Best ways to navigate the numbers crunch

[ryanwanner]

Hello F&B community!

As is shown in the headlines nationwide (at least here in the US), restaurants are seeing some significant cost pressures. Closures have been announced at a staggering pace. In fact, here in Colorado Springs, over 10 restaurants and breweries announced their closure in just the last two weeks!

We can sit here and discuss the reasoning behind the pressures: increased rents, payroll costs out of control, cost of raw goods, paper costs, utility costs, insurance costs, etc. etc. etc. We all live in this purgatory right now, we don't need to focus on the problem.

Let's focus on the solutions: what cost trimming measures have you started working on in order to survive this crunch?

For me, my first big leap was to close my cafe in late 2023. My landlord and I could not come to an agreement on rates, and I took it as a sign to run away. In hindsight, I realized this was the best for the survivability of my business. I was able to focus my menu on just the coffee roasting aspect of things, find a brick and mortar where the rent and utilities are a third of what I was paying, and for now work it just by myself. I'm not saying that drastic of a cut would work for everyone, but maybe you could figure a way to subdivide your space: do you need that big of a dining room anymore if the majority of your service is to go anymore?

After that, it's been a constant monitoring of what is and isn't selling, and making tough but necessary cuts to the menu. If it's a profitable item, it stays. If it's consistently in the bottom 10 of sales volume, it goes. Does it take extra prep time that takes a team member away from something else?

Pricing: when I first entered the manager stage of my foodservice experience, the number I was told to always keep an eye on over everything else was the Food Cost. At that time, the labor dollar wasn't nearly as important in my market: servers were still making $2.13/hr. Nowadays, I've found that if I don't continually monitor the cost of the labor at least as hard as the food cost, things get out of control very, very quickly. So I've changed my thinking to ask what is the prime cost for the menu items? Prime being the cost of the product plus the cost of the labor to make it. Hopefully the prime is below 60%. Don't forget to factor in the cost of the dishwasher who washes the plates and line tools! You may end up finding out that your pricing strategy needs to improve. I know I did the last time I looked at these numbers!!

I'm curious to hear what innovative tricks you've come up with to keep costs as low as possible without affecting the customer experience!