Many business people in the hotel industry fantasise about receiving glowing reviews and seeing lines out the door. However, very few people are ready for this level of achievement.
When French Bistro Madame Rouge was the only new restaurant in Queensland to receive a chef's hat in the Good Food Guide in 2017, a national honour, this was always a possibility for the business. In fact, it was the only new restaurant in the country to do so.
The fact that the restaurant could accommodate the increased business after winning the prize came as a complete shock to the proprietor, Mary Randles, who commented to The Pulse on the matter.
"The only reason I made it down to the awards ceremony was that I made a commitment to my front-of-house manager that we would." "The first six to eight months of the business were a struggle for us financially since we had to put in a lot of hard work," she explained.
She mentioned that the most significant change was that the restaurant was now fully booked all during the week and not just on the weekends.
It was quite different from the prise experience that her husband, Phil Johnson, had. It was in 1997 when his E'cco Bistro was awarded the title of Restaurant of the Year by Gourmet Traveller; to this day, it is the only restaurant in Queensland to have achieved this honour.
Randles recalled that the client "still remembers coming back from the restaurant on the Monday to discover layers of faxes on the floor with appointments."
According to her, incidents like that do not arise in the hotel business nearly as frequently as they once did. There is now a greater selection of restaurants of a very high grade.
However, there are moments when the pressure that comes with owning a restaurant that has won multiple awards, along with the focus that comes along with it, becomes too much to take.
What to do when success is tricky to handle
Late in 2017, one of France's most celebrated chefs, Sébastien Bras, requested that the three Michelin stars awarded to his restaurant be taken away. He desired to put an end to the expectation that every dish that came out of his kitchen would be deserving of three Michelin stars.
Randles considered the award of only one hat to be a blessing. The cafe reaped the benefits of increased attention, but it avoided the intense pressure that comes with being compared to restaurants that have achieved two or three Michelin stars.
"There are times when you do feel the weight of the prise, but that's simply a matter of perspective," said the winner. According to Randles, "if you're trying to create the greatest meals you can and you're winning accolades, it's important to keep doing things the way that got you the prizes in the first place."
Dealing with the numbers
When there are more clients clamouring to get in the door, it can be difficult for smaller businesses to deal with the logistical aspects of success.
Other restaurants that have been forced to contend with the increased business that excellent evaluations bring have turned to technological solutions. There are apps that create "virtual lines," such as LadderChat. With these apps, customers are placed in a "virtual queue," and they are notified by the app when their table is ready. There is no need to form a line.
In addition, software like Open Table enables companies to display their available bookings on their respective websites.
When it comes to managing wait times for hungry diners, some restaurants still use the time-honoured method of arranging reservations by pen and paper. Or those that direct the wait staff to switch customers' seats as quickly as they can (and face some miffed diners in the process).
Success can also deter restaurateurs to innovate.
Why try harder when you’re No. 1?
After receiving a prize, there is sometimes the temptation to continue doing things in the same way that got you the honour.
Why not do it again if it was successful and earned you an award in the first place?
How to keep your restaurant or café's expensive promotional disaster at bay
In the hospitality industry, offering promotional bargains is a tried-and-true method for attracting new consumers. However, how can you ensure that your campaign does not fail to live up to its potential?
There is no assurance that utilising promotional tools such as coupons, giveaways, and discount packages will result in a favourable outcome, despite the fact that they are some of the most popular options on the marketing menu of every hospitality company.
The recent closure of a "all-you-can-eat" hot pot restaurant in Chengdu, which was forced to shut down as a result of losing more than $100,000 as a result of giving a "all-you-can-eat" option, has grabbed the attention of media outlets all over the world.
The eating establishment came up with a campaign in which customers could buy a membership card for the price of $25 and receive an unlimited supply of meals for the duration of the promotion, which was one month.
Where does this leave us? It wasn't long until it was providing service to more than 500 individuals each day, albeit operating at a loss.
