Knowing how to keep your business thriving during tough times is one of the biggest lessons businesses have to learn. So many companies had to figure out how to keep their business competitive, especially during Covid. The restaurant industry is one notable example that had to completely alter its services in order to remain competitive and turn a profit. But post-Covid, there are still a number of challenges the restaurant industry faces. Here are a few that budding and experienced restaurant owners can find.
Slim Profit Margins
There can be a number of detrimental operating and variable costs. Financially speaking, it can benefit businesses to diversify their income streams by optimizing a menu that forces customers to opt for more expensive meals. There are other aspects that can cause major problems because some restaurants, very simply, don’t know about them. For example, when it comes to playing music in restaurants, you need the appropriate licensing so you can bypass the ASCAP (the American Society of Composers, Authors and Publishers) fees. Knowing how to avoid ASCAP fees is only one aspect, but as we all know, the cost of food is increasing, therefore we may have to pass this on to the customer. When profit margins are so slim, combined with higher minimum wages, it requires a greater diversity of services to thrive.
While we need to hire the right people with the right skills for the role, we have to look at hiring people more holistically. When there are issues with employee turnover we’ve got to work on finding the right people and building on their skills later. There are a number of problems when it comes to having dedicated staff in the restaurant industry. These include a lack of flexibility, asking too much of employees, and not giving them an appropriate amount of time to develop their skills. When there are issues with hiring and turnover, we should encourage practices like peer-to-peer mentoring, building employee referral programs, and being more flexible.
Changing Customer Behaviors
Restaurants had to deliver during the pandemic to remain competitive and to turn any profit. One of the biggest issues is that many restaurants have now completely removed this. Consumer behaviors since the pandemic have resulted in more online orders, but when restaurants do not provide a delivery service, they are selling themselves short. We have to focus on convenience, for example, by delivering meals but this can also spread to other aspects of customer convenience. You can be more competitive by promoting lunch specials or optimizing the ordering experience, for example, via mobile apps.
Managing a restaurant is a challenging role because there’s a very delicate balancing act all under one roof. Managers have to look after the back office duties as well as the front of house, which means they can be stretched very thin. It’s important to invest in our managers’ development, not just by utilizing tech but also by giving them a greater degree of flexibility. Many managers want to oversee the restaurant, but this means working inordinately long shifts. In a post-pandemic world, we should be focusing more on well-being.