Do you spend enough time working on your business?

Recently I was reading some industry news regarding some large chain business and I found it a tad disturbing that these sizable chains were not doing well in the most recent quarter for a year over year same store sales look. Here are the two separate releases about results for Applebee’s and for the Outback Steakhouse, Carrabba’s and Bonefish Grill group.

Julia Stewart has resigned as CEO of IHOP and Applebee’s parent DineEquity after leading the franchisor for 16 years. Simultaneous with the announcement, DineEquity disclosed that Applebee’s domestic comparable-store sales for the fourth quarter of 2016 fell 7.% from the same period of the prior year, and IHOP’s same-store sales slipped 2.1%.  http://www.restaurantbusinessonline.com/news/julia-stewart-resigns-ihop-and-applebees-parent

After suffering a quarterly loss and a decline in same-store sales for all but one of its brands, Outback Steakhouse parent Bloomin’ Brands said it will close 43 underperforming restaurants. The four-concept company pegged its losses for the fourth quarter of 2016 at $4.3 million on a 4.3% decline in revenues, to just over $1 billion. Bloomin’ reported a profit of $17.7 million for the same period of 2015. Bloomin’s core brand, Outback Steakhouse, posted a domestic comp-sales decline of 4.8% on a traffic slide of 7.7%. Carrabba’s and Bonefish Grill’s same-store sales slipped 2.3% and 1.9%, respectively, on traffic declines of 3.8% and 5.2%. http://www.restaurantbusinessonline.com/news/outback-parent-close-43-restaurants-after-posting-loss

In all my years working within the independent foodservice operator world and talking about the chains having deep pockets this news can be disturbing and possibly disheartening to the independent operator. My message to these operators is that it is time to do that major evaluation of your business to ensure that you at the very least maintain your profitability. The ultimate goal would be to be able to grow your sales and profitability once you have put the magnifying glass on your business.

There are always the stock benchmarks that you need to be looking at, food and liquor costs, labor cost, occupation cost including utilities, insurance and maintenance to be able to find any glaring numbers that would dictate a closer look. How much time do you spend evaluating your costs? This needs to be part of the weekly recap of your business.

The closer look at one of these areas, Food and Liquor Costs, would include some of these key points as follows:

✓    Individual Menu Cost Analysis
✓    Your vendors pricing – check on rebates, product options, better pricing
✓    Your menu looked at for accurate sell price and engineering
✓    Portion Control, Prep, Receiving, Storage Procedures
✓    Inventory Control Measures and Accuracy

The list could go on and get much more specific but I am sure you get the idea for this category and the others mentioned above.

This is just one piece of the profitability pie and as I have always said you can’t save your way to prosperity. In future pieces we will also be spending time talking about how to grow our sales and profits through your menu, your waitstaff, your marketing efforts, your tenacity, your creativity and more. Let us come in and use our magnifying glass to help you evaluate the numbers. Let’s see if we can find more of that much needed profitability you are looking for.

So, Do I have to Count Everything?

InventoryThat dreaded word to the majority of kitchen workers, inventory. This is a much needed restaurant process and important to a multitude of areas within an operations profitability. Most kitchen folks hate the idea of doing inventory but if you are a stakeholder in a restaurant you need to stress the importance to those involved to be part of this process.

Why is inventory so very important? There are many reasons that it is important to take inventory – accurate food costs, internal fraud reduction, food specification consistency, pricing controls, quality control with FIFO rotation, vendor order ease & accuracy and ultimately profitability.

There are some critical components to the inventory process that can help with the process.

*Accurate inventory worksheets. These list should be everything that you buy and have the latest values of each item on them. These should be easily attained from your vendor in Excel spreadsheet format.
*Accurate ways to count each item. There are many variables on how to count each item. Make sure to be specific on how you are going to count each item, by the case, the pound, the unit and so on. This should be set to maximize the most accurate way to count as well as the most efficient way to count them.
*Get your inventory areas set up and organized.
*Have the same person take inventory. Less chance for errors. Maybe create an incentive for your inventory manager.
*Set up your frequency of inventory – daily for high cost, perishable items (steaks, seafood, etc), weekly (this would assist with ordering and fraud protection) and then of course monthly. I would always recommend taking inventory monthly at the very least. Taking inventory annually for tax purposes does not do much good to monitor your food cost.

Back to the original question, do I have to count everything? Well, the answer is yes if you want to have an accurate food cost. So that means counting all your back stock at the end of a business day so that nothing goes in (receiving) and nothing goes out. That is where open stock comes in. Everything gets counted and that includes the open stock with in the kitchen line area, prep area and waitress areas.

The takeaway, get organized, get motivated and get counting, accurately of course, to help your operation to better cost control and profitability. Get with me about how I can assist you with this process and get your inventory on track and where you want it to be. Should I say where you need it to be.

Become Your Companies Chief ‘Looking Around The Corner’ Officer

Recently had the opportunity to read a manifesto that Robert Bloom wrote. It was called Looking Around The Corner and shatters some old-school thought processes of looking ahead every year. He comments that, “This fixation on an obsolete planning process guarantees that firms that use it will not keep pace with the rapid, substantive changes in our business world”.

As I plan for the new year of 2011 and develop the strategies and tactics necessary to achieve our overall objective, this doc hits home and gets the creative juices flowing on how we will go to market in a multitude of areas.

Great stuff. Get it at Change This.