There are several marketing opportunities
According to Sally Neville, Deputy CEO of Restaurant and Catering Australia, the popularity of promotions in the hospitality space is driven by a crowded marketplace, with restaurants using them to grow their share of new customers. This causes "operators to promote their business to grow their share of new customers and to remind and incentivize past customers to return," which causes "restaurants to use promotions to grow their share of new customers."
As a result of this, there is now a vast array of promotional options that are "every bit as varied as the industry itself."
"From 25 to 50 percent off menu prices, to 'buy two get on free,' to 'vouchers with incentive to return,' to 'complimentary glass of wine with the main course,' to'special pricing,' to 'free BYO,' to 'value add,' – the list goes on and on," said Neville. "The list also includes complimentary glass of wine with the main course." In addition to that, the list comes with a complementary glass of wine to enjoy with the main dish.
In addition, the means of distribution that these campaigns take are extremely diverse. Some of these distribution channels are a bit more conventional than others, such as letter drops and print vouchers. Other distribution methods, such as email marketing or apps that may "push" messages to customers as they walk near a storefront, are examples of more contemporary distribution channels.
The amount of effort that business owners are willing to put into testing and learning varies tremendously, despite the fact that each of these forms of advertising and methods for delivering them has the potential to be successful.
"The success of any promotion is dependent on the product that is being offered and the value that is perceived by the customer, the distribution reach of the channel, the age and demographic of the target market, as well as the preferences and trust that the target market has in certain channels over others," says Neville. "The success of any promotion is dependent on the product that is being offered and the value that is perceived by the customer."
There are five techniques to make sure your promotion is successful
In the past ten years, in order to promote their restaurants and cafes, businesses have been compelled to try out a wide array of cutting-edge marketing strategies, which has led to a diverse set of outcomes.
Neville claims that there are a significant number of cases in which hospitality companies experienced monetary losses as a direct result of the process (though perhaps none so extreme as the recent Chinese hot pot example).
According to Neville, "Businesses periodically oversold the coupons, which led to an influx of business that resulted in minimal or no profit." This meant that the product offering was diminished as a result. "The vouchers were occasionally oversold by the businesses,"
"Even if there was speedy generation of revenue, the venue's reputation was ruined in the eyes of the consumer if the experience was poor," and "the outcome was a negative experience for the customer."
What steps can you take to guarantee that the effectiveness of your promotions will be maintained? The following are the five items of advice that Neville has to offer:
- Simplify the offer – “Customers despise it when they are taken aback or made to feel embarrassed by unexpected fees and expenses.”
- Make the point plain – “Because the offer has to be profitable for the company in the end, if it is only cost-effective to make the bargain available from Monday to Thursday, then the phrasing of the offer has to make it abundantly obvious so that customers, employees, and business owners can all comprehend it.”
- Ask for opinions – “An invitation to have a cup of coffee or a glass of wine with the owner will not only develop loyalty among their customers, but it will also provide vital input from those customers regarding which promotions are valued the most. Because they are on the front lines of the company, employees will also have ideas to contribute.”
- Measure, test, and repeat – “The proprietor or manager is responsible for evaluating the effectiveness of all promotions to evaluate whether or not they are producing a profit or merely increasing turnover. Has the campaign resulted in the acquisition of new customers who are likely to become repeat customers? After all, raving customers who come back and spend money are the "holy grail" of the hospitality industry.”
- Embrace your promotions in long-term marketing strategies – “Because there are now more firms opening their doors than there were in the past, the "honeymoon period" for new companies is now shorter than it ever has been. It is absolutely necessary if you want your company to continue expanding, to devise a strategy that will enable you to maintain an ongoing dialogue with your clientele.”
The phenomenon of promotions has evolved into something that is expected of businesses in the retail and hospitality sectors due to the intense rivalry that exists for new clients.
