Owning a Restaurant in Today’s Economy
Let’s talk about this crazy economy, or at least how crazy it is for owning a restaurant in today’s economy. I have good news: there is a solution to the madness. Watch this video for some motivation and hope to get through today’s economy.
Do you think things can get any crazier? We've been dealing with COVID-19 business restrictions in one form or another for almost two years now. Depending on where your restaurant is, the local government might be asking you to become an enforcer of regulations. What about food prices, shortages and delivery? Many items on your food orders have price increases, approaching 300 percent since January 2021. Can you remember the last time you received everything you ordered to your back door? What about just getting a delivery? Not only are the big distributors short on drivers, some are experiencing complete walkouts for higher wages.
Do I even need to go through the rising wages, whether state mandated or restaurants just fighting for anyone to come through their door? Heck, for the first time in my career, I've been advising some of my members to close their doors one to two days a week because they are so short staffed. On top of that, most restaurants are experiencing record sales with the most demanding, rude customers we've ever encountered. The Internet is littered with videos and stories of these customers who have gone downright mad.
What can a restaurant owner do? Where can you find hope in what might feel like a hopeless time? How can you take advantage of this booming restaurant economy? Well, there's good news and there's better news.
The good news
The good news is I'm seeing my members in my group coaching program having great success in combating these challenges. Let me be clear. They too have suffered. They too have felt hopeless for a moment. They too have been working their butts off. But what they've done is worked with me to find solutions. For example:
Raising prices: we have rising prices, rising wages. Some restaurant owners just raise prices across the board. In the case of my members, they have systems and reporting in place that give them data they need to make pricing changes. They have recipe costing cards, they know their menu mix and they how to surgically raise their prices. They don’t have to raise prices across the board because they can literally raise the prices on their top sellers and know that that's enough to move the needle.
They have budgets, and they've reworked them, identifying where to lower their food costs in order to combat all of this, to find the extra money for labor, or to make it more efficient when it comes to labor. Their budget is their plan for success, and they've made the changes necessary.
They've revamped their menus. I've had people reduce their items by as much as 70 items, which includes side dishes, desserts, anything on the menu that you sell. It’s amazing to see them focusing on what they do well and still offering their guests what they want. I have members who have changed their menus completely, taking out complete sections, even if they were popular, because they had to reduce their labor hours in the kitchen. The key to their labor was the menu.
They’re paying more. They have figured out that if they pay more, they can stand out in their marketplace and pull people in. I've had members add managers to pay attention to labor, to pay attention to food costs and all the controls that go with that by making sure the guest has a great experience. With managers the place is clean, that they actually can make more money and have a life again instead of being a prisoner to their business.
They’re building positive workplaces. My members are working hard to create a positive work environment. While there are a lot of reasons for the staffing shortage right now, restaurants themselves have a lot to do with the shortage. A lot of people left the restaurant business because of COVID and now don't ever want to come back. We're working current employees to death. They're tired and customers are beating them up, and they don't want to be in the restaurant business anymore. It’s up to restaurant owners to do everything you can to change your work environment, to be a positive work environment, to build back flexibility, fair pay, good supervision, belonging to something bigger to do more.
The better news
The better news is, working with me, my members figured out they are actually the solution to all their challenges. That's right. You, the restaurant owner, are all you need to get through these crazy times.
Here's your recipe for success:.
- Change your mindset from a fixed to a growth mindset. People with a fixed mindset look for others to blame for challenges, from the government to employees to customers. It's always somebody else's fault. When you think this way, you don't internalize or take responsibility for what you can do in your businesses. Instead, the growth mindset says look at all these challenges. What can I do to improve the situation? They know it may require money, or time, or learning something new, but they know they can get through the challenge. They are the leader their restaurant needs.
- Create a budget. Your budget is your plan for success. It’s based on your numbers and your goals, not some arbitrary number everyone else is using. It is a challenge, but if you put your budget together, you can put your plan for success in place.
- Become an employer of choice. Need I say more?
- Make sure you have an implementer. The bottom line is you as an entrepreneur are not meant to implement systems and do them every single day. Your job is to work on budgets, marketing, developing your team, leading your managers, holding them accountable, moving the business forward. You need someone on your side who is going to help you put these systems in place, train the managers and hold them accountable. That is key to you having freedom from your business.
Now, look. I get it. I talk with restaurant owners almost every day. I see your pain. Owning a restaurant in today's economy is not easy. I can also tell you that when you change your mindset, because I've seen it, You, my friend, are freaking unstoppable.
If you would like to learn how to own a restaurant that doesn't depend on you being in it to be successful, opt in to watch this free video course that teaches you three key principles to running a successful restaurant. If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful.
Be sure to visit my YouTube channel for more helpful restaurant management video tips.
If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful.
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