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[Rick Braa]Engineer your business
Acclaimed restaurant consultant Rick Braa took the time to host a comprehensive webinar on financial strategies and tips to make use of during the coronavirus crisis. In part three of this webinar, he went over one of the toughest challenges in the new normal — engineering your business for success.
“Engineering your business means make your business break even or better,” Braa said. “That is a very lofty task when you have got declining sales of 30% to 70%. If your cash flow … before you pay rent is negative, it’s better to remain closed. If you don’t have any PPP money, it is better to remain closed until sales turn around. If you are losing money before you pay the rent and have to pay rent on top, that’s just going to be compounded.”
In short, if there is no realistic way to recoup losses from diminished sales, staying shut down until sales resume is the safest bet.
However, businesses have prevailed in hard times before — Braa said that during the 2008 recession there was talk of companies dying out. But “smart companies” found four key areas to work on in order to turn this around. These areas are the product, the service, the facility and the systems therein.
Working on the product can include things like engineering your menu and consolidating products to a minimum.
“Sell things you make money on,” Braa said. “We’re really in that spot where we need to be taking margin over percentage, because that will offset on the labor side.”
Make sure everything you have offers value on the product side. Anyone who purchased their products, you want them to come back.
Restaurants are losing market share to grocery stores. Whatever you are offering as a restaurant, it’s known to be more expensive than the grocery store. Make sure, Braa said, you’re always offering value.
The key to excellent service during this pandemic is flawlessness execution. Not only should your business be flawlessly executing its service, but you should hold your third-party delivery partners to the same standard and keep people accountable. Every interaction between guests and your operation should serve to create an experience. If you offer outdoor dining, make sure it’s the absolute best outdoor dining it can be. The quality of your brand should be clearly reflected.
“It has never been more important to let the guest have the experience in their own hands,” Braa said. “It’s never been more important to give the guest the opportunity to have the experience in their own hands by being fast. If they are ordering online or through takeaway, make sure they can get it very quickly.”
You can’t keep customers waiting.
“If you need to staff a little heavier to get product out, do that,” Braa said.
Be aware of the realities of outdoor seating and government mandates regulating it — the governor defines currently outdoor seating as consisting of at maximum two walls. Unless that is changed, you’ll want to offset that as you design outdoor seating to accommodate for inclement weather.
The current restrictions already limit how much dining space you can allot to your guests. Make sure you’re making use of the unused space to improve other aspects of your operation, like expanding the kitchen real estate or creating an area to aid in takeout and delivery operations.
Air purification is of high concern to customers today and in the future. This can be a great marketing area as the industry is battered by concerns and bad publicity about spreading the disease — you can clear some of this negativity by making sure you have nice, clean air.
Another investment, though they can be costly, are more advanced temperature scanning technologies. Braa noted that there are times when you have kitchen staff or prep staff who come in before even the managers do. They may work multiple jobs and they may be vectors of disease. You want to make sure they get temperature-checked, and there are technologies that will allow them to self-check-in, but they are not cheap, starting at about a $1500 investment.
Braa acknowledges the challenge of the cost, but it’s a cheaper outcome than being shut down for a day or much longer.
Cleanliness remains as critical as it ever has been. Braa also urges you consider the street appeal and how your restaurant looks both inside and out.
Braa details some internal systems that you can engineer to help your operation succeed. One example is your reservation system; Braa said that most operations benefit from having the ability for guests to reserve seating online. However, some reservation systems reserve ownership of the reservation data — this will be detrimental should you ever wish to change systems, so make sure that you work with your reservation system provider so that you own all the data you receive.
Make sure your financial systems are in similarly great working order, Braa said. You need good information coming to you every week and every pay period. Marketing and messaging are important, and communications systems are “the key to the future” according to Braa. Creating marketable videos about food or meal kit creation, showcasing the cleanliness of your facility can make sure you are on top of your communications systems.
Lastly, Braa emphasized the importance of your tech stack — computers, information technology areas, these should be sharpened up and renewed. Make sure you have the right tools and you know how they’re used.