In recent years, it has been clearly evident to business owners that the careful application of these revenue-boosting deals and their ongoing improvement must be a cornerstone of any marketing strategies with the express purpose of boosting foot traffic, retaining consumers, and raising sales. It wasn't always like this.
Is home delivery doing restaurants a disservice?
An investigation by the Australian Competition and Consumer Commission (ACCC) was conducted into UberEats. As a result of the investigation, the company agreed to change an unfair condition, which stated that restaurant owners were responsible for compensating customers for mistakes made by the program's delivery drivers.
The BBC made waves in the United Kingdom when it successfully joined the delivery platform as a "fake" takeaway restaurant without any identity, bank details, or food hygiene rating checks being performed.
Since then, UberEats has made changes to its onboarding procedure, following the release of a statement in which the firm was described as being "extremely concerned by the infringement of food safety standards." Obtaining a valid food hygiene rating is a requirement for signing up with UberEats at this time.
Restaurants have a problem with food delivery services in general, not just UberEats. Both Deliveroo and Foodora have been subjected to their fair share of negative news because to allegations of "wage theft" and revised contracts that place the responsibility for correcting wrong orders with the rider rather than the platform itself.
We talked to a few different restaurant owners to get their perspectives on these platforms, and we compiled a list of some important considerations to keep in mind when determining whether or not home delivery services are a good fit for your company.
Will you be gaining more customers?
In Sydney, you'll find the Thirsty Wolf, which is both a bar and a restaurant. When they were on King Street in Newtown, they discovered that they were in a "dead zone" in terms of the amount of passing traffic. After considering all of their available choices, they came to the conclusion that the best way to reach nearby customers who were not likely to walk by the venue was to work with numerous home delivery providers.
It became abundantly clear to both of them very rapidly that this was the best choice for their financial situation. They were able to stay alive thanks to the home delivery service, which increased their food sales by several hundred per cent and allowed them to continue their search for a new location for their venue.
When it comes to home delivery services, a great number of other locations all around Australia share the same sentiments. They believe that these apps enable them to reach customers who would not typically dine at their venue, or if they have a venue that is not designed to cater for many dine-in guests, they believe that the home delivery service enables them to sell more food than they would if they only served customers face to face.
The restaurant Salmon & Bear discovered that after they started offering food delivery to customers' homes, they not only witnessed an increase in the number of customers purchasing food, but they also saw a decrease in the number of customers visiting the restaurant "in-venue." It found out that once they had the choice, customers preferred to eat at home rather than go to the location where the restaurant was located. They decided against providing delivery to clients' homes in order to entice them to visit the venue in order to get the "whole experience."
It is essential to think about what you hope to achieve by utilising a home delivery service, and then to keep a very close eye on the financials of your company in order to determine whether or not you are, in fact, making money, or whether or not the association is one that is actually one that is not working for you.
Does it enhance your venue’s offering?
Kittyhawk, Big Poppa's, The Lobo Plantation, and Jared Merlino's newest establishment, Bartolo, are just a few of the excellent local venues that Jared Merlino owns in the Sydney area. Traditional Italian foods such as homemade pasta, ragu, and fresh Italian focaccia are given a contemporary twist at the Italian restaurant and bar known as Bartolo. Bartolo also serves cocktails.
Merlino does not currently offer home delivery, and the company has no current intentions to start doing so.
"In our experience, most delicious cuisine does not fare well when transported. In addition, the setting in which you dine and the level of service that you are provided with both contribute to the overall exceptional quality of the Bartolo dining experience, he explained.
"On top of that, I truly worry that people will judge the experience at Bartolo based on something that they might eat at home after it has travelled halfway across Sydney,"
When it comes to leaving their reputation in the hands of a third-party organisation, a lot of different locations have the same worries. There are a lot of things to think about, what with the never-ending concerns over the length of time it can take for food to be delivered, followed by the discussions around who is liable when food does not arrive in the same condition it was ordered in.
