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Prevent loses in slower times of the year

Q: We’re a highly season, and offseason sales are hard to generate each year. With the lull in business, I’m losing money because my labor cost is so high. How do I keep from laying my kitchen people off or substantially decreasing their hours?

A:
During the offseason, it’s a challenge to keep prime cost (cost of goods sold percentage plus fully loaded labor cost) close to 60 percent. With lower sales, labor as a percentage of sales grows due to fixed costs primarily from management and kitchen labor. In the kitchen, labor tends to be stair stepped and body based; front-of-the-house is closer to linear and adjustable to guest flow. With floor supervision, it’s much easier to phase front-of-the-house labor as a supervisor can easily fill a position in a crunch. Since work in the kitchen is technical in nature, phasing kitchen personnel is more difficult since it takes the supervisor off the floor and away from serving guests’ needs and managing the crew. This results in the leaving more bodies in the kitchen with higher hourly wages than those in the front-of-house. In addition, kitchen labor has become increasing difficult to staff, so keeping your kitchen team is priority.


Since there are only two components to prime cost, and labor in the offseason is going to increase as a percentage of sales, the equation to push is cost of goods sold. This is the time to work diligently and experiment with your menu. Explore the following opportunities:

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Layering: the key to boosting your lunch sales

Q: Our restaurant has reasonable lunch sales, but some online reviewers complain that we’re expensive. What is the best way of changing the guests’ perception to improve lunch traffic?

A:
Your decision to address your guests’ input is wise. Be encouraged the guest took the time to complain; now you can make necessary changes. What the consumer is expressing is a lack of consistency between pricing and the value perceived by the guest.

Rarely will one complain about price if the value matches what the guest believes the product is worth. Take the power of a brand. In a supermarket, you’ll find one product next to another with identical ingredients often made by the same company. One is a “private label” the other is a trusted consumer products brand. Consumers have gotten wiser, but most still choose a brand over a private label more often because the perceived value is higher though the product is exactly the same. What can be borrowed from retailers is the secret of differentiation in the mind of the consumer. We buy brands because we trust them and they provide a positive assurance to meet our need or want. In the restaurant equation, we buy because we want to “feel” a certain way: satisfied, treated, spoiled, full, etc., while having our needs met. Your menus a direct line of generating that emotion and delivering a message of value. Remember, value has more to do with perception than price, and the best way to improve the price/value perception is to layer the pricing on your menu.

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Focus your training on understanding

Q: It seems like our training is not as effective as it should be. How do I make my training investment pay off?

A:
There is a clear industry slide downward in service over the last few years. There is likely one culprit—understanding the “why” of hospitality. Effective training needs to focus on understanding—not imparting knowledge. Employees can know a lot about something but not really understand the important reason behind it. Why do you want them to offer appetizers, beverages, special entrees, dessert, a legitimate greeting and a thank you? Why do you want excellent product quality, prepared quickly? Why do you want a sparkling clean facility? People can forget what they know but they never forget what they understand. When was the last time you needed a refresher on tying your shoes or brushing your hair? Obviously, you understand how to do these things and will never have to be taught again. When was the last time you recited a few of the elements from the Periodic Table in chemistry? Likely, you would need to brush up on it. What’s the difference? Tying your shoes and brushing your hair have real meaning and application to your life and are more important to you and you have a high level of understanding. At one point you may have known the Periodic sign for Iron, yet today you may not be able to recall it at all. The most successful companies continually train their people to a level of understanding and where there is understanding there is breakthrough and paradigm shift. Take the time with each training technique to answer the key question of “Why?” Use these techniques to move your training to a culture of understanding:

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