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%.

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%.

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.