Restaurant Consulting NYC | The Dog Days of Summer How to Manage During a Downturn in Business | 4Q Consulting, LLC

The Dog Days of Summer

How to Manage During a Downturn in Business

Summer in the NY Metro Region is often a slow period for area restaurants – as the temperature and humidity rise while kids are out of school, customers escape the heat to take vacations and many leave for weekends.  Being able to nimbly anticipate these slow weeks and make changes to your operation will allow you to survive the dog days of summer without taking a financial hit.

As we discussed in our last blog, The Value of A Good Business Plan, a restaurant is a living breathing entity that requires constant reevaluation. Now restaurateurs must understand the value of being flexible when the thermostat rises and business levels fall off as people escape the heat.

Here are four key things to help manage your restaurant in a short downturn:

Adjust Your Cash Flow Management – Many restaurants fail not because they are unprofitable, but because they ultimately become insolvent. The single most important step for survival of your restaurant when business slows is to rigorously manage your cash. Calculate what your cash flow needs will be based on both your estimated fixed and variable expenses.  Know what your break-even point is, as sometimes a viable cash management strategy is to close the business for the slowest portion of the slower season.  And lastly, adjust the way you operate to further reduce your variable expenses.

Adjust Your Variable Expenses – Variable expenses are those expenses that change based on your level of business – the largest controllable categories being food and labor costs.  From Where Oh Where Has My Margin Gone?, we know that labor is a restaurant’s largest variable expense and is only becoming more costly.  Planning for this fall-off in business is key in being able to scale back schedules in advance, rotate out vacations among the staff and utilize staff that has been cross-trained – increasing productivity per work hour.   If you have staff standing around staring at the walls, you have too much staff on hand.  Lowering total payroll also lowers payroll taxes and payroll processing fees.  Other controllable variable expenses can include paper goods, any merchandise, some utilities and maintenance.

Adjust Your Menu Offerings – Changing your menu can also impact food, beverage and labor costs. Consider replacing some menu offerings with less expensive items using seasonal and local ingredients. Consider lightening your menu to offer more salads and refreshing cold options.  You don’t want potential customers not to consider coming to your restaurant on a hot, sticky day because your menu is too heavy.  Furthermore, less labor-intensive preparations allow you to work with less staff.  Guests, by nature, tend to eat less and lighter fare when the thermostat rises.  Cooking with what is locally in season is always less costly than using out-of-season imported items.  

Adjust Your Purchasing and Inventory Management – When items are not flying out of your walk-in or your stock room, you should look at what you are buying and how you are buying it.  Intelligently reducing the overall number of offerings on your menu can increase your product cross-utilization allowing you to carry a smaller inventory – both in number of inventory items and quantity of each item you stock.  Analyze what is selling, at the best profit margin, and either remove the non-selling items or find creative ways to reinvent them.  By sitting on non-moving inventory, especially alcoholic beverages, you are just tying up your cash flow.

Being aware and flexible about managing your business in the Dog Days of Summer can help keep your bottom line from melting away.

Email us today for a free business consultation at www.4qconsult.com.  We help restaurants be profitable, from Start-ups to existing restaurants looking for a fresh set of eyes.  4Q Consulting, LLC can develop customized plans and operational guidelines to survive a slow period of business!

All original content copyright Noelle E. Ifshin, 2016-2017. 

Noelle E. Ifshin, President, 4Q Consulting, LLC 

noelle@4qconsult.com  

www.4qconsult.com 

244 5th Avenue, Suite 1430, NY, NY 10001  

(212) 340-1137

Restaurant Consulting NYC | Why Cross Training and Creating Redundancy in your Restaurant Staff is Crucial to Success | 4Q Consulting, LLC

Why Cross Training and Creating Redundancy in your Restaurant Staff 

is Crucial to Success

As we discussed in A Well Trained Staff is Your Secret Weapon: “People run your business and your business is only as good as your people.  An effective training program is an owner’s key tool to ensure consistency in product and customer service, which is a basic tenet of running a restaurant.”  

The restaurant business is a team sport which has specialists in certain positions – i.e. bartenders, servers, line cooks, etc.  Each person on the team should know their role, be trained for their specific job and know how it fits into the team as a whole.  However, what happens when the only manager who knows how to close calls out sick or you are under staffed and no one is cross trained? It becomes increasingly difficult to run a successful restaurant when you have no redundancy.

Here are four reasons why redundancy and cross-training in your restaurant staff is crucial to your business:

Better Productivity – Cost and insufficient time are often cited as reasons why restaurants do not take the time to set up cross-training programs.  Though it may increase your overall training costs, to train multiple people to do multiple jobs, you reap the benefit when pressed into action.  Employees and managers who are properly cross-trained can increase your restaurant’s productivity because it allows you to make changes without disrupting service. We tell our clients that it is more costly, in the long run, to not cross-train your staff.  The cost comes in many forms, but mostly in a work force that is not as productive as possible, resulting in having to use more staff per shift, expensive mistakes being made by untrained stand-ins and the possibility of a poor customer service experience for your guests.

Better Product Quality through Consistency – As we examined in Consistency is King, “Customers should not have to spin the roulette wheel each time they visit your restaurant; they should experience the same quality of food and service every time.  It should not matter which chef or server is working on any given day, the customer experience should never be a surprise.”  We have all been to a restaurant that was great one day and then only so-so the next time around.  Whether the staff line-up has changed due to growing the business or people calling out sick, you must have bench strength in your ranks, this way no one can tell that the Sous Chef is cooking instead of your Executive Chef on any given night.  Consistency is the key to establishing regular clientele, and regular clients are the most important customers to have.    Maintaining regular clientele is a critical factor in establishing a solid reputation that will attract newcomers.

Better Employee Retention – There are many reasons why employees leave jobs; high on the list is becoming frustrated or bored in a job.  Assuming you've done everything correctly during the on-boarding process, yet you are still having large amounts of turnover, it is time to look at what type of advancement and cross-training opportunities you provide your employees.  Cross-training also helps to engage the long-time employee who feels that they are no longer learning anything and feels that the restaurant doesn't invest in furthering their knowledge.  At a basic level, human beings like to feel that they are continually learning new skills and will acknowledge management’s investment in them by staying with the company.

Better Financial Results– Improved productivity, product quality and employee retention should all lead to organic cost savings.  These savings, in the long run, will offset the initial costs to cross-train all of your staff.  By being able to achieve the first three “betterments” stated above, you will be able to: reduce production steps and/or mistakes; run your business leaner; make time-effective market-driven changes; focus on cultivating on-going, repeat business; and lower your recruiting and hiring costs.

You must start by setting training expectations with your management team. Often chefs and managers do not want to train their staff to do their job, for fear that they will be replaced, so they leave out crucial steps or ingredients that are key to a great product or service.  They must understand that they are only as successful as those they train underneath them, and they can only grow in their careers if there is someone “on the bench” ready to go!  Take your best people and encourage them to share their most developed skills: Make teaching a badge of honor for employees who achieve an elite level of competence.

By focusing on cross-training your staff and building in redundancy, you can create a place where teamwork can thrive, your employees are invested and are continually learning.  

Don’t know where to begin?  4Q Consulting can develop customized business and operational guidelines to help you start and run your business.  Email us today for a free business consultation at www.4qconsult.com.

All original content copyright Noelle E. Ifshin, 2014-2015.
Noelle E. Ifshin, President, 4Q Consulting, LLC 
244 5th Avenue, Suite 1430, NY, NY 10001
www.4qconsult.com