What’s your goal?
First things first: figure out what you want to accomplish before making a decision on whether or not to sign up for a home delivery service. If you want to produce food that is easy to transport and sell it to the greatest number of customers feasible, then delivery may be the right choice for you. If you want to serve cuisine that doesn't travel well or if your goal is to provide a more customised experience for your customers, you may need to examine whether or not delivery is right for your business.
No matter what you choose to do, it is crucial to monitor the situation and identify any issues as soon as they arise by keeping an eye on your profit margins and actively listening to input from your customers.
Key decisions to consider when launching new takeout and delivery models for your restaurant
There is little room for debate over the catastrophic and pervasive effects that COVID-19 has had on the restaurant and food service business in the Australia.
By the 22nd of March in the year 2020, about 38 states across the country had implemented stay-at-home directives and forced eateries to limit their operations to take-out and delivery only. This was a response to the global catastrophe that had occurred. These limits were a devastating blow to a great number of restaurants and other types of enterprises operating along the same lines.
The National Food Service Industry sent a letter to the White House in March 2020, warning of a $225 billion decline in sales, despite initial projections of $899 billion in sales by the end of 2020. This decline would have a direct effect on the livelihood of the 15.6 million workers employed in the industry. Despite initial projections of $899 billion in sales by the end of 2020.
Even large national chain stores were impacted by the issue. The likes of McDonald's and Starbucks have all been forced to temporarily close their locations, while the Union Square Hospitality Group, which is frequently and publicly acclaimed for their exceptional employee standards, has laid off thousands of people.
On the other hand, for some, the transition to a model that centres on online ordering and delivery gave an opportunity to maintain their presence in uncharted seas. Recent research conducted by Datassential found that approximately 57 percent of customers would be willing to place an order with a restaurant even if it did not have a drive-through option. In comparison, 47% of people are willing to utilise a delivery service, while 46% are willing to use a takeout or carry out service. The popular press is replete with examples of companies that have successfully converted their operations to new methods of doing business after making strategic use of the data that is already available to them.
Even after several months have passed and lockdown limitations have been lifted and returned, COVID-19 continues to pose a significant risk. Consequently, although many companies in other industries are working to discover new ways of conducting business in a socially detached manner, those in the restaurant industry already have a solution that has been tried and proven to be effective.
However, adopting this "new normal" does not eliminate all of the difficulties; rather, it only replaces some of them with new problems of its own design.
Introducing a new menu
It is a fact that is frequently ignored that not every item on the menu that is served in your establishment is totally suited for takeaway or delivery. Dishes that must be served extremely fresh might not be at their peak after travelling across town for twenty to thirty minutes, while it might not be possible to serve other dishes in any other manner besides in the restaurant where they were prepared.
This is one of the reasons why you should think about modifying your menu to accommodate the new method of operation. One more reason is that you may discover that the majority of the things on your menu are ignored by the majority of your consumers.
Deliveroo, a startup that specialises in the delivery of food, reported that in the United Kingdom, between 80 and 90 percent of customers place orders for fewer than half of the items on the menu. There is no reason why this trend wouldn't be the same in other nations as well.
Adapting your menu to a world where the lockdown has been lifted requires, of course, that you take a good hard look at what is successful and what is not.
Restaurant owners no longer have to wait until the end of the month, or even the end of the week, to monitor their establishment's sales when they have access to individualised information. It is possible to compile sales reports and send them through email to key stakeholders whenever and however the need arises. Due to the fact that time is of the essence, this enables you to make quick judgments that are well informed about the menu items that are available for delivery and takeout, so reducing waste and increasing revenue.
Accounting may also be of great assistance in controlling inventory in order to enhance productivity, determining which components just aren't fit for your new style of functioning, and making intelligent decisions regarding reordering when necessary.
