This is a complicated question. A variety of thoughts keep restaurateurs tossing and turning through the evening. We asked the question and are now creating resources which deal with the most significant problems, as shared with us by food service professionals just like you.
1. What do I do about my staff?
Singapore is known as a food oasis. But, if you ask any restaurant owner here, they will tell you that the F&B industry is starved of manpower.
Despite a 5.6 percent growth in wages in 2013 for the rank-and-file workers in the food services sector, statistics show that Singaporeans are still, by and large, ignoring jobs in the industry.
This issue doesn't just plague the daily operations of restaurants, but also impacts the long-term plans of the business. A restaurant owner recently shared with us that, because of the lack of manpower, he is continually caught up with work on the floor, leaving him no time to think about improvements nor expansion.
As a result, there is little growth in his business. His primary challenge is attracting potential applicants to work for him, especially millennials. Despite great benefits and many postings on various job application channels—Carousel jobs, Facebook jobs, Glints, or through recruitment agencies, he, like many restaurant owners, still received little interest from applicants. Others, who applied and were hired, only worked for a short period before quitting.
Quite understandably, they have a whole career path ahead of them, and plenty of options on how they want their future to be. Thus, when a better or more lucrative job opportunity comes along, they grab it.
Many restaurant owners think that older staff members may not be able to cope with the long working hours, and might struggle with the heat of the kitchen— that the conditions of restaurant work might hinder productivity for seniors, and thus, they resist hiring them.
However, couldn’t this be a risk worth taking? Perhaps, if owners can see through the downsides, they can find older workers who can make significant contributions to their business, and who can add value.
The growing pool of senior talent can be a boon to the F&B industry if businesses are able to help them integrate into the workplace and tap into years of invaluable knowledge and expertise.
Owners need to recognize strength in diversity, even if older workers have less energy or enthusiasm than younger employees. In many instances, employers who put faith in older workers to get the job done can, at the end of the day, be rewarded with employees who are honest, responsible, dependable, loyal, focused, organized and mature.
With older employees, we can expect dedication to the job at hand. Seniors are known to take pride in their work, and often require less training. In engaging with this group of baby boomers, most of whom have no plans to move up and out, significant cost savings can occur for the business in the long run.
"I prefer hiring senior citizens. They already come with 30 years of experience. The experience doesn’t have to relate directly to the F&B industry, but for example, they’ve had 30 years of eating out at restaurants. Some of them travel the world. So, with their skill sets, when we put them on the job, you can see that they know how something needs to be done, just because they’ve been eating out all these years."— Kenneth Choi, Business Development Manager at Ginko House HK
2. Inventory ordering nightmare
A restaurant owner shared to us that, one night, he woke up in a panic because he forgot to place his order. Talk about an inventory nightmare!
The logistics of running a restaurant are never easy. The struggles of invoicing and scheduling are something that no restaurateur can honestly say they enjoy.
Specifically, the raw material is an enormous area of concern for restaurant owners. Variance, spillage, and theft lead to the unaccounted loss of stock, which negatively impacts your restaurant's bottom line. Tasks like these aren't easy, but they can be made easier if you understand how to perfect your processes.
FoodRazor's Thought: Automate your inventory processes
Inventory tracking is an essential part of restaurant management. If you can't do this, it's either time to: find somebody who can, consider a career change, or learn the best ways to track, measure, and manage inventory.
An inventory function integrated into your order creation will save you hours of time and unspeakable amounts of effort. With this system in place, there’s no need to accommodate how every supplier wants to be contacted – from phone calls to text messages, emails, and even faxes.
FoodRazor combines all of your purchase orders into one single screen, regardless of your supplier’s preferred communication channel. Plus, we keep track of all your orders, delivery schedules, and costs— right from the start.
Your orders and invoices can be tracked without deviation, and misplaced paper invoices are no longer a problem, because all the data are collected in one central system. Without confusion, you can easily make inventory orders whenever necessary. This provides invaluable insight into what's selling and what's not, which allows for highly accurate and efficient ordering from suppliers.
With customer trends and preferences going digital, restaurants have to invest in technology to survive in the market. Your capacity to adapt to and adopt these technologies will prove to be the differentiator between “businesses” and “successful businesses.”
3. How can I cut my cost?
It's absolutely critical for restaurants to look for inventive ways to save money. Whether it’s a major franchise or an independent, family-owned restaurant— cutting costs is always a relevant concern.
However, not all cost-cutting methods are effective. Deciding what cutbacks are smart is tough, and requires a lot of foresight. What may save you a penny today could lose you customers in the long run.
