The past year has been perhaps most difficult for small restaurant operators. In a fragmented industry dominated by 70% owner operators, the average restaurant’s annual revenue is around $1 million, generating an operating profit of just 4-5%, according to the Harvard Business School. The National Restaurant Association projected an industry revenue shortfall of $240 billion for 2020, when 40 percent of America’s restaurants were shuttered at some point. So you don’t need us to tell you that the current business model for small independents and chains is incredibly challenging.
What can you as a smaller operator do to wring every last bit of efficiency out of your business plan? Let’s take a closer look what today’s restaurant technology advancements can do.
Challenges of Doing Business
Harvard went on to clearly lay out the top challenges faced by restaurants:
- They are, without exception, deeply labor intensive – “by any productivity metric [restaurants] rank among the least productive industries.” When you consider that any restaurant must have employees who prepare food as well as employees who serve food and attend to guests, it’s no surprise that the average restaurant spends 30% of their revenue on labor costs – with that number steadily increasing.
- An equally large expenditure is the costs of goods sold. Smaller chains and independent restaurants often pay a higher percentage as they often lack the ability to lock in pricing and are at the mercy of supply-price fluctuations.
- Finally, the pandemic rushed the adoption of business model expansions such as delivery services and online ordering. These are additional costs restaurants had to take on in order to survive but often struggled to cover with incoming revenue.
Finding Efficiency
The problem is that cutting these costs isn’t easy. Your supply line is what it is, within parameters that you can plan for. Pandemic-related expenses will be worked out over time, either by costs coming down or by additional services being eliminated once the crisis has passed – but in the interim, they also are what they are.
That leaves labor as a place to look to trim costs. However, the concern is that the long-term answer is not to cut staff; that could damage customer service, thereby reducing repeat business and eventually hurting sales. So restaurants are increasingly turning to technology to improve the efficiency of not just their staff time but also their organizational training.
Minimize Administrative Tasks
A digital, mobile checklist app can streamline and enhance the process of filling out necessary checklists and forms like public safety and food safety compliance, line checks, branding standards, etc. This means your staff spends lhttps://meazureup.com/blog/technology-and-commercial-kitchens-the-ultimate-pairing-for-efficient-restaurant-operations/ess time on administrative work and more time on those all-important customer service tasks. In fact, in some cases, these apps need no employee at all as today’s “smart” thermometers and other tools communicate directly with the app.
Further, since all this operations data is already in the cloud and available to anyone in your organization with a phone, the process of preparing for, performing, and reviewing the data from audits is vastly more effective. Advanced data analytics reports make it easy to uncover the organization-wide trends that support timely, fact-based decision-making.
Personalize Online Training
Some aspects of employee training seem to have opposing goals. You want all your training standardized, for instance, so that all employees receive the same information — but only on certain topics like compliance and the customer experience. Other parts of your training only apply to certain positions, so it would be more effective to customize the modules so that only delivery drivers, for instance, are required to document a safe driving record and receive training on safe portable food handling.
A digital audit solution will also host all your training materials, meaning your employees can train online from anywhere, and that updates can be made just once and rolled out to all devices in real time. You can also update any training modules on the fly so that, for instance, it’s quick and easy to update which positions receive training for cross-training purposes.
Operational Efficiency
Let’s expand on that digital checklist solution from an operational standpoint. As your employees are quickly and easily completing your checklists and forms, it’s the work of a few seconds to also add photos and videos to round out the documentation. As each entry is saved, the app also automatically records the employee, the time and the location so that each entry becomes your legal record.
Further, each entry is made available on the app’s dashboard in real time, opening an objective window into actual conditions inside each location. Management can easily see what’s going on and address any concerns, no matter where they are. Spotting any deficiencies becomes the work of a couple hours (or less) rather than days or weeks. Employees are aware of how these transparent processes are holding them accountable, so potential for shrinkage due to carelessness and pilferage are reduced. All this means less money wasted and less potential for long-term damage to your customer experience.
Over the long term, this accountability and the ability to address concerns almost immediately lead to another crucial improvement: A customer experience that is both safe and consistent to your brand standards in every location, during every shift. Your locations are able to develop the kind of relationships with customers that lead to repeat business.
Small Chain Operators Need MeazureUp
Operators of small restaurant chains must prioritize cost management, operational efficiency, and a consistent customer experience in order to survive. You must incorporate current health and safety protocols into strong operational guidelines as executed by well-trained employees. MeazureUp is a digital, mobile checklist and audit solution designed to help your organization reach these goals at a price that makes sense for small restaurant chains and independent operators. We help you ensure that every employee it taking the right action at the right time, over every shift. And our own highly rated customer service team provides the same great care no matter the size of your business. Curious to see what MeazureUp can do for your business? Request a free trial today.
