By Robert Lewis
Bars, restaurants, and entertainment venues that tend to have incorrect inventory counts, high-cost menu items, inadequate supply chains, increased food waste, and untrained staff rarely survive economically challenging times. Here are some money-saving strategies we advise hospitality clients to implement during economic downturns:
1. SAVE MONEY & KEEP A CASH RESERVE
During a recession, it is just as imperative to spend conservatively as it is to keep a large amount of cash accessible during tough times. Keeping extra cash on balance sheets not only serves as an emergency fund but can also be used for business investments and acquisitions when opportunities arise— as they typically do in recessions. As they say, recessions create millionaires.
It can be difficult to save in a downturned economy, so it is important money that is saved is working hard for you. Emergency savings accounts should be high-yielding and should equate to 12 to 24 months' worth of expenses.
Make sure you are reviewing all expenses quarterly with staff members to spot where to make spending cuts and to ensure wastefulness is not taking place.
2. CORRECT YOUR INVENTORY
Tons of food is wasted because of poor inventory management. If your business is not tracking inventory correctly and often, you can experience a great profit loss. Taking inventory daily helps reduce employee theft and minimize food waste.
To help support your business margins, we suggest investing in a POS software that automates inventory controls via recording can help management flag discrepancies faster and more effectively.
3. DON'T OVERSTOCK ON FOOD BY SETTING A LIMIT FOR STORAGE
Many hospitality clients overstock to feel better prepared for what business can bring. However, overstocking leads to increased spoilage by way of staff theft or by forgetting the items are in stock. To keep stock fresh and edible, determine the maximum and lowest storage levels for specific products at your restaurant. Setting limits to backup inventory, even for the most frequently ordered items, helps eliminate waste.
If you own a chain of restaurants, think about transferring some unsold inventory to locations where it is used more frequently. You should be able to update this information using your food inventory management system.
4. TRAIN YOUR STAFF
Having well-trained employees saves your business time and money, helping you reduce waste and increase profits. In order to survive recessions in a fiercely competitive industry, make sure that every member of your team, from the wait and kitchen staff to the management, receives quality and ongoing training.
Handling of Food:
- To ensure food safety, restaurant employees must be trained in proper food handling techniques. A well-trained staff, for example, would understand how to store certain foods at the proper temperatures or the need to wash their hands before beginning the cooking process. Employees who understand food safety practices can prevent food poisoning and food spoilage or waste due to contamination. They will also ensure that your restaurant complies with all food-safety regulations.
The Art of Customer Service:
- To ensure that your customers come back and refer you to their friends and families, your workers must be experts in the art of customer service in hospitality business. The majority of patrons travel to restaurants in order to enjoy dining in a pleasant environment, according to Tourism-Review.com. As a result, providing excellent customer service is crucial to ensuring client satisfaction. A well-trained waiter, for example, speaks politely to customers or goes above and beyond to give them a special service. Such clients are likely to return and have positive memories of your business.
- Furthermore, training staff members to up-sell and cross-sell items is a proven strategy to increase profitability. Suggesting a specific cocktail to pair with an appetizer is an example of upselling. Cross-selling is offering a complimentary item in order to encourage an increase in purchasing behavior.
- A benefit to your restaurant is having well-coordinated operations from food procurement to service. Training programs give your staff precise job descriptions and encourage positive workplace relationships that foster a sense of camaraderie. They get along well and perform their responsibilities, which frequently overlap. Customers receive their food on time at restaurants with efficient operations, chefs prepare food as needed, and waitstaff treats patrons politely.
- Among other business-related topics, an effective training program in a restaurant covers quality standards. To ensure staff carry out their responsibilities in accordance with these standards, training serves as a reminder of your restaurant's principles, procedures, and rules to staff members. For example, waiters will consistently provide clients with polite service, while highly-trained cooks should always be able to handle food securely and prepare it well. When patrons observe that your restaurant has maintained its high standards, they will come back.
5. CHANGE THE MENU
During a recession, businesses may find it difficult to offer the same menu items and recipes they once did due to inflation costs on certain products, distribution problems, or a lack of staff members. To help cut costs while meeting consumer demand, we recommend clients change their recipes to simpler and readily available ingredients while controlling portion sizes. Analyze your menu to best determine customer favorites and eliminate least ordered items. Being more strategic while reinventing your menu will help attract recession-stricken patrons.
People often believe that entrepreneurs like to gamble with risk. That is incorrect. Successful business people effectively manage risk by dispersing it as broadly as possible. Hospitality businesses should embrace open innovation and discover clever methods to collaborate now more than ever.
It's simple for leaders to freeze and concentrate on survival during the avalanche of recession. Avoid freezing. Take advantage of the potential to turn today's uncertainty into tomorrow's opportunity by looking for the bright side.