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Restaurants and expensive bills: “In order not to close, you have to analyze the costs”

THEL dear energy becomes crazythe costs related to bills of light And gas compared to a year ago, they are actually quadruple for everyone including me restorers protesting from north to south of Italy (the showcase invoice initiative which invites traders to display their 2021 and 2022 invoices to show the obvious price increases to customers is emblematic). Government solutions to reduce energy costs have so far proven ineffective and, in fact, according to the latest estimates of Confessercenti, the new decree aimed at calming energy prices may not be enough; in Italy, 100,000 businesses are at risk of closure.

Restaurants, in particular, are at a crossroads compensate customer to save profit marginbut with the big risk of losing more and more customersWhere necessarily reduce profit margins, but with the equally great fear of not being able to keep the business open. And also find one middle ground between these two strategies may not be enough.

He knows it well Giacomo Pinientrepreneur, CEO and founder of GpStudiosa consultancy and training company in the catering and tourism sectors, as well as the author of the best-selling books “Restaurant Boom. Create success for your restaurant” And “The art of breakfast“.

“I want to be frank: if I‘increase of the bills reaches the 400% compared to 2021 I believe that many businesses will inevitably close from now on – explained Pini – In my opinion, Investing in new technology now in hopes of immediately reducing energy costs could be counterproductive. The risk is to take on more debt and close the shop even earlier than expected. A restaurant can’t even change its opening hours to save gas and electricity, as other catering businesses, such as patisseries, have been able to do. The only the solution is review your business down to the smallest detail through a ‘efficient and detailed cost analysis. Probably like never before. In fact, I am convinced that many companies were already in trouble, not only because of the pandemic, but also because of this. What is happening has therefore highlighted critical issues of the past. However, to carry out an effective cost analysis, it is not enough to go to your accountant: you must contact specialized consulting firms“.

Giacomo Pini

What does it mean for a restaurant to review its business model?
It means rethinking the layout of the kitchens, the production line of the dishes, the menu and the staff, the cost of which, I remind you, represents 40% of an activity. Many companies in Italy that deal with restoration are artisanal. If this is good on the one hand, on the other hand it can be a limitation in crisis situations because the tools to deal with it are not fully known.

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Who is in franchising is most likely to get away with crises?
Certainly yes, because it has already implemented some good practices related to cost optimization and standardization of procedures, imposed by the franchise activity or the implementation of the take-out and delivery service. I cite a few examples to make it simpler: Signorvino, wine merchant and wine merchant specializing in the sale of 100% Italian quality wines and tastings, has planned 15 openings around the world between 2022 and 2023, 10 of which have already materialized year. Then there is the case of Pacifik Poke, which aims to increase the number of its premises to 30. In addition, pokeries have an additional advantage in this case compared to traditional restaurants, in fact they consume less energy because they mostly use fresh ingredients.

Restaurants and expensive bills:

Where to start to optimize costs?
Elaborate menus, favoring dishes that are easier to prepare or that have shorter cooking times and which are at the same time more in demand by customers. Even for drinks, it is possible to standardize recipes in order to always control costs and revenues. This goes for everyone and especially for bars and hotels. After that, once you’ve designed the menu, you decide on a pricing strategy based on the dishes’ profitability and popularity. In addition to this, we can also work on the communication factor. That is to say, you have to know how to tell stories, know how to tell the story of the place, but also its dishes, its “workhorses” and you have to ensure that the staff knows how to do the same; in this way, he will be able to guide customers in choosing the most profitable dishes. But these communication techniques also serve to build customer loyalty. If we create some kind of bond, it will be more difficult for them to “leave” their favorite restaurant.

Can we also intervene on the warehouse?
Of course, the first step is to analyze in detail the raw materials used to prepare the dishes. Together with personnel costs, raw material expenses absorb about 50-75% of sales profits. It is therefore necessary to calculate the Food Cost, i.e. the sum of all the costs linked to each raw material used. To do this, it is necessary to weigh the weights of each ingredient so that they always come out in the same proportions, then calculate the forecast food cost and also the relative final balance. This allows us to reduce waste and at the same time to calculate exactly how many raw materials I need to prepare a dish and to control the quantity in stock.

Restaurants and expensive bills:

How can you influence the prices of recipes?
You have to be very careful and think carefully about your choices. Every decision is heavily influenced by several factors. To be clear: is it better to have ten people who pay a receipt of 100 euros or to have 1,000 who only pay one euro? Certainly, for a chain like Mc Donald’s, the second hypothesis is better, because you have a lower but guaranteed margin and because already there you are working by standardizing procedures. If we consider a single catering company without the help of experts, it will be difficult to provide the correct answer. In fact, the best strategy is not unique.

Restaurants and expensive bills:

To reduce costs in the kitchen, is it better to work with semi-finished products or raw materials?
This is another difficult question. The most correct answer is that it depends, because on the one hand the semi-finished product increases the cost of food, while on the other hand it reduces the full cost, which includes all other costs related to catering, ie the cost of staff, kitchen equipment and their maintenance. At the same time, relying on semi-finished products could reduce the quality of our dishes and it is therefore difficult to know what is the most sustainable action to take from an economic point of view without having first carried out a study adequate from the Company. For this reason, in our consulting projects, we analyze in detail the dishes offered to then balance them in terms of popularity and profitability and give the best answer to these questions.

What does it mean, on the contrary, to analyze customers?
It is to understand why he decides to come to our restaurant. But not only that, you have to understand what an average recipe consists of, what type of customers are, but also how often they come to the restaurant and also the average time of stay, in order to also calculate the turnaround time of the tables and optimize them with those of the preparation of the dishes.

On the other hand, how to act on staff costs?
The cost of personnel represents 40% of the total costs of a catering business. From then on, it is possible to reason in the kitchen and understand if it is better to focus on certain equipment which makes it possible to prepare a good product while renouncing certain professionals and the related costs. To give a concrete example, I cite that of cannoli. Do I prepare it “from scratch” or do I start with a ready-made, quality product? In the second case, I can usually do without the master pastry chef and therefore concentrate on less qualified and therefore cheaper staff. However, even in this case, one must be attentive to the type of restaurant offered and how it is perceived by customers.

Restaurants and expensive bills:

How much can an effective consulting service cost?
It depends, from a few hundred euros to several thousand. It’s like when you go to the doctor, everything depends on the depth of the analysis requested. The important thing is not to improvise, to rely on do-it-yourselfers or unqualified consultants. You have to rely on professionals in the sector; otherwise you risk making a hole in the water and losing other valuable resources.

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