Why Your Restaurant Business Success Depends on You Embracing Change
I don't need to tell you that running a restaurant has always been full of challenges. You’re living it. Right now you’re dealing with costs increasing at a record pace and a real labor shortage. You already know you can't keep doing what you've always been doing. Something must change. In this episode of The Restaurant Prosperity Formula podcast, I’m asking you one question: are you really willing to make those changes? The idea of change is one thing. To actually take action to make changes, especially when they're difficult, is a whole other level. I'm on calls every single day with restaurants just like you, whether it's on a discovery call or a group coaching call, or one on one call. One thing I can tell you for sure is that if you didn't react to the rising costs in first quarter 2022, odds are you lost 2 to 3 percentage points from your bottom line in food cost alone. Forget about labor. If this is something you would like to prevent going forward, and if you are willing to make changes, I invite you to listen to this podcast episode.
In this episode, you’re going to learn:
- The one number you must know to have any chance to make any money, prime cost, and why it is critical to this discussion. Prime cost is the total cost of goods sold plus total labor costs, including taxes, benefits, and insurance.
- Why it’s important to use gross sales versus net sales when calculating your prime cost. Gross sales is a ring at the register before discounts, not including sales tax.
- The target prime cost for your restaurant if you do $850,000 a year more in sales, and the target if you do less.
- The tool that will help you manage fluctuations from week to week and month to month so that you maintain your prime cost average.
- Solutions some of my members have tried to bring their costs down without sacrificing the quality of the experience for their customers.
In listening to this podcast episode, I’m challenging you with ideas of changes you might have to make to your menu to lower your costs, increase your sales and better manage your labor costs.
If you know you aren’t willing to change anything in your restaurant, if you’re not willing to consider a menu overhaul, if you don’t want to dig into the numbers, you need to stop searching for answers. Stop listening to the podcast, watching videos, reading books. If you're not willing to take action, stop. If you're not willing to take action, and you're not willing to change what you're doing, even when and especially when it's hard, then why even bother?
Remember the definition of insanity? Albert Einstein is doing the same thing over and over again but expecting a different result. If you’re doing the same thing over and over and expecting a different result, how is that working for you? If you always do what you always did, you always get what you always got. It is time to change.
The last two and a half years has been the smack in the head that a lot of restaurant owners have needed to make change. What are you waiting for?
When you're willing to change. When you have a willingness to change, a willingness to learn, a willingness to take action, those are the keys to your success in these challenging times. If you want to be successful in the restaurant business, you must be willing to change. Are you?
Click the podcast player above to listen in, or you can watch the video on YouTube, click here to download the latest episode.