Thanks God It's Friday!
A new post from lazygourmet...
The Summer Season is closing with a decidedly shaky landscape for many. There is no need to harp on our obvious Hospitality challenges. We deal with them, knowing that through "Boom or Bust" that is our assignment, creating that Memorable Experience. Be steadfast and prosper!
As the food prices keep rising, restaurant owners cannot help thinking about ways to deal with the eroding profit margins.
At times like this, it may seem like a good idea to shop around for better prices on your key ingredients. After all, what if you could:
- Negotiate better prices with your current supplier?
- Make several suppliers bid for your business?
- Or switch your suppliers altogether?
This is a natural response. But you could be shooting yourself in the foot.
Trying to get a better price on chicken breasts can only get you so far. The benefit to your business may be short-lived and illusory: The only way food prices are going is up. And you could be trying to solve the problem from the wrong end.
Think about what you’d have to give away to get a better deal:
- Scenario #1: You sacrifice the food quality. If you are already a troubled restaurant, that could be the last nail in the coffin of your business.
- Scenario #2: You replace your old supplier with someone less reliable. Then one night you may leave more money on the table than you could have saved on the ingredients.
- Scenario #3: You throw yourself into heavy-duty negotiations that will suck up a lot of your time. You should know that your time has a high price tag attached to it and it may be better invested elsewhere.
Which brings us to the next point:
The fact that you cannot sustain the increase in food costs is a symptom of a bigger problem. If the menu is stale and unoptimized, if the concept is unexciting, and if you are doing a mediocre job of getting enough people to try your food, then do not look for a bail out from your supplier.
Sure, you should not be paying more than a fair market price for the ingredients. And you shouldn’t be paying much less either. If the basic economics of your business are not right, you are fighting a losing battle against an enemy of your own creation.
That enemy’s name is “Poor Me” and we have all met him at some point in our lives. He comes unannounced and turns a confident restaurant owner into a wimp blaming everything and everyone — government, weather, competition, economy, suppliers, even customers – for the lack of profits in their business.
To have a fighting chance, you need to get out of the cost-saving penny-pinching mindset and start plugging creative holes in your marketing.
These are not just “end of summer” musings. The issues are very real. They touch upon sustainability and sensibility. We are living challenges right now, but we know this will not last forever. However, what will we see at the upswing? By all indications, we will face a very different Hospitality marketplace. If we have not done our homework and applied a little introspection, we will enter this new phase unprepared rather than undaunted. We need to get on track!
We need to get on track!
#Quote of the week#
"Never order anything off a menu that is longer than your underwear!"
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