The Christmas rush is long gone and as the owner of an independent hospitality business you're probably breathing a heavy sigh of relief. However, the first couple of months of the year provide a great opportunity for you to sit down with your managers and staff to review the performance of the business. What were your successes and what are the things in your restaurant that can be improved upon from last year? Here are 5 key suggested areas and resolutions for your restaurant business to help focus your mind and develop a strategy.
Hospitality is a margins business. What are your margins? How profitable are you? Even if your business is doing well, the level of profitability can always be improved upon. One way of achieving this is to set targets; they provide you with a destination and the direction to reach it.
When deciding upon targets, focus on accomplishments and failings from the previous year(s). Examine the business and make the targets obtainable. Setting them too low can adopt complacency; conversely too high can damage staff motivation and morale.
One element of improving profits is to reduce costs, yet the costs of running a business are constantly rising. It's as important to control this as it is to boost demand - so try targeting a 5% reduction in costs.
Will you achieve this? Perhaps not, but it's important to try if only to stop costs rising so quickly. There are always savings to be made in any business, however lean. Are your long-term suppliers still the lowest cost option? Can you organise your workforce to better effect?
Compare trends in current overheads in recent years and focus on those rising fastest. This is a good place to start and also consider introducing new technology to assist with this. Unless you look hard, your costs will continue to eat into your profits. Consider some of the following areas for reducing spend:
Staff meetings are derided by some as a waste of time - which they can be if not organised properly. In fact, they are essential if you want to keep your staff informed and feeling involved.
Given the right structure they can be a valuable source of ideas and suggestions for improving efficiency. Numerous surveys show that communication with staff is a key requirement for any business and you should not overlook this advice.
Training is another key activity which is often disregarded. Many businesses prefer to recruit already trained staff; howver training your employees gives them a sense of identity that binds them to a business. Perhaps here, we ought to mention the induction.
Before you commence with any training, you have to be able to induct new recruits properly. Induction is frequently too slapdash and disorganised. It needs to be carefully planned so that new arrivals are introduced seamlessly into the business.
Training and development are often lumped together however, you should look to separate them as there are clear and important differences. Every member of staff should have a development plan so that your business is then able to get the best out of your employees. That will then allow you to operate at maximum efficiency. The kinds of questions you should ask include:
At least 1% of turnover should be spent on training and development. It rarely is, and this is one of the hospitality industry's weaknesses. Not enough time and money is spent on training and developing its workforce and with 2.5m people employed in the sector, that's a huge concern.
This blog post is an extract from an article written by Bob Cotton that appeared in FSM magazine.
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The content of this post is up to date and relevant as at 04/02/2014.
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