How to Adapt to Rising Minimum Wage

Meet the Speakers

Robert Ancill

CEO, The Next Idea Group, Restaurant and Food Consultants

Robert runs an L.A.-based restaurant consulting agency that specializes in new concepts, management, design, turnarounds, franchising, operations, and international growth. He is widely considered the ultimate authority on restaurant trends, operations, and international markets.

Bruce Macklin

Consultant, TouchBistro

In the industry for more than 20 years, Bruce started in the dish pit and worked his way up to management, helping restaurant owners cut costs, manage staff, and fine tune operations. At TouchBistro, he sets restaurants up for success with deep knowledge of the industry and the technology restaurant owners need to run their businesses.

Tiffany Regaudie

Webinar Moderator & Content Marketing Manager,

TouchBistro

Tiffany led the report on The State of Minimum Wage for Restaurants to equip restaurateurs with the knowledge they need to remain as profitable and thriving as possible. She also regularly writes about how restaurateurs can run a better business.

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A little Bit About TouchBistro

About TouchBistro

• #1 iPad POS in ma US.
• Used and loved in 100+ countries
• 12,000+ restaurants powered by TouchBistro
• Built for restaurant people by restaurant people
• We help restaurants make more money, deliver a better guest experience, and make better business decisions with actionable Insights

Restaurant Insights Report

Problem

Restaurants need to adapt to rising minimum wage. What are some of the best ways to do this?

Research Questions

• How much are labor costs increasing because of minimum wage?
• What is the overall impact on profit?
• What solutions are restaurants using to offset extra labor costs?
• What is the impact on employees?

About the Research

• Conducted by Maru Matchbox research firm on behalf of TouchBistro
• Feedback from restaurant owners and staff in U.S. who live in one of the 18 affected states

Respondent Profile

Report Highlights

• Expected 2018 Restaurant
• Labor cost increase

Overall, 77% of restaurants surveyed have seen shrinking profits because of the minimum increase.

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WHAT WE FOUND

3 Most Common Solution for Offsetting Increased Labor Costs

Owner Behaviour If Profits Are Shrinking

Risks To Consider

So What Now ?

How do I actually deal with higher labor costs?

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RECOMMENDED SOLUTION #1

Create New Revenue Streams

• Open your space for events and classes on slow nights
• Hire out your staff for outside events
• Rent out your kitchen as a commissary for food trucks or "ghost restaurants"
• Turn your kitchen into a production kitchen to sell prepackaged food (sauces, dips, frozen products, etc.)

RECOMMENDED SOLUTION #2

Strategically Adjust Menu Prices

• Calculate the true cost of each menu item
• Calculate contribution margin
• Adjust prices of individual menu items based on:
• True cost
• Contribution margin
• Competitive analysis

Benefits of Menu Engineering

• Leading customers to specific purchases (away from others)
• Increasing average check size
• Maximizing a restaurant's profitability

RECOMMENDED SOLUTION #3

Leverage New Technology

Take Out Technology

• Online ordering through your own site
• Third-party online ordering (e.g. Uber Eats, GrubHub, DoorDash)

IT'S 6% CHEAPER TO GENERATE A TAKEOUT VS. FULL-SERVICE ORDER.

 

STAFFING TECHNOLOGY

• Labor reports
• Restaurant scheduling software (e.g. 7shifts)
• Schedule according to your needs
• Reduce overtime
• Redeploy staff

AUTOMATION TECHNOLOGY

• Kitchen Prep
• Self-ordering Kiosk

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TOP TAKEAWAYS

• You can't control rising minimum wage, BUT you can find new ways to cut costs and increase sales.

• Avoid staff cuts, blanket menu price increases, and reduced operating hours.

• Find new revenue streams by thinking about your business as more than "just a restaurant."

• Strategically adjust menu prices for single items by looking at food cost, profit margin, and the competition.

• Leverage technology to bring in new customers through takeout, make more informed staffing decisions, and improved FOH and BOH efficiencies.

 

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About The Company

The Next Idea was built on the simple premise that Ideas and Execution must be synchronized. Contrary to popular belief; a good Idea has no value on its own, just the same as a bad Idea, executed flawlessly, and equally possesses no value. However, a good Idea implemented with methodology and immaculate execution will transcend boundaries at every level. It is this most basic of theories that represents the foundation of The Next Idea!

 

Contact Us :

Company : TheNextidea

Website : https://www.thenextidea.net/

E-mail : info@thenextidea.net

Phone : +1 818 887 7714

Reference :

How to Adapt to Rising Minimum Wage