Industry experts suggest that the ferocity of the F&B landscape is due to a mix of circumstances, not excluding intense oversaturation of the market. Rapid expansion may cause a rush of adrenaline, but one must accept the consequence of this gamble— potentially growing too soon and reaching a point where supply defeats demand. In addition to rising food prices, labor shortages, and high turnover rates, to see how restaurants often struggle financially isn’t exactly rocket science.
Developing and expanding a new restaurant concept, or starting an existing one in a new location, is truly an exciting time. However, growth really should be approached with caution.
Setting up new outlets needs to happen in a structured manner so that every outlet is monitored and regulated. Controlling which suppliers can be ordered from, deciding who can make the orders (and what they order), reviewing all spending and tracking budgets closely— these are all areas of business which require immense attention to detail.
Once a new location is up and running, it is vital to properly analyze and understand customer demographics and purchase behavior for the site. Commonly, the central kitchen or the head office is far too isolated from the daily issues at each specific area, especially when menus, information, and promotions are shared.
This can be a challenging task— especially when the central office needs to ensure control over portions, recipes, specs, and purchases of every outlet.
Having fully automated ordering to suppliers and invoice management that is linked to your live supplier pricing, such as offered by FoodRazor, is a great way to manage the task, and comes with the added benefit of providing complete transparency across the business.
Retrieve control of restaurant finance
It is easy to get tied down to admin, allowing food costs to spiral out of control. To regain control of restaurant finance, you need to be constantly aware of sales data, able to track dishes, and really know what is working on a menu and what isn’t. You need to price correctly and to see which recipes are performing the best, which need adapting, and which should be dropped.
Constant fluctuations in food prices mean that even standardized menus need to be regularly reviewed. This also applies to restaurant chains. Just because you have a set menu, doesn’t mean you can simply cost once and rely on margins. By having live pricing links to all ingredients purchased, it becomes possible to make small tweaks and adjustments without having to take on massive sweeping changes regarding menu pricing.
Many businesses struggle with maintaining margins and delivering good profits. And, with rising costs, they turn to add $ 0.50-1.00 on every main course or starter. This is definitely not the answer when you are looking to increase customer loyalty and grow. Many customers will just walk away, to a competitor that charges less or doesn’t raise prices on their favorite items.
At FoodRazor, we believe in a more structured and sensible approach to managing costs and price variations. We believe in helping you to work in partnership with your suppliers: agreeing on a rational plan to deal with price increases, finding alternative products/cuts, and negotiating better prices for bulk purchasing.
Instead of letting three produce suppliers fight every week for your business, use 1/2/3 vegetable suppliers, but give all of them a decent share of your orders. In return, they will provide you with better prices. Making one supplier provide and deliver two separate orders of chives is not good for them, and they will find a way of getting that cost back somehow in the future! In this scenario, no one is a winner.
In these difficult and financially challenging times, you need more than just luck and few spreadsheets to ensure that you generate significant profits. Our merchants can see up to 5% variance by using our full daily price notifications and spending analysis in their business. Whether you are a single site or a multi-site, or even a multi-language business— FoodRazor can work for brilliantly, efficiently, and securely.