Make no mistake; higher statewide minimum wages are happening, first in California and New York, and surely in other states as well. Many larger cities, including Los Angeles and Seattle, have already enacted laws that would phase in $15 per hour rates over the coming years. These laws are complex and often onerous, even for those operators who agree with the “living wage” ideology, and if this November’s elections swing towards Democrat, the movement will grow.
Restaurant margins are already tight, as all operators know. But many consumers favor minimum wage increases, and companies that have resisted such increases in the past have paid the price in patron disapproval. It’s a thorny issue all around, in which both sides have valid points.
Short of raising prices and cutting staff, operators need to get a menu development and labor optimization plan together. Even with higher wages, restaurants are having difficulty finding and retaining staff, for demographic and competitive reasons. We also can see that food costs are going nowhere but up.
Here are 10 steps operators should be taking now. We’ll go into many of these in detail in future blog posts.
- Assess your menu mix to determine your true labor needs; if there are items on the menu that require a disproportionate amount of labor, change the recipe or nix it altogether
- Boost cross-utilization by eliminating orphan ingredient SKUs and sub-recipes used in just one or two items
- Study historical data to make sure you’re not overproducing—or underproducing—prep for any given day
- By the same token, forecast labor needs by studying past customer counts; if most of your dinner business doesn’t start until seven, don’t have every server coming in at 5 p.m.
- Create signature dishes that will set your operation apart from the competition; when local patrons are in the mood for popular items like a burger or lobster mac-and-cheese, they should think of your restaurant
- Build average checks with the so-called left side of the menu, including soups, salads, starters and small plates, snacks and sides, as well as desserts
- Consider additional profit centers such as self-service catering or happy hour. These revenue boosters represent the efficient use of labor, inventory and prep space
- Train front-of-house staff in the fine art of suggestive selling to boost checks—and their tips
- Be scrupulous about eliminating waste, not only because it’s the right thing to do, but because waste is a huge drain on food costs
- Decrease the ratio of bell-ringer items like proteins on plated items, in favor of more produce, grains and other lower-cost ingredients
At Synergy Restaurant Consultants, we’ve got solutions for the challenges associated with labor inefficiency. Get in touch if you have any questions for us or if you would like to discuss the many ways Synergy can help support your goals.