Discover Ways To Turn Your Restaurant Business Around During A Recession

Analysts are saying we’re officially in a deep recession, and it’s been for some years now. I don’t know about you, but being in one doesn’t mean that, for your restaurant business, the only way to go is down.

This strikes up memories of the 70s when people were used to seeing signs like “Last one out please turn out the lights,” hung over major highways in the US. But there’s something else I remember from the 70s. Not only were there were there survivors, but there were actually some who thrived during those hard times. Why should this time be any different?

Karen Malody is a Principal at Culinary Options, a foodservice consultancy organization based in the Greater Seattle Area. Here are some of her tips on how to stay up during the down times.

1. Police the kitchen
Karen says,

“The lists of profit-killing habits that can occur in the kitchen are endless. The challenge here is that most owners, unless they are the chefs, find that digging into the kitchen is a bit like shopping in a foreign country: They know roughly what the exchange rate is but don’t always do the math exactly on every purchase.”

Mismanaged inventory, storage errors, and back-of-the-house theft all contribute to erosion of food costs by as much 2% to 5%. Are delivered goods still meeting specification standards? If not, were they sent back? Are the staffs still checking invoices to double check what shows up at your door? Are the products being received and stored properly?

Solution: Hire. Yes, at a time when everyone else is contemplating laying off employees, the solution is to hire an inventory checker. Diane calls this the “Kitchen Police”. The KP reports directly to management or someone in accounting about inventory issues. And if you’re thinking “I can’t afford to hire a KP,” think about that later when you’re seeing one more percent profit every $100K worth of sales, just about.

2. Rehire your vendors
To make a long story short, buying stocks from the same people, year after year and without looking anywhere else, Karen says, is business suicide. It’s a competitive world out there. The relationship between you and your vendors is a business relationship, not a marriage. Are you and your vendors still on the same page? Or are they scrambling now, doing some monkey business behind your back to save themselves?

Solution: Conduct blind tastings as a means to scout for better products. Also consider if changing your buying pattern has an effect on your finances. Is it going to cost you more if they deliver in smaller quantities? Consult all this with your KP and draw up a plan.

Karen couldn’t have put it better,

“It’s a lot like renewing your vows. Sure, you were hot for each other back then, but would you commit today?”

3. Cost every plate
Karen believes in the importance of presentation standardization, costing systemization, and recipe documentation in sustaining a restaurant business that has survived its first two or three years. Your business running on its fifth year or so means you may have a product your customers deem competitive enough to make them want to come back. The question is: do you have a system to sustain that competitive edge?

Solution: Cost every plate. Document everything that goes into the back storage door and out into the dining area. For example, if you don’t take note how much you paid someone for boiling water, you might attribute the wrong cost to a cup of coffee later on.

Dennis Lombardi once said,

“Adopt — even embrace changes to your operation. Changing sooner is better than changing later.”

Fourteen words that determines whether you’ll be the person to turn off the lights or the one to keep it burning. Simply put, foodservice experts like Karen and Dennis believe that adapting is the secret to surviving these harsh economic conditions.

Times change. Is your restaurant business doing the same?