Setting up online ordering
Although there is not really anything wrong with placing an order over the phone, it is not the most effective method that is now accessible. When business is particularly busy, answering the phone can become a full-time job in and of itself, diverting employees' attention away from tasks such as food preparation and other crucial responsibilities. As a consequence of this, it does not take much to aggravate a greater number of consumers than you are able to satisfactorily satisfy.
Because of this, having a reliable method for placing orders online has become absolutely necessary, especially in light of the current situation. There is an abundance of software in the form of applications, Software as a Service (SaaS) solutions, and bespoke tools that can assist restaurants in accepting online orders; however, installing one is sometimes only the first step in the process.
In addition to this, you need to make sure that the software is compatible with your point of sale (POS) software and that the POS software itself is compatible with other tools, such as your accounting and inventory management software. This guarantees that online orders are logged appropriately, that invoices and receipts are created appropriately, and that inventory is managed appropriately.
For instance, if during a single shift your famous sweet potato fries unexpectedly see a boom in popularity, your inventory management system can notify you that you need to replenish your supplies to avoid running out of stock and losing customers.
By integrating your online ordering app with QuickBooks Online Advanced, you will be able to track each and every dollar generated through online ordering. This will help to ensure a smooth transition from the model you were using before, and it will also allow you to keep track of the products that are selling the best, which will improve your ability to make decisions.
When it comes to chain brands that are in the middle size range, one of the most difficult decisions to make is which locations should remain operational while the business focuses on online ordering and delivery.
One of the benefits of using QuickBooks Online Advanced is that it makes it simple to track data from various locations and access that data from a single dashboard across all of those sites. This might assist you in determining which of your branches are seeing the greatest demand as well as those that are not doing as well. When you have this information at your disposal, you will be able to reduce expenses by temporarily closing down branches that are not meeting customer expectations and possibly moving employees to those areas that require the greatest assistance on-site.
A shift in overhead costs
Your bottom line will be impacted in more ways than one by the cost of operating more sites than are absolutely necessary. The move towards online ordering and delivery will also involve a change in the overhead costs incurred on a daily basis.
For instance, if there are fewer in-house customers, the establishment will use less electricity to operate the lighting, background music, and other aspects that are crucial to the quality of the experience for the consumer. On the other hand, you may end up spending more money on fitting containers for takeout orders and deliveries, not to mention the cost of paying delivery personnel. In the meantime, the updated menu that was outlined earlier will also bring about changes to your incoming and outgoing costs, all of which need to be managed efficiently if your company is to successfully adapt to the "new normal."
The advanced version of QuickBooks Online offers a lot of helpful features to accommodate this move, including the following:
- You are able to gain a better grasp on the costs associated with staffing thanks to the payroll capabilities that track employees' hours worked. Concurrently, the capability to have your expenditures automatically categorised and to monitor all of those categories from a single location makes it simple to maintain cost control.
- Users of other versions of QuickBooks Online, such as QuickBooks Online Advanced, receive the benefit of seamless integration with more than 600 different apps designed to accomplish a variety of tasks, like managing inventories and scheduling employees.
When taken together, these capabilities give you all of the information you need to figure out exactly how adjusting to a new way of working affects your costs and efficiently control those expenditures.
Navigating food delivery to your restaurant customers
There is not a single other sector of the economy that has been hit as hard by our shelter-in-place orders as the restaurant industry has. It has been especially difficult for upscale dining establishments. Don't believe me? Take a peek at the statistics that OpenTable has collected from around the world. This is most likely the most devastating economic impact that the restaurant business will ever experience, and it will permanently alter the landscape of the industry.
The outlook is not favourable for restaurants at this time in light of the existing circumstances. Most likely we're looking at eight weeks before we even start to see recovery (no, not a full recovery, just the start). How are eateries going to stay in business?
So delivery, right?
We have witnessed a significant number of restaurants rapidly transitioning towards delivery and takeout, and we have even witnessed some businesses being successful in making this transition. Should you follow my example? Certainly not in every case. Before making the transfer, there are a lot of operational questions that need to be considered:
- Does your POS allow for online ordering? You are in a strong position if they have a point-of-sale system that is more recent and allows individuals to place orders from their phones or without phoning. The burden of needing to take orders over the phone is lifted from the front of the home as a result of this change. You absolutely must have an online ordering system, and here are 22 reasons why.
- Is it enough? If you were making $8,000 in sales per day, do you think that a take-out sales budget of $1,000 would be sufficient? It's possible that this will be a waste of time and effort, and it's also possible that it won't even be profitable.
- Health and liability.You need to be alright with the fact that you might be putting employees in danger if you insist that they continue working at this time; it's possible that they won't want to do it.
- Does it fit the concept?There are some restaurant concepts that may not lend themselves well to delivery, and there are also some factors that could hurt the restaurant's image. If you own an oyster bar, for instance, providing delivery services is probably not in your deck of cards. "Do it Well or Not at All" is a well-known phrase that springs to mind here. If the items on the takeaway menu are not ones that your customers will find appealing, this will have an adverse effect on the reputation of your company; in addition, does the takeout service only bring in a modest amount of revenue? It's likely not going to be worth the effort.
- Don’t use delivery services: The restaurant will wind up losing money on the food delivery service because the delivery service takes the lion's share of the earnings. Avoid making use of them. The end of the tale.
The majority of our restaurant customers have decided to close their establishments, secure the interiors, and hunker down in preparation for the oncoming storm. In order to develop a firm that is financially sustainable, delivery needs to make sense on all five aspects.
Decrease inventory and change menu design
If you want to pursue the route of delivery, the most significant challenge you will have with regard to your sit-down restaurant idea is getting rid of their surplus inventory. There are some things that, depending on the preparation method, might not work very well for takeout. For instance, if ceviche is listed as an option on the menu, we can rule out that possibility. Determine a method for reducing the surplus of inventory, and then rework the menu to accommodate takeout orders. The following are some extra things to take into consideration:
- Family style is the way to go: Conventional take-out and delivery restaurants are not designed for families. However, restaurants that offer a prix fixe menu for two, four, or more people might alleviate some of the stress that parents have while feeding their families.
- Value-oriented: Even the wealthiest families are looking at their finances right now, so put the truffles on the back burner and concentrate on getting food into people's mouths. The current trend that cannot be stopped is comfort food.
- Takeout boxes: Why on earth would you put your fries in an airtight container when McDonald's doesn't even put theirs in one? Think about how the menu is going to be executed, and stop serving everything in a box; no one wants their french fries steamed.
Free cash flow tool
How do you plan to stay alive? To tell you the truth, this is not going to be an easy task. The restaurant sector faces a make-or-break period in the coming days and weeks that will have a significant impact on its trajectory going forwards. A cash flow spreadsheet that caters exclusively to the needs of restaurants has been developed by Prix Fixe Accounting. You are welcome to have a look and download a copy from this location. Watch this video for instructions on how to use the spreadsheet.
- Ensure your staff feels valued. ...
- Revamp your menu on a seasonal basis. ...
- Be thoughtful about marketing. ...
- Train employees to expect the unexpected. ...
- Suggest hosting events. ...
- Make tracking sales and inventory easier. ...
- Experiment with fun promotions. ...
- Pay attention to online reviews.
A well-rounded manager must be able to multitask, think quickly, and consistently maintain a calm demeanor despite “putting out fires” or dealing with difficult people. Additionally, restaurant managers need to be fluent in all aspects of restaurant operations, including front and back of house functions.
- Be consistent. ...
- Manage proactively. ...
- Learn the operation by doing the work yourself. ...
- Prioritize staff retention. ...
- Keep your eye on customer satisfaction. ...
- Improve the customer experience. ...
- Take word-of-mouth seriously. ...
- Invest in advertising.