most cases, the ideas are on their own footing great, but it is the execution that falls flat on the face.

If your goal is to increase the revenue and margins, then it means that you have to reduce your expenses. If you have your costs under control and if your operation works like a well-oiled engine then you should have the free cash flow to reinvest into the business- be it to employ skilled labor or to repair and buy new equipment.

Tightening The Reins Of Your Restaurant

What is it that customers come to your restaurant? To eat good food, be in the midst of an aesthetic ambiance, and to have a swell time in terms of service. The ride must be great from the time they enter the doors of the restaurant when they leave a tip and leave with a contented smile.

Are you teaching your staff what the customer expectations are? Are they being trained well? If you are known to have fresh ingredients, are you serving the item on the menu 7 days a week? Start with accountability and ensure that your customers are satisfied. Oftentimes, external factors are looked into and not the business operations and this is where many business owners fail.

Streamline And Refine Your Operations

Be it lack of leadership, poor execution, or insufficient training, there are many bosses who fail when they take the mantle of an employee under them. If they can’t understand the basics of running a shift, clearing a table, and working with one another, how can they be expected to direct and guide them?

It is like asking the chef to make a bowl of soup when the owner doesn’t know what goes behind it, what training is needed, how much time is needed, and what the background operations that leads to a bowl of soup landing at the requested table are.

Getting the right people to guide the team and staff is as essential as training the staff itself. Leaders don’t own or share the blame- they take it all.  Remove the person from the helm of leadership that is not fit for the role of motivating the staff and directing them. Poor performance and excuses no longer have space.

It’s Not About Cutting Costs But Cutting The Right Cost

Employing cost-cutting measures means that you need to reduce capital that is being wasted or not properly utilized, and instead spend it at a place that required the capital. If you are unable to meet up with the operational costs, then you may need to take the services of a lender or a partner to obtain capital to grow.

There are certain fixed expenses like rent, taxes, and utilities such as electricity and water. What you can control is the cost of food as well as labor, so as to maximize your profit margins. If you don’t know the usage for every $5000 dollar, then start with the costliest items to take control of your costs. Say you need food production of 500 lbs. for every $5000, and you are making $40000 in sales in a week, then you would require 4000 lbs. of food along with a buffer of 20% giving 4800 lbs. for a week. This buffer is needed for growth and in the issue of any unforeseen circumstance or shortage.

By sticking to removing people working against proper coaching, adding in new hires, and training them well, your restaurant franchise is expected to grow in terms of revenue generated, lowered costs, and increased bottom line.

The hardest part is not the effort, but dropping the pride and admitting that you may not have put in the work needed for the success of the business. If you are in need of financing then check us up at Fundrly, at (877) 386-3035 or write to us at info@buildingblockcapital.com