How to overcome the 4 biggest challenges all restaurant owners face
Over the last 18 months or so, restaurant owners have gotten a crash course in how to run a business during a pandemic. As we emerge from the shadow of COVID-19, owners and management teams are facing four key challenges:
- Finding and retaining quality staff
- Mitigating rising food costs
- Controlling growing operational costs
- Reaching new customers
Here are some actionable solutions to help you overcome these obstacles and thrive.
Challenge #1: Finding and retaining quality staff
As restaurants re-open and expand operations post-COVID, the need for quality employees is rising. But restaurant owners who used to field dozens of applications for an open position are now struggling to find anyone to fill available jobs.
Diners are able to enjoy their local restaurants in person thanks to the availability of vaccines and relaxed mandates, but these widespread reopenings may be exactly why there’s an issue finding solid candidates.
It’s a simple case of supply and demand. Thousands of restaurants are finally opening for weekend service or adding lunches and brunches, and applicants have the opportunity to be picky.
Solution: Build a culture around your restaurant that makes potential employees want to work for you
To attract and keep quality employees, you need to offer a culture that’s more attractive than your competitors. Staff turnover is common in the hospitality industry, but it’s also costly. Now more than ever it’s important to get good applicants through the door and keep them there.
- Use your contacts to find potential employees that come with an endorsement you can trust. Using connections can turn your friends into “recruiters,” attracting candidates that are more inclined to stay for the long term.
- Hire personalities, then train them. A candidate who is eager to learn and takes direction well can be far more successful than an experienced server with an attitude.
- Find room for qualified applicants even if you don’t have an opening for their preferred position. Avoid letting versatile talent walk away.
Once you have a team you love, it’s important to keep them happy. This can be as simple as asking them for their opinion and taking action based on that feedback.
Your employees want to know that their opinions and their happiness matter. Offering employee perks like benefits, family meals, prime schedules based on seniority and other bonuses could make a prospect choose you instead of a competitor.
Challenge #2: Tackling rising food costs
The pandemic did a number on the supply chain.
In 2020, shuttered restaurants and grocery stores along with issues with transport forced farmers to dump fresh milk and plow through their vegetable fields. Farmers are now scrambling to play catchup. That and other factors have led to a 5% jump in food cost year over year, and numbers are still rising.
That means everything from eggs to flour is coming into restaurants at a higher cost, and restaurants must find a way to cope.
Solution: Control food costs and optimize your menu pricing
Start by learning how to control food expenses. Talk to your current vendors and see if they can help you with pricing. You may discover that there are untapped deals waiting if you simply switch up the type of tomatoes you’re buying or if you buy them in a different quantity.
Other methods of cost control include:
- Buying whole vegetables and primal cuts of meat to tackle pricey prep in-house
- Banding together with other local restaurants to create a group purchasing organization to increase buying power while decreasing costs
- Retraining staff on prep protocols to help reduce waste
- Repurposing meat and vegetable trimmings for things like stock, sauces, sides or soups instead of tossing them out
- Coaching FOH on reducing POS errors and monitoring for theft
- Creating seasonal dishes that use more cost-effective ingredients
Next, master your menu pricing. Calculate your food cost percentages, then review the menu to see which prices need adjusting. It may be time to shrink your menu, ditching low-selling/low-profit items and leaving only popular items and those with a higher profit margin.
Consider how your target demographic has changed, too. If you’re doing more takeout and delivery, you might want to temporarily discontinue items that don’t travel well or aren’t frequently ordered.
Challenge #3: Controlling growing operational costs
In addition to the rising cost of food, staffing and general operational costs have surged. The struggle to find staff has put a strain on restaurants’ budgets as they pay current employees overtime to cover extra shifts. With some areas still experiencing restrictions and many Americans are still hesitant about the return to in-person dining, there is only so much owners can do to generate revenue using their existing operational infrastructure.
Solution: Maximize your restaurant’s revenue potential with a virtual restaurant
Virtual restaurants are delivery-only operations that offer restaurateurs a way to tap into soaring delivery demand without taking on an entirely new business. Virtual restaurants allow restauranteurs to cross-utilize ingredients from their existing menu and leverage their existing staff to execute additional delivery orders.
Interested in getting started? Look to Billy Brick’s Wood Fired Pizza owner Ric Gruber for inspiration. Gruber launched several unique virtual restaurant concepts based on which cuisines were trending on Grubhub to target new customers.
While Gruber’s initial concept was pizza-focused, his virtual restaurants offered everything from specialty salads to pasta dishes. “With revenue loss during the pandemic, my virtual restaurants have helped me fill in those gaps with an additional couple thousand dollars per concept every week,” Gruber said.
Challenge #4: Reaching new customers
If you cook a killer carbonara and no one knows about it, all you have is a bowl of quickly cooling pasta and rapidly increasing debt. To thrive, restaurants have to catch the attention of local diners. Gone are the days when foot traffic alone was enough to build a loyal clientele. Now, diners head to digital channels to hit up restaurants and research new eateries.
Here is why going digital matters:
Solution: Build a 360-degree marketing strategy for your restaurant
Every restaurant needs a solid marketing strategy. This formal blueprint serves as a road map for all of your marketing, promotions, outreach and more. Your strategy can be broad (“attract more diners”) or specific (“fill all the seats for our upcoming wine dinner”). The basic plan will look very similar, but how you flesh out each step depends on your objective.
You can also grow your online presence through social media marketing. Start by choosing the right social media platforms for your demographic and intent. Then use tactics like social media contests and user-generated content to gain traction to get potential guests excited about your restaurant. Make sure every profile includes a link to your online ordering.
A strong online presence also includes an updated, optimized restaurant website. When 90% of diners are researching local restaurants, they should find your site where they can read about your chef, check out your menu and even place an order for pickup or delivery. You can offer your own branded online ordering experience with Grubhub Direct.
Overcome the biggest challenges of being a restaurant owner in a post-pandemic world with Grubhub by your side.
Running a restaurant in a post-COVID world is not without its challenges. But by using existing tools and partnering with Grubhub, you can optimize your operations and prepare for success without stressing your bottom line.
Whether you’re interested in commission-free online ordering solutions or want to capture new customers using our proven solutions and technology, we’re ready to put your restaurant first.