8.6.2021

Long and Short Term Restaurants Goals

Written by Aine Hendron

restaurant goals

When it comes to running a hospitality business, it can be easy to focus on day-to-day operations, and put long and short term restaurant goals on the back burner.

Creating goals can be challenging when you’re experiencing limited cash flow, in a highly competitive field or simply feel that customers aren’t resonating with your business decisions. 

We look in detail at three common restaurant goals: increase profit and revenue, improve employee performance, and achieve effective business growth.

Increase profit and revenue

From small restaurant business loans to yearly sales, understanding your restaurant's finances ensures it can continue to function and remain lucrative. The odds are stacked against you, since restaurants are well known to have notoriously low profit margins. However, there are ways to make good profits with the right strategy. 

Choose a cost focus strategy

A cost focus strategy works well for businesses that aren’t able to raise their prices without putting off customers. The aim is to offer competitive prices while lowering operational costs as much as possible. 

Ways to implement this strategy in your restaurant include shopping around for the best-priced produce and equipment to lower the food cost percentage. You’ll probably want to opt for in-season ingredients, which might mean altering your menu. 

Or, you could work to optimize your supply chain. Working closely with farmers, rather than buying from wholesalers, could mean getting a better cost for the same high-quality ingredients. 

Create a menu pricing strategy

The pricing of menu items is the most important deciding factor for some people when choosing where to dine. Your menu pricing strategy help you determine how much you’ll charge for each dish, taking your entire menu, and other aspects, into account. These aspects include:

  • Direct costs such as food waste, food cost, portion sizes, and customizations
  • Indirect costs like water, gas, and employee labor
  • Overhead expenses like rent, interior design, and renovation costs
  • Seasonal costs such as heating/cooling during hot and cold months and the cost of hiring seasonal staff to meet demand

Improve inventory management

Stringent inventory control could save your restaurant a lot of money. Food waste and shrinkage massively impact costs in a lot of restaurants, so tackle this by having a constant overview of stock levels. Shrinkage being a reduction in the takings of a business due to wastage or theft.

One way to do this is by syncing your point of sale (POS) to your inventory management system. This allows you to enter exactly how much of every ingredient is used per dish. Then with every sale entered into the till, your master inventory level will automatically update, giving you an extremely accurate picture of when and how often certain items are being sold.

Set goals that target waste, too. This includes proper recycling and waste procedures, and better food storage and preservation methods. Not only will this improve your bottom line, but it will make your business a lot more environmentally sustainable

Improve employee performance

Often, employees serve as the face of the company. Aside from simply fulfilling their duties, they are responsible for making guests feel welcome, creating a good atmosphere, and actively carrying out the mission statement of your business. 

Their impact shouldn’t be underestimated. In a survey of 568 businesses, Harvard Business Review found that 71% of managers feel that employee engagement is one of the most important factors in overall organizational success [1]. It’s crucial to find the right employees, and make sure that they are happy in their role for increased productivity.

So, how can you make sure that employees are performing at peak level?

Training and development plans

Discuss plans for progression with employees to gain a better understanding of their long-term goals with your company. Some people may apply to your job for seasonal work, while others may be seeking a career. Either way, encourage honesty and filter their response into your development and training plans. 

As well as providing initial training, consider giving ongoing training to existing staff as a refresher on how you’d like to operate. Include training that keeps your business goals in mind:

Each employee should have a development plan, and be encouraged to express their desires for progression and additional training within the company. In turn, this will prove that their hard work does not go unnoticed, and will motivate employees to work hard. 

Encourage employee feedback

Disengagement and lack of job satisfaction are the two most common reasons why people leave their jobs [2]. Avoid dissatisfaction and high employee turnover by checking in with your employees regularly for their feedback. 

Ask questions that focus on improving the working environment, procedures, and personal development. Encourage a detailed response so you can make impactful change. Some example might look like:

  • Do you feel valued while working here? Please explain the reason for your response, and give suggestions for improvement.
  • What changes would you like to see to help you feel better supported on shift?

Consider employee opinions when making decisions

As the people on the ground, employees experience firsthand how operational decisions affect their work. Listen to suggestions for improvement with an open mind. 

Sometimes, restaurant owners will have to enforce a policy that positively impacts revenue but negatively affects staff morale. It’s your duty as a business owner to decide the order of priority for these things or find a happy medium. Sometimes explaining the reasoning behind decisions will provide a better understanding. 

Employees have a valuable perspective that restaurant owners don’t. Age discrimination studies show that younger staff who work in more customer-orientated roles, or those in more junior roles, are treated differently and receive different customer feedback than those in managerial positions [3].

If you aim to improve employee productivity, make sure that they are happy in their role and be considerate of their opinions and feedback. In turn, this will reduce turnover and therefore save money on recruiting and onboarding, and lower high labor costs that are spent to cover the price of unproductive employees.

Effective business growth

Growth can be hard to define since success and growth look different to different business owners. 

Growth can be achieved through a combination of a solid business plan, growth strategy, marketing strategy, and SMART goals. SMART goals are specific, measurable, achievable, relevant, and time-based targets. Below are a few examples of smaller goals that can accumulate into long-term growth.

Increase versatility

Offering discounts, loyalty programs, and gift cards are a few ways you can effectively reach a new audience and retain existing customers. Loyalty cards have been proven to encourage customer retention, and improve the customer’s overall experience and opinion of the business.

Of course, certain types of discounts may not align with your brand. For example, it’s unlikely that a Michelin starred restaurant will run a happy hour every Tuesday night. 

If you’ve completed a yearly sales review and one month, in particular, stands out for having poor sales, then consider running a limited-time offer where you introduce a specials menu for a slightly lower price. In turn, this will increase monthly net sales while giving customers an incentive to visit. 

Expand your offerings

While this sounds expensive, you can reach a wider audience and improve your relationship with current customers by offering an alternative to the traditional dining experience. 

During the COVID pandemic, the need to be adaptable and creative with business operations has never been more immediate. Many restaurants have resorted to offering takeout and will continue to post-pandemic. Offering takeaway has a range of benefits:

  • Restaurants are no longer restricted to table capacity and can serve more customers at once
  • Increased sales
  • Accessible to a wider range of customers
  • Lower labor costs

Track business performance with precision

Using Epos Now software, you can review KPIs and detailed sales analyses with ease. Our multi-award-winning point of sale (POS) software is categorized by industry, allowing you to access the most relevant, innovative POS reports for your hospitality or retail business.

  • View sales reports by item, profit margin, or time
  • Review sales performance by employee
  • Track stock levels with a live inventory check, linked to the POS
  • Manage tables by color codes to track time spent in the restaurant, and maintain solid turnover
  • Built-in CRM system
  • Easily integrate customer information with marketing and communication software to send frequent follow-ups, gather reviews, and encourage customer loyalty
  • Design email marketing campaigns with access to unique templates and simple drag and drop functionality
  • Over 100 app integrations available, including bookkeeping, accounting, and loyalty program applications

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