In the fast-paced world of restaurant management, efficiency is key to running a successful establishment. One of the crucial aspects that can significantly impact a restaurant's bottom line is labor management. To help restaurant owners and managers better understand the nuances of this, we introduce the Restaurant Labor Exercise.
Step 1: Reviewing the Past and Projecting the Future
The Restaurant Labor Exercise begins with a thorough review of the past four weeks of business sales. This historical data provides valuable insights into your restaurant's performance trends. Next, we compare this data to the same four weeks from the previous year, helping us project future sales for the upcoming week.
For instance, if our projected sales are $50,000, we have a starting point to work with. However, it's essential to note that we are exclusively considering hourly labor costs in this exercise – no salaries are part of the equation.
Step 2: Setting a Labor Goal
With the sales projection in hand, the next step is to set a labor goal for the week. Let's assume we aim for an 18% labor cost relative to our projected sales. This percentage encompasses both Front of House (FOH) and Back of House (BOH) labor costs.
Step 3: Crafting Employee Schedules
Now comes the part where we craft employee schedules. The goal here is to create schedules that align with our labor goal. For example, if our projection suggests a 19.2% labor cost based on the initial schedule, we must make adjustments to bring it down to the target 18%.
Step 4: Fine-Tuning in 30-Minute Increments
To achieve this, we take a meticulous approach, examining every employee's schedule. The adjustments are made in 30-minute increments, ensuring that employees do not exceed their scheduled hours. This fine-tuning is essential, especially for restaurants with larger staff numbers.
Step 5: Monitoring Sales Performance
An important variable in this exercise is sales performance. Are we consistently meeting our sales goals? If we fall short of our projected sales – say, we only hit $45,000 instead of the planned $50,000 – we must consider adjusting our labor costs accordingly.
Achieving a More Profitable Bottom Line
Suppose your restaurant is already operating with an 18% labor cost goal but you aim to increase your bottom line by reducing it to 17%. In that case, you can employ the same exercise over a few weeks to achieve your desired target. This small shift can make a significant difference in your restaurant's profitability.
In the competitive restaurant industry, even a 1% reduction in labor costs can have a substantial impact on your overall bottom line. The Restaurant Labor Exercise is a powerful tool that, when executed properly, can help you optimize your labor management and improve your financial results.
ROI Restaurant Consulting: Your Partner in Success
For those in the restaurant industry seeking expert guidance in mastering the Restaurant Labor Exercise and other strategies to enhance their business, ROI Restaurant Consulting is here to help. We work with restaurant owners across the country to achieve greater profitability and operational efficiency.
If you're ready to increase your restaurant's bottom line and enhance your financial performance, don't hesitate to reach out to ROI Restaurant Consulting. Visit our website at (www.roirestaurantconsulting.com) to learn more about how we can assist you on your path to success.