If you are a restaurant, bodega, service deli, or
convenience store selling grocerant niche Ready-2-Eat or Heat-N-Eat fresh prepared
food this year it’s time to remember what got you to where you are today. The first thing you need to look at is your topline-sales
and bottom-line profits according to Steven Johnson Grocerant Guru® at Tacoma, WA
based Foodservice Solutions®.
Johnson reminds us that others the ilk of Ben Johnston is the COO of Kapitus,
had to say:
With ever rising costs for supplies and staffing, there are
important measures restaurant owners can take to navigate an uncertain economic
climate in 2024. That being said, unemployment remains low across the country
and consumer spending is strong despite higher interest rates. We expect
this to continue, at least in the near term.
In these uncertain times, we encourage restaurant owners to
take the following steps:
Forecasting Financial Needs—Restaurant owners should determine whether they are likely
to need capital going into the 2024 and if so, work to line up that capital
now. The most common mistakes small business owners make is failing to
properly forecast the cashflow needed to secure the inventory and staff
required. Small business owners are by nature optimistic, and sometimes
optimism causes us to overlook the downside contingencies that can become
essential when things don’t go as planned.
Restaurant owners should work to forecast their busy and
slow seasons and use these projections to determine whether they are likely to
need capital as they transition into their busy season.
Banks have been reducing exposure to small businesses ever
since the pandemic, and now with higher interest rates putting pressure on bank
deposits and greater regulatory scrutiny, banks are reducing their loan books
even more. Fortunately, there are a number of small business lenders who
have been expanding their ability to provide small business capital in the face
of this bank contraction. Small business owners should consider exploring
options with their bank as well as these non-bank lenders.
Consider Offerings to Attract Customers—Restaurants trying to attract price conscious diners
should make sure that their menus carry several low-cost, higher margin staples
that can be sold at reasonable prices. Consider reducing the size and
price of certain staples and then offering a “super-sized” portion for a higher
price. Keep a close eye on your margins, and don’t be afraid to slim up menus
and reduce hours of operation if demand begins to slip.
Retaining Staff—Flexible
shifts and secure shifts may actually be more important than wages to some
employees. An effort to maximize staffing levels by cutting shifts short
or imposing last minute shifts can be very disrupting to employees’
lives. It may be easier said than done, but allowing employees more input
into their shift times and durations can go a long way to creating employee
loyalty. We also encourage restaurants to automate as much of their process as
possible, keeping headcount light.
Planning for Growth—When
considering expansion plans, restaurants should understand the demand in their
local market as well as the competitive environment. A restaurant’s
success is likely to be driven more by the local economy and by the competition
than by national economic indicators.
Restaurants are expensive to start and can take years to
become important fixtures of the community. As a result, it is important
to have a good capital plan in place. Most restaurant owners have
financial backers to help them get off the ground, and debt financing
relationships to help them grow and cover temporary shortfalls of
capital. Having the right financial relationships is important, and
fortunately there are a number of non-bank lenders who are able to provide
financing options to restaurants.
Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy. Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook, LinkedIn, or Twitter
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