September 4, 2013 Operations & Management Series (Part One): 5 Key Operational Challenges that Can Make or Break Your Bar or Restaurant’s Success
Intense competition, rising food and beverage costs, and the lingering recession are just a few named challenges that today’s bars and restaurants face. In a world where more than 60 percent of all restaurants fail within the first three years, depending on the source, the stakes are high.
As a bar or restaurant owner, you’ll need more than just a few tricks up your sleeve and a dose of luck in order to survive and thrive. Marketing, sales, P&Ls, service, staffing, inventory, food and beverage quality, the menu, technology, and the list goes on and on. Where to begin…
Many of the blog posts on Smarts focus on the sales, marketing and technology aspects of the bar and restaurant business, all vitally important. But let’s not forget about the operational issues that can make or break a bar or restaurant. Because at the end of the day, the success of your business is riding on how well you can execute on your promise to customers.
5 Step Marketing Budget Planner
The ultimate guide for owners & managers.
So to help you in your journey toward operational excellence, we will be dedicating this four-part series specifically to Operations & Management. To start, here is a look at five of the biggest operational challenges impacting bar and restaurant businesses, along with strategies to minimize or avoid them all together.
1. Inconsistent food quality: even restaurants with the most exceptional food can fall into this trap. While it’s impossible to please every guest, every time there are things you can do to help you keep your guests happy more times than not. Among them include choosing the best suppliers; always using the same quality ingredients in every dish or beverage preparation; adequately staffing your kitchen for anticipated rush times; and keeping close tabs on your products by instituting proper labeling and strict adherence to safety standards.
2. Inadequate staff training procedures: employee turnover in the bar and restaurant industry is notoriously high, making it essential to instill the right training procedures. Before letting new employees hit the ground running, make sure that they are equipped with the knowledge they need to perform well in their jobs. This includes instituting a thorough training and orientation process, having a formal employee handbook, and creating a forum for open and honest feedback.
3. Inaccurate pricing of menu items: keeping your food and drink costs under control and maintaining good profit margins require an understanding of how to correctly price your menu items. Generally, food cost should be around 30-35 percent, accounting for food, labor and service costs.
4. Being an absentee business owner: the demands, stresses and long hours of the bar and restaurant business can easily take their toll. But owners who do not keep a close eye on their day-to-day operations are putting their business in great danger.
5. Excessive theft: theft in bars and restaurants can take many different forms and be difficult to detect. As a busy restaurant owner, it’s impossible to be everywhere at the same time. However, you can put certain procedures in place in order to help avoid theft, such as installing security cameras in your establishment, keeping an accurate inventory of your food and beverage supplies, and making sure that all credit card transactions are secure.
Is there a particular operational challenge that keeps you up at night, or do you have your own words of wisdom to share? Use the comment box below to drop us a line.
Next up in our Operations & Management Series: (part 2) how to choose the best food suppliers.