Here are the top three worst cost-cutting ideas, which you should avoid:
1. Cut Portions and Ingredients
This is one of the first and most common strategies which many restaurateurs use to save money. Although many establishments successfully reduce costs by decreasing their portions and going easy on expensive ingredients, some operators take this strategy too far. From offering the supermarket’s brand of ice cream as dessert to saving on beer by adding more foam to each glass, too many establishments have lacked common sense in their decisions – such changes come across as very disappointing to customers.
Tip: It is better to review food costs and downsize menus to include only the most profitable items. Customers return to your restaurant for the unique recipes, flavors, and tastes they become attached to— don't fail them.
2. Sticking to Old Technologies
Investing in new technology is essential in the F&B business. It is often scrapped during tough times, which is not particularly wise. Using old, outdated technology can mean higher costs for your restaurant, even if it seems to be saving you money. System maintenance is often one of the biggest IT costs for companies; the older your system, the more you will have to spend on maintenance and integrations. Not to mention all the problems (and expenses) in cases of breakdowns and outages!
Tip: New restaurant technologies with features like Inventory Management, Invoice Management and more, are not only cheaper to maintain than old tech, but they also help cut costs by accurately identifying and improving areas of waste.
FoodRazor's platform provides real-time, accurate food spending data that puts owners in a better position to analyse their business accurately and plan the business’s future based on actual numbers. As an owner, you can easily maintain control over your budget among different locations, as all transactions are consolidated and viewed in one place.
3. Hire unqualified staff
Because labor costs are one of the restaurant's highest expenses, it makes sense that owners try to keep them down. By hiring young and inexperienced staff, you can save a few bucks— but is it the right decision for your restaurant?
There is a significant downside to keeping the salary costs down: underpaid workers tend to be demotivated and uncommitted, which inevitably shows in the quality of work.
Tip: If you want to save money on salaries, focus instead on retention. Although few restaurateurs account for these costs in the expense sheet, it is time-consuming and expensive to train new staff. If you manage to keep your employees by providing them with a living wage and healthy working conditions, your restaurant will gain from it, too.
Managing cost is essential in running a restaurant, but owners must be cautious when deciding how to make the cuts. Remember that some ways to reduce overhead may end up being counterproductive, and a small cost decrease is not worth the jeopardising your restaurant's reputation.
4. Are customers happy with the dining experience?
The success of a restaurant is dependent on how customers enjoy the dining experience. Any restaurant has the power to succeed, but few restaurant owners know what's needed to move their business beyond keeping the ship afloat.
New restaurants pop up all the time. Competition is ruthless in almost every corner of the city. However, maintaining the status quo and lacking the drive to stay ahead of the curve is can kill any restaurant.
Here are 3 tips that we believe restaurant operators, like you, can use to foster a deeper connection with your customers.
Consistency is the name of the game
If there's one thing that every single restaurant owner should swear by when trying to run a healthy business, it's consistency. No matter if you're a charming cafe so far-flung that you might even get “My Maxis” signals from Malaysia, or the hottest new bistro in the heart of the city center, providing consistency will ultimately determine your success over time.
From food quality standards to the customer experience, consistency is essentially a mantra that every gastronomic operator should practice religiously. It can be tough to maintain consistency on a daily basis, but it's worth striving for. If consistency seems impossible, it may be time to reimagine your processes in order to make it more achievable.
Value retention over acquisition
Customers are what keep your doors open. For restaurants, however, if you're only able to bring in new customers rather than returning customers, you won’t stay open for long.
Restaurants typically rely on repeat customers due to the local nature of dining establishments. Unless you run a restaurant for tourists, the pool of potential customers is mostly restricted to your immediate area.
This is where consistency will help bring customers back time and time again. If a guest is given a consistent experience every time they sit down, and they like the food, they will probably return. But it's not just the food— quality of wait staff service, overall cleanliness, and the environment you create all play a huge part, as well. Every facet of the dining experience must be consistently exceptional if you want people to come back.
Revisit menu pricing
Generally speaking, the cost of ingredients will increase over time. From a business perspective, failing to price items appropriately will only harm profitability, so it can't be ignored for long.
This is a challenge which most established restaurants face— but changing menu prices can be tricky. Retention is, overall, the most important consideration for established restaurants, and many guests have somewhat ingrained expectations for what they usually spend.
Still, because pricing is a necessary evil, it's important to review costs to determine whether or not items are still profitable at current price points.
Instead of implementing changes all at once, it's better to make them gradually.
Restaurants often fail. Most often, the failure occurs because the restaurant doesn’t address elements that, even though they may seem far-fetched, in fact are within their own control. Restaurants who get too comfortable will be unprepared for the future, and will eventually join the 50 percent of F&B establishments in Singapore that doesn’t survive beyond 5 years.
Hopefully, these tips planted some food for thought— we believe they can help you, and restaurateurs of all types, take each business